The World Bankdocuments.worldbank.org/curated/en/... · COM Community Operation Manual CP Community Professionals ... PCOS Project Coordination Office Secretariat PDO Project Development

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: PAD1627

INTERNATIONAL DEVELOPMENT ASSOCIATION

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED CREDIT

IN THE AMOUNT OF SDR 15.1 MILLION (US$20.17 MILLION EQUIVALENT)

TO THE

KINGDOM OF CAMBODIA

FOR A

LIVELIHOOD ENHANCEMENT AND ASSOCIATION OF THE POOR PROJECT (LEAP)

February 2, 2017

Agriculture Global Practice EAST ASIA AND PACIFIC REGION

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective as of December 31, 2016)

Currency Unit = Cambodian Riel (KHR) 1 Cambodian Riel = US$0.00024

US$1.00 = 4,044 Riel SDR1 = US$1.34433

CAMBODIAN FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS AC Agricultural Cooperative ADB Asian Development Bank ADDA Agricultural Development Denmark Asia AWPBs Annual Work Plan and Budgets CCs Commune Councils CDD Community Driven Development CEN Country Engagement Note CEW Commune Extension Worker CGAP Consultative Group to Assist the Poor CIP Community Investment Plan CLF Commune Level Federations CLIF Community Livelihood Investment Fund COM Community Operation Manual CP Community Professionals CSF PIM Commune/Sangkat Fund Project Implementation Manual CSO Civil Society Organization D&D Decentralization and De-concentration DA Designated Account DFs District Facilitators EMP Environmental Management Plan ERM Emergency Response Manual ESMF Environmental and Social Management Framework FM Financial Management GDA General Directorate of Agriculture GNI Gross National Income GRM Grievance Redress Mechanism GRS Grievance Redress Service HRDSP Human Resource Development Service Provider IA Implementing Agency IBRD International Bank for Reconstruction and Development IDA International Development Association IDPoor Poverty Identification Process IFAD International Fund for Agricultural Development IRC Inter-ministerial Resettlement Committee

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IRM Immediate Response Mechanism LASED Land Allocation for Social and Economic Development Project LEAP Livelihood Enhancement and Association of the Poor Project LIGs Livelihood Improvement Groups M&E Monitoring and Evaluation MAFF Ministry of Agriculture, Forestry and Fisheries MEF Ministry of Economy and Finance MFI Microfinance Institutions MIP Micro Investment Plans MIS Management Information System MoI Ministry of Interior MoLVT Ministry of Labor and Vocational Training MoU Memorandum of Understanding NCB National Competitive Bidding NCDD National Committee for Sub-National Democratic Development NCDDS National Committee for Sub-National Democratic Development

Secretariat NGO Non-Government Organization NIS National Institute of Statistics NSDP National Strategic Development Plan PAC Project Advisory Committee PADEK Partnership for Development in Kampuchea PCO Project Coordination Office PCOS Project Coordination Office Secretariat PDO Project Development Objective PG Producer Group PA Provincial Administration PIA Project Implementation Agency PIM Project Implementation Manual PPC Phnom Penh Capital PPCH Phnom Penh Capital Hall RGC Royal Government of Cambodia RPF Resettlement Policy Framework SDG Sustainable Development Goal SHG Self-Help Group SMT Sub-Management Team SOP Standard Operating Procedures SOP/PM Standard Operating Procedures and Procurement Manual SRPA Siem Reap Provincial Administration TA Technical Advisors TSSD Tonle Sap Poverty Reduction and Smallholder Development Project TVET Technical Vocational Education Training VAHW Village Animal Health Worker VEW Village Extension Worker UPC Urban Poor Community WB World Bank

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Regional Vice President: Victoria Kwakwa Country Director: Ulrich Zachau

Global Practice Senior Director: Juergen Voegele Global Practice Director: Ethel Sennhauser

Country Manager: Inguna Dobraja Practice Manager(s): Nathan M. Belete

Susan Shen Task Team Leader(s): Mudita Chamroeun

Erik Caldwell Johnson

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KINGDOM OF CAMBODIA Livelihood Enhancement and Association of the Poor (LEAP) Project

TABLE OF CONTENTS

Page

I. STRATEGIC CONTEXT ...............................................................................................13

A. Country Context .......................................................................................................... 13

B. Sectoral and Institutional Context ............................................................................... 13

C. Higher Level Objectives to which the Project Contributes ........................................ 16

II. PROJECT DEVELOPMENT OBJECTIVES ..............................................................17

A. PDO............................................................................................................................. 17

B. Project Beneficiaries ................................................................................................... 17

C. PDO Level Results Indicators ..................................................................................... 18

III. PROJECT DESCRIPTION ............................................................................................18

A. Project Components .................................................................................................... 18

B. Project Financing ........................................................................................................ 21

C. Lessons Learned and Reflected in the Project Design ................................................ 21

IV. IMPLEMENTATION .....................................................................................................23

A. Institutional and Implementation Arrangements ........................................................ 23

B. Results Monitoring and Evaluation ............................................................................ 26

C. Sustainability............................................................................................................... 26

V. KEY RISKS AND MITIGATION MEASURES ..........................................................27

A. Overall Risk Rating and Explanation of Key Risks .................................................... 27

B. Overall Key Risks Rating Explanation ....................................................................... 27

VI. APPRAISAL SUMMARY ..............................................................................................28

A. Economic and Financial Analysis ............................................................................... 28

B. Technical ..................................................................................................................... 29

C. Financial Management ................................................................................................ 30

D. Procurement ................................................................................................................ 30

E. Social (including Safeguards) ..................................................................................... 31

F. Environment (including Safeguards) .......................................................................... 33

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G. World Bank Grievance Redress .................................................................................. 36

Annex 1: Results Framework and Monitoring .........................................................................37

Annex 2: Detailed Project Description .......................................................................................42

Annex 3: Implementation Arrangements ..................................................................................56

Annex 4: Implementation Support Plan ....................................................................................83

Annex 5: Communications Strategy...........................................................................................88

Map of the Project Areas – IBRD Map 42343 ..........................................................................90

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.

PAD DATA SHEET

Cambodia

KH - Livelihood Enhancement and Association of the Poor Project (LEAP) (P153591)

PROJECT APPRAISAL DOCUMENT .

EAST ASIA AND PACIFIC

Agriculture Global Practice

Report No.: PAD1627 .

Basic Information

Project ID EA Category Team Leader(s)

P153591 B - Partial Assessment Mudita Chamroeun, Erik Caldwell Johnson

Lending Instrument Fragile and/or Capacity Constraints [ ]

Investment Project Financing Financial Intermediaries [ ]

Series of Projects [ ]

Project Implementation Start Date Project Implementation End Date

24-February-2017 31-May-2022

Expected Effectiveness Date Expected Closing Date

01-May-2017 30-November-2022

Joint IFC

No

Practice Manager/Manager

Senior Global Practice Director

Country Director Regional Vice President

Nathan M. Belete Juergen Voegele Ulrich Zachau Victoria Kwakwa .

Borrower: KINGDOM OF CAMBODIA

Responsible Agency: Ministry of Interior (MoI)

Contact: H.E. NGY Chanphal Title: Secretary of State

Telephone No.: 855-12-909879 Email: [email protected]

Responsible Agency: Ministry of Agriculture, Forestry and Fisheries

Contact: H.E. TY Sokhun Title: Secretary of State


Responsible Agency: Phnom Penh Capital Hall (PPCH)

Contact: H.E. PA Socheatvong Title: Phnom Penh Capital Governor


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Responsible Agency: Siem Reap Provincial Administration

Contact: H.E. KHIM Bunsong Title: Provincial Governor

Telephone No.: 855-63-761575 Email: [email protected] .

Project Financing Data (in USD Million)

[ ] Loan [ ] IDA Grant [ ] Guarantee

[ X ] Credit [ ] Grant [ ] Other

Total Project Cost: 22.17 Total Bank Financing: 20.17

Financing Gap: 0.00 .

Financing Source Amount

BORROWER/RECIPIENT 2.00

International Development Association (IDA) 20.17

Total 22.17 .

Expected Disbursements (in USD Million)

Fiscal Year 2017 2018 2019 2020 2021 2022 2023

Annual 0.50 3.00 5.50 3.37 3.30 3.00 1.50

Cumulative 0.50 3.50 9.00 12.37 15.67 18.67 20.17 .

Institutional Data

Practice Area (Lead)

Agriculture

Contributing Practice Areas

Social, Urban, Rural and Resilience Global Practice

Proposed Development Objective(s)

The Project Development Objectives (PDO) are to improve access of poor and vulnerable households in selected communities to financial services, opportunities for generating income, and small-scale infrastructure, and to provide immediate and effective response in case of an eligible crisis or emergency. .

Components

Component Name Cost (USD Millions)

Component 1: Improving Livelihoods for Rural Poor and Vulnerable Households

14.48

Component 2: Improving Livelihoods for Urban Poor and Vulnerable Households

3.72

Component 3: Project Management 3.97

Component 4: Contingent Emergency Response 0.00 .

Systematic Operations Risk- Rating Tool (SORT)

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Risk Category Rating

1. Political and Governance Substantial

2. Macroeconomic Moderate

3. Sector Strategies and Policies Moderate

4. Technical Design of Project or Program Substantial

5. Institutional Capacity for Implementation and Sustainability Substantial

6. Fiduciary Substantial

7. Environment and Social Substantial

8. Stakeholders Substantial

9. Other

OVERALL Substantial .

Compliance

Policy

Does the project depart from the CAS in content or in other significant respects? Yes [ ] No [ X ] .

Does the project require any waivers of Bank policies? Yes [ ] No [ X ]

Have these been approved by Bank management? Yes [ ] No [ X ]

Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ]

Explanation:

Does the project meet the Regional criteria for readiness for implementation? Yes [ X ] No [ ] .

Safeguard Policies Triggered by the Project Yes No

Environmental Assessment OP/BP 4.01 X

Natural Habitats OP/BP 4.04 X

Forests OP/BP 4.36 X

Pest Management OP 4.09 X

Physical Cultural Resources OP/BP 4.11 X

Indigenous Peoples OP/BP 4.10 X

Involuntary Resettlement OP/BP 4.12 X

Safety of Dams OP/BP 4.37 X

Projects on International Waterways OP/BP 7.50 X

Projects in Disputed Areas OP/BP 7.60 X .

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Legal Covenants

Name Recurrent Due Date Frequency

Institutional Arrangements (Section I.A, Schedule 2 of Financing Agreement)

X CONTINUOUS

Description of Covenant

Obligation of the Recipient to maintain, throughout the implementation of the project, the SC, PCO and SMTs, all with composition, functions, staffing and resources satisfactory to IDA.


PIM (Section I.B, Schedule 2 of Financing Agreement)

X CONTINUOUS


Obligation of the Recipient to carry out the project in accordance with the Project Implementation Manual (PIM).


Annual Work Plans and Budgets (Section I.C, Schedule 2 of Financing Agreement)

X Yearly


Obligation of the Recipient to prepare and furnish to IDA, for its approval, the annual work plans and budgets containing all activities and eligible expenditures to be included in the project in each fiscal year of the Recipient. Due date is November 30 of each year.


Sub-projects (Section I.D, Schedule 2 of Financing Agreement)

X CONTINUOUS


Obligation of the Recipient to ensure that all Community Grant sub-projects have been prepared, approved and implemented in accordance with the eligibility criteria, guidelines and procedures specified in the PIM, and under Grant Agreements with each beneficiary Commune Council on terms and conditions acceptable to IDA and set out in the Financing Agreement.


Environmental and Social Safeguards (Section I.E, Schedule 2 of Financing Agreement)

X CONTINUOUS


Obligation of the Recipient to carry out the project in accordance with the Environmental and Social Management Framework (ESMF) and Resettlement Policy Framework (RPF) as specified in the safeguard provisions of the Financing Agreement. .

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Conditions

Source Of Fund Name Type

IDA Contingent Emergency Response Implementation (Section I.G, Schedule 2 of Financing Agreement)

Disbursement

Description of Condition

Obligation of the Recipient to adopt a satisfactory Emergency Response Manual for Component 4 of the project and, in the event of an eligible crisis or emergency, ensure that the activities under said component are carried out in accordance with such plan and all relevant safeguard requirements.

Team Composition

Bank Staff

Name Role Title Specialization Unit

Mudita Chamroeun Team Leader (ADM Responsible)

Senior Rural Development Specialist

Task Team Leader GFA02

Erik Caldwell Johnson Team Leader Senior Social Development Specialist

Co-Task Team Leader GSU02

Sreng Sok Procurement Specialist (ADM Responsible)

Procurement Specialist

Procurement GGO08

Reaksmey Keo Sok Financial Management Specialist

Extended Term Consultant

Financial Management GGO20

Andreas Groetschel Team Member Consultant Project Preparation and Agriculture Economics

GFA02

Bunlong Leng Safeguards Specialist Environmental Specialist

Environment GEN2B

Saroeun Bou Team Member Communication Officer

Communication and Outreach

EAPEC

Carmenchu D. Austriaco

Team Member Finance Officer Finance WFALN

Dzung Huy Nguyen Team Member Disaster Risk Management Specialist

Irrigation / Infrastructure

GSU08

Frederick Yankey Team Member Senior Financial Management Specialist

Financial Management GGO20

Hong Seng Team Member Consultant Skill Development and Employment

GFA02

Juan Martinez Safeguards Specialist Senior Social Scientist

Social GSU02

Manush Hristov Counsel Senior Counsel Legal LEGES

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Narya Ou Team Member Program Assistant

Administrative and Logistical Support

EACSF

Samsen Neak Team Member Consultant Poverty GMF02

Sarin Chea Team Member Consultant Resettlement Policy Framework

GSU02

Sarin Khim Team Member Consultant Project Preparation / Coordination and Rural Development

GFADR

Srey Chanthy Team Member Consultant Community Needs Assessment and Manuals

GFA02

Vanna Pol Team Member Program Assistant

Financial Management and Procurement Support

EACSF

Virak Chan Team Member Water & Sanitation Specialist

Water and Sanitation GWA02

Waraporn Hirunwatsiri Safeguards Specialist Senior Environmental Specialist

Environment GEN2B

Extended Team

Name Title Office Phone Location

Chase Palmeri M&E Specialist +393357516403 FAO, Rome

David Moles Peer Reviewer +85561801080 .

Locations

Country First Administrative Division

Location Planned Actual Comments

Cambodia Siem Reap Siem Reap X

Cambodia Phnom Penh Phnom Penh X .

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I. STRATEGIC CONTEXT

A. Country Context

1. Following more than two decades of strong economic growth, Cambodia has attained lower-middle income status as of 2015, with GNI per capita reaching US$ 1,070. Cambodia grew by an average annual rate per capita of 5.3 percent during 2005–15, ranking among the top 14 economies in the world.1 The main drivers of growth have been the manufacturing sectors, in particular garment and more recently construction, and the services sectors, especially tourism and real estate. After experiencing a strong growth, the agriculture sector has decelerated. Economic growth flattened in the aftermath of the 2009 global financial crisis but recovered quickly since, averaging at 7.2 percent during 2010–15. Growth is estimated to ease slightly to 7.0 percent in 2016, in the context of a slowdown in the Chinese economy. In the medium term, growth is expected to remain strong at around 6-7 percent, underpinned by regional integration with resilient exports and strong domestic demand boosted by low oil prices.

2. The sustained economic performance has lifted a large proportion of the population above the national poverty line, but Cambodia is still one of the poorest countries in the Southeast Asia region. Between 2004 and 2013, the poverty incidence under the national poverty line declined from 50.2 percent to 10.1 percent of the population.2 Most of the poverty reduction occurred between 2007 and 2009, when the poverty headcount rate declined by 20 percentage points, driven by a significant hike in the price of rice, the main agricultural product of Cambodia. Despite this progress, the vast majority of the families that rose above the poverty line did so by a small margin, leaving them at risk in the event of an adverse shock. Poverty reduction in Cambodia has been accompanied by shared prosperity—the real consumption growth of the bottom 40 percent of the distribution was larger than that of the top 60 percent—and a decrease in inequality, with the Gini coefficient going down from 0.372 to 0.258 between 2007 and 2013.3 Further reductions in poverty are expected. For urban households poverty reduction will be driven by growth in the construction, garment and services sectors. For rural households there has been an increase in sources of non-agriculture income.

3. The overall welfare of households, described by nonmonetary indicators, improved significantly throughout the 2004 to 2014 period but, several challenges remain. Cambodia achieved most of the Millennium Development Goal targets, including those related to poverty reduction, child mortality, and maternal mortality. Targets have been nearly achieved in primary education, whereas areas such as gender equality and environmental sustainability have seen less progress. Moreover, the incidence rate and death by tuberculosis remain high. Cambodia's Human Development Index in 2014 was 0.55, well below the East Asia and Pacific average of 0.70 and also below the medium-income country average of 0.63.

B. Sectoral and Institutional Context

4. The agriculture sector is central to the livelihoods of most Cambodians as 80 percent of the total population live in the rural areas. In 2011, Cambodia's poor people who lived under

1 GDP per capita (constant LCU). Source: WDI 2 World Bank staff estimates from CSES (2004-2013) and the Global Monitoring Report (2016). 3 World Bank staff estimates from CSES (2004-2013).

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US$1.15 per day were about 3 million and the near-poor who lived under US$2.3 per day were about 8.1 million, with about 90 percent of them living in rural areas. The majority or 66 percent of the rural population depends on agriculture for their livelihood, however more than 10 percent are landless and a large share of the rural population cultivates less than 0.5 ha which on average provides for less than half of the basic nutritional needs for a typical rural family. Two thirds of the country's rural households still face seasonal food shortages each year.

5. Poor rural households are constrained by lack of human, financial and social capital, in particular access to finance and to markets. Despite the growth in the formal financial sector in Cambodia, the poor are still forced to take loans at usurious rates to fulfill basic consumption needs, many are becoming over-indebted, handicapped by low financial literacy. A combination of not being able to achieve economies of scale by producing as a group, lack of technical know-how, limited access to agricultural extension services, lack of market information, and poor infrastructure (e.g., roads and markets) inhibit the ability of the poor to successfully participate in key value chains. Despite the productivity improvements and some limited capturing of market opportunities by some small farms in recent years, the productivity of most small, traditional farms has remained low. The poor also lack voice and institutions that can empower them. This lack of voice and sense of powerlessness perpetuates a belief among the poor that their situation is unchangeable, causing some to spiral into inaction or social vices. Together, these constraints create a vicious cycle of sustained poverty, i.e., inadequate incomes to meet consumption needs and indebtedness to private moneylenders. 6. While agriculture-dependent livelihoods still constitute the majority of self-employment in rural areas, wage employment (particularly through migration to neighboring Thailand) provides important income supplements especially for poor households. Wage employment is often associated with smoother and more stable income and consumption patterns for the household, given higher predictability of income. However, to reap the potential benefits of wage employment locally, workers require information about the labor market and opportunities for employment as well as better, employable skills and knowledge that are tailored to meet labor market demand. Enterprise surveys indicate a sizable skills gap among the workforce, predominantly for skilled labor, but also for mid- and low-skilled workers. Soft skills, and basic cognitive skills, are often cited to be lacking among low-skilled workers. Drop-out rates, particularly for the rural poor, remain high. A significant number of students do not complete the required Grade 9 education that enables them to pursue formal educational opportunities, technical vocational education training included. 7. To address the needs of the rural poor, the government implemented a new and comprehensive livelihood approach through the Livelihood Enhancement and Association of the Poor (LEAP) Project in Siem Reap Province in 2009. Siem Reap was selected based on considerations of need (i.e., high poverty level of the province), capacity (i.e., presence of self-help groups or SHGs, community groups, non-government organizations or NGOs, and microfinance institutions or MFIs), as well as opportunity (i.e., links to the growth engine of the Angkor Wat tourism industry). Siem Reap also had many of the basic requirements for the model to work, such as active SHGs, farmer federations, community-based organizations, a strong private sector driving growth, and existing service providers.

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8. Initially, the implementation of LEAP was designed to cover 50 communes in the province, with the Asian Development Bank and International Fund for Agricultural Development planning to finance a complementary operation, the Tonle Sap Smallholder Development (TSSD) Project, in the other 50 rural communes. While the TSSD Project moved forward and eventually covered selected villages in 58 communes, the LEAP approach was piloted using a project preparation advance in only 6 communes during 2010-2012. The pilot project proved successful, and facilitated the establishment of 100 SHGs and their development into savings and credit groups. Functioning groups emerged as entry points for capacity building and resource provision for economic activities that strengthened livelihoods and increased incomes from investments in agriculture, livestock and handicraft production. An impact evaluation found it to be effective in encouraging savings and associations through SHGs.

9. While poverty levels have decreased in Siem Reap since the conclusion of the pilot operation, the context and enabling conditions for applying the LEAP approach in Siem Reap remain valid. IDPoor data collected by the Ministry of Planning show an overall decrease in the percentage of combined IDPoor 1 and 2 households in the province from 30.7% in 2008, to 24.6% in 2012, and 17.7% in the most recent surveys conducted in 2015. Despite the progress, Siem Reap remains one of the poorest provinces in Cambodia. The population of Siem Reap is also growing fast, with IDPoor data identifying a total of 172,260 households in 2008, 180,692 households in 2012 and 190,008 households in 2015. Also, while the TSSD Project developed the capacity of SHGs and provided related economic infrastructure in its target communes and villages, those communes targeted under the project did not receive any such support and have therefore been left behind. As such, the proposed operation aims to address the remaining gaps and build upon the lessons from the pilot operation. 10. With nearly nine out of 10 poor households residing in rural areas as of 2012, rural communities remain the primary focus of poverty reduction efforts. Nonetheless, poverty is a growing concern in urban areas, which contain pockets of extreme poverty, particularly in the rapidly growing Phnom Penh Capital. The first IDPoor survey for Phnom Penh Capital which was conducted in 2015 (covered 8 out of 12 districts)4 found a total average poverty rate of 9.9 percent. Combined IDPoor 1 and 2 levels in several Sangkats (urban equivalent of a commune) exceed 20 percent, with one Sangkat reaching more than 40 percent. In addition to IDPoor data, the Phnom Penh Capital has compiled a list of 215 Urban Poor Communities (UPCs). These communities are largely informal and are on public and state land (railways, road side, sewage pipe, lake, river bank, roof of old buildings, pagoda, stupa), private land owned by the state, community land, private land, areas the government relocated, and private lands the government or communities rented5. UPCs are also characterized by lack of infrastructure support and services as well as low wage and low skill income generation opportunities. A needs assessment conducted in several

4 The four central/downtown districts of Phnom Penh Capital were not included in the 2015 IDPoor survey as the methodology was considered to be insufficient to capture the unique social-economic characteristics of urban households. A new methodology designed specifically for central/downtown, urban households is being piloted by the Ministry of Planning (2015-2016). This new methodology will most likely be applied in 2018, when the next application of the Phnom Penh IDPoor survey is planned. IDPoor surveys are conducted in each province every three years, but the timing of the next survey in Phnom Penh may take place sooner as there is significant interest in gathering data from the districts where IDPoor data has yet to be gathered. 5 The Phnom Penh Urban Poor Community Need Assessment Report, December 2012, Phnom Penh Capital.

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UPC communities in preparation for the proposed project confirmed the need for invest in income generating activities, build skills for better and more stable jobs, which are prerequisites for sustaining financial services to alleviate the heavy burden of household debt, and improve the quality of community infrastructure.6

11. Recognizing that the pressures on urban poverty and informal settlements would continue to grow with rural-urban migration, and the unique development challenges faced in urban areas, Phnom Penh City was selected for inclusion in the proposed LEAP operation.7 It is currently implementing its Five-Year Development Plan (2014-2018), and together with the national government, is developing strategies to manage the risks and opportunities of urban growth, with the LEAP operation intended to demonstrate effective, sustainable approaches to addressing urban poverty.

C. Higher Level Objectives to which the Project Contributes

12. The project is in line with the government policies and poverty reduction objectives laid out in the National Strategic Development Plan (NSDP) and the Rectangular Strategy. One of the key priorities identified in the NSDP is to improve the livelihoods of about 20 percent households who continue to be poor. The NSDP also prioritizes food security, reducing poverty for all Cambodians, and supporting households who have moved out of poverty, but remain vulnerable to shocks. The Rectangular Strategy’s Phase III (2014-2018) aims to ensure development sustainability and poverty reduction in response to the aspirations of the people. The four pillars of the Rectangular Strategy include: (a) enhancement of the agricultural sector; (b) private sector growth and employment; (c) continued rehabilitation and construction of physical infrastructure; and (d) capacity building and human resource development. The project would contribute to all of these pillars by supporting rural farmers, providing skills training and job placement support, investing in small-scale infrastructure and building the capacity of self-managed institutions for the poor. The project would also support the aims of the five-year Strategic Plan for Gender Equality and the Empowerment of Women in Cambodia, Neary Ratanak IV (2014-2018).

13. The project would likewise help in the achievement of the following Sustainable Development Goals: (a) to end poverty in all its forms everywhere; (b) to end hunger, achieve food security and improved nutrition and promote sustainable agriculture; (c) to achieve gender equality and empower all women and girls; (d) to promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all; and (e) to make cities and human settlements inclusive, safe, resilient and sustainable.

14. The project is one of seven projects specified in the World Bank Group’s Cambodia Country Engagement Note (FY2016-2017) (Report No. 104843), and is aimed at improving service delivery and reducing vulnerability. It would support the achievement of the World Bank Group’s twin goals to reduce extreme poverty and promote shared prosperity by specifically targeting poor and vulnerable households as the primary beneficiaries. Through its emphasis on

6 The Phnom Penh Capital’s Urban Poor Community Needs Assessment was undertaken in 2015 by Srey Chanty. This is part of the collaborative initiative of the World Bank and the Phnom Penh Capital. 7 In 1998, one in every 20 Cambodians lived in the city of Phnom Penh. This number had increased to about one in 10 in 2012. The population of Phnom Penh is expected to double by 2025.

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building well-functioning SHGs, producer groups and agricultural cooperatives, the project would enable poor households to improve their livelihoods, address poverty, and increase welfare in their communities. The beneficiaries’ vulnerability to disaster and climate risks, in particular droughts and flooding, would also be mitigated through small-scale infrastructure investments in water resources management, water and sanitation services and small-scale irrigation investments.

II. PROJECT DEVELOPMENT OBJECTIVES A. PDO

15. The project development objectives (PDO) are to improve access of poor and vulnerable households in selected communities to financial services, opportunities for generating income, and small-scale infrastructure, and to provide immediate and effective response in case of an eligible crisis or emergency.

B. Project Beneficiaries

16. The key beneficiaries of the project would be the IDPoor8 and vulnerable households in the target 47 communes and 13 Sangkats in Siem Reap Province and Phnom Penh Capital, respectively. The beneficiaries in Siem Reap Province would come from the 47 communes that did not receive support from the TSSD Project: 42 communes did not receive any TSSD support and will be fully covered by LEAP; and 5 communes that did not receive full coverage by TSSD but have above average poverty levels, will have villages included in LEAP (Annex 2, Table 1). The beneficiaries in Phnom Penh Capital would come from the 13 Sangkats, with selection criteria as follows: (a) for the eight Khans where IDPoor data is available, the Sangkats with the largest total number of IDPoor households were selected -- one Sangkat each from the six Khans comprising 10 or fewer Sangkats, and two Sangkats each from the two Khans with more than 10 Sangkats; and (b) in the four Khans for which IDPoor data is not available due to their central/downtown location, one Sangkat per Khan which has the highest total number of urban poor communities (UPC) households as identified by Phnom Penh Capital9 was selected. Using a combination of IDPoor and UPC criteria allowed the inclusion of both peri-urban and central-urban Khans. The Phnom Penh coverage was purposely set at a modest level to allow the piloting of project activities in the urban context, with the potential of scaling-up on the basis of good implementation experience as the project progresses (Annex 2, Table 2).

17. The IDPoor household members of existing and to be established SHGs, producer groups and agricultural cooperatives would be the main project beneficiaries in Siem Reap. IDPoor households would also be the primary beneficiaries of skills development and employment assistance, with additional use of proxy means testing for applicants who do not have IDPoor cards, but may still meet the IDPoor criteria. It is expected that all households in the target

8 Since IDPoor surveys are only conducted every three years, commune and Sangkat leaders would be asked to identify potential household beneficiaries that may have become poor since the last survey due to economic factors (commodity price drops), natural calamities (drought, floods, destroyed crops) or other shocks based on the IDPoor questionnaire. Those identified as new IDPoor households would be given a proxy means test based on the IDPoor methodology to validate their eligibility. 9 No urban poor community has been identified in Khan Prampi Makara, one of these four Khans. Hence, only three Sangkats were finally selected for the project. (Annex 2, Table 2)

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communes/sangkats would benefit from the planned infrastructure improvements under the project, but preference would be given to priorities expressed by IDPoor households to ensure that they benefit. Not all communities will be eligible to receive community infrastructure – only communities classified as permanent settlements will be eligible.

C. PDO Level Results Indicators

18. The main indicators to measure the achievement of the PDO are:

(a) Number of direct project beneficiaries, percentage of whom are women; (b) Percentage of self-help groups rated as self-reliant; (c) Percentage of participants receiving skills development training with new or improved

employment or increased income; (d) Percentage of beneficiaries that feel community infrastructure investments have

reflected their needs, (disaggregated by gender); and (e) Number of beneficiaries (disaggregated by gender).

III. PROJECT DESCRIPTION

A. Project Components

19. The proposed project would be implemented in two distinct contextual and institutional environments of the mostly rural Siem Reap Province and the rapidly urbanizing Phnom Penh Capital. The core project activities would be separated into rural and urban components, each would have specific geographical scope and implementation arrangements which are customized to each unique setting while maintaining consistency and continuity across the project.

20. Component 1: Improving Livelihoods for Rural Poor and Vulnerable Households (total estimated cost US$14.48 million; to be fully financed by IDA Credit). This component aims to address the needs of the IDPoor and vulnerable households in the 47 communes in Siem Reap Province through a demand driven approach. As the predominant sources of income for these rural poor households are from agriculture, livestock and fisheries, the project would leverage the technical support of the Ministry of Agriculture, Fisheries and Forestry (MAFF) and other technical service providers. Drawing from the experience of the pilot project, this component would be implemented by the Siem Reap Provincial Administration through the following sub-components:

21. Sub-Component 1.1: Building and Strengthening Institutions of the Rural Poor (total estimated cost US$8.27 million; to be fully financed by IDA Credit). This would support the formation and strengthening of associations of poor and vulnerable households in Siem Reap Province, mainly through SHGs, producer groups or agricultural cooperatives, in order to enable their members to engage jointly or individually in productive activities. Capacity building assistance would include basic financial literacy (savings, budgeting, etc.), micro-enterprise/business planning, basic accounting and record keeping, good governance practices, and access to financial services. Furthermore, groups and individual farmers would be assisted and

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strengthened through facilitation of market linkages, technical assistance and capacity building for producers to increase access to assets, skills, technology and markets.

22. To supplement the initial savings generated by the SHGs, the project would provide seed grants (US$1,000-1,500 per SHG) for on-lending to members to implement their Micro Investment Plans (MIPs). The grant would be for SHGs that have previous experience in implementing and managing microenterprises/livelihood activities. Where commune-level federations of SHGs, producer groups, agricultural cooperatives, etc. are existing and assessed by commune councils as qualified to handle funds for on-lending to member groups, the project would provide them with Community Livelihood Investment Fund (CLIF) grant of up to US$37,000 per federation. This grant would be on-lent to member groups that are not qualified to access credit from MFIs and other formal banking institutions, for their investment plans. The project would also link the federations with financial institutions to access additional/bigger credit funds and other financial services.

23. MAFF as well as NGOs/other service providers would be tapped to provide technical assistance and market linkage services to the beneficiary groups and where warranted, to individuals. These would focus on improving production efficiency, productivity enhancement, access to technology extension, logistics infrastructure and information services, and building pro-poor market systems for small and marginal producers that would enable them to participate in higher value chains.

24. Sub-Component 1.2: Enhancing Skills and Employment Opportunities for the Rural Poor (total estimated cost US$1.96 million; to be fully financed by IDA Credit). Taking advantage of the opportunities offered by enterprises connected to the rapidly growing tourism industry in Siem Reap, this sub-component would provide a complementary livelihood pathway to self-help group, value-chain and market access support under Sub-component 1.1. The Project would invest in the development of beneficiary skills (particularly unemployed youth and women from poor households) and ability to obtain new or improved wage employment. Activities would include: (a) local labor market surveys and training provider assessment; (b) beneficiary selection; (c) employability training and career counseling; (d) voucher provision and skills training; (e) job placement and employment support, including to engage in partnership with the tourism sector (hotels, basic English training for tourism related job opportunities).

25. Sub-Component 1.3: Improving Basic Services and Community Infrastructure for the Rural Poor (total estimated cost US$4.25 million; to be fully financed by IDA Credit). This would support small-scale community infrastructure and services to respond to the priority needs of the beneficiaries and contribute to their productivity and income generating potential. Investments would include small scale storage or warehouses, water supply and sanitation facilities, small-scale irrigation schemes, community access roads, and better on-farm water management practices, among others. The identification of priority needs would follow the existing annual participatory identification and planning process that provides opportunity for the beneficiaries to advocate their investment priorities and ensure that these are included in the Commune Investment Plan (CIP). The project will use the Commune/Sangkat Fund Project Implementation Manual (CSF PIM) for the preparation and implementation of community sub-projects. The CSF PIM is a tested manual that has been used by Communes for planning and implementation of small-scale investments for several years.

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26. Component 2: Improving Livelihoods for Urban Poor and Vulnerable Households (total estimated cost US$3.72 million; to be fully financed by IDA Credit). This component aims to address the needs of the IDPoor and vulnerable households in 13 Sangkats in Phnom Penh Capital through a demand driven approach. Activities would include: (a) skills development training; (b) employment support services; and (c) provision of productive infrastructure to improve livelihood and increase productivity. Direct financial services support would not be provided but where appropriate, linkages to existing financial institutions and services would be facilitated. This component would be implemented by the Phnom Penh Capital Hall through the following sub-components:

27. Sub-Component 2.1: Enhancing Skills and Employment Opportunities for the Urban Poor (total estimated cost US$1.69 million; to be fully financed by IDA Credit). Since there are many training and employment programs in Phnom Penh and a wider range of employment opportunities compared to Siem Reap, support would be provided to more secure, satisfying and higher earning jobs. As in Sub-component 1.2, the Project would invest in the development of beneficiary skills (particularly unemployed youth and women from poor households) and the ability to obtain new or improved wage employment. Activities would include: (a) local labor market surveys and training provider assessment; (b) beneficiary selection; (c) employability training and career counseling; (d) voucher provision and skills training; (e) job placement and employment support. Some of the livelihood priorities identified during project preparation include food preparation and processing, handicraft making, retailing/ buy and sell, off-site garment factory sewing/dressmaking, cosmetology services, transportation operation, etc. Beneficiaries, particularly youth, would be encouraged to consider a wider range of career opportunities and skills where there is high demand and potential for career development in the private sector.

28. Sub-Component 2.2: Improving Basic Services and Community Infrastructure for the Urban Poor (total estimated cost US$2.03 million; to be fully financed by IDA Credit). This would follow the same process as in Sub-Component 1.3, and use the CSF-PIM. To ensure that the sub-projects would most benefit the poor and vulnerable households such as the UPCs, the community planning meetings would include both IDPoor households and representatives of the UPCs. The types of infrastructure facilities that would be funded include but would not be limited to drainage system, community road/footpath, water supply and sanitation system, and street lighting. These community infrastructure investments have been identified in the UPC needs assessment and are expected to increase the beneficiaries’ productivity, resilience and ability to adapt to natural and economic shocks.

29. Component 3: Project Management (total estimated cost US$3.97 million; US$1.97 million financed by IDA Credit). This component would support the overall implementation, supervision and coordination of the project at the national, provincial, district/Khan, commune/sangkat, and village/community levels, including: (a) social and environmental safeguard risk management; (b) procurement planning and contracts management; (c) financial management, disbursement and audit; and (d) monitoring and evaluation (M&E), and communication.

30. Component 4: Contingent Emergency Response (US$0.00 million). This component, with an initial allocation of zero, is part of the World Bank’s (IDA’s) support to an immediate

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response mechanism in Cambodia. This would allow the reallocation of a portion of undisbursed balance of the project for recovery and reconstruction support following a formal government request in the event of an eligible emergency.

B. Project Financing 31. The total estimated project cost is US$22.17 million, including price and physical contingencies. An IDA credit equivalent to US$20.17 million would be provided. Government support in form of counterpart financing would amount to US$2.00 million, including in-kind contributions, and including the use of office space, staff costs and utilities expenses.

Table 1: Breakdown of Project Cost by Component

Project Components

Project Cost (in Million US$)

IDA Financing (in Million US$)

Counterpart Financing

(in Million US$) 1. Improving Livelihoods for

Rural Poor and Vulnerable Households

14.48 14.48 00.00

2. Improving Livelihoods for Urban Poor and Vulnerable Households

3.72 3.72 00.00

3. Project Management 3.97 1.97 2.00 4. Contingent Emergency

Response - - -

Total Project Cost 22.17 2.00 Total Financing Required 20.17 20.17

C. Lessons Learned and Reflected in the Project Design

32. The design and approach of the project build on the experiences and lessons learned from the LEAP pilot as well as similar projects and programs in Cambodia and in other countries on enhancing rural and urban livelihoods. These include the following:

(a) Lessons from the LEAP pilot. The short time-frame of the pilot project was enough time to support forming of 100 SHGs, two commune-level federations and more than 50 producer groups. However, without the ongoing support facilitated by the project, many of these young institutions ceased to exist or became largely inactive. The interest and commitment of community members to pursue this initiative has remained strong, but they have been constrained by lack of technical and managerial capacity to consolidate and scale up their activities on their own. This experience confirms the need for long-term capacity building and a certification approach to sustainability based on institutional maturity and capacity. MFIs are also more prevalent than at the time of the pilot, so the roles of the CLFs need to be carefully considered, and rooted in local institutions, such as the Commune Council. The project would need to facilitate institutional linkages between CLFs/Sangkat-level federations (SLFs) and Commune Councils, and build CLF/SLF capacity to serve its members on a sustainable basis. Producer groups have largely ceased to operate without

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the project, and they struggled in the absence of technical guidance on issues such as animal health, marketing and market linkages.

(b) Impact evaluation findings of the LEAP pilot. A randomized study of the pilot was conducted six months after the close of the project in 2012. The evaluation found that the pilot had a large and positive effect on savings in communities. In the project communities, poor members out-saved non-poor members. Incomes from the sales of meat and fish rose in the project communities, which is consistent with LEAP’s creation of a relatively large number of poultry and pork producer groups. However, while there is strong evidence that the program fostered participation in savings groups there is no consistent evidence that participation in these savings groups generated/led to participation in other social networks, in greater civic engagement by the poor, or in more pro-social norms of behavior. The lack of evidence of increased social capital can be attributed to research design and methodology issues as well the timing of the study, less than three years after the pilot project’s launch. This project would focus on more specific indicators of social capital created through groups insofar as it would specifically track the performance of groups as an intermediate outcome and the participatory rating of the longer term self-reliance of the groups.

(c) Contributors to successful, sustainable SHGs. The project has included in its design a range of features and lessons from the experiences of previous and ongoing livelihoods projects in Cambodia, good practice lessons from other regions (in particular, South Asia), as well as analytical research done by the Consultative Group to Assist the Poor (CGAP)10. Experiences with credit and savings oriented SHGs in the urban Phnom Penh context have not been broadly successful. The project would facilitate linkages to existing financial institutions in Phnom Penh but would not establish such groups or provide additional direct monetary support to groups. Such activities would be limited to the rural Siem Reap Province.

(d) Some of the key elements of a successful SHG strategy that have been incorporated into the project design are: (a) targeting the poorest households, as several existing efforts at SHG formation in Siem Reap Province have left the ‘ultra-poor’ out of their coverage; (b) self-determined/voluntary group membership; (c) group-determined savings and intra-lending norms which are informed by sharing of experience across groups, rather than imposed from outside; (d) promoting homogeneity in group membership as non-homogenous groups (e.g., where better off families are combined with very poor ones) tend to be prone to elite capture; (e) predominantly women exclusive membership would be encouraged as international experience suggests that thrift groups are better managed when they are composed predominantly or entirely by women; (f) initial intra-lending only with own savings; (g) emphasis on a growing savings corpus (i.e., continuous contribution even after receipt of project funds) as several models in Cambodia involve ‘one-off’ or finite ‘revolving funds’ which by definition only grow at the rate of accumulation of interest earnings; (h) encourage bank MFI linkages from the very start; (i) link with commercial

10 Independent policy and research center dedicated to advancing financial access for the world's poor. Provides market intelligence, promotes standards, develops innovative solutions and offers advisory services to governments, microfinance providers, donors and investors.

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credit; (j) support services (like training/micro-planning) included alongside group formation so as to promote good use of funds (for productive purposes) as well as to reduce vulnerability to household and community level shocks/risks (like health, floods, natural disasters, etc.) that could wipe out accumulated asset bases of the poor and in the process threaten the viability of the group; and (k) emphasis on promoting the creation of federated higher order structures without which the true power of aggregation cannot be exploited and higher order needs cannot be addressed. All of these best practices have been bundled in one package in this project, which makes this a pioneering effort in the context of Cambodia.

(e) Migration affects the collective activity of poor and vulnerable households. Labor migration in Cambodia, both short- and long-term, remains an integral part of many rural households’ livelihood strategy. In particular resource poor households depend on transfers or (daily) wage income earned abroad by household members for their survival, as returns to labor are generally higher in neighboring countries. They need to maximize the return to their labor. This impacts the functioning of SHGs where several members are absent from the village for extended periods (months or years), and where absentee members do not repay their loans, or simply reduce the motivation of groups due to the smaller number of members. The rules and regulations for SHGs will reflect this situation, providing for stronger oversight, delayed payments, or other acceptable means in order to not exclude migrating households while ensuring the integrity of the savings and credit activities.

(f) Increasing the wage income of migrating households, and/or reducing their transaction costs would also help to address poverty. Skills training could potentially offer migrant household members that remain in country, to be employed in better-paid jobs, or to offer an alternative for potential migrant workers to stay in-country despite the higher wages they may earn outside of the country. Vocational training would enhance the prospects of higher paying jobs for both those that remain in the country and those that migrate. In particular, in areas in high demand it would reduce the pressure for long-term migration and increase family income and savings, adding to strengthened resilience of poor and vulnerable households.

IV. IMPLEMENTATION A. Institutional and Implementation Arrangements

33. Steering Committee (SC). The project would be supervised by a Steering Committee chaired by a Secretary of State of the Ministry of Interior (MoI). This Committee would provide the strategic direction and guidance in the management and operations of the project, and would include the Ministry of Economy and Finance (MEF) and members from other relevant government institutions involved in rural and urban development programs. Other institutions and individuals from academia, NGOs and the private sector would also be invited to provide advice to the committee.

34. Project Coordination Office (PCO). A Project Coordination Office, within the General Secretariat of MoI will be responsible, inter alia, for the overall Project coordination, management, procurement including support for procurement activities at the Commune/Sangkat level, financial

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management including support for financial management activities undertaken by the Sub-Management Teams, environmental and social safeguards management with the oversight of the Inter-ministerial Resettlement Committee (IRC)/MEF on any resettlement matters and support to the relevant Sub-Management Teams, and overall monitoring and evaluation of the Project including support for monitoring and evaluation activities undertaken by the Sub-Management Teams. The PCO secretariat would be headed by a Project Director and composed of a team of specialists with expertise in project operations, procurement, financial management, social and environmental safeguards, and M&E activities. The PCO would draw on technical expertise of designated staff, non-permanent PCO members, from relevant government institutions and development partners.

35. Due to the predominance of agriculture and fishery-based livelihoods in rural areas, the MAFF would be a key implementing agency. It would provide the beneficiaries with: (a) technical assistance to their planning, assessment and implementation of investment plans that would be financed under the project; and (b) extension services (through the Farmers Field School approach) focusing on production, processing and marketing aspects. The Safeguards Working Group of the National Committee for the Sub-National Democratic Development (NCDD) at MoI would be responsible for the review and confirmation of the livelihood and infrastructure environmental screening undertaken at the commune/sangkat and provincial levels based on the Environment Watch-list.

Figure 1: Project Implementation Arrangements

Steering Committee Chaired by MOI Secretary of State (with members from relevant government institutions responsible for rural

and urban area development)

PCO Headed by and Located in MOI

(with members from SRPA, PPCH, MEF, MAFF, MRD,

MoLVT, MOC, MoWA, NCDD, WB and other donors)

MAFF

SMT 1 Siem Reap

NGOs Private Sector

Contracted

PAS • Academic • DP • Multisector • NGOs

SMT 2 PPC

DF DWG

D/KF DWG (Khan)

CPs/CAHEWs

CC, CLF, AC, SHG

Rural Poor HHs

Sangkat Council

Urban Poor HHs

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36. Sub-Management Team (SMT). One SMT within each at the Siem Reap Provincial Administration and Phnom Penh Capital Hall would be established to lead the project’s local operations. The SMTs would be supported by the respective local governments, district/Khan and commune/sangkat level professionals and facilitators. The SMTs would engage experienced NGOs, public, and/or private sector agencies to provide support for social mobilization and group formation activities, livelihood improvement, capacity building, value chain linkage, skill-building and employment support services in areas where government services cannot fulfill that function. They would work alongside the responsible government institutions and ensure appropriate knowledge transfer.

37. In line with the government policy to strengthen roles and responsibilities of the District Administration, a team of full-time District/Khan Facilitators (DFs) would be contracted by each SMT to facilitate and supervise implementation of village and commune level activities, including social and environmental safeguards. The DFs would also directly support the District and Commune/Sangkat Councils, and in the case of Siem Reap, coordinate and support the work of Community Professionals (CP) and provide the link between the district and commune level administrative structures with the provincial and national-level expertise available for support.

38. Commune/Sangkat Councils. These councils would perform a variety of roles with respect to the different sub-components of the project. The Councils would identify and validate IDPoor households as potential beneficiaries, assist in awareness building and the mobilization of beneficiary households, review and validate SHG seed funding and CLIF funding proposals (in the case of Component 1), encourage application for skills building and employment support services, and perform their mandated responsibilities with respect to community infrastructure procurement, including the monitoring of the implementation of social and environmental safeguards to be financed by the project according to the commune planning process and CSF PIM.

39. At the village/community level, for Component 1, the project with the support of contracted NGOs and District Facilitators would identify a cadre of CPs to be developed as village facilitators, book keepers, community development officers, skilled extension workers, etc. These CPs would be identified and selected from within the communities where SHGs are operating to assist the project in social mobilization, group formation, strengthening and sustainability of SHGs. Specific roles for community workers will include Commune Extension Worker (CEW), Village Extension Worker (VEW), Village Animal Health Worker (VAHW), and where needed, other livelihood development facilitators, including social and environmental safeguards that are able to respond to the needs of beneficiaries. CPs would work closely with Commune Councils to assist them in their functions, drawing on capacity building and technical support from DFs and SMT staff as needed. As there would be no self-help group activities in Component 2, only District Facilitators would be contracted to provide support to Sangkat Councils to facilitate project activities. Community Professionals would not be needed.

40. The community infrastructure sub-components would utilize the CSF PIM. This manual requires the identification of community investment priorities through a participatory process led by the Commune/Sangkat’s Budget and Planning Committee, Chief, and Council. Once the investment activity is defined, the district and provincial technical staff would help in the

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design of the sub-project including incorporation of the social and environmental safeguards requirements. Upon approval at the provincial level, the Commune/Sangkat Council manages the procurement and supervision of a contractor, drawing on district and provincial technical services as needed. Rather than the Provincial Treasury releasing payments to contractors, the Provincial SMTs would release the payments following a similar financial transaction and approval procedure based on the NCDD’s Finance Manual of December 2008 to ensure consistency with existing provincial procedures.

B. Results Monitoring and Evaluation 41. Monitoring and Evaluation (M&E) Design. The M&E system would be designed to monitor the project’s physical progress, financial progress, results and impact. These would be assessed regularly using the agreed targets and indicators provided in the Annual Work Plan and Budget (AWPB), financial accounting system, and results framework. The M&E system would also include conduct of in-depth studies and audits of selected project processes, the results of which would be used for performance improvement and knowledge sharing. These will be identified by the PCOS as needed at the time of the preparation of the AWPB. The impact of the project and the achievement of the PDO would also be assessed through an internal impact study that would be informed by the baseline and completion surveys. Special arrangements will be made for monitoring of compliance with respect to an Environmental and Social Safeguard Framework, as described below in VI. Appraisal Summary E. Social and F. Environment and as detailed in Annex 3: Implementation Arrangements.

42. Institutional Arrangements and Utilization of M&E. The PCO would have the overall responsibility for M&E. It would also be responsible for oversight and reporting on the implementation of the ESMF, by MoI. The M&E team would be led by a Coordinator and supported by one M&E Officer based in each of the SMTs. While MOI would have to contract international M&E consultant, the PCO would draw on an experienced evaluation unit in NCDDS, including for training and technical guidance, as needed. Field staff from the implementing agencies including Community Professionals, NGOs, service providers and local governments would be required to provide specific reports and data. The terms of reference of field staff and the institutional arrangements between the PCO and its implementation partners would specify the M&E responsibilities. The collection, storage, display and reporting of data would be organized using an MIS application for use with hand-held devices that would be specifically designed for the project and would be drawing on the experiences of other similar projects. The surveys and impact evaluation would be undertaken by the National Institute of Statistics and contracted impact evaluation specialists in collaboration with NCDD. Annual M&E workshops would provide a forum to share results and implementation experiences, and will help to ensure sustainability.

C. Sustainability 43. The sustainability of SHGs emerged as a significant risk following the completion of the LEAP pilot in September 2012. This is largely the result of the limited time and interventions to sufficiently build the capacity of the SHGs to make them viable and independent. A performance assessment and certification approach would be adopted under the project to determine the SHGs’ organizational development level and identify additional capacity building interventions to address the gaps. The commune level federations together with Commune Councils would also provide

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adequate, technical and some financial support to SHGs. The federations’ continuing activities would be sustained through membership dues paid by individual SHGs and from the CLIF grant being revolved to support SHG activities. Linkages to MFIs would also help to sustain SHGs through the provision of financing and technical assistance. 44. Activities aimed at strengthening access to markets would be sustained through improved producer connections through value chains which would allow them to continue to benefit from increased productivity and income. Individuals who have received training, counseling and job placement support would continue to benefit from their enhanced skills, higher earning jobs and better career opportunities.

45. Small-scale infrastructure would be sustained through a combination of Commune/Sangkat Council Fund investments (financed through annual allocations) and, in the case of Component 1, individual household and producer group’s financing and support. Beneficiaries/users of community based infrastructure such as water supply systems and irrigation schemes would be trained to undertake collective operation and maintenance of the infrastructure as well as generate funds/users’ fees for routine repair and maintenance. Infrastructure that are connected to national, provincial/municipality or utility networks such as wastewater drainage, water supply and electricity, would be maintained by the relevant agencies.

V. KEY RISKS AND MITIGATION MEASURES A. Overall Risk Rating and Explanation of Key Risks

Table 2: Risk Ratings Summary Table

Risk Categories Rating 1. Political and governance Substantial 2. Macroeconomic Moderate 3. Sector strategies and policies Moderate 4. Technical design of project Substantial 5. Institutional capacity for implementation and sustainability Substantial 6. Fiduciary Substantial 7. Environment and social Substantial 8. Stakeholder Substantial 9. Other

Overall Substantial B. Overall Key Risks Rating Explanation

46. The project risks are rated as substantial. Political events, in particular the Commune/Sangkat elections (2017) and the National elections (2018), might increase project implementation risks. There are substantial fiduciary risks. And, while the project design builds on the implementation experience of the rural pilot, the proposed urban livelihood activities are new and untested in the Cambodia context.

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47. The LEAP pilot has tested and found effective the institutional mechanisms and methodology for delivering assistance in the rural areas of Siem Reap Province. The overall project design is still considered relevant and replicable in the target communes but with some enhancements based on the experience and lessons learned under the pilot. The inclusion of urban communities into the project, however, would require the design of unique interventions to suit the urban context. As such the provision of vocational and job-related training would be most relevant, rather than agricultural training, financial and capacity building support to SHGs. Planning and implementation of small-scale infrastructure projects will follow the CSF PIM. The 2009 CSF PIM is used in all government-funded projects under the Commune/Sangkat Fund allocations and procedures are consistent with WB policies, which will reduce implementation risks on that sub-component.

48. For Component 2, the Phnom Penh Capital Hall’s capacity to implement the project is considered significant given its experience in working with several UN agencies and NGOs in addressing urban poverty. It also has a dedicated Urban Poor Development Office, and a program for supporting urban poor communities that are important to facilitate project activities. The coordination however between and among the implementing agencies may cause some challenges. Capacity building in project management and technical aspects would be part of the project activities as well as during Bank implementation and technical support missions. Strong monitoring and supervision would accompany implementation, ensuring compliance with fiduciary procedures and safeguards requirements. Strong participatory processes are applied in all project planning and implementation activities, in particular at local level.

49. Beyond the substantial risk identified for national-level political and governance issues, there are other risks that are specific to working in areas in Phnom Penh Capital where people may have been displaced due to urban development activities. There may also be criticism of the choice of target areas, beneficiaries, types of support and other issues either related or entirely unrelated to the project. To manage these risks, a proactive approach to portfolio implementation is envisaged to address and respond to potential challenges, criticism, and issues that stakeholders might raise. The project also includes a communication strategy for the Phnom Penh Capital, Siem Reap Province and commune/sangkat levels as well as a feedback handling mechanism to help ensure that the implementing agencies monitor and respond in a timely manner to views that are expressed by stakeholders on the project. The Bank would also use this mechanism as a means of reviewing the types of feedback received and discussing these with government counterparts as needed. A facilitated project launch workshop would be organized by the IAs to foster effective communication with a broad range of stakeholders on how the project intends to achieve its objectives.

VI. APPRAISAL SUMMARY A. Economic and Financial Analysis

50. The project’s economic benefits would derive from a combination of credit and income generating interventions that are supported through Components 1 and 2, particularly activities under Sub-Components 1.1 and 2.1, as well as community infrastructure investments such as irrigation, water supply, drainage and roads. The proposed investments are expected to benefit some 20,000 rural poor households (or about 80,000

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individuals) in 47 communes in 9 districts of Siem Reap Province, and some 5,000 urban poor households (or about 20,000 individuals) in 13 Sangkats in 11 Khans in Phnom Penh Capital. As infrastructure investments benefit all household members, the percentage of male and female beneficiaries is expected to be about 50/50. As for training activities in SHGs and producer groups, it is expected that at least 60 percent of prospective beneficiaries would be women. This would be the case as the vast majority of SHG members would be women (93% of SHG members were women in the pilot phase) and most of the training would be directed to the members of the SHGs. Producer Group training is expected to have broader male/female participation. Overall, the majority of all project beneficiaries would be IDPoor 1 and 2.

51. An ex-ante financial analysis has been conducted to examine the benefits that could be achieved by intensifying production and adopting better basic technology. The analysis is based on data collected for the same or similar agriculture production systems as planned under the project. Data from the TSSD Project and the 2013 data from the Bank’s “Cambodian Agriculture in Transition” study indicate increased/improved gross margins when switching production technology, with increases in gross margins which is particularly significant in vegetable production. The studies show that for most crops in small-scale farms, switching from a traditional to a more modern production system increases gross margins by 100 to 300 percent, in particular when changes in the production technology are accompanied by improvements in the supporting infrastructure especially irrigation.

52. For investments as envisaged under Sub-Components 1.3 and 2.2, the increased and improved availability of community infrastructure such as irrigation justifies the investments. The “Cambodian Agriculture in Transition” study calculated that a small-scale irrigation sub-project has a financial rate of return of 30 to 40 percent. In livestock production, gross margins heavily depend on mortality rates, which can be improved by animal health services such as vaccinations. Improvements in employability and employment, and increasing wage incomes from better-paid jobs would have financial benefits for participants that would justify the public investment in skills development and vocational training. The average costs to the project/government per participant is about US$1,300, which is expected to translate over and beyond the duration of the project to considerably higher financial benefits for participants and their families.

53. Like other community driven development operations, a detailed ex-ante economic benefit analysis of the entire project is not possible. Instead, the support to the business investment plans of groups and individual households would include preparation of simple cost-benefit estimates of potential rural livelihood interventions using well-informed assumptions of estimated cost and revenue streams, calculating gross margins, basic cost-benefit ratios, and where applicable internal rates of return.

B. Technical

54. The project would not introduce any new or sophisticated technology but would build on existing knowledge and tested farming system improvements or off-farm employment and income possibilities. Technical and managerial support to beneficiaries is delivered by experienced service providers, from the government, private sector and NGOs. Although the envisaged multi-disciplinary nature of beneficiary support is not yet deeply rooted in government

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approaches, the implementation structures and the involved expertise from the government and the private sector would ensure smooth implementation. The experiences from the pilot and the TSSD Project had identified technical implementation problems and appropriate measures have been included in the design.

C. Financial Management 55. A financial management (FM) assessment in line with OP/BP 10.00 was conducted including an examination of funds flow to decentralized levels, capacity building, external audit, financial reporting, technical assistance support during implementation and other FM arrangements. The assessment concluded that all the implementing entities have acceptable financial arrangements to implement the project subject to satisfactory implementation of some risk mitigating measures. The overall FM risk is assessed as high because of the decentralized nature and involvement of communes/sangkats as well as communities at the sub-national level which have weaker capacity including FM. The main risks are associated with: (a) limited experience of the accounting and finance staff of the Phnom Penh Capital Hall and MAFF in World Bank-funded operations, (b) lack of experience in FM and human resources at commune/sangkats and communities; (c) community grants and high number of small contracts for sub-projects implemented by Communes/Sangkats; and (d) insufficient time dedicated by the FM counterpart staff to handle the FM functions due to other responsibilities and tasks. The key measures that would be adopted under the project are: (a) incorporation of supplementary FM guidelines in the Project Implementation Manual (PIM) and Community Operations Manual (COM) and detailing of the payment processes and service standards; (b) provision of hands-on support by FM consultants to the national and sub-national level; (c) adoption of the accounting software by all implementing agencies; (d) appointment of qualified and adequate number of FM counterpart staff; and (e) conduct of risk-based internal audits of the project by the MOI’s Internal Audit Department. The residual FM risk after mitigating measures is substantial.

56. The project would follow established financial management arrangements laid out in the SOP’s financial management manual for the national level and follow the NCDD’s financial management manual procedures for the sub-national level. To take into account the decentralized authority and capacity of communes/sangkats, the Commune/Sangkat Councils would monitor the performance of beneficiary groups (SHGs, producer groups, agricultural cooperatives, etc.) and certify payment requests for SMTs’ processing and payment directly to beneficiary groups’ bank accounts. This would streamline funds flow management and provide the commune/sangkats with delegated authority. Financing of seed grants and Community Livelihood Investment Fund (CLIF) grants to SHGs and commune level federations, respectively, for on-lending to its respective members will be based on the COM, including the selection of Community Professionals, and training in management of those grants. The project would also be required to submit a consolidated Interim Unaudited Financial Report every semester and have its annual financial statements audited by an independent external auditing firm with a Terms of Reference acceptable to the Bank. FM support missions would be carried out twice per year.

D. Procurement

57. Procurement under the project will be governed by World Bank Procurement Guidelines: Procurement of Goods, Works, Non-consulting Services under IBRD Loans and IDA

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Credits and Grants by World Bank Borrowers and Consultant Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers dated January 2011, revised July 2014. Government Standard Operating Procedures and Procurement Manual issued under Sub-Decree 74 (dated May 22, 2012) would apply for procurement under national competitive bidding (NCB) subject to the improvement that would be included in the NCB annex to the project Credit Agreement. The Project Implementation Manual (PIM), which makes reference to all applicable procurement guidelines and manuals including the Commune/Sangkat Fund PIM for small-scale infrastructure, has been developed for this project. The procurement arrangements and responsibilities of each procurement level are elaborated in Annex 3.

58. The procurement risk is assessed as substantial. Key procurement risks emanate from: (a) the PCO Secretariat has limited number of experienced staff and oversight experience on a large number of sub-projects, (b) possible delays in procurement start up due to slow technical inputs, (c) governance-associated risks, including possible misrepresentation of staffing/documents in the bids/proposals of bidders. Risk mitigation measures have been discussed and agreed with government and detailed in an action plan in Annex 3.

59. In the event that Component 4 may finance goods, works and/or consultant services required for an eligible crisis or emergency, the applicable procurement methods and procedures under the relevant provisions of the World Bank’s procurement guidelines would be further detailed in the Emergency Response Manual.

E. Social (including Safeguards)

60. The MoI conducted a comprehensive social review during earlier project design as well as continued community consultations where the project would be implemented. The review focused on the analysis of social context, diversity and gender; assessment of the stakeholders and relevant formal and informal institutions in the project areas; and associated risks from and to the project. The UPC needs assessment also assessed the unique context and challenges faced in poor communities in Phnom Penh Capital. These assessments have provided valuable information in the design of the project, including the preparation of the Resettlement Policy Framework.

61. The project would operate in a very diverse social context with rich social capital which requires flexibility and continuing learning. The social review also highlighted the heterogeneity of stakeholders and their interests and perceptions about the project. The consultations and stakeholder analysis indicated broad support from the different stakeholders. The IDPoor and vulnerable beneficiary households have reconfirmed their urgent need for better access to basic infrastructure, markets, education and health services. Civil society organizations (CSOs) and NGOs are also generally in favor of the project. Most of them have experience in building community groups’ capacity, conflict resolution, project monitoring and supervision, and may be tapped as service providers.

62. The MoI has identified key areas where the project is expected to contribute positively to social development outcomes, including: (a) social inclusion - the proposed project interventions and approaches are expected to reduce the current situation of marginalization and

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social exclusion by providing better access to services, markets, and relationships with other groups; (b) empowerment - the project would operate on a demand-driven approach to infrastructure and services. With the strengthening of the communes’ abilities to articulate demand and hold institutions accountable for providing services and technical assistance as well as improved transparency and capacity building at different levels, the project is expected to strengthen the empowerment processes in the target areas; and (c) gender equity - the provision of basic infrastructure services, particularly in the areas of water and sanitation, is expected to have direct and positive benefits particularly for women’s working hours and reduction of hard work. The project is also expected to enhance women’s participation in community decision-making. 63. Indigenous Peoples (OP/BP 4.10). The 2009 National Policy on Indigenous Peoples’ Rights recognizes 24 ethnic indigenous groups in Cambodia. These groups are primarily located in the six northeastern upland provinces of Rattanakiri, Mondulkiri, Stung Treng, Kratie, Preah Vihear, and Kampong Thom. As part of project preparation, a screening exercise was conducted in the proposed target area in Siem Reap where the project will be implemented to determine the presence of Indigenous Peoples. There are only two communes in Siem Reap identified as having ethnic indigenous minorities, the Kuoy indigenous group, located in Srae Noy and Khun Ream communes. Neither of these are project target communes. In the case of Phnom Penh, recent indigenous peoples data which is under preparation by the Cambodia Indigenous Peoples Organization indicated that there are individual indigenous families present in one village in the project area, the Pors indigenous group, located in Kean Klaing village, Preak Leap Sangkat, and Chrouy Changvar Khan. However, these families are mixed with other Khmer families, they do not possess a collective attachment to the project area and they do not have any customary cultural, economic, social, or political institutions. For these reasons, the Bank’s policy on indigenous peoples (OP 4.10) is not triggered. However, the Project will use participatory community informed consultation to ensure access of poor and vulnerable households located in the project area.

64. Involuntary Resettlement (OP/BP 4.12). The Project is embedded in a community driven development model whereby local communities/groups of households make decisions regarding the types of interventions they seek. For example, small pieces of land may need to be acquired for the benefit of communities for income generating purposes such as small grain storage, cattle sheds, as well as basic public infrastructure such as the upgrading of roads, water supply, irrigation and drainage systems. For these reasons OP/BP 4.12 Involuntary Resettlement policy has been triggered. Based on previous experience with small-scale infrastructure investments through the Commune/Sangkat Fund, it is highly unlikely, but not impossible that compensation for land may be required. Landowners usually contribute their land via voluntary donation. While there are several natural protected areas in Siem Reap, impacts are expected to be minor and site specific, and can be mitigated through the application of Technical Environmental Guidelines included in the ESMF. Activities for protected areas management and access restrictions will not be supported under the project.

65. To mitigate the potential risks associated with land acquisition, and land donation, and in compliance with this safeguard policy, a Resettlement Policy Framework (RPF) has been developed which has been cleared by the Ministry of Economy and Finance’s Inter-ministerial Resettlement Committee. The Project will primarily make use of the land acquisition provisions in the CSF PIM for small-scale infrastructure. If there is a situation in which the CSF

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PIM is not utilized, the RPF includes provisions for the preparation of Resettlement Action Plans and other associated documents and procedures required for land acquisition, including a compensation framework.

66. The Cambodian Government and the World Bank have agreed to implement the safeguards requirements under the project in accordance with the relevant Cambodian laws and regulations and the World Bank’s environmental and social safeguard policies in the design and implementation of this project, including OP/BP 4.12.

67. Grievance Redress Mechanism (GRM). In addition to the grievance redress mechanisms directly with World Bank and regarding safeguard procedures, there would be a project-internal mechanism that allows for complaints by beneficiaries and other stakeholders, and which ensures the transparent handling by designated project staff. The GRM and its procedures is elaborated in PIM and COM.

68. Gender. The project would contribute to increasing gender equity and support the five-year Strategic Plan for Gender Equality and the Empowerment of Women in Cambodia, Neary Ratanak IV (2014-2018), including women’s social and economic empowerment through targeting and inclusion of women in local institutions; strengthening of their vocational skills, development of their micro-, small- and medium-scale enterprises; and improvement of infrastructure which they identify to improve the environment for improved livelihoods in project areas. As noted in the Economic Analysis section above, more than 60% of the beneficiaries of SHG and producer group training would be women, and it is expected that a vast majority of the SHG members would be women, as was the case during the pilot phase when 93% of SHG members were women. The project would provide intensive training for SHGs, including financial literacy and guidance in effective savings and household investment. The individual and collective voice of women would be strengthened through the formation and strengthening of SHGs, producer groups and agricultural cooperatives, as well as through the enhanced participation of women in commune/sangkat decision-making processes and around project investments. Skills building and job placement activities would also enhance the wage earning capacity of women and their ability to acquire more satisfying jobs. Project results would be gender-disaggregated to allow monitoring and ensure a gender-sensitive response to emerging issues.

F. Environment (including Safeguards)

69. The proposed project is expected to generate overall positive environmental and social impacts given its objective to increase livelihood opportunities for poor rural and urban households. Based on the experience from the LEAP pilot, SHG/producer activities would likely include livestock raising, vegetable farming, rice cultivation, fishery, rice mill, home business (e.g., home-made bakery), fertilizer shop, etc. Investments in productive infrastructure such as storage or small warehouses, community wells or simple on-farm irrigation schemes, household water supply improvements, sewerage and/or latrines, could also be made by SHGs, producer groups and agricultural cooperatives. The environmental impacts from these activities are considered nuisance and can be in the form of air/odor quality from rice mill and livestock raising; soil erosion; usage of pesticides, fertilizers, and/or chemical substances; and pollution of surface water and ground water. These livelihood activities would be supported under Component 1 except the pesticide-based agriculture. Organic farming and non-pesticide based agriculture

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would be promoted under the project in line with MAFF policy. In addition, public, small-scale infrastructure would be financed such as water supply, sewerage system and road maintenance. No major road construction activities would be supported. Typical impacts of small-scale civil works include limited land clearance, temporary erosion, sedimentation of water bodies, dust and waste generation, etc. The small-scale community infrastructure and agricultural and livelihood activities are expected to have minimal environmental and social impacts during civil works implementation. 70. There would be no investments in agriculture, livestock and fisheries activities in the Phnom Penh Capital under Component 2. The livelihood focus would be on skills development and employment support. Public, small-scale infrastructure such as drainage systems, as well as water supply and sanitation, street lighting and community road/footpath maintenance would also be financed under this component. The impacts of these small-scale infrastructure are considered minor, temporary, site specific and are manageable through project design and construction management techniques in the ESMF. The relevant social and environmental aspects of the CSF PIM are integrated into the ESMF. The nature of LEAP’s livelihood and infrastructure investment activities are similar to the Commune/Sangkat Fund small-scale investment project. No significant or irreversible impacts are foreseen as a result of project activities. The project is assessed as Environmental Assessment category “B”. The environmental safeguard policies on Environmental Assessment (OP/BP 4.01), Natural Habitats (OP/BP 4.04), Physical Cultural Resources (OP/BP 4.11), and International Waterways OP/BP 7.50 are triggered. 71. Environmental Assessment (OP/BP 4.01). The project would finance small-scale infrastructure on a demand-driven basis, including small-scale irrigation systems, water supply systems and road maintenance, etc. The exact sites and number of small-scale infrastructure are yet to be determined. Due to the demand driven nature of the project and as specific sites and exact activities are not known at this stage, an Environmental and Social Management Framework (ESMF) has been prepared to screen, assess, and mitigate environmental impacts related to proposed sub-projects that may involve investments in productive activities and construction or rehabilitation of small-scale infrastructure. The ESMF lays out the environment and social risk assessment requirements for the activities that would be financed, the corresponding project actions to mitigate risks and potential negative impacts on local people and the environment, and the institutional arrangements to execute the ESMF during project implementation. The ESMF also describes the project’s complaints mechanism and contains monitoring provisions. The Commune/Sangkat Fund has been providing grants to every commune/sangkat in the country since 2003 for activities such as road improvements, water supply, irrigation, and other activities that are consistent with the activities to be financed under the project. The last update of the CSF PIM was in 2009 and this version would be adopted for the implementation of community infrastructure activities under the project. In addition, the ESMF and RPF include measures for identifying and managing the environmental and social risks of other project-financed activities and those that may not be included in the CSF PIM, in particular, small-scale livelihood investments by individual households, SHGs, producer groups and agricultural cooperatives. MoI would be responsible for ensuring that the provisions of the ESMF are followed and complied with during implementation.

72. The Safeguards Working Group of the NCDD at MoI would review the screening of livelihood and infrastructure activities done at the commune/sangkat and provincial level. These include those proposed activities that would be located in forest, wetland areas and protected

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areas which are sensitive to impact on the environment as per Environment Watch-list. The Working Group would also confirm the potential environmental impacts and the requirement to conduct an environmental analysis.

73. Natural Habitat (OP/BP 4.04). The small-scale community infrastructure and agricultural and livelihood activities may impact on the natural habitat such as wetlands, Tonle Sap Lake or forest patches. These are considered minor and site specific and can be mitigated through the application of Technical Environmental Guidelines included in the ESMF. An environmental screening checklist and guidelines for the animal raising and fish farming sub-projects as part of the ESMF was prepared to prevent project activities from impacting on Tonle Sap Lake, any known natural habitats, wet land and potential protected area. The ESMF also includes screening procedure to: (a) determine whether the proposed facilities are in a critical or non-critical natural habitat; and (b) avoid any significant conversion or degradation of any critical natural habitat.

74. Physical Cultural Resources (OP/BP 4.11). The project would finance infrastructure investments in Siem Reap, a province of major cultural heritage. These small civil works may impact on unknown, physical cultural resources as defined by OP/BP 4.11. A chance find procedure, which includes the form of cultural and religious sites, of physical cultural resources was integrated as part of the ESMF. All civil work contracts will include the following chance find procedure clause:

If the Contractor discovers archeological sites, historical sites, remains and objects, including graveyards and/or individual graves during the civil work, the Contractor shall:

Stop the construction activities in the area of the chance find; Delineate the discovered site or area; Secure the site to prevent any damage or loss of removable objects; and Notify "any cultural heritage" found to the government implementing agency or the

relevant provincial Culture Department as early as possible. 75. Civil work may resume only after permission is given from the implementing agency or the provincial Culture Department.

76. International Waterways OP/BP 7.50. The project activities may extract water that indirectly links to the tributaries of an international waterway, the Mekong River. As such, the policy is triggered. However, it is unlikely that Project activities will adversely impact the quantity and quality of international waterways, as the proposed support under Component 1 will only finance farm level rehabilitation of existing, small-scale irrigation schemes and gravity-fed water systems. More specifically, the proposed project would support rehabilitating field ditch systems and establishing third tier on-farm distribution canals for approximately 2,000 ha to allow more efficient on-farm water distribution from the existing primary and secondary irrigation canals. The water sources for the existing irrigation schemes in the 47 targeted communes are mostly from small natural tributaries in the highland area. The on-farm irrigation work to be done under the project will not increase the abstraction from these water sources. Rather, the work supported by the project will allow for more efficient distribution of water within the irrigation scheme. As the project activities both in Phnom Penh and Siem Reap will not adversely change the quality or quantity of water flows of the Mekong River, an exception as allowed under para 7(a) of OP 7.50 was granted from the requirement of riparian country notification.

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77. The project would build on established mechanisms for implementation and monitoring of infrastructure sub-projects with regard to potential negative impacts. Access to finance by the SHGs, producer groups and agricultural cooperatives would also be subject to commitment by beneficiaries not to engage in practices that harm the environment. Budget has been allocated for further capacity development and mentoring of sub-national level staff and NGOs who would facilitate the preparation of sub-project proposals on safeguards implementation and environmental protection awareness.

78. All the safeguards instruments used on the project were consulted with stakeholders during safeguards and technical support missions from July 11 to 15, 2016, and July 18 to 29, 2016, and during consultation workshops conducted in August 2016 (in Siem Reap and Phnom Penh) and at a civil society consultation meetings conducted prior to appraisal on November 11, 2016, and post appraisal, conducted on December 28, 2016 in Phnom Penh and December 29, 2016 in Siem Reap. The final safeguards instruments were initially disclosed locally in Khmer and in English on September 29, 2016 and subsequently re-disclosed on January 10, 2017 at the Ministry of Interior, Phnom Penh Capital Hall and Siem Reap Provincial Administration offices and on the internet at www.interior.org.kh. Specific website link to the ESMF is at http://www.interior.gov.kh/interior_f/320 and the RPF is at http://www.interior.gov.kh/interior_f/321. On the same dates, the final English and Khmer safeguards instruments were also initially disclosed, and re-disclosed at the Bank via the World Bank’s external website. Consultations would continue during implementation.

G. World Bank Grievance Redress

79. Communities and individuals who believe that they are adversely affected by a World Bank-supported project may submit complaints to existing project-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project-affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/GRS. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org.

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Annex 1: Results Framework and Monitoring

Country: Cambodia

Project Name: KH - Livelihood Enhancement and Association of the Poor Project (LEAP) (P153591)

Results Framework

Project Development Objectives

PDO Statement

The Project Development Objectives (PDO) are to improve access of poor and vulnerable households in selected communities to financial services, opportunities for generating income, and small-scale infrastructure, and to provide immediate and effective response in case of an eligible crisis or emergency.

These results are at Project Level

Project Development Objective Indicators

Cumulative Target Values

Indicator Name Baseline YR1 YR2 YR3 YR4 YR5 End Target

Direct project beneficiaries (Number) - (Core) 0.00 10000.00 30000.00 50000.00 75000.00 100000.00 100000.00

Female beneficiaries (Percentage - Sub-Type: Supplemental) - (Core)

0.00 50.00 50.00 50.00 50.00 50.00 50.00

Self-Help Groups (SHGs) self-reliance rating is moderately satisfactory or better, (percentage) (Percentage)

0.00 0.00 5.00 20.00 60.00 80.00 80.00

Participants receiving skills development training with new or improved employment or increased income (percentage)

0.00 0.00 10.00 30.00 60.00 80.00 80.00

Beneficiaries that feel project investments reflected their needs (percentage) (Percentage) - (Core)

0.00 0.00 25.00 50.00 75.00 90.00 90.00

Beneficiaries that feel project investment reflected their needs - male (number) (Number - Sub-Type: Supplemental) - (Core)

0.00 0.00 3750.00 12500.00 28125.00 45000.00 45000.00

Beneficiaries that feel project investment reflected their needs - female (number) (Number - Sub-Type: Supplemental) - (Core)

0.00 0.00 3750.00 12500.00 28125.00 45000.00 45000.00

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Total beneficiaries - male (number) (Number - Sub-Type: Supplemental) - (Core)

0.00 5000.00 15000.00 25000.00 37500.00 50000.00 50000.00

Total beneficiaries - female (number) (Number - Sub-Type: Supplemental) - (Core)

0.00 5000.00 15000.00 25000.00 37500.00 50000.00 50000.00

Intermediate Results Indicators

Cumulative Target Values

Indicator Name Baseline YR1 YR2 YR3 YR4 YR5 End Target

SHGs supported (Number) (Number)

0.00 0.00 400.00 900.00 1250.00 1250.00 1250.00

Total amount of savings mobilized (US$) (Amount (USD)) 0.00 0.00 100000.00 300000.00 500000.00 700000.00 700000.00

Client days of training provided (number) (Number) - (Core)

0.00 0.00 50000.00 200000.00 350000.00 500000.00 500000.00

Client days of training provided - Female (number) (Number - Sub-Type: Breakdown) - (Core)

0.00 0.00 27500.00 110000.00 192500.00 275000.00 275000.00

Agricultural producers receiving training who report improved returns to labor (Percentage)

0.00 0.00 40.00 60.00 75.00 75.00 75.00

Participants receiving skills development training (Number) 0.00 0.00 300.00 1200.00 1700.00 2100.00 2100.00

Completed community-identified small-scale infrastructure sub-projects assessed as good quality in technical audit (Percentage)

0.00 0.00 80.00 80.00 80.00 80.00 80.00

Sub-projects with post-project community engagement or O&M arrangements (%) (Percentage) - (Core)

0.00 0.00 50.00 75.00 80.00 85.00 85.00

Sub-projects that are expected to have a mechanism for post-completion operation (Number - Sub-Type: Supplemental) - (Core)

0.00 0.00 20.00 60.00 96.00 102.00 102.00

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Indicator Description11

Project Development Objective Indicators

Indicator Name Description (indicator definition etc.) Frequency Data Source / Methodology

Responsibility for Data Collection

Direct project beneficiaries Direct beneficiaries are people or groups who directly derive benefits from an intervention (i.e., children who benefit from an immunization program; families that have a new piped water connection). Please note that this indicator requires supplemental information. Supplemental Value: Female beneficiaries (percentage). Based on the assessment and definition of direct project beneficiaries, specify what proportion of the direct project beneficiaries are female. This indicator is calculated as a percentage.

Semi-Annually Project Progress Reports Project Coordination Office (PCO) and Sub-Management Teams (SMTs)

Female beneficiaries Based on the assessment and definition of direct project beneficiaries, specify what percentage of the beneficiaries are female.

Semi-Annually Project Progress Reports PCO and SMTs

Self-Help Groups (SHGs) self-reliance rating is moderately satisfactory or better, (percentage)

Percentage of beneficiary SHGs whose self-reliance rating (based on a participatory rating process) is moderately satisfactory or better.

Annually SHG Participatory Self-Reliance Assessment Report

PCO and SMTs (with assistance of Development Facilitators or DFs)

Participants receiving skills development training with new or improved employment or increased income (percentage)

Percentage of skills development participants with new or improved employment or increased income in their area of skills development within a year of training completion.

Semi-Annually Project Progress Report PCO and SMTs

11 11 M&E data will be collected in a gender sensitive manner and system records will show data disaggregated by gender, and by project area.

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Beneficiaries that feel project investments reflected their needs (percentage)

As the primary measure of citizen engagement in the project, this will measure the extent to which decisions about community infrastructure investments reflect community preferences which are elicited through a participatory needs assessment process.

Annually Project Progress Reports (Mini-surveys in selected Communes, cross-checked with CIPs)

PCO and SMTs

Intermediate Results Indicators

Indicator Name Description (indicator definition etc.) Frequency Data Source / Methodology

Responsibility for Data Collection

SHGs supported (Number) Number SHGs (new and existing) supported under the project in Siem Reap.


Total amount of savings mobilized (US$)

Amount of savings generated by all SHGs assisted by the project.

Annually Project Progress Report PCO and SMTs

Client days of training provided (number)

This indicator measures the number of client days of training provided i.e. the number of clients who completed training multiplied by the duration of training expressed in days.


Client days of training provided - Female (number)

No description provided. Semi-Annually Project Progress Reports PCO and SMTs

Agricultural producers receiving training who report improved returns to labor

Percentage of producers that have applied the agricultural technology and skills acquired in project-funded training and have reported improved returns to labor.


Participants receiving skills development training

Number of individual training participants. Semi-Annually Project Progress Report PCO and SMTs

Completed community-identified small-scale infrastructure sub-projects assessed as good quality in technical audits

Percentage of project-funded small-scale infrastructure sub-projects that are completed and in good quality as per the technical audit rating in the CSF PIM.


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Sub-projects with post-project community engagement or O&M arrangements (%)

This indicator is likely to be most relevant for CDD-type projects and measures the existence of specific arrangements created under the project to ensure owner ship by project beneficiaries.

Semi-Annually Project Progress Report PCO and SMT

Sub-projects that are expected to have a mechanism for post-completion operation

No description provided. Semi-Annually Project Progress Reports PCO and SMT

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Annex 2: Detailed Project Description

CAMBODIA: Livelihood Enhancement and Association of the Poor Project (LEAP) (P153591) Project Development Objective (PDO) 1. The project development objectives are to improve access of poor and vulnerable households in selected communities to financial services, opportunities for generating income, and small-scale infrastructure, and to provide immediate and effective response in case of an eligible crisis or emergency.

2. This would be achieved through the: (a) establishment of self-help groups (SHGs), savings and credit groups, producer groups, agricultural cooperatives and other peoples groups/organizations; (b) provision of capacity building and training to beneficiaries to improve their income generation opportunities; (c) establishment of private sector linkages to improve and expand market opportunities; and (d) identification and provision of community-based social and economic infrastructure to help improve livelihood and economic productivity.

3. The main indicators to measure the achievement of the PDO are:

(a) Number of direct project beneficiaries, percentage of whom are women. (b) Percentage of self-help groups rated as self-reliant. (c) Percentage of participants receiving skills development training with new or improved

employment or increased income; (d) Percentage of beneficiaries that feel community infrastructure investments reflected

their needs, (disaggregated by gender); and (e) Number of beneficiaries (disaggregated by gender).

Project Components 4. The project would be implemented in two distinct contextual and institutional environments of the mostly rural Siem Reap Province and the rapidly urbanizing Phnom Penh Capital. The core project activities would be separated into rural and urban components, each would have a specific geographical scope, and implementation arrangements would be customized to each unique setting while maintaining consistency and continuity across the project.

5. Component 1 is the rural component and would be implemented by the Siem Reap Provincial Administration. It would cover 47 communes (including 6 communes included in the LEAP pilot) that are not receiving support from the ongoing Tonle Sap Poverty Reduction and Smallholder Development (TSSD) Project. Component 2 is the urban component and would be implemented by the Phnom Penh Capital in 13 Sangkats (urban equivalent of communes). Component 3 would support overall project management and administration activities such as subnational coordination, intergovernmental coordination, safeguards and fiduciary management and supervision, and monitoring and evaluation. Component 4 is part of IDA’s support to an immediate response mechanism (IRM) in Cambodia. It has an initial allocation of zero dollars However, if there would be a formal request from the government in the event of an eligible emergency in the future, this component would allow the reallocation of a portion of the undisbursed project balance for recovery and reconstruction purposes.

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Component 1: Improving Livelihoods for Rural Poor and Vulnerable Households (US$14.48 million)

6. This component aims to address the needs of the IDPoor and vulnerable households in the 47 communes in Siem Reap Province through a demand driven approach. Activities would include: (a) conduct of organizational and capacity building support to SHGs, producer groups and agricultural cooperatives; (b) provision of seed grants for their livelihood sub-projects; (c) conduct of market studies; (d) extension of business support services; (e) skills development training; (f) employment support services and (g) provision of productive infrastructure to improve livelihood and increase productivity. As the predominant sources of income for these rural poor households are from agriculture, livestock and fisheries, the project would leverage the technical support of the Ministry of Agriculture, Fisheries and Forestry (MAFF) and other technical service providers. Drawing from the experience of the LEAP pilot, this component would be implemented by the Siem Reap Provincial Administration (SRPA) through the sub-components described below.

7. Sub-Component 1.1: Building and Strengthening Institutions of the Rural Poor (US$8.27 million). This would support the formation and strengthening of self-governed and well-functioning institutions of the poor and enabling their members to engage jointly or individually in productive activities. SHGs would be assisted initially in thrift and credit activities with the aim of potentially aggregating upward to form commune-level federations and cooperative associations such as producer groups or agriculture cooperatives. The services of non-government organizations (NGOs) or other private service providers would complement government efforts to motivate and mobilize beneficiaries for group formation, ensuring leadership and supervision, and provide guidance and capacity building towards sustainability. Support staff would be based in communes to facilitate group formation, awareness raising and training, and operations of credit and savings groups. Support would also be provided, on a demand-driven basis, to the formation and institutional capacity building of informal producer groups or formal agricultural cooperatives. These groups, and individual farmers, would be assisted and strengthened through facilitation of market linkages, technical assistance and capacity building for producers to increase access to assets, skills, technology and markets in key value chains.

Self-Help Group Mobilization, Formation and Training 8. NGO service providers would be engaged to undertake group formation and capacity building of SHGs and other beneficiary groups (producer groups, agricultural cooperatives, etc.). They would cover geographically contiguous clusters of approximately 10 communes and would be assisted by District Facilitators (DFs) and Commune Councils and community-based resource persons like Community Professionals (CPs) and Commune Extension Workers (CEWs).

9. The DFs would be contracted by the Siem Reap Sub-Management Team (SMT) for each of the target districts to facilitate and support project activities. They would coordinate with NGO service providers and respective District Administrations and Commune Councils to leverage their engagement. The Commune Councils would play a central role in the identification of IDPoor households and formation of SHGs, while village- and community-level CPs and CEWs who have experience in social mobilization would be identified and trained to help as resource persons for the SHGs and other livelihood groups.

Formation of Village Associations and Commune Federations

10. The project would encourage SHGs and their members to form federations at the commune level. The formalization of federations would enable them to engage with other public

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and private technical and financial service providers at a higher level. Producer groups and agriculture cooperatives are recognized institutions that receive public support and can be effective partners for private sector businesses. The project would engage the services of NGOs, Department of Agriculture Cooperatives and other public and private service providers to conduct training and capacity building activities to these federations.

Access to Finance and Facilitation of Linkage with Formal Financial Sectors

11. The SHGs and federations of beneficiary groups would be the entry points to improve the access of the poor to financial services. The savings and credit functions of these groups would help them to gain experience in small-scale investment, develop credit history for poor households and help change the risk perception by formal financial institutions. Under the project, the beneficiary households would be capacitated to use their initial savings as the basis for SHG formation and intra-group lending. For SHGs that have achieved threshold performance and have developed Micro Investment Plans (MIPs) for member households through a participatory process, the project would complement the SHG savings with seed grants on demand driven basis. The grant size would be determined by the number of members and is expected to be US$1,000-1,500 per SHG, at 10-15 members per SHG. The Commune Councils would help in the initial screening of funding proposals and identify any risks that would need to be considered by the SMT in making decisions. The CPs and CEWs would also assist the Commune Councils in screening proposals/MIPs from SHGs.

12. Where commune level federations (CLFs) are established and choose to perform an on-lending role, the project would provide them with Community Livelihood Investment Fund (CLIF) grants of up to US$37,000 per federation. The grant funds would be for on-lending to the federation’s member groups that are not qualified to access credit from microfinance institutions (MFIs) and other formal banking institutions for their planned investments. The project would also link the federations with financial institutions to access additional/bigger credit funds and other financial services.

Improved Access to Markets

13. Poor rural households in Siem Reap are dependent on production systems which are constrained by access to finance but also by insufficient/lack of information, resources, infrastructure and market access. In this regard, the project would support training and market linkage services for the beneficiary groups on improving production efficiency; productivity enhancement; access to technology extension, logistics infrastructure and information services; and building pro-poor market systems for small and marginal producers. The MAFF, primarily through the provincial and district-level staff, would be engaged and supported by the SMT to provide demand-driven support services in response to the needs of the beneficiary groups and as required in their MIPs and CLIF proposals. An annual work program for MAFF would be agreed with the SMT each year based on demand and subject to updating as needed. At the field level, the project would support the engagement of CEWs and Commune Animal Health Workers (CAHWs). If and as required, other subject matter specialists from, and outside MAFF, would be tapped to provide technical and managerial support.

14. Sub-Component 1.2: Enhancing Skills and Employment Opportunities for the Rural Poor (US$1.96 million). Wage employment is often associated with more stable income and consumption patterns for the household due to higher predictability of income. However, to maximize the potential benefits of wage employment locally, workers require information about the labor market and opportunities for employment, as well as better, employable skills and knowledge that are tailored to meet labor market demand. In Siem Reap Province, distance to

45

training centers, cost of tuition fees, limited information about job opportunities and skill requirements, and distance to employment centers are key obstacles in finding better employment. These challenges would be addressed by the project to take advantage of employment opportunities in view of the growing tourism industry and associated developments in the province.

15. This sub-component would provide a complementary livelihood pathway to self-help group, value-chain and market access support under Sub-component 1.1 by investing in the development of beneficiary skills (particularly unemployed youth and women from poor households) and the ability to obtain new or improved wage employment. Activities would include: (a) local labor market surveys and training provider assessment; (b) beneficiary selection; (c) employability training and career counseling; (d) voucher provision and skills training; (e) job placement and employment support.

Local Labor Market Surveys and Training Provider Assessment

16. A needs assessment would take place during the first six months of implementation as the first activity undertaken by a Human Resource Development Service Provider (HRDSP), contracted by MOI to help determine local labor market trends and employer demand for specific occupations and/or technical skills in areas near target communes. The HRDSP would also assess the quality of local training providers, to determine a menu of available training options. The project would identify and negotiate agreements with training providers to offer a package of complementary activities, such as sensitization of wage employment opportunities, provision of soft skills, counseling, job search training, and job matching services. Preference would be given to training providers that are recognized by the Ministry of Labor and Vocational Training (MoLVT) or other government agencies, with proven track record and good performance as per employers’ hiring record, and which can provide their trainees with certified diplomas upon completion of the programs. In the public domain, the project may offer access to training options to supplement the ADB-funded TVETSDP Project led by MoLVT, particularly their enterprise- and center-based training options.

17. The Project would systematically engage with potential employers, job matching agencies/NGOs, and the Ministry of Labor’s public employment services platform to customize training offerings. To the extent possible, both training and employment opportunities that are as close as possible to the home of the participants would be identified.

Beneficiary Selection

18. The provision of skills development support aims to reach a total of approximately 1350 individuals in Siem Reap. Activities would be targeted to individuals from IDPoor 1 and 2 households who are not currently enrolled in formal or informal education or training. In addition, non-IDPoor individuals may benefit from the program if they meet a pre-specified set of criteria which would be aimed to reflect the IDPoor approach. Self-selection would be the primary method for candidate identification, but Commune Councils, SHGs and CLFs, would also be invited to identify and encourage potential participants, particularly unemployed women and youth, within their communities. Given distance constraints, the program would focus on communities that are in close proximity to both training and employment opportunities.

19. A screening/intake committee in each commune would be established to be in charge of the intake process. The committee would comprise of DFs, members of the Commune Councils, SHGs, and CLFs. Their responsibility would include IDPoor identification/validation; screening of potential participants who are not IDPoor; assessment of applicants’ eligibility,

46

individual skills level of educational attainment and desired training. If the number of qualified individuals exceeds the maximum number of Project participants per commune per year, there must be an equal number of male and female participants, and the selection process will be done on a random, lottery basis so as to ensure fairness. Priority would be given to IDPoor 1, followed by IDPoor 2 and then individuals who do not have IDPoor identification, but who meet IDPoor qualification criteria.

20. The Human Resource Development Service Provider (HRDSP) will support the committees in completing the intake process and in undertaking most of the activities under this sub-component.

Employability Training and Career Counseling

21. Upon acceptance into the skills building activity of the Project, individuals will participate in an induction and skills development planning workshop organized by the HRDSP. The workshop will include the following elements: (a) introduction to the objectives and support provided under the “Enhancing Skills and Employment Opportunities” sub-component; (b) information on local labor markets, career development training and preparation skills development plans; (c) provision of training in “soft,” employability skills such as how to find a job, the expectations of employers, etc. Upon completion of their skills development plans, participants will identify training programs of interest from a list of training institutions provided by the Project. Participants will also be invited to nominate additional training institutions if they are not already on the list and these will be screened by the HRDSP to see if they meet the qualification criteria. If they meet the criteria, and agree to provide the support required by the Project, they will be added to the list.

22. Opportunities for one-on-one career counseling will also be built into the workshop format and continue after the workshops on a demand-driven basis. Individuals who successfully complete this activity and prepare complete skills development plans will proceed to the next step of the process.

Voucher Provision and Skills Training

23. The HRDSP will review all of the skills development plans and training providers identified by the participants to recommend a training package for each participant. The training to be offered would mainly be classified as level 1 (CQF 1) under the Cambodia Qualification Framework (CQF), short-course, technical vocational education training (TVET) of 2 weeks to 4 months, as well as more limited support for longer-term (up to 12 months) courses at CQF Level 2. Consultations during project preparation identified interest in a range of skills and occupations such as motorbike repair, sewing, and hospitality services. The types of training to be supported under the project would remain flexible so that participants could propose subject areas that may not be typical vocational training topics, but which reflect labor market demand, and for which there is an acceptable training provider. Training vouchers for tuition would be up to $300 for a short course and up to $600 for a long course. The Project would also provide allowances for travel, food and accommodation, if needed, to facilitate beneficiary participation.

24. Upon participant confirmation of the training package to be supported by the Project, an agreement would be signed between the Project and the Participants and between the Project and the Training Provider. Each party would agree to undertake various responsibilities under the agreements. Participants would be provided with vouchers that they can submit to the training providers that could then be redeemed with the Project to initiate a payment.

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Job Placement and Employment Support

25. One critical responsibility of the training providers is that they assist the participants in identifying and obtaining jobs upon completion of their training. The HRDSP will monitor training provider support in this respect and urge further support as needed. The HRDSP will also monitor participant acquisition of employment and conduct tracer studies to determine whether participants remain in their new positions and the impact employment is having on their livelihoods. Commune Councils, SHGs and CLFs would also follow-up with trainees to encourage their continued attendance, provide possible logistical/transportation support, and monitor individual progress in the completion of coursework and post training/employment status.

26. Sub-Component 1.3: Improving Basic Services and Community Infrastructure for the Rural Poor (US$4.25 million). This would facilitate provision of small-scale economic infrastructure sub-projects which respond to the priority needs of poor households in target communes and contribute to their income generating potential. Responses to the needs to increase productivity, resilience and adapt to natural and economic shocks include access to reliable and affordable water supply and sanitation services, storage or small warehouses, small-scale irrigation schemes, community access roads, and better on-farm water management practices.

27. The identification of priority needs in poor communities would follow the existing, annual participatory identification and planning process resulting in a Commune Investment Plan (CIP), and thus empowering the intended main beneficiaries to advocate for their investment priorities. The project would support the active participation of IDPoor households in the identification and planning process for CIP proposals that specifically address their needs for economic infrastructure. The allocation of funds to finance prioritized investment proposals would be calculated based on the number of IDPoor households in a commune. The average allocation per commune would be approximately US$85,000 for the duration of the project. After an initial year of planning, the amount would be available for expenditures over 3 or 4 years, depending upon the cost of sub-projects chosen for financing by the Sangkats. A commune can combine project funds with funds from other sources when making investments. Up to 188 sub-projects would be implemented over the course of the Project period if all of the 47 communes were to implement 4 sub-projects each.

28. Implementation of infrastructure investments would follow the procedures outlined in the Commune/Sangkat Fund Project Implementation Manual (CSF PIM). Once a sub-project is selected for financing, the CSF PIM procedures, except for payment mechanism, are initiated, beginning with a safeguard screening and the formation of a Project Management Committee. The Commune Councils lead the process, including procurement and management of a contractor, and with support from the provincial and district administrations’ Technical Support Unit. To supplement the capacity of the provincial, district technical teams, an infrastructure specialist would be contracted as part of the SMT to supervise the infrastructure investment process, provide technical assistance and monitoring, and support the Commune Councils in contracts supervision and management.

Component 2: Improving Livelihoods for Urban Poor and Vulnerable Households (US$3.72 million)

29. This component aims to address the needs of the IDPoor and vulnerable households in 13 Sangkats in Phnom Penh Capital through a demand driven approach. Activities would include: (a) skills development training; (b) employment support services; and (c) provision of productive infrastructure to improve livelihoods and increase productivity. This component would be implemented by the Phnom Penh Capital Hall through the following sub-components.

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30. Sub-Component 2.1: Enhancing Skills and Employment Opportunities for the Urban Poor (US$1.69 million). Wage employment opportunities in urban areas of Phnom Penh constitute an even more significant part of urban poor’s livelihoods than in rural areas. And while there are new job growth areas in Phnom Penh such as construction and the garment industry, these types of positions are often unreliable, casual labor with low wage rates and limited potential for advancement. To tap the potential of stable and well-paid wage employment, workers require, as in the rural areas, reliable information about the labor market and opportunities for employment, as well as better, employable skills and knowledge that are tailored to meet labor market demand.

31. This sub-component would provide investment in the development of beneficiary skills (particularly unemployed youth and women from poor households) and the ability to obtain new or improved wage employment, i.e. taking advantage of the opportunities offered by small, medium and larger enterprises present in Phnom Penh. As in the rural sub-component 1.2, activities would include: (a) local labor market surveys and training provider assessment; (b) beneficiary selection; (c) employability training and career counseling; (d) voucher provision and skills training; (e) job placement and employment support.

32. The Project would address these challenges in urban areas in a very similar manner as for rural areas described in sub-component 1.2. It is expected that the project will employ only one Human Resource Development Service Provider (HRDSP) for both Phnom Penh and Siem Reap Province. A Human Resource Development Specialist would be hired to work in each SMT to coordinate the work of the HRDSP in each location and to facilitate the roles of the districts and communes.

33. Sub-Component 2.2: Improving Basic Services and Community Infrastructure for the Urban Poor (US$2.03 million). This would follow the same process as in Sub-Component 1.3, and use the CSF PIM. To ensure that the sub-projects would most benefit the poor and vulnerable households such as the UPCs, the community planning meetings would include both IDPoor households and representatives of the UPCs. The types of infrastructure facilities that would be funded include, but are not limited to, drainage system, community road/footpath, water supply and sanitation system, and street lighting. These community infrastructure investments have been identified in the UPC needs assessment and are expected to increase the beneficiaries’ productivity, resilience and ability to adapt to natural and economic shocks.

34. The identification of priority needs in poor communities would follow the existing, annual participatory identification and planning process resulting in a Sangkat Investment Plan (SIP), and thus empowering the intended main beneficiaries to advocate for their investment priorities. The project, mainly through District Facilitators, would support the active participation of IDPoor and UPC households in the identification and planning process for SIP proposals that specifically address their needs for economic infrastructure. The allocation of funds to finance prioritized investment proposals would be calculated based on the number of IDPoor households in a commune. Due to the higher cost of construction and infrastructure in Phnom Penh, an average amount of US$130,000 is allocated per Sangkat for the duration of the project. After an initial year of planning, the amount would be available for expenditures over 3 or 4 years, depending upon the cost of sub-projects chosen for financing by the Sangkats. A Sangkat can combine project funds with funds from other sources when making investments. Up to 52 sub-projects would be implemented over the course of the Project period if each of the 13 Sangkats were to implement 4 sub-projects each.

35. Implementation of infrastructure investments would follow the procedures outlined in the Commune/Sangkat Fund Project Implementation manual (CSF PIM). Once a sub-

49

project is selected for financing, the CSF PIM procedures, except for payment mechanism, are followed, beginning with a safeguard screening and the formation of a Project Management Committee. The Sangkat Councils lead the process, including procurement and management of a contractor, and with support from the city and khan administrations’ Technical Support Unit. To supplement the capacity of the city and khan technical teams, an infrastructure specialist would be contracted as part of the SMT to supervise the infrastructure investment process, provide technical assistance and monitoring, and support the Sangkat Councils in contracts supervision and management.

Component 3: Project Management (US$3.97 million) 36. This component would support the overall implementation, supervision and coordination of the project at the national, provincial, district/Khan, commune/sangkat, and village/community levels, including: (a) social and environmental safeguard risk management; (b) procurement planning and contracts management; (c) financial management, disbursement and audit; and (d) monitoring, evaluation and communication.

37. Activities would include: (a) establishment and operation of the Project Coordination Office (PCO) under the General Secretariat of the Ministry of Interior (MoI); (b) establishment and operation of respective Sub-Management Teams (SMT) at the Siem Reap Provincial Administration and Phnom Penh Capital Hall; (c) engagement of core group of specialists at the PCO and SMT levels to provide technical support and advice for the various components; (d) engagement of district/khan and commune/sangkat level facilitators to provide direct support to activities at the community level; and (e) establishment and operation of the project’s procurement, financial management, and monitoring and evaluation (M&E) systems.

38. The effective implementation of the project would require the early establishment of an M&E system. In particular, the conduct of the baseline survey and the setting-up of a dedicated management information system (MIS) would be one of priority activities at project start-up.

Component 4: Contingent Emergency Response (US$0.00 million)

39. This component, with an initial allocation of zero, is part of IDA’s support to an immediate response mechanism (IRM) in Cambodia. The IRM allows the reallocation of a portion of undisbursed balance from the project for recovery and reconstruction support following a formal government request in the event of an eligible emergency.

40. With IDA’s support, the government is developing its Emergency Response Manual (ERM) for all projects in Cambodia which make use of this mechanism. The manual would detail eligible uses, financial management, procurement, safeguards and other implementation arrangements. The preparation and acceptance of the manual is a condition prior to disbursement of any funds reallocated to this component. In the event that the IRM is activated, the results framework would be amended as needed, through a formal restructuring to reflect the provision of immediate and effective response to the eligible crisis or emergency.

Targeting and Selection

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41. The key beneficiaries of the project would be the IDPoor12 and vulnerable households in the target 47 communes and 13 Sangkats in Siem Reap Province and Phnom Penh Capital, respectively. Tables 1 and 2 and Figures 1 and 2, below, provide maps and profiles of the targeted Districts/Khans, Communes and Sangkats. 42. The beneficiaries in Siem Reap Province would come from the 47 communes that did not receive support from the TSSD Project. There are 42 communes that did not receive any TSSD support and will be fully covered by LEAP. In addition, there are 5 communes that did not receive full coverage by TSSD, but which have above average poverty levels and will have respective villages included in LEAP. Table 1, below, provides a list of all target districts and communes in Siem Reap, including the number of target beneficiaries. Figure 1, below, is a map of the target area, identifying the location of target communes. 43. The beneficiaries in Phnom Penh Capital would come from the 13 Sangkats, with selection criteria as follows: (a) for the eight Khan where IDPoor data are available, the Sangkats with the largest total number of IDPoor households were selected, one Sangkat each from the six Khan with 10 or fewer Sangkats, and two Sangkats each from the two Khan with more than 10 Sangkats; and (b) in the four Khan for which IDPoor data are not available due to their central/downtown location, one Sangkat per Khan, which has the highest total number of urban poor communities (UPC) households, as identified by Phnom Penh Capital Hall13, was selected. In the absence of IDPoor data for the entire city, combined use of IDPoor and UPC criteria allows the inclusion of both peri-urban and central-urban Khan. The modest beneficiary target for Phnom Penh is intended to allow the piloting of project activities in the urban context, with the potential of scaling-up as the project progresses. Table 2, below, provides a list of all target Khans and Sangkats in Phnom Penh, including the number of target beneficiaries. Figure 2, below, is a map of the target area, identifying the location of target Sangkats.

12 Since IDPoor surveys are only conducted every three years, commune and Sangkat leaders would be asked to identify potential household beneficiaries that may have become poor since the last survey due to economic factors (commodity price drops), natural calamities (drought, floods, destroyed crops) or other shocks based on the IDPoor questionnaire. Those identified as new IDPoor households would be given a proxy means test based on the IDPoor methodology to validate their eligibility. 13 No urban poor community has been identified in Khan Prampi Makara, one of these four Khans. Hence, only three Sangkats were finally selected for the project (Annex 2, Table 2)

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Table 1: Target Communes and Beneficiaries for Component 1 (Siem Reap Province)

District (2015) Communes

Identified and Proposed

(2015)

Villages Identified

and Proposed

(2015)

Total HHs

(2015)

Poor Level 1 (2015) Poor Level 2 (2015) Total Poor Level 1&2 (HH)

Total Poor Level

1&2 (%)

Total Target

HH People % HH People % No. of Communes

No. of Villages

HH IDPoor Level 1&2

(No.)

Angkor Thum

Chob Ta Trav 5 828 79 343 9.5% 111 477 13.4% 190 22.9% 1 5 190

Leang Dai 9 2256 264 1085 11.7% 399 1664 17.7% 663 29.4% 1 9 663

Peak Snaeng 6 1203 182 719 15.1% 192 812 16.0% 374 31.1% 1 6 374

Svay Chek 7 1417 76 289 5.4% 259 1116 18.3% 335 23.6% 1 6 335

4/4 27 5704 601 2436 10.5% 961 4069 16.8% 1562 27.4% 4 26 1562

Chi Kraeng

Anlong Samnar 16 2753 75 252 2.7% 347 1555 12.6% 422 15.3% 1 16 422

Chi Kraeng 14 1976 152 665 7.7% 369 1597 18.7% 521 26.4% 1 14 521

Kampong Kdei 16 2243 131 489 5.8% 281 1239 12.5% 412 18.4% 1 16 412

Kouk Thlok Kraom 18 3187 426 1842 13.4% 339 1630 10.6% 765 24.0% 1 18 765

Spean Tnaot 15 2205 257 1089 11.7% 460 2037 20.9% 717 32.5% 1 15 717

5/12 152 29440 2482 10302 8.4% 3557 15618 12.1% 6039 20.5% 5 79 2837

Kralanh

Kampong Thkov 8 1153 20 93 1.7% 78 381 6.8% 98 8.5% 1 8 98

Sambuor 8 1529 63 243 4.1% 140 558 9.2% 203 13.3% 1 8 203

2/10 99 13901 376 1395 2.7% 1064 4342 7.7% 1440 10.4% 2 16 301

Puok

Sasar Sdam 14 2720 72 259 2.6% 211 827 7.8% 283 10.4% 1 14 283

Doun Kaev 13 2807 210 780 7.5% 332 1448 11.8% 542 19.3% 1 13 542

Kdei Run 7 1092 83 314 7.6% 197 817 18.0% 280 25.6% 1 7 280

Kaev Poar 8 1409 55 231 3.9% 134 557 9.5% 189 13.4% 1 8 189

Khnat 12 2160 208 820 9.6% 202 878 9.4% 410 19.0% 1 12 410

Lvea 12 2362 163 666 6.9% 385 1712 16.3% 548 23.2% 1 12 548

Mukh Paen 6 1206 91 339 7.5% 222 907 18.4% 313 26.0% 1 6 313

Pou Treay 2 419 52 183 12.4% 25 116 6.0% 77 18.4% 1 2 77

Prey Chruk 12 1883 62 240 3.3% 131 598 7.0% 193 10.2% 1 12 193

Reul 14 3017 416 1742 13.8% 748 3286 24.8% 1164 38.6% 1 14 1164

Samraong Yea 6 1278 42 176 3.3% 109 451 8.5% 151 11.8% 1 6 151

Trei Nhoar 10 2005 247 1002 12.3% 429 1832 21.4% 676 33.7% 1 10 676

Yeang 5 1002 98 346 9.8% 175 728 17.5% 273 27.2% 1 5 273

13/14 132 26140 1868 7343 7.1% 3383 14518 12.9% 5251 20.1% 13 121 5099

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Prasat Bakong

Bakong 6 1744 32 142 1.8% 147 590 8.4% 179 10.3% 1 6 179

Ballangk 8 1381 65 257 4.7% 116 459 8.4% 181 13.1% 1 8 181

Kampong Phluk 3 731 22 101 3.0% 59 235 8.1% 81 11.1% 1 3 81

Kantreang 8 2011 47 164 2.3% 84 334 4.2% 131 6.5% 1 8 131

Kandaek 10 2875 72 293 2.5% 218 920 7.6% 290 10.1% 1 10 290

Mean Chey 6 1220 59 243 4.8% 158 632 13.0% 217 17.8% 1 6 217

Roluos 7 1630 152 670 9.3% 141 643 8.7% 293 18.0% 1 7 293

Trapeang Thum 9 1883 145 586 7.7% 130 575 6.9% 275 14.6% 1 9 275

8/8 57 13475 594 2456 4.4% 1053 4388 7.8% 1647 12.2% 8 57 1647

Siem Reap

Svay Dangkum 6 2566 107 510 4.2% 242 1120 9.4% 349 13.6% 1 6 349

Chong Khnies 7 1320 141 709 10.7% 121 621 9.2% 262 19.8% 1 7 262

Sangkat Ampil 10 1612 37 110 2.3% 194 796 12.0% 231 14.3% 1 10 231

Sangkat Krabei Riel 12 1734 109 438 6.3% 211 824 12.2% 320 18.5% 1 12 320

Sangkat Tuek Vil 10 2452 185 836 7.5% 143 638 5.8% 328 13.4% 1 10 328

5/13 94 32937 1570 7146 4.8% 2898 13771 8.8% 4468 13.6% 5 45 1490

Soutr Nikom

Dan Run 13 2640 180 723 6.8% 312 1347 11.8% 492 18.6% 1 13 492

Kampong Khleang 10 2122 515 2287 24.3% 340 1585 16.0% 855 40.3% 1 10 855

2/10 113 22460 2275 9781 10.1% 3036 13474 13.5% 5311 23.6% 2 23 1347

Srei Snam

Chrouy Neang Nguon 7 1483 67 280 4.5% 181 782 12.2% 248 16.7% 1 2 25

Klang Hay 8 714 38 133 5.3% 65 236 9.1% 103 14.4% 1 2 12

Tram Sasar 7 1280 62 276 4.8% 147 717 11.5% 209 16.3% 1 1 29

Slaeng Spean 14 2313 113 477 4.9% 292 1242 12.6% 405 17.5% 1 7 224

4/6 46 7560 351 1494 4.6% 912 3957 12.1% 1263 16.7% 4 12 290

Svay Leu

Boeng Mealea 8 1258 78 320 6.2% 77 344 6.1% 155 12.3% 1 2 27

Khnang Phnum 8 937 63 260 6.7% 143 638 15.3% 206 22.0% 1 2 52

Svay Leu 11 2183 153 636 7.0% 219 982 10.0% 372 17.0% 1 5 183

Ta Siem 6 1315 105 490 8.0% 122 533 9.3% 227 17.3% 1 2 52

4/5 35 7326 469 2016 6.4% 722 3260 9.9% 1191 16.3% 4 11 314

9/12

47/100 916 190008 12561 52855 6.6% 21070 92107 11.1% 33631 17.7% 47 390 14887

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Figure 1: Map of Target Communes for Component 1 (Siem Reap Province)

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Table 2: Target Sangkats for Component 2 (Phnom Penh Capital)

Khan Sangkat Village/Krom HHs

IDPoor1 IDPoor2 Total Poor Level 1 &2 HH

Total Poor Level 1&2

HH %

Urban Poor Communities, 2015 Target

HH People % HH People % UPC (No.)

UPC Identified

(No.)

Houses (No.)

Family (No.)

People (No.) % Location

code

Identified

village

(No.)

HH ID

Poor 1&2

Houses

UPC

Family

UPC

Chamkar Morn

Tumnob Tuek 5 2110 6 6 474 495 1948 23.5% 2, 6 2 474 495

1/12 95 24015 9 6 635 681 2727 32.3% 2,3,6 2 474 495

Daun Penh

Srah Chak 24 4089 11 11 658 663 2867 16.2% 1,2,5,6 8 658 663

1/11 134 15976 17 11 838 901 3874 5.6% 1,2,5,6,9 8 658 663

Prampi Makara 0/8 66 13388

Tuol Kork

Boeng Kak Ti Muoy 14 2398 6 6 730 829 2512 34.6% 1,2,3 5 730 829

1/10 143 26658 19 6 2307 2828 10684 10.6% 1,2,3 5 730 829

Dangkor

Dangkor 6 4445 61 255 1.4% 172 794 3.9% 233 5.2% 5 5 487 518 2402 11.7% 3,5,6,11 6 233 487 518

Prey Veng 9 1360 300 1451 22.1% 339 1662 24.9% 639 47.0% 2 2 418 452 2022 33.2% 4,6 9 639 418 452

2/13 87 17854 1100 4585 6.2% 1389 6089 7.8% 2489 13.9% 9 7 977 1047 4832 5.9% 3,4,5,6,11 15 872 905 970

Mean Chey

Chak Angrae Leu 7 2935 156 724 5.3% 191 1065 6.5% 347 11.8% 6 6 702 742 3639 25.3% 2,4,5,11 7 347 702 742

1/7 59 30984 464 2230 1.5% 590 3237 1.9% 1054 3.4% 28 6 2118 2283 11147 7.4% 2,3,4,5,6,8,11 7 347 702 742

Russey Keo

Chrang Chamreas Ti Muoy 4 1807 191 846 10.6% 250 1266 13.8% 441 24.4% 5 5 217 313 1452 17.3% 2,4 4 441 217 313

1/7 30 18214 466 2118 2.6% 805 4988 4.4% 1271 7.0% 38 5 2065 2381 10904 13.1% 1,2,3,4,5,6,11 4 441 217 313

Sen Sok

Khmuong 13 4119 272 1727 6.6% 221 1416 5.4% 493 12.0% 7 7 1065 1080 4330 26.2% 2,3,6 13 493 1065 1080

1/6 47 23339 452 2511 1.9% 619 3190 2.7% 1071 4.6% 22 7 2569 2697 11685 11.6% 1,2,3,6,11 13 493 1065 1080

Por Sen Chey

Trapeang Krasang 13 3476 98 564 2.8% 97 610 2.8% 195 5.6% 9 9 1550 1702 6256 49.0% 6 13 195 1550 1702

Chaom Chau Pir 16 5900 29 124 0.5% 126 803 2.1% 155 2.6% 2 2 220 220 854 3.7% 6 12 155 220 220

2/13 162 36613 702 2801 1.9% 825 4197 2.3% 1527 4.2% 12 11 1858 2085 7483 5.7% 3,6 25 350 1770 1922

Chroy Changvar

Preak Leap 4 2617 119 556 4.5% 210 901 8.0% 329 12.6% 5 5 416 453 2006 17.3% 3,6,11 4 329 416 453

1/5 22 11766 338 1767 2.9% 1061 3618 9.0% 1399 11.9% 14 5 871 850 3597 7.2% 3,6,11 4 329 416 453

Preak Pnov

Kork Roka 18 3131 526 2004 16.8% 217 1027 6.9% 743 23.7% 10 10 1470 1498 5794 47.8% 2,3,6 18 743 1470 1498

1/5 59 10837 1001 3935 9.2% 760 3510 7.0% 1761 16.2% 10 10 1470 1498 5794 13.8% 2,3,6,11 18 743 1470 1498

Chbar Ampov

Chbar Ampov Ti Pir 6 4013 276 1498 6.9% 592 3314 14.8% 868 21.6% 6 6 412 636 2589 15.8% 4,6,10,11 6 868 412 636

1/8 49 26489 1707 8056 6.4% 2922 14378 11.0% 4629 17.5% 37 6 1754 2296 10269 8.7% 3,4,6,10,11 6 868 412 636

11/12 13/105 953 256133 6230 28003 2.4% 8971 43207 3.5% 15201 5.9% 215 80 17462 19547 82996 7.6% 107 4443 8819 9601

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Note: Location code of urban poor community Code 1. Community settled along railway Code 2. Community settled on public road Code 3. Community settled on canal &drainage Code 4. Community settled on river side Code 5. Community settled on public lake Code 6. Community settled on provided land by government Code 7. Community settled on temporary renting land by government Code 8. Community settled on temporary renting land (by private owner) Code 9. Community settled on roof top of the old building Code 10. Community settled on pagoda, crematorium and cemetery Code 11. Community settled on other locations – none of the above code Figure 2: Map of Target Sangkats for Component 2 (Phnom Penh Capital)

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Annex 3: Implementation Arrangements

CAMBODIA: Livelihood Enhancement and Association of the Poor Project (LEAP) (P153591) Project Administration Mechanisms 1. Maintaining a national level Steering Committee and Project Coordination Office, the project implementation follows Government principles of decentralization and de-concentration, assigning key functions of planning and implementation, including procurement activities, to sub-national levels. Based on the pilot phase, and adapted to the current institutional environment, project administration structures have been designed to reflect the dual rural and urban project components and implementation requirements.

Roles and Responsibilities 2. The organizational structure of the project would involve Government implementing agency oversight by a Project Coordination Office (PCO) located in the Ministry of Interior (MoI) under the General Secretariat of the MoI. Two Sub-Management Teams (SMTs) located at Siem Reap Province and at Phnom Penh Capital would be responsible for field-level implementation with the support of District/Khan and Commune/Sangkat level professionals and facilitators.

3. The SMTs would be supported by a group of resource NGOs who would be contracted to lead the core social mobilization efforts under the project. In addition, specialized NGOs, public, and private sector agencies would also be identified and contracted to provide respective support on the livelihood improvement, capacity building, value chain linkage, and skills development elements in areas where government services cannot fully fill that function. Where employed, they would work alongside the responsible government institutions and ensure appropriate knowledge transfer.

4. Steering Committee (SC). Strategic guidance for implementation would be provided by a Steering Committee (SC) chaired by a Secretary of State of the Ministry of Interior. The SC would provide oversight of project implementation and would ensure smooth inter-ministerial cooperation and coordination at national and sub-national levels. The Steering Committee would include the Ministry of Economy and Finance and members of other relevant government institutions involved in and supporting development in rural and urban areas. To ensure application of best practices and lessons-learned from across rural and urban development initiatives, the Steering Committee may invite and engage other institutions and individuals from academia, NGOs or private sector to act as advisors to the SC and the project.

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Figure 3.1: Project Implementation Arrangements

5. Project Coordination Office (PCO). Since the project aims to cover more than one province, the PCO at the national level under MoI would play an even more important role than defined during the pilot phase. The PCO would be headed by a Project Director, a senior staff from within MoI. Members would come from the national level ministries and institutions that have a stake in the project and its implementation activities. Members would include Siem Reap Provincial Administration, Phnom Penh Capital Hall (PPCH), Ministry of Economy and Finance (MEF), Ministry of Agriculture, Forestry and Fisheries (MAFF), Ministry of Rural Development (MRD), Ministry of Labor and Vocational Training (MoLVT), Ministry of Commerce (MoC), Ministry of Women’s Affairs (MoWA), National Committee for Sub-National Democratic Development (NCDD), World Bank, and other donors. Where members are not permanently assigned to the PCO, focal persons in the participating institutions would be nominated to ensure availability of technical expertise as needed.

Steering Committee Chaired by MOI Secretary of State (with members from relevant government institutions responsible

for rural and urban area development)

PCO Headed by and Located in MOI

(with members from SRPA, PPCH, MEF, MAFF, MRD,

MoLVT, MOC, MoWA, NCDD, WB and other donors)

MAFF

SMT 1 Siem Reap

NGOs Private Sector

Contracted

PAS • Academic • DP • Multisector • NGOs

SMT 2 PPC

DF DWG

D/KF DWG (Khan)

CPs/CAHEWs

CC, CLF, AC, SHG

Rural Poor HHs

Sangkat Council

Urban Poor HHs

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6. The PCO would be supported by a secretariat, which will be managed on a day-to-day basis by a Project Director who would head a permanent team supporting sub-national entities on technical and managerial issues. The PCO would work closely with relevant line ministries to ensure synergies and coherent planning and implementation. Assistance on in particular technical planning and assessment tasks would be provided by designated technical staff from concerned government institutions and development partners.

7. The main responsibilities of the PCO would include major procurement activities and financial management, the preparation of work plans, budgeting and funding requests, preparation and compilation of M&E reports, and regular contacts with the World Bank. The PCO would include a senior officer who would serve as the M&E coordinator for the project. The PCO and its activities would be supported by an operations consultant and other technical and managerial experts as required. The PCO would also act as Secretariat to the Steering Committee.

8. Project Advisory Services (PAS). Ensuring the best practices from across rural development interventions and experiences, project management should invite the services of agriculture, rural development, NGO partners, and MFIs for advisory functions as and when needed. To ensure the effective coordination and guidance, Project Advisory Services can be invited from representatives of those institutions to provide guidance during the implementation phase. The PAS should start as early as possible to advice during the project preparation phase. The Project Steering Committee and Project Coordination Office should access PAS whenever useful or necessary, or when called upon by the chair

9. Ministry of Agriculture, Forestry and Fisheries (MAFF). The specific importance of agriculture-based livelihoods particularly in rural villages and communes gives MAFF a special role in providing technical expertise and assistance for sub-national implementing institutions. MAFF has staff experience in implementing rural livelihood project activities under the TSSD project in Siem Reap with the same scope and rural provincial coverage. MAFF’s technical departments that would provide relevant services would include the Department of Agriculture Extension, the Department of Cooperative Promotion, and the Department of Agro-Industry; all under the General Directorate of Agriculture (GDA). While MAFF would be represented as a member of PCO, technical staff of relevant departments would be involved as technical resources for the provincial and district departments and for respective communities/group in the field.

10. Filed level planning and implementation support will be provided in Siem Reap Province. National and provincial MAFF staff would work in close cooperation and coordination with the Siem Reap SMT. Extension services, support for production and marketing would be provided to project communities. The terms of reference for those staff who provide services to LEAP communities would also include the responsibility for reporting on services to the Sub-Management M&E staff. MAFF as the main technical line ministry would be considered as the technical Project Implementing Agency (PIA).

11. National Committee for Sub-National Democratic Development (NCDD). The Safeguards Working Group of the NCDD at the Ministry of Interior (MoI) would play a major role in maintaining/updating a list of communes/Sangkats on an Environment Watch-List: communes/Sangkats that are located in wetland areas and other protected areas which are sensitive to impact on the environment. For sub-projects proposed in these communes/Sangkats, the

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Safeguards Working Group, would review the screening done at the commune and provincial level to confirm the potential for environmental impacts and the requirement to conduct an Environmental Analysis.

12. Sub-Management Teams (SMT). While the PCO would be the main coordination and management contact for national level stakeholders, the Project Implementation Agencies (PIA) at sub-national level would be the Siem Reap Provincial Administration and Phnom Penh Capital Hall. Provincial Sub-Management Teams (SMTs) would be established for Siem Reap Province in the Planning and Investment Division (PID) and for Phnom Penh Capital in the Urban Poor Community Development Unit. Project Managers would be appointed to head the SMTs in Siem Reap Province and at Phnom Penh Capital. The Sub-Management Teams would include technical support officers from relevant line departments drawn from various parts of the provincial administration. They would also include one M&E Officer. These staff would be organized into a technical unit and a finance and administration unit and support the district and commune level implementation structures as required.

13. The SMT would manage, supervise, and coordinate the implementation activities in Siem Reap Province and in Phnom Penh Capital City respectively. Their tasks would include ensuring effective and efficient implementation of project activities, the administrative and management support for district level and commune level institutions and the mobilization of technical expertise from provincial or national level to support community level implementation activities. The SMT M&E Officer would work with the technical unit staff and the finance and administration unit to prepare progress reports for submission to the PCO who would consolidate them twice yearly. The SMT can be assisted by a range of national, and if needed international consultants and technical advisors (TA) as required to supplement its capacity and temporarily fill any identified skills gaps.

14. Field level implementation support would be provided by third party service providers, private sector or NGOs that will work under the guidance and supervision of the SMTs. In Siem Reap Province this will cover support under component 1.1 and 1.2, establishment and strengthening of SHGs and their economic activities, and the implementation of skills building and vocational training. The Phnom Penh Capital Hall will be supported in implementation of component 2.2, covering vocational training in the urban project communities.

15. District Facilitators (DFs). At the district level, a team of district facilitators (DFs) would be in charge of facilitating and supervising the implementation of the village and commune level activities envisaged under the project. These facilitators would also provide the link between existing district and commune level administrative (and project) structures and the provincial (and national) level expertise available for support. The DFs would be a contracted staff of the SMT and would be selected based on qualifications, experience, and residency. Their work would be integrated into the District Administration structure. Efforts would be made to look carefully into the skills required to undertake this district facilitation role and see whether these would be available from within the existing Provincial Government departments (e.g. Depts. of Women’s Affairs, Depts. of Rural Development or Agriculture) or whether they would need to be drawn in as contracted staff (consultants or advisors). Each district would have one DF who would assist Commune/Sangkat Councils in coordinating and strengthening the work of community professionals (in the case of Component 1) working in his/her district. DF terms of reference would

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include responsibilities for reporting on their activities to the Sub-Management Teams as part of the overall M&E system and for inclusion in project progress reports.

16. Community Professionals (CPs). For Component 1, at the village level the project would, over time, make a concerted effort to build and develop a cadre of Community Professionals like village facilitators, book keepers, community development officers, skilled extension workers etc. These cadres of CPs would be identified and selected from within the Community/SHGs to assist the project in social mobilization, and formation & strengthening of SHGs. In particular, in the rural communes, they would include also the Commune Extension Worker (CEW), Village Extension Worker (VEW), Village Animal Health Worker (VAHW), and where needed other livelihood development facilitators.

17. They are mostly expected to be young men and women from the village, who are seen to be promising community leaders/members from mature SHGs who came out of poverty or had a very positive and convincing experience. They would play a vital role in expanding the group base and providing different technical and non-technical services to the community at large on a sustained basis. They would be the key resource persons in the project to replicate the institution building processes with their experiential learning and exposure to best practices. To further sharpen their skills and enhance their knowledge base the project would organize several training programs and exposure visits, particularly in the areas of social mobilization, financial audit of SHGs, conflict resolution, leaderships, preparation of micro-plans/Micro-investment plans, farming systems planning, extension techniques etc.

18. The CPs are meant to, over time, take over the process of mobilizing the community; facilitating the formation of SHGs; and providing continuing support to these groups for both financial (e.g., book-keeping) and, livelihood (e.g., agriculture and other training on new technologies, etc.) aspects. The CPs would report on their activities to the Sub-Management Teams who would provide them with very simple activity report formats for entry of information into the project MIS system. The CPs would also ensure a project presence in the village, and would be present to answer any questions arising from village members and to communicate village concerns and questions to the SMT where necessary. CPs would initially receive a stipend from the project. Over the project duration, they should be turned into contracted consultants of the village/commune level institutions of the poor so that they have a locally sustainable source of income. Assisted by the District Facilitator and/or where involved other service providers, the Commune Councils (CCs) would be responsible for coordinating and supervising the work of the contracted CPs in the commune, providing guidance, coaching, and performance review and feedback.

19. Cooperation with Development Partners, Non-Government Organizations and Other Private Sector Service Providers. While the relevant services for livelihood improvement are still limited and fragmented from the government side, and in particular Commune/Sangkat Councils and Village authorities can only draw on limited technical and managerial experience, NGO and CSO services are seen as complementary, helpful and effective in reaching out to poor groups. Both Siem Reap Province and Phnom Penh Capital authorities are already cooperating with NGOs regarding assistance to poor communities under their jurisdiction. The two NGOs involved in the LEAP pilot phase, namely ADDA and PADEK, have adopted parts of the LEAP approach and continue to support some poor communities in Siem Reap with their own limited

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funds. They remain potential partners for project implementation. NGOs and/or private sector service providers can be funded by the project for coaching and capacity building, strengthening SHGs, CPs and CCs. Private sector service providers that collaborate with the project would report to the concerned Sub-Management Team on their planned and actual activities and outputs and expenditures according to requirements detailed in their contracts. The information provided by the service providers would be entered into the project MIS by the service providers and checked by M&E Officers who would use that information in the progress reports prepared at the level of the Sub-Management Team.

20. Project Implementation Manual (PIM). The project would adopt the adapted PIM prepared for the LEAP Pilot Project with revisions and modifications to accommodate the changes in target areas and new activities to be implemented. Key areas elaborated in the PIM are: (a) roles and responsibilities of the implementing partners and the corresponding funds flows including to MOI, SMTs, MAFF/GDA, Commune/Sangkat Councils and communities; (b) establishment of SHGs and provision of funds for development to support local groups’/communities’ initiatives; (c) inclusion of third party service providers as service delivery agents; (d) participatory planning for small-scale infrastructure; and (e) provision of skills building and vocational training. The PIM builds on the Standard Operating Procedures, and the Commune/Sangkat Fund Project Implementation Manual.

21. Community Operations Manual (COM). Given the project’s support to further decentralization with greater involvement of Districts, Commune/Sangkat Councils and communities, a COM has been prepared for use under the project. The COM provides detailed and step-by-step instructions to implement the decentralized project activities, including the procedures for community participation in planning and procurement. The COM builds on, and further details, the activities described in this PAD and the PIM. The COM has separate chapters for each of the main sub-components, highlighting the different ways in which activities may be implemented in Siem Reap (Component 1) or Phnom Penh (Component 2), depending upon the unique circumstances in each province/municipality. The three main chapters are:

a) Building Institutions for the Poor (for Component 1 only) b) Enhancing Skills and Employment Opportunities for the Poor (for Components 1 and 2) c) Community Infrastructure and Services (for Components 1 and 2).

22. Commune/Sangkat Fund Project Implementation Manual (CSF PIM). The Project would use the procedures as described in the CSF-PIM for the planning and implementation of its small-scale infrastructure projects. The 2009 Manual (the most recent version) is used in all government-funded sub-projects under the Commune/Sangkat Fund allocations. The Bank was involved in the preparation of the manual and different Bank-financed projects have adopted and successfully applied the manual for implementation. Coverage of safeguards provisions is consistent with Bank policies. The CSF PIM would be an integral part of the PIM and COM, as well as the project-specific RPF and ESMF.

Financial Management 23. The implementing agencies, the Ministry of Interior (MOI) and Sub Management Team (SMT) of Siem Reap, have experience in implementing previous Bank financed

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projects; while the Ministry of Agriculture, Forestry and Fishery (MAFF) and SMT of Phnom Penh Capital (PPC) do not have experience in managing Bank-financed projects. A number of actions below would be implemented for each project implementing agency to improve financial management (FM) systems to ensure FM operations.

Table 3.1: Agreed Financial Management Actions

Action Responsibility Completed by

FM Staffing and Systems

1. Training on FM and disbursement for all FM project staff

Bank and all IAs Before effectiveness

2. Assign adequate FM counterpart staff for the project

All IAs After signing financing agreement

3. Setting up computerized accounting system, including chart of accounts and financial reporting design by FM consultant

All IAs and FM consultant

3 months after effectiveness

Internal Audit

4. Carry out internal audit of the project’s activities by MOI’s IAD

MOI’s IAD Annually

Community Grant

5. Disbursement of seed grants and Community Livelihood Investment Fund (CLIF) grants to SHGs and commune level federations, respectively, for on-lending to its respective members is contingent upon: Compliance with the COM Selection of Commune Professionals,

and Training in management of those

grants

All IAs Implementation requirement

24. Budgeting and Counterpart Funding. The budget cycle of the project would run from January 1 to December 31. The Annual Work Plan and Budget (AWPB) would be prepared by MOI, approved by MEF, and submitted to the Bank for review and no-objection by November 30 of each year. The processes of AWPB’s preparation and responsibility of different entities are stated in the PIM. The Government would contribute in the form of in-kind such as office space, staff time spent on the project, and utilities.

25. Funds Flow. To directly access funds from the World Bank, a Designated Account (DA) at the National Bank of Cambodia would be established for the PCO in MOI, while MAFF, and the two SMTs in Siem Reap and PPC would create project accounts at commercial banks which

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would act as advance accounts for each entity to have sufficient funds to implement their respective activities and provide full financial reports to the PCO for reporting back to MEF and the World Bank. The advances to MAFF and the two SMTs are equal to the three-month rolling work plan and would be replenished on a monthly basis after the submission of financial reports to MOI. Below is the overall fund flow diagram for the project:

Figure 3.2: Project Funds Flow

26. FM Staffing. MOI would provide enough government FM staff to manage its financial management and disbursement, including management and monitoring of project advances made to the project bank accounts of MAFF and the two SMTs. MAFF and the two SMTs of PPCH and

MOI DA at NBC

Siem Reap Provincial Administration

Project Bank Account at a Commercial Bank

Petty Cash (Minor Expenses)

WB

Contractors, Communes/Sangkats-level Federations, SHGs, Service Providers, Suppliers, Training

Institutions, Operating Costs (Siem Reap and PPCH)

Phnom Penh Capital Hall

Project Bank Account at a Commercial Bank

MAFF

Project Bank Account at a Commercial

Bank

Training and Workshop, Consultants, Project Management

(MAFF and MOI)

MEF

Petty Cash (Minor Expenses)

Project advance clearance and reporting Fund transfer to DA Payment for eligible expenditures

Advance to Project Accounts

Fund request

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Siem Reap would assign a number of government FM staff sufficient for its respective FM responsibility. Three government staff should be assigned to roles as finance officer, accountant and cashier for MOI and the two SMTs; and for MAFF, finance officer and a cashier would suffice. A capacity building effort for all Project FM staff would be provided through formal training and hands-on support from local FM consultants. One full time national FM Consultant to be based at PCO in MOI would support all the implementing agencies at the national level (MOI, MAFF and PPC). In Siem Reap, one full-time national FM consultant would be engaged to support operations in Siem Reap as well as at the community level. The FM consultants’ role would focus on budget preparation, financial report analysis and capacity building in the form of hands-holding support and guidance; while day-to-day FM operations would be handled by counterpart staff of MOI, MAFF, PPC and Siem Reap province. District Facilitators and Community Professionals will provide support to SHGs and commune-level federations in managing the community grants.

27. Accounting and Maintenance of Accounting Records. The Government has issued Standard Operating Procedure (SOP) which includes a Financial Management Manual (FMM). The FMM contains broad accounting policies and internal control procedures of all areas in financial management. The project adopts all provisions of SOP/FMM for national level entities (MOI and MAFF) and adopts NCDD’s Finance Manual for the two SMTs. The project adopts cash basis of accounting, except for advance. Particular FM structure, payment approval processes and procedures for project advances to, and its related reporting from, MAFF and SMTs would be provided in the project PIM. To align with the accounting software used at the MOI’s sub-national level, Sage 50 accounting software, formerly known as Peachtree, would be purchased and used by the finance team of PCO, PPC, MAFF and Siem Reap until the Government’s Integrated Financial Management Information System is rolled out and implemented by the implementing agencies. Sage 50 would enable the project to produce timely and reliable financial reports. The original supporting documents shall be kept by MOI, MAFF and the two SMTs for a period of 10 years as required in the Government’s SOP/FMM.

28. Community grants. The community grants refer to seed grants and Community Livelihood Improvement Fund (CLIF) grants. Management of these grants, micro-investment plans, on-lending, and collections system will be developed by contracted NGOs or other private service providers and training provided to the SHGs and commune-level federations. Accounting and reporting of the community grants would be included in the COM and training would be provided to the communities with hands-on support from Community Professionals. Seed grants and CLIF grants are considered as expenses after disbursements to communities. The financing of the community grants will be based upon compliance with the PIM and COM, including training provided to communities and selection of Community Professionals. These grants are subject to review and verification by the external auditor to ensure that grants are used for intended purposes.

29. Internal Controls and Internal Audit. The project adopts the SOP/FMM and NCDD’s Finance Manual which already contains sound internal control over financial management. There is a need to apply the Government’s chart of accounts into the project’s financial management system and to design the financial reports in the accounting software. More controls would be established in the project PIM and COM to address the project’s specific risks, such as project advances to MAFF and SMTs and advance clearance, community grants, payment for operating costs and training/workshop, and service standard for the Commune/Sangkat to certify the request for payment from contractors/communities and for PCO, MAFF and the two SMTs to make

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payment and project advances. A standard daily subsistence allowance rate of US$34 (US$14 for food and US$20 for accommodation) agreed with all development partners and MEF would be adopted for in-country missions for the project. For international travel, if any, the IDA rates may be applied. NCDD rates applicable for travelling to Communes/Communities area would be reviewed and adopted as long as they are reasonable.

30. The Internal Audit Department (IAD) of MOI is encouraged to carry out the project’s internal audit activities based on risk-based approach at least once per year. The findings resulting from the internal audit shall be discussed with the project’s management. The Director of IAD will issue the final audit report to the project’s management and to the Minister of MOI according to his/her responsibilities. After getting the final internal audit, the project shall send a copy to the Bank no later than 15 days after receipt. If the internal audit reports are not submitted to the Bank or the IAD is unable to carry out internal audit on the project’s activities, the Bank may request the project to engage a consulting firm to build capacity of the IAD and to work with the IAD to perform an internal audit of the project.

31. Periodic Financial Reporting. The consolidated Interim unaudited Financial Reports (IFRs) would be prepared semi-annually by MOI and be submitted to IDA within 45 days after the end of each semester - starting from the first semester following the project’s first disbursement until the grace period. The format and contents of the IFR would be modified by the project and discussed with the Bank. MAFF, and the two SMTs are responsible for its monthly financial reports to be submitted to MoI for consolidation.

32. Arrangements for External Audit. An independent external audit firm would be engaged by MEF under the external audit bundling to audit one consolidated financial statement for the whole project. The audit will integrate a review of the post review procurement packages at the subnational levels at a percentage based on the auditor’s risk assessment, but not less than 10 percent of the total post review procurement packages. The appointed auditor and terms of reference shall be acceptable to IDA and it requires that the auditors will visit some selected Communes/Sangkat and communities to verify supporting documents and controls over the community grants and existence of infrastructure. The external auditor would be required to express an audit opinion on the whole financial statement of the project covering all implementing agencies and issue separate management letters. The audited financial statements and management letters are required to be submitted to IDA within six months after the end of each fiscal year. The cost of the audit would be financed from the project proceeds. The audited financial statements should be disclosed by MoI on its website. IDA would also make the audits available for the public on its external website as required by the Policy on Access to Information.

33. FM Supervision Plan. The project would require an in-depth and intensive supervision in the initial year to ensure the successful implementation of the FM arrangements and that capacity building activities have been adequate. This would include field visits to provincial offices and communities on a six-monthly basis and review of system and/or transactions and consultation with the internal and external auditors. The FM risks would be reassessed and the supervision plan would be revised accordingly after each implementation support mission.

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Disbursements

34. MoI is authorized to operate a Designated Account (DA) under acceptable terms and conditions and is responsible for disbursement and accountable for funds received from IDA. The DA has a variable ceiling equivalent to a six-month cash forecast minus the: (a) the cash balance at DA; and (b) requested-amount-but-yet received amount at the bank statement date. The IDA Credit proceeds would be disbursed against eligible expenditures as follows:

Table 3.2: Allocation of Credit Proceeds

Category

Amount of Credit

Allocated (in SDR

Equivalent)

Amount of Credit (in

US$ Equivalent)

Percentage of Expenditures to

be Financed (inclusive of

Taxes) (1) Goods, works, non-consulting

services, consultants’ services, training and operating costs under Parts 1, 2 and 3 of the Project, excluding Community Grants

12,600,000 16,930,000 100%

(2) Community Grants under Part 1.1 of the Project

2,500,000 3,240,000 100% of amount disbursed

(3) Emergency Expenditures under Part 4 of the Project

0 0 100%

TOTAL 15,100,000 20,170,000 35. The budget by different cost types such as civil works, goods, non-consulting services, consultant’s services, training and workshops and incremental operating costs and by components/sub-components would be broken down in the AWPBs which would be reviewed and agreed by the Bank. A detailed annual training plan should be prepared as part of the AWPB.

36. Disbursement Arrangements for Components 1, 2 and 3. The primary disbursement methods would be reimbursement, advances, special commitment, and direct payments. E-disbursement would be used. Supporting documentation required for eligible expenditures paid from the DA is the Detailed Statement of Expenditures. The frequency of reporting of expenditures paid from the DA shall be monthly. The minimum application size for reimbursements, special commitment, and direct payments would be equivalent to US$100,000.

37. Disbursement Arrangements for Component 4 (Contingent Emergency Response). No withdrawal shall be made under Component 4 until the Government has: (a) declared that a crisis or emergency has occurred, and the Bank has agreed with such determination; (b) prepared and disclosed all safeguards instruments required for activities under Component 4 of the project, if any, and the Government has implemented any actions which are required to be taken under said instruments; (c) established adequate implementation arrangements, satisfactory to the Bank, including staff and resources for the purposes of said activities; and (d) prepared and adopted the Emergency Response Manual, acceptable to the Bank and annexed to the PIM, so as to be appropriate for the inclusion and implementation of activities under Component 4. The ERM is

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expected to be developed during the first year of project implementation or in any event prior to the release of any funds under Component 4.

38. Disbursements would be made either against a positive list of critical goods and/or against the procurement of works and/or consultant services required to support the immediate response and recovery needs of government. All expenditures under this component, should it be triggered, would be in accordance with OP/BP 10.00 and would be appraised, reviewed and found to be acceptable to the Bank before any disbursement is made. All supporting documents for reimbursement of such expenditures would be verified by the internal auditors of government, where applicable, and by the implementing agency, certifying that the expenditures were incurred for the intended purpose and to enable a fast recovery following the crisis or emergency, before the withdrawal application is submitted to the Bank. This verification would be sent to the Bank together with the application.

39. A provision for retroactive financing will be made in the Financing Agreement, with withdrawals up to an aggregate amount not to exceed SDR 20,000 allowed for payments made prior to the date of the Financing Agreement, on or after February 24, 2017, for Eligible Expenditures.

Procurement

40. Public procurement in Cambodia is governed by Public Procurement Law enacted in January 2012. Article 3 of the law provides an exception to follow procurement guidelines and procedures agreed between the Royal Government of Cambodia and a Development Partner for the project financed by the Development Partner. Accordingly, the Updated Standard Operating Procedures (SOP) and Updated Procurement Manual for all Externally Financed Projects and Programs issued under Sub Decree 74 dated May 22, 2012 has been agreed and applicable for the World Bank financed/administered projects/programs. The Update Standard Operating Procedures and Procurement Manual (SOP/PM) contain principles, rules and guidelines for planning, supervision, procurement procedures for all externally financed projects/programs. These SOP/PM include comprehensive complaints, disclosure and transparency regime to be followed. SOP/PM apply at the central level. Public Procurement Law enacted in January 2012 also provides for the policy and procedures for procurement under government own financed projects/programs. The law establishes the General Department for Public Procurement (GDPP) within Ministry of Economy and Finance as responsible regulatory body for public procurement. The Law also provides for disclosure and complaints rules to be followed by both bidders and public officials. Both documents are publicly available on the MEF website.

41. The enabling legal frameworks are generally comprehensive and incorporate fundamentals of modern procurement legislation. The key challenge, however, lies with the capacity to implement the legal framework. Staff capacities need further development and procurement is yet to be a profession developed within the public service.

42. Procurement under the project will be governed by World Bank Procurement Guidelines: Procurement of Goods, Works, Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers and Consultant Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers dated

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January 2011, revised July 2014. Bank Anti-Corruption Guidelines dated October 2006 revised January 2011 would also apply. Systematic Tracking of Exchanges in Procurement (STEP), which is the internet-based system developed for all the World Bank funded/administered projects, will apply for this project. All requests for approvals for procurement plans, prior review requests, and records of procurement transactions of individual packages will be done through STEP. Government Updated Standard Operating Procedures issued under Sub Decree 74 dated May 22, 2012 would apply for procurement under national competitive bidding and low value contracts subject to the improvements included in the NCB annex to the project loan agreement. The Project Implementation Manual (PIM) which makes reference to all applicable procurement guidelines and manuals including the Commune/Sangkat Fund PIM for small-scale infrastructure activities carried out by the sub-national levels (Commune/Sangkat), has been developed for this project.

43. Capacity Assessment. The PCO Secretariat located at MoI is assigned to be responsible for carrying out all procurement activities at the central level on behalf of other project entities including Phnom Penh Capital Hall, Siem Reap Provincial Administration, MAFF, and MOI itself. However, each of these project entities would be responsible to sign and management contracts under their own supervision, with exception for the joint procured contracts (procurement of goods and some services) that PCO Secretariat would sign and manage those contracts with technical support from concerned entities. The sub-national level entities, i.e. 47 communes and 13 Sangkats in Siem Reap Province and Phnom Penh Capital, respectively will carry out all procurement activities under the sub-projects delegated to them. The Commune/Sangkat Councils would carry out procurement of goods, works, non-consulting services and services needed for their communities with the support of SMTs in Siem Reap and Phnom Penh following the processes and procedures elaborated in the Project Implementation Manual (PIM). However, in case any procurement package that would not be able to be procured at the sub-national level and at the request of any sub-national entities, PCO Secretariat would carry out the procurement activities on behalf of such entities. The PCO Secretariat carried out similar procurement activities under the pilot of LEAP project and were assessed to have sufficient experience to undertake the procurement activities under this project, but will require capacity enhancement through the support of NCDDS and additional staffing for oversight support to the sub-national level entities. The targeted communes/Sangkats are also capable to carry out the delegated procurement activities under this project since they have sufficient experience for similar works financed by the pilot project and government’s own Commune/Sangkat Fund program.

44. Risks and Mitigation Measures. Key procurement risks are: (a) the PCO Secretariat has limited number of experienced staff and oversight experience on a large number of sub-projects, (b) possible delays in procurement start up due to slow technical inputs, and (c) governance associated risks, including possible mis-representation of staffing/documents in the bids/proposals of bidders. The following risk mitigation measures have been agreed with Government.

Table 3.3: Procurement Risk Mitigation Measures

Risk/Risk Area

Mitigation Measure Period of

Implementation of the Measure

Limited number of experienced staff and oversight

1. PCO Secretariat would request the necessary supports from NCDDS for

Prior to the project effectiveness and

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experience on a large number of sub-projects.

oversight of the sub-projects assigned to the targeted communes/Sangkats;

2. PCO Secretariat will assign at least one additional qualified procurement staff or a national procurement consultant to support PCO Secretariat in carrying its own procurement activities and oversight/support provided to the targeted communes/Sangkats.

3. The World Bank procurement specialist would provide procurement training to all project staff and sub-national level entities in collaboration with the PCO Secretariat upon request

during the project implementation.

Possible delays in procurement start up due to slow technical inputs,

1. Each project entity will assign focal persons to be responsible for preparing and providing necessary technical inputs (drawings, specifications, ToRs, estimated costs, etc.) to the PCO Secretariat for commencing procurement process;

2. PCO Secretariat will closely coordinate with appointed focal persons from each project entity to obtain technical inputs for each package in a timely manner;

3. PCO Secretariat procurement officer/staff shall keep track of all procurement actions and monitor procurement progress on the biweekly basis. The procurement tracking form in the government SOP/PM should be used for this purpose in addition to the implementation of STEP.

4. PCO Secretariat must keep the WB updated on a monthly basis on procurement progress and any bottlenecks which may require the Bank’s intervention.

5. Advance procurement for key consultants and goods would be carried out by PCO Secretariat to minimize the project start-up delay. Accordingly, PCO Secretariat would reserve a reasonable small budget for this purpose.

Prior to the project effectiveness and during the project implementation.

Governance associated risks

1. The project design includes a communication strategy to inform stakeholders about the project which would bring more awareness. SOP and

During implementation

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Procurement Law provides grounds for enhanced mitigation of governance risks and each bidding document/RFP would provide for channels and contacts of both Government and Bank through which interested parties may lodge their procurement complaints.

2. PCO Secretariat will include the annual procurement post review a sample of 10% of all sub-project contracts in the annual financial audit carried out by the external auditor to be engaged by PCO Secretariat for the project.

3. The World Bank will also carry out the annual post review on a sample of 10% of all post review contracts financed by the project.

Misrepresentation of staffing/documents in the bids/proposals of bidders

1. PCO Secretariat and Communes/Sangkats shall carry out due diligence in verifying the proposed staffing and documents submitted directly with the proposed staff/consultants, former clients of bidders, and other associated entities/manufacturers.

2. Fraud and corruption policies in the Bank guidelines as well as in the bidding documents/RFP and contracts shall be applied in case of misrepresentation.

During the bid/proposals evaluation process and contract execution.

45. Based on the above identified risks, the overall procurement risk for this project is Substantial. However, the identified risks would be managed and mitigated through the above agreed action plan, and the residual procurement risk of this proposed LEAP project is Moderate.

46. Procurement Plan. The first 18 months procurement plan for the project has been prepared and the summary is presented below in Table 3.5. The Procurement Plan will be entered in STEP and would be updated in agreement with the World Bank annually, or as required, to reflect the actual project implementation needs and improvement.

47. Prior Review Threshold. The thresholds are based on the project procurement risk rating for the project and are provided below:

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Table 3.4: Prior Review Threshold Procurement Method Prior Review Threshold (US$)

Goods and non-consulting services Each package estimated to cost more than US$4,000,000. Works Each package estimated to cost more than US$15,000,000. Selection of Consulting firms Each package estimated to cost more than US$2,000,000. Selection of Individual Consultant Each package estimated to cost more than US$400,000.

Table 3.5: Summary of Planned Procurement Plan for LEAP Project Packages

Description

Estimated Cost

(in US$ million)

Procurement Method

Domestic Preference

Review by the Bank

Comments

Procurement of Works Community infrastructures

5.48

Shopping No Post review

At least 60 contract packages will be procured by Communes/Sangkats individually for the whole life of the project.

Procurement of Goods Procurement of vehicles, office equipment, office furniture, motorcycles, etc.

0.92 Shopping No Post review

8 contract packages and will be procured centrally at the beginning of project implementation

Consultancy Assignments

Description of Assignment

Estimated Cost

(in US$ million)

Selection Method

Review by the Bank

Comments

Producer Group Mobilization for Siem Reap (NGO package)

0.34 QCBS Post Review

Self-help Group Mobilization for SRP (NGO) 0.27 QCBS Post Review Human Resources Development Services Provider (HRDSP) for Siem Reap (NGO/Firm)

0.55 QBS Post Review

Human Resources Development Services Provider (HRDSP) for PPC (NGO/Firm)

0.37 QBS Post Review

Consulting firms for baseline survey, impact survey, and final impact survey, and External financial auditing

0.175 CQS Post Review 4 contract packages

Individual consultants for supporting the national level and sub-national level project entities (finance, procurement, infrastructure, community development, micro-finance experts, livelihood specialists, etc.)

2.93 Selection of Individual Consultants

Post Review Multiple contracts

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Figure 3.3: Project Procurement Process - National Level Procurement

Commune/Sangkat Level Procurement

MOI/PCO Secretariat Carries out all procurement processes on behalf of the project entities at the national level, SRPA, PPC, and MOI/PCO own procurement. However, each of these project entities would sign and manage contracts for their respective entity with exception for the joint procured contracts (procurement of goods and some services) that PCO Secretariat would sign and manage those contracts with technical support from concerned entities. In order for MOI/PCO Secretariat does procurement on their behalf, these project entities shall submit their required procurement packages and technical inputs (drawings, specifications, ToRs, estimated costs, etc.) to MOI/PCO Secretariat on timely manner and these entities may be part of the bid evaluation processes if required by MOI/PCO.

SRPA PPCH MAFF * Communes/ Sangkats

Contractors/ Suppliers/

Consultants


Consultants


Consultants

* Suppliers/ Consultants


Consultants

Contractual relationship (contract signing and management)

PCO Secretariat carries out all procurement processes for supply of goods, civil works, and selection of

Project collaboration

* In case the consulting services/goods are not available at Commune/Sangkat level.

Sub-Management (Provincial/Municipal) Facilitation Team Provide necessary technical support/assistance to C/S in (i) carrying out all procurement activities; (ii) monitoring the contract implementation; (iii) preparing reports; and (iv) other tasks as specified in the CSF PIM

MOI/PCO Secretariat Overall Procurement Oversight role for the project

Siem Reap Provincial/PP Capital Governor (i) Approve list of pre-qualified contractors; (ii) solve complaints associated with procurement and contract execution; and (iii) other roles as specified in the CSF PIM

District/Khan Facilitation Team (DFT), Technical Support Official Assist the C/S in (i) preparing the bidding documents including drawings and specification; (ii) checking the contractor’s work plan; (iii) preparing contract documents; (iv) supervising the contract and certifying works done; and (v) other tasks as specified in the CSF PIM

Commune/Sangkat With all necessary supports from Provincial/Municipal Facilitation Team, SMT, District /Khan Facilitation Team (DFT), Technical Support Official/Consultants, Communes/Sangkats are responsible for all procurement activities delegated to them. These activities include: (i) preparation of the bidding documents; (ii) the bid opening meeting, bid evaluation and contract award recommendation; (iii) bidding reports; (iv) contract signing; (v) contract supervision; (vi) recommendation for payments to contractors/suppliers; (vii) document filing, etc.; and (viii) other tasks as specified in the CSF PIM.

Contractors/Suppliers/Consultants

Rel

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pay

men

t

Rep

ort o

f co

nstr

ucti

on p

rogr

ess

and

paym

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reco

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Environment 48. The project has sufficient tools and capacities to manage the safeguard aspects. An experienced team is in place in particular in Siem Reap Province that has gained ample experience under the LEAP pilot project and TSSD Project where safeguard issues have been handled fully in line with established procedures. The project can build on established mechanisms for screening, supervision and monitoring of small-scale infrastructure investments with regard to potential negative impacts. Any small-scale infrastructure investment and livelihood activities in Environment Watch-list areas would be subjected to an additional environmental screening by NCDDS. Access to finance would be subject to commitment by beneficiaries not to engage in practices that harm the environment. The budget for further safeguard capacity building and environmental protection awareness of concerned officials and Commune/Sangkat Councils has been allocated under the project. Further details on environmental safeguards are described below.

49. The project’s development activities such as small-scale infrastructure, agricultural and livelihood activities and community services may have minimal environmental and social impacts during implementation. Typical impacts of small-scale infrastructure investments include land clearance, erosion, and sedimentation of water bodies, dust and waste generation, spoil and debris, etc. However, those impacts are temporary, reversible, and manageable through construction management techniques described in the CSF PIM, which has been implemented by the Commune/Sangkat Councils throughout the country. In addition, the ESMF is used to manage temporary, and irreversible impacts caused by agricultural and livelihood interventions and community infrastructure investments.

50. As specific sites and exact activities are not known at this stage, an Environmental and Social Management Framework (ESMF) has been prepared to screen, assess, and mitigate environmental impacts related to proposed sub-projects that may involve investments in productive activities and construction or rehabilitation of small-scale infrastructure. The ESMF also describes the project’s complaints mechanism and contains monitoring provisions.

51. Environmental Safeguards. The project is classified under Environmental Category B provided that LEAP’s investment activities would only cause minor, temporary and self-contained environmental and social risks that can be managed through this ESMF and the RPF. In the unlikely case that the results of project screening or assessment determine that an activity to be supported under the project is of high risk, the Ministry of Interior (MOI) would contact the World Bank to determine whether such an activity is eligible based upon the significance of potential impacts, risks and the capacity of the implementing agencies to manage such risks.

52. Lessons Learned. This ESMF is informed by the analysis conducted under the LEAP pilot phase which was implemented from 2010-2012. In preparation for the pilot project and eventual project expansion, an Environmental Assessment and a Social Assessment were prepared covering the target areas in Siem Reap Province. An Environmental Management Framework (EMF) was developed and applied during the pilot phase and the lessons of implementation are incorporated into this ESMF. As Phnom Penh has been added as a target project area subsequent to the pilot phase, an Urban Poor Community Needs Assessment was conducted in selected communities in Phnom Penh in 2015 to better understand the needs of target communities and the context for

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addressing poverty in the urban setting. This Needs Assessment has further informed the design of this ESMF, as have consultations with beneficiary communities and civil society organizations.

53. As the pilot phase of LEAP was only implemented for a limited period from 2011-2012 and the activities implemented were limited to the establishment and initial capitalization/financing of self-help groups, the safeguard lessons are of limited application to the proposed project expansion which also includes investments in small-scale infrastructure. 54. For the pilot phase, a two-step screening process was applied:

Micro-investment planning. Community professionals, and the NGOs assisting the self-help group (SHG) member households to develop micro-investment plans (MIPs), screened the MIPs for possible environmental and social impacts including land acquisition to ensure that the environmental guidelines were followed.

Micro Investment Plan (MIP) activity design and implementation. The individual household ensures that the environmental guidelines are followed during activity preparation, including the design of the investment activities to ensure that the proposed measures are taken into account. The community professionals, the NGO and the Provincial PIU staff ensure that the guidelines and the ESMF are followed and complied with by the households.

55. The MIP screening process was applied during the pilot by CPs and NGOs and no activities were proposed that were inconsistent with the environmental guidelines. Proposed activities included vegetable gardening, chicken raising, pig raising and handicrafts. CPs and NGOs also monitored household investments to ensure that the Technical Environmental Guidelines (TEGs), the key design and implementation measures that need to be taken into account at all phases of each activity type (i.e. pig raising or vegetable farming). As the TEGs were brief and easily understandable by participating households, they were followed. Unfortunately, since the pilot project duration was short, some households had difficulty maintaining animal health in the absence of technical support. The proposed phase would address this challenge as it would be implemented over a longer duration and the Ministry of Agriculture, Fisheries and Forestry, would play an integral role in project implementation.

56. As the coverage of LEAP increases, and the commune, district and provincial governments begin to take over some of the activities implemented by the NGOs under the pilot, particularly safeguard screening and monitoring, a significant capacity building effort would be needed. Training would need to be conducted by qualified environmental specialists, early on in project implementation, to ensure that all of the roles defined in this ESMF are well understood and implemented accordingly.

57. Experience with the implementation of the Commune/Sangkat Fund indicates that while there are clear procedures and responsibilities for safeguard monitoring of small-scale community infrastructure sub-projects, this does not take place in a systematic fashion. As such, the LEAP implementing agencies at the national and provincial levels, in particular, would need to review the coverage of social (i.e. land donation) and environmental monitoring efforts and address any insufficient coverage with additional training or resources persons, if needed.

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58. Environmental Assessment (OP/BP 4.01). The policy is triggered due to potential minimal temporary, and site specific impacts that may be caused by the project activities. However, theses impacts would be managed through construction management techniques included in the Commune/Sangkat Fund’s Project Implementation Manual (CSF PIM) and ESMF. Technical Environmental Guidelines and Environmental Code of Practice (ECOP) will be used to guide the management of potential adverse environmental impacts of small-scale infrastructure investments, and livelihood and communities interventions.

59. The ESMF consists of: (a) implementation procedures for assessing and mitigating the risks of activities implemented under Sub-component 1.1; and (b) procedures for assessing and mitigating the risks of activities implemented under Sub-components 1.3 and 2.2. To ensure that the activities financed by SHG and Producer Group members do not pose a significant social or environmental risk, the following screening, implementation and monitoring process would be followed:

Step 1 - The Micro-Investment Plans (MIPs) produced by each SHG would be screened by the Commune Council before recommending the MIPs to the Provincial SMT for seed grant financing to ensure that plans are in accordance with the Technical Environmental Guidelines (TEGs) and the screening form for voluntary land donation (from RPF) is applied below.

Step 2 – The MIPs and CLIF proposals recommended by the Commune Council for seed grant of CLIF financing would be reviewed by a properly trained social and environmental safeguard specialist at the provincial level to ensure that TEGs are followed.

Step 3 – Occasional safeguard spot checks by the provincial safeguard specialists on a periodic basis to ensure that MIP and CLIF activities are being implemented in accordance with TEGs and are not generating any new and significant social or environmental risks.

60. Technical Environmental Guidelines. The technical environmental guidelines (TEGs) list the key design and implementation measures that need to be taken into account at all phases of each MIP and CLIF activities. The guidelines are based on the typical activities that were implemented during the pilot LEAP operation and subsequently proposed by local communities during the project preparation. Additional guidelines would be created for new types of activities as they emerge during implementation, and included into this ESMF and relevant implementation and training documents.

61. Guidelines for Animal Raising Sub-projects (cow and pig farming, poultry raising).

The design of any animal raising sub-project should ensure proper management of animal wastes to ensure no contamination of nearby surface water bodies, ground water sources and to avoid complaints from communities from foul smell.

For pig raising, the construction of septic tank or small biogas digester to manage pig wastes may be considered. The biogas digester would convert methane into fuel for household cooking to replace the use of fuel wood.

For chicken raising, chicken dung may be collected and used as natural fertilizer in vegetable gardens and farms or used in compost as enhancer to speed up the composting/decomposition process.

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For cattle raising, wastes may also be used as organic fertilizer or as compost enhancer or feed into biogas digester for cooking gas.

Pigs must be put in a pig pen and not allowed to roam freely and adequate sanitation should be maintained at all time.

If possible, the pig pen should be located in area far away from houses/settlements. 62. Guidelines for Fish Farming Sub-project.

The use of local/endemic species should be favored in lieu of introduce exotic species. Should exotic species be introduced, the design should ensure proper containment of

introduce species through the use of safe enclosures so as to not allow the exotic species to escape into open water bodies that may cause biological contamination.

Supplemental feeding using formulated feeds should ensure that enrichment/eutrophication of water bodies would be minimized, if not avoided. This can be done by maximizing primary production (phytoplankton and zooplankton) as the natural source of food for the cultured fish and limiting the use of formulated fish.

63. Guidelines for Vegetable Cultivation.

Use of organic fertilizers such as compost should be encouraged over the use of chemical

fertilizers. Use of chemical pesticides should also be discouraged and promote cultural, environmental

friendly, biological, etc. The use of integrated crop management, which is already adopted in some areas in

Cambodia, should be promoted and supported. Multiple and intercropping are encouraged over mono-cultural practices.

64. Guidelines for Rice Farming.

Promote and encourage the adoption of integrated crop management to manage pest

problems. Promote organic farming and non-chemical pesticide based agriculture.

65. The procedures to manage temporary, site specific and irreversible impacts caused by small-scale community infrastructure sub-projects that would be funded by the project would be those described in the CSF PIM, including five (5) key steps: (a) safeguard screenings of sub-projects; (b) environmental mapping; (c) analysis of the environmental impact; (d) preparation of the Environmental Management Plan; and (e) preparation of an Environmental Monitoring Plan. The procedures and the forms provided in the ESMF are excerpted from the 2009 CSF PIM, but all relevant procedures and documentation included in the CSF PIM regarding social and environmental safeguards will be applied when implementing and monitoring the small-scale infrastructure investments at the community level. The ESMF describes the key environmental criteria and procedures for project implementation.

66. Natural Habitats (OP/BP 4.04). The policy is triggered as the project activities may adversely impact natural habitats such as the Tonle Sap Lake, wetlands or a future protected areas

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as per the Environmental Watch list maintained by the NCDDS. Impacts include loss of habitat as well as erosion and sedimentation associated with agriculture and community livelihood interventions as well as the small-scale infrastructure investment sub-projects However, the rural poor development support activities would not involve either utilization of pesticides thus it is not necessary to trigger the safeguard policy on pest management. The impacts are considered to be localized, site specific and manageable with known technical approaches. An environmental screening checklist and guidelines for animal raising and fish farming sub-projects were prepared as part of the ESMF to prevent project activities from impacting Tonle Sap Lake, any known natural habitats, wet land and protected area. The ESMF also includes screening procedures to (i) determine whether the proposed facilities are in a critical or non-critical natural habitat and (ii) avoid any significant conversion or degradation of any critical natural habitat.

67. Specifically, the approach developed for this project involves planning at different levels. At the provincial level, a screening methodology for site selection would rule out sites, which present highly sensitive environmental conditions. For example, sites which may impact wet lands, potential areas to be protected area, any known natural habitats in particular Tonle Sap Lake, would be avoided. At the commune planning level, a methodology has been developed to assess each site during the site assessment process, which includes consideration of terrestrial and aquatic habitats, and sites of environmental risks such as high, steep slopes, among others. The Safeguards Working Group of the National Committee on Decentralized Development (NCDD), Ministry of Interior (MoI), maintains a list of communes/Sangkats on an Environment Watch-List: communes/Sangkats that are located in wetland areas and other protected areas which are sensitive to impact on the environment. For sub-projects proposed in these communes/Sangkats, the Safeguards Working Group would review the screening done at the commune and provincial level to confirm the potential for environmental impacts and the requirement to conduct an Environmental Analysis.

68. Physical Cultural Resources (OP/BP 4.11). As the project would finance infrastructure in the vicinity of a national cultural heritage site in Siem Reap, that may impact unknown, physical cultural resources, therefore the Physical Cultural Resources OP/BP 4.11 policy is triggered. The project would use the provincial level “hot spots” maps, and local knowledge of burial sites or merit forest or places of ritual significance. A chance find procedure is therefore included as part of the ESMF. A procedure for chance finds of cultural heritage clause during the infrastructure construction would be included in the bidding and contract documents to require the contractor to report “any cultural heritage” found to the relevant provincial Cultural Department or concerned government implementing agencies and the World Bank. In case of potential damage to chance finds physical cultural resources, the contractor will be required to stop work in the area immediately and proceed in line with the relevant national laws and World Bank’s OP 4.11.

69. International Waterways OP/BP 7.50. The project activities may extract water that indirectly links to the tributaries of the Mekong River, an international waterway. As such, the policy is triggered. However, it is unlikely that Project activities will adversely impact quantity and quality of international waterways. As the proposed financing support under Component 1 will only finance the farm level rehabilitation within the existing irrigation schemes which is the gravity-fed water systems or small-scale irrigation schemes. As the project activities both in Phnom Penh (urban poor) and Siem Reap (rural poor) will not adversely change the quality or

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quantity of water flows of the Mekong River, an exemption was granted from the requirement of riparian country notification.

70. Public Disclosure. The final safeguards instruments were initially disclosed locally in Khmer and in English on November 29, 2016, and subsequently re-disclosed on January 10, 2017 at http://www.interior.gov.kh. The final Khmer and English versions of the safeguards instruments were also initially disclosed via the World Bank’s external website on November 29, 2016 and subsequently re-disclosed on January 10, 2017. Hard copies of the ESMF were made available at the Provincial Departments of Environment, and at the offices of the target commune/sangkat councils. The key environmental requirements outlined in the ESMF are reflected in the project PIM.

71. Monitoring and Evaluation. The MOI would be responsible for coordinating and reporting the monitoring of environmental and social safeguard implementation, with support and inputs from NCDD Secretariat, the Ministry of Agriculture, Forestry and Fisheries. The reporting of environmental and social safeguard implementation would follow the project PIM, and would be included in dedicated sections of overall project progress reports produced by the M&E team.

72. During the implementation of sub-projects, the project director or designated officer/advisor would monitor compliance of the environmental mitigation measures. The monitoring would focus on how well the environmental mitigation measures are being adhered to and followed by participating households during micro-investment planning, preparation and implementation. This means checking on whether, for example, animal raising activities/sub-projects have properly addressed waste issues in the design as well as during implementation and whether households involved in vegetable farming have adopted good pest management practices (e.g. integrated pest management guidelines).

73. The Commune/Sangkat Council is responsible to keep all the documents including environmental reports. Original documents of each project should be kept in project files that are kept in the Commune/Sangkat Office. The file should be kept in the office for at least five years after the project is completed. More details are outlined in the CSF PIM.

74. The World Bank would carry out implementation support missions to clarify the requirements as well as to emphasize the importance of carrying out the measures consistent with the key environmental safeguard documents and the PIM. The Bank’s Environmental Safeguards Specialist would separately review adherence to the environmental safeguards documents during their annual supervision mission. All records of the ESMF monitoring reports shall be kept by the recipient for review during missions. Social 75. Involuntary Resettlement (OP/BP 4.12). Due to the nature of the project, involuntary resettlement caused by project construction would be very limited, if any. Since detailed project activities could not be identified during project preparation, a Resettlement Policy Framework (RPF) was prepared by the government according to the Bank’s OP 4.12.

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76. The Project is embedded in a community driven development model whereby local communities/groups of households make decisions regarding the types of interventions they seek. For example, small pieces of land may need to be acquired for the benefit of communities for income generating purposes such as small grain storage, cattle sheds, as well as basic public infrastructure such as the upgrading of roads, water supply, irrigation and drainage systems. Based on previous experience with small-scale infrastructure investments through the Commune/Sangkat Fund, it is highly unlikely, but not impossible that compensation for land may be required. Landowners usually contribute their land via voluntary donation. While there are several natural protected areas in Siem Reap, impacts are expected to be minor and site specific, and can be mitigated through the application of Technical Environmental Guidelines included in the ESMF. Activities for protected areas management and access restrictions will not be supported under the project. As in the case of environmental safeguards, any small-scale infrastructure investments under the projects would apply the provisions of the CSF PIM with respect to the use of land. The RPF establishes principles and procedures to be followed if subsequent stages of project design or implementation are to cause land acquisition. In such instances, the RPF requires the preparation of a Resettlement Action Plan (RAP) by the Government for World Bank review and approval. The government and the World Bank have agreed to implement the safeguard requirements under the project in accordance with the relevant Cambodian laws and regulations and the World Bank environmental and social safeguard policies in the design and implementation of this project, including OP 4.12, "Involuntary Resettlement". For this project, design and scheduling considerations make it impossible to determine the extent of resettlement planning requirements at appraisal.

77. Grievance Redress Mechanism (GRM) - A GRM for the implementation of the RPF and ESMF is necessary for addressing legitimate concerns of affected individuals and groups who may consider themselves deprived of appropriate treatment under the project. The RPF and ESMF outline the requirements of the GRM which includes: (a) a recording and reporting system, including grievances filed both verbally and in writing; (b) designated staff with responsibility at various levels of governments; and (c) a time frame to address the filed grievances. This mechanism would be detailed in the sub-project safeguards documents. The functioning of the grievance redress mechanism would be regularly monitored and evaluated during project implementation. In addition, the project’s overall complaints handling mechanism and the Bank’s Grievance Redress Service are detailed in the PIM.

78. Participatory Approach. For project implementation the participatory approach of the project would ensure the participation of all beneficiaries and relevant stakeholders in the planning process, including the livelihood activities and small-scale community infrastructure activities. The process of participation would be conducted by commune representatives, village officials and representatives and land users at all stages. This is the best way to avoid or minimize risk, and minimize any land acquisition and involuntary resettlement.

79. Indigenous Peoples (OP/BP 4.10). As part of project preparation, a screening exercise was conducted in the proposed target area in Siem Reap where the project would be implemented to determine the presence of Indigenous Peoples. There are only two commune in Siem Reap identified as having ethnic indigenous people, the Kuoy indigenous group, located in Srae Noy and Khun Ream communes. However, these are not one of the project target communes. Recent information provided by an indigenous peoples organization shows that there are individual

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indigenous families present only in one village in Phnom Penh, the Pors indigenous group, located in Kean Klaing village, Preak Leap Sangkat, and Chrouy Changvar Khan, .However, these families do not meet the criteria for classification of indigenous peoples accordingly to OP/BP 4.10, as they are mixed with other Khmer families, they do not practice any collective attachment to the project area and they do not have any customary cultural, economic, social, or political institutions. For this reasons, the Bank’s policy on indigenous people (OP 4.10) is not triggered. However, the Project will use participatory community informed consultation to ensure access of poor and vulnerable households located in the project area.

80. Gender Mainstreaming. The project would contribute to increased gender equity and support the five-year Strategic Plan for Gender Equality and the Empowerment of Women in Cambodia, Neary Ratanak IV (2014-2018), including women’s social and economic empowerment through targeting and inclusion of women in local institutions; strengthening of their vocational skills, development of their micro- small- and medium-scale enterprises; and improvement of infrastructure which they identify to improve the environment for improved livelihoods in rural areas. The majority of the potential target beneficiaries of the project are likely to be women. Under the LEAP pilot, 93% of SHG members were women. The project would provide intensive training for SHGs, including financial literacy and guidance in effective savings and household investment. The individual and collective voice of women would be strengthened through the formation and strengthening of SHGs, producer groups and agricultural cooperatives, as well as through the enhanced participation of women in commune/sangkat decision-making processes and around project investments. Skills building and job placement activities would also enhance the wage earning capacity of women and their ability to acquire more satisfying jobs. Project results would be gender-disaggregated to allow monitoring and ensure a gender-sensitive response to emerging issues.

Monitoring and Evaluation 81. The project M&E system would include activities to monitor the physical progress, financial progress, results, and impact. The physical progress would be monitored by the PCO through Semi-annual Progress Reports covering project inputs, activities and outputs. The financial progress of the project would be monitored as described here above in the Financial Management section of Annex 3, through the financial accounting system acceptable to the Ministry of Economy and Finance and the World Bank. The results would be monitored using the Results Framework, with the responsibilities for data collection, data sources and frequencies shown in Annex 1. An added dimension of M&E will be the MoI implementation of special arrangements for monitoring of compliance with environmental and social safeguards through the ESMF as described above.

82. Data and information collected on the Results Framework indicators and on project physical and financial progress by concerned stakeholders and implementing partners, such as the SHG, Service Provider, Commune Professional, or Commune/Sangkat Council, would be consolidated by the PCO M&E team. Findings from the monitoring and on-going evaluation of the indicators in the Results Framework would be analyzed by the M&E team and provided to PCO. This would be done in the form of face-to-face briefings and the Semi-annual Progress Reports. The data would be made available by the PCO electronically to all concerned stakeholders

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as soon as reports become available. MoI findings and results of project compliance with the ESMF would also be incorporated in project reports and made available to concerned stakeholders.

83. The M&E system would include provisions to contract subject matter specialists to undertake in-depth studies or audits of selected project processes, constraints or success factors for use by project management and implementing agencies during implementation. Such studies might include a review of the effectiveness of producer group training or urban skills training activities being financed by the project in connection with the RF indicators being tracked on these topics. The studies could also be a means of documenting findings that would be especially useful for government in related future investments and programs such as a study of what the project finds to be the best community-level arrangements for O&M of small-scale infrastructure.

84. To contribute to learning and evidence-based decision making by RCG, in particular MoI, NCDD and MAFF efforts in poverty reduction and urban development, the PCO M&E Team would work with the National Institute of Statistics, (NIS) and the M&E Office of the National Committee for Sub-National Democratic Development, (NCDD) within the Ministry of the Interior to do an evaluation of the impact of the project. The NCDD M&E Office, with the support of NIS, would conduct a baseline survey in both of the project areas during the first three months of project implementation. This would be followed by a completion survey in the last year of project implementation. The design of the survey would be informed by lessons learned and the parameters studied in the baseline survey done by NIS for LEAP in 2011 and work of the Impact Evaluation Team of the World Bank Development Research Group reflected in the paper “Self-Help Groups, Savings and Social Capital, Evidence from a Field Experiment in Cambodia” published in July 2015.

85. As indicated above, the overall responsibility for M&E would rest with the PCO. The M&E team, as such, would consist of the M&E Coordinator located in the PCO and two M&E Officers, located in the Siem Reap SMT and the Phnom Penh SMT. They would compile and report on data collected by field staff from implementing agencies using forms for reporting on activities to be designed by the M&E team and included in the PIM and COM. To facilitate data collection, compilation, display and analysis, LEAP will commission the development of an MIS application designed for the project drawing on the experiences of MIS applications in-country that build on data entry through hand-held devices at the field level, such as used by the project for Agriculture and Economic Empowerment (PADEE), World Fish, and DFAT.

86. Project financing would support: (a) M&E staff; (b) services to build MIS system in the first project year, tablets for all Community Professionals; (c) Special studies in M&E; (d) Baseline and Completion Surveys; (e) training of project staff, local government and other services providers by project M&E staff; (f) internet services cost for tablets; (g) internal travel for M&E staff; and (h) field staff meetings and other miscellaneous operations costs.

Role of Partners

87. The project would complement the coverage of the ADB/IFAD TSSD Project in Siem Reap Province. LEAP would provide similar interventions and benefits as under the TSSD Project in the targeted 47 communes. The project would also explore complementarities with other WB

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funded projects that are part of the current reengagement. Project activities under LEAP would not by itself include large investments in infrastructure beyond the community level. However, capacity building, market linkages, extension services would have an increased impact where the project could overlap with projects supporting infrastructure rehabilitation (KETSANA). Similar synergies could be exploited through a cooperation and coordination with educational support activities as under the Second Education Support Project and the health services under the Health Equity and Quality Improvement Project. In general, the coordination and cooperation with all existing and relevant livelihood support activities by public and private entities in the project area would be exploited. For the vocational and skills training, the project would not set up own training or capacity building interventions, but tap into the provisions of existing providers such as the ADB-funded STVET project, activities of NGOs such as "Friends" and "Hagar" in Phnom Penh, and jobs initiatives in Siem Reap, such as Paul Dubrule and Sala Bai.

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Annex 4: Implementation Support Plan

CAMBODIA: Livelihood Enhancement and Association of the Poor Project (LEAP) (P153591)

Strategy and Approach for Implementation Support 1. The strategy for implementation support has been developed based on the nature of the Project and its risk profile. Risks considered to be notable include: (a) limited experience among implementing agencies and high level of difficulty in delivering skills development support to poor households; (b) limited experience from Phnom Penh Capital Hall in working with the World Bank and other multilateral institutions and need to integrate interventions with other municipal support to poor communities; (c) difficulty for self-help groups to become sustainable and to form viable commune-level federations; (d) small-scale infrastructure quality may vary and provincial and district capacity may be constrained to address design and construction challenges; (e) establishment of agriculture value-chain linkages and sustained market access requires flexible, responsive Government services and strategic mobilization of the private sector; (f) the early establishment of effective M&E and MIS systems will be critical to maintaining lines of communication and coordination across several layers of national and sub-national project support systems. The proposed mitigation measures to contain these risks are integrated into various Project design features. Specifically, the strategic approach for implementation support includes the following measures:

(a) Limited experience among implementing agencies and high level of difficulty in delivering skills development support to poor households. Neither PPC nor Siem Reap Province are particularly involved in training and job acquisition activities, though there are some ad hoc activities and partnerships with NGOs and the Ministry of Labor and Vocational Training. In addition, the target population is especially difficult to serve given their poverty status. Intensive support will be provided early on to ensure that the design remains robust and obstacles are addressed in a timely manner. Careful monitoring will be needed and adjustments to the design to respond to the varying contexts in Siem Reap and Phnom Penh.

(b) Limited experience from Phnom Penh Capital Hall in working with the World Bank and other multilateral institutions and need to integrate interventions with other municipal support to poor communities. PPC has primarily worked with international agencies that finance and manage their own activities, so this will be the first time PPC has had to manage a major donor-funded operation itself. Intensive fiduciary and safeguard support will be provided early on to ensure that PPC understands the Bank’s requirements well and can effectively apply them. Broader support around urban development and service delivery will also be provided to help ensure the sustainability of the interventions within PPCs ongoing activities.

(c) Difficulty for self-help groups to become sustainable and to form viable commune-level federations. The pilot project illustrated the difficult of sustaining SHGs in the absence of ongoing support. While the project will provide such intensive support, lessons from other countries will be drawn upon to help the implementing agencies monitor

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the situation on the ground and advise as to effective ways to address SHG challenges, including incentives and operational approaches for the development of commune-level institutions.

(d) Small-scale infrastructure quality may vary and provincial and district capacity may be constrained to address design and construction challenges. Communes and Sangkats have extensive experience with the procurement and construction of small-scale infrastructure across the country. However, experience varies and some designs may be more complex or face implementation challenges that will require monitoring and support to ensure that the investments made lead to full, quality sub-project completion.

(e) Establishment of agriculture value-chain linkages and sustained market access requires flexible, responsive Government services and strategic mobilization of the private sector. Pilot project experience was positive, but limited in terms of the types of products, distance to markets and sheer numbers of communes participating. The breadth of coverage across a large province will require support to MAFF, in particular, to be able to be highly responsive to farmer needs and opportunities. Support will be provided to MAFF to strengthen their services and overall monitoring and support to the Siem Reap SMT will be provided to build their capacity to provide effective livelihood support.

(f) The early establishment of effective M&E and MIS systems will be critical to maintaining lines of communication and coordination across several layers of national and sub-national project support system. The establishment of baseline data and systems for monitoring implementation is often slow to develop in projects and this inhibits the flow of performance information and advice to implementing staff, consultants and government regarding how to perform their roles and how to assess their own performance. Intensive support will be provided from early on to help implementing agencies to establish these systems so that they can be fully utilized through the project for performance and results monitoring.

Implementation Support Plan

2. Project implementation will be supported primarily by CMU/region-based staff, including fiduciary compliance and operational support, technical aspects, and safeguards compliance. Country-based administrative and fiduciary staff will provide operational support and liaison with the client. Formal missions will be conducted at least three times during the first year of implementation, and semi-annually thereafter. 3. In addition to periodic reviews by the Bank and inputs (monitoring, training) from procurement, financial management, and safeguards specialists, the plan identifies appropriate technical expertise (such as vocational training and community infrastructure) to contribute to periodic reviews. The Implementation Support Plan will be reviewed regularly to ensure that it continues to meet the implementation support needs of the project.

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Table 4.1: Focus of Implementation Support

Time Focus

Resource Estimate

Skills Needed Staff /

Consultant Weeks

Partner Role

Budget (US$)

First twelve months

Support to detailed design of Baseline Survey

Impact Evaluation Methodology

4 NIS, MoI, NCDD to

host

Specifications for procurement of MIS system; Review of MIS application designed

MIS Systems 4 MoI PCO to manage

Orientation set-up of M&E system

Project Management 4

MoI PCO to manage

Project management Project planning, operations, training

6

Procurement Procurement support, reviews, training, etc.

5

Skills development, vocational training

Vocational training, planning

3

Self-help Group formation

Social mobilization 3

Agriculture planning, value-chains

Small-scale agriculture, production planning, extension

8 GDA

TOTAL – YEAR 1 32 160K

Year 2 to Year 5

Follow-up to ensure smooth operation of M&E System

Project Management, M&E

2 MoI, PCO

Support to prepare mid-term and completion survey

Impact Evaluation Methodology

8 NIS, MoI NCDD

Agriculture planning, value-chains

Small-scale agriculture, farmer groups, extension

30 GDA

Procurement Procurement support, reviews, training, etc.

20

Financial Management FM reviews, training 20

Skills development Capacity building and training, vocational training

20

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Time Focus

Resource Estimate

Skills Needed Staff /

Consultant Weeks

Partner Role

Budget (US$)

Community infrastructure

Small-scale economic infrastructure, participatory planning

12

Social Safeguards 10

Environmental Safeguards

10

Impact Evaluation Support to prepare mid-term and completion survey

10 NIS, MoI NCDD

M&E, MIS 10 NIS, MoI NCDD

Financial Inclusion, Microfinance

Access to finance, savings and credit groups, federations, MFI

6

Self-help group formation

Social mobilization, 6

Communication Stakeholder dialogue, consultations

6 MoI

Urban Development Infrastructure planning,

6 PPC

TOTAL – YEAR 2-5 176 700K

Table 4.2: Skills Mix Required

Skills Needed Number of Staff Weeks

Number of Trips

Comments

Task Team Leader (ADM) 50 0 In-country Co-Task Team Leader 40 0 In-country Project Assistant 50 In-country Agriculture Specialist, value-chains

30 10

Procurement Specialist 20 0 In-country Financial Management Specialist

20 0 In-country

Skills development, vocational training

20 5

Community infrastructure Specialist

12 4

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Skills Needed Number of Staff Weeks

Number of Trips

Comments

Social Safeguard Specialist 10 5 Environmental Safeguard Specialist

10 In-country

Impact Evaluation Specialist 10 3 M&E, MIS Specialist 10 2 Financial Inclusion, Microfinance Specialist

6 2

Self-help Group Specialist 6 2 Communications Specialist 6 In-country Urban Development Specialist 6 3

Partners

Name Institution/Country Role None

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Annex 5: Communications Strategy

CAMBODIA: Livelihood Enhancement and Association of the Poor Project (LEAP) (P153591)

Context 1. Ninety percent of Cambodia’s poor live in rural areas and about 1.5 million Cambodians live in poverty. While a majority of poor households are in rural areas, urban areas are littered with pockets of extreme poverty, a situation likely to be exacerbated by rural-urban migration. Poor rural households are constrained by lack of human, financial and social capital, in particular access to finance and markets.

2. The project development objectives are to improve access of poor and vulnerable households in selected communities to financial services, opportunities for generating income, and small-scale infrastructure, and to provide immediate and effective response in case of an eligible crisis or emergency. LEAP was piloted in Siem Reap province between 2010 and 2012, supporting establishment of 100 self-help groups in six communes. Based on this pilot, the project is being scaled up to cover 47 communes in the Siem Reap Province and 13 Sangkats in the city of Phnom Penh. The primary beneficiaries would be IDPoor households within selected communes and Sangkats.

3. Project activities would be separated into two main components, one rural and one urban. While each of the two main components would be divided geographically and administratively, the same sub-components would be delivered under each component. The sub-components include: support to self-help groups to engage jointly or individually in productive activities; technical assistance and capacity building for producers to increase access to markets; skills development and job placement assistance; and small-scale, community infrastructure.

Communication Objectives 4. The communications strategy aims at supporting the effective implementation of project activities and helping mitigate potential risks by: (a) raising general awareness of LEAP’s development objective among stakeholders and the public, (b) building strong support from project stakeholders to ensure smooth implementation and to mitigate potential operational risks, (c) getting project beneficiaries’ participation and confidence in the project, and (d) building support among general public and other stakeholders.

Stakeholders 5. The following are the project stakeholders: (a) people in project areas – both direct and non-direct beneficiaries; (b) civil society organizations; (c) government representatives from line-ministries, provincial and city cabinets and departments, districts and khans, and communes and Sangkat; (d) development partners; (e) project implementation teams; (f) private sector; and (g) the media. Below is the project’s communications strategy by target audience:

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Table 5.1: Communications Strategy by Target Audience

Pillars of the Communications Strategy 6. Raise awareness about LEAP’s Project Development Objective. Project awareness raising materials would be produced and disseminated, including: project fact-sheets, leaflets, and project documents. The materials would be distributed to participants at consultation meetings, printed and distributed for targeted beneficiaries and other stakeholders. The project team would create a website and utilize social media tools to highlight the project activities and results.

7. Build strong support for the project to mitigate potential project operational risks. Continuous targeted engagement with relevant stakeholders would take place through consultation meetings to attract input for improved project design and implementation. Awareness raising would highlight the fair and transparent process of selecting beneficiaries.

8. Getting project beneficiaries’ strong participation in the project. Information, education and communication (IEC) materials would be developed to support project beneficiaries and to build their confidence in participating in the project. The experiences and stories of project beneficiaries would be documented and shared.

9. Build public and stakeholders support. All levels of government, as well as civil society (local and international), would be engaged to support the project and its implementation. Communications materials would highlight project results and lessons learned from implementation and its long term sustainability and benefits to the local and national economy. Individual stories from beneficiaries would be shared using various channels.

Target Audience Objective

Project beneficiaries Strong participation in the project; seeing the project as a means to improving their access to services and income generation

Government Officers Better understanding of the project and effectively supporting it Local and provincial and

municipal officers Smooth implementation of the project activities ensuring sustainability of the project

Civil Society Groups Increased support for project’s implementation and collaboration

Development Partners Co-ordinated efforts to contribute to the public development dialogue

Public Better understanding of and support for the project development objective and its achievements.

Media Better, more accurate coverage of project activities and its results.

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Map of the Project Areas – IBRD Map 42343

Documents

The World Bankdocuments.worldbank.org/curated/en/... · COM Community Operation Manual CP Community Professionals ... PCOS Project Coordination Office Secretariat PDO Project Development