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Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: PAD684
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED GRANT
IN THE AMOUNT OF EUR 67.62 MILLION
(US$93.32 MILLION EQUIVALENT)
TO THE
GOVERNMENT OF EGYPT
FOR AN
EMERGENCY EMPLOYMENT INVESTMENT PROJECT
May 25, 2014
Social Protection, Human Development
Middle East and North Africa 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 March 31, 2014)
Currency Unit = EUR
EUR1 = US$1.38
US$1
US$1
=
=
EUR0.72
EGP6.97
FISCAL YEAR
January 1 – December 31
ABBREVIATIONS AND ACRONYMS
BD Bidding Document IA Implementing Agency
CDA Community Development Association IFR Interim Financial Report
DA Designated Account IVE Independent Verification Expert
EEIP Emergency Employment Investment
Project
M&E Monitoring and Evaluation
EGP Egyptian Pounds MIS Management Information System
ELIIP Emergency Labor Intensive Investment
Project
NCB National Competitive Bidding
EMP Environmental Management Plan NGO Non-Governmental Organization
ESIA Environmental and Social Impact
Assessment
PDO Project Development Objectives
ESSAF Environmental and Social Screening and
Assessment Framework
PIU Project Implementation Unit
EU European Union PWP Public Works Project
FM Financial Management RFP Request for Proposal
GDP Gross Domestic Product RO Regional Officer
GoE Government of Egypt SA Sponsoring Agency
HCD Human and Community Development
Central Sector
SFD Social Fund for Development
HIECS Household Income and Expenditure and
Consumption Survey
Regional Vice President: Inger Andersen
Country Director: Hartwig Schafer
Acting Sector Director: Enis Baris
Sector Manager: Yasser El Gammal
Task Team Leader: Afrah Al-Ahmadi
EGYPT, ARAB REPUBLIC OF
Emergency Employment Investment Project
TABLE OF CONTENTS
Page
I. STRATEGIC CONTEXT .................................................................................................1
A. Introduction ................................................................................................................... 1
B. Country Context ............................................................................................................ 1
C. Sectoral and Institutional Context ................................................................................. 2
D. Higher Level Objectives to which the Project Contributes .......................................... 3
II. PROJECT DEVELOPMENT OBJECTIVES (PDO) ....................................................4
Project Beneficiaries ........................................................................................................... 4
PDO Level Results Indicators ............................................................................................. 5
III. PROJECT DESCRIPTION ..............................................................................................5
A. Project Components ...................................................................................................... 5
B. Project Financing .......................................................................................................... 6
Project Cost and Financing ................................................................................................. 7
C. Lessons Learned and Reflected in the Project Design .................................................. 7
IV. IMPLEMENTATION .......................................................................................................9
A. Institutional and Implementation Arrangements .......................................................... 9
B. Results Monitoring and Evaluation .............................................................................. 9
C. Sustainability............................................................................................................... 10
V. KEY RISKS AND MITIGATION MEASURES ..........................................................10
A. Risk Ratings Summary Table ..................................................................................... 10
B. Overall Risk Rating Explanation ................................................................................ 10
VI. APPRAISAL SUMMARY ..............................................................................................11
A. Economic and Financial Analysis .............................................................................. 11
B. Technical ..................................................................................................................... 13
C. Financial Management ................................................................................................ 14
D. Procurement ................................................................................................................ 15
E. Social (including Safeguards) ..................................................................................... 15
F. Environment (including Safeguards) .......................................................................... 16
Annex 1: Results Framework and Monitoring .........................................................................17
Annex 2: Detailed Project Description .......................................................................................22
Annex 3: Implementation Arrangements ..................................................................................26
Annex 4: Operational Risk Assessment Framework (ORAF) .................................................41
PAD DATA SHEET
Egypt, Arab Republic of
Emergency Employment Investment Project (P146143)
PROJECT APPRAISAL DOCUMENT
MIDDLE EAST AND NORTH AFRICA
MNSSP
Report No.: PAD684
Basic Information
Project ID EA Category Team Leader
P146143 B - Partial Assessment Afrah Al-Ahmadi
Lending Instrument Fragile and/or Capacity Constraints [X]
Investment Project Financing Financial Intermediaries [ ]
Series of Projects [ ]
Expected Effectiveness Date Expected Closing Date
31-July-2014 02-January-2018
Joint IFC: No
Sector Manager Sector Director Country Director Regional Vice President
Yasser El-Gammal Enis Baris Hartwig Schafer Inger Andersen
Recipient: Government of Egypt, Ministry of International Cooperation
Responsible Agency: SOCIAL FUND FOR DEVELOPMENT
Contact: Ms. Hanaa El Hilaly Title: Acting Managing Director
Telephone No.: 202-376-222-55 Email: [email protected]
Approval Authority
Approval Authority: RVP Decision
Please explain: As per the Large RETF Grant Procedures, the project is subject to RVP approval
Project Financing Data(in USD Million)
[ ] Loan [X] Grant [ ] Guarantee
[ ] Credit [ ] IDA Grant [ ] Other
Total Project Cost: 93,323,880 Total Bank Financing: 0.00
Financing Gap: 0.00
Financing Source Amount
Recipient 0.00
MNA VPU Free-standing Trust Funds 93.32
Total 93.32
Expected Disbursements (in USD Million)
Fiscal Year 2015 2016 2017 2018
Annual 28.98 26.22 26.22 11.90
Cumulative 28.98 55.20 81.42 93.32
Proposed Development Objective(s)
The project development objective is to: i) create short-term employment opportunities for the unemployed,
unskilled and semi-skilled workers in selected locations in Egypt; ii) contribute to the creation and/or
maintenance of community infrastructure and services; iii) improve access to basic infrastructure and
community services among the target population; and iv) improve the employability of young men and
women through short-term training or other support services to facilitate transitions to wage and self-
employment.
Components
Component Name Cost (USD Millions)
Component 1: Employment-intensive Small-scale Infrastructure
Sub-projects
1.35
Component 2: Intensive Community Service Sub-projects and
Youth Employment Activities
78.47
Component 3: Improving Workers’ Employability 8.12
Component 4: Project Implementation1 and Capacity Building 4.73
Contingency 0.65
Institutional Data
Sector Board
Social Protection
Sectors / Climate Change
Sector (Maximum 5 and total % must equal 100)
Major Sector Sector % Adaptation
Co-benefits %
Mitigation Co-
benefits %
Health and other social services Other social services 99
Public Administration, Law, and Justice Public administration-
Other social services
1
1 Including EU visibility activities.
Total 100
I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to
this project.
Themes
Theme (Maximum 5 and total % must equal 100)
Major theme Theme %
Social protection and risk management Social safety nets 60
Social protection and risk management Improving labor markets 25
Social protection and risk management Other social protection and risk
management
15
Total 100
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 [X] No [ ]
Is approval for any policy waiver sought from the Board? Yes [ ] No [X]
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
Conditions and Legal Covenants
Name Recurrent Due Date Frequency
(Project Agreement)
Schedule
Section I.C
For the purposes of proper implementation
of the Project, the Project Implementing
Entity shall, not later than six months after
the Effective Date, appoint for the
duration of Project implementation, and on
terms and conditions mutually agreed upon
between the World Bank and the Project
Implementing Agency, an Independent
Verification Expert (IVE) to assess and
verify that: (i) Project outcomes have been
met; and (ii) Sub-projects are implemented
and maintained in accordance with the
requirements of the Maintenance Manuals,
the ESSAF and the Operations Manual.
Not later than 6
months after
Effectiveness Date
Assessments to
be undertaken at
least twice a
year.
(EU Grant Agreement)
Schedule II, Section IV. B
In the event that the ESSAF requires
preparation of additional sector specific
EIA/EMP and/ or Environmental
Safeguard Guidelines, these documents
should be furnished to the World Bank for
no objection.
In the event new
sectors are
introduced to the
Infrastructure
Component.
In the event new
sectors are
introduced to
the
Infrastructure
Component.
Team Composition
Bank Staff
Name Title Specialization Unit
Afrah Alawi Al-Ahmadi Senior Social Protection
Specialist
Team Lead MNSHD
Haneen Ismail Sayed Lead Operations Officer Team Lead (at Concept Stage) MNSSP
Syed I. Ahmed Lead Counsel Lead Counsel LEGAM
Mazhar Farid Legal Analyst Legal Analyst LEGAM
Amy Champion Operations Analyst Operations Analyst MNSHH
Mira Hong Senior Operations
Officer
Senior Operations Officer MNSSP
David A. Robalino Lead Economist Lead Economist HDNSP
Chaogang Wang Senior Social
Development Specialist
Senior Social Development Specialist MNSSU
Maiada Mahmoud Kassem Finance Officer Finance Officer CTRLA
Elena Gagieva-Petrova Operations Analyst Operations and Portfolio Analyst MNSHD
Alaa Ahmed Sarhan Senior Environmental
Economist
Senior Environmental Economist MNSEE
Jamal Abdulla Abdulaziz Senior Procurement
Specialist
Senior Procurement Specialist MNAPC
Kevin Marcus Hempel Consultant Youth Employment Specialist MNSSP
Sanjay Agarwal Senior Social
Development Specialist
Senior Social Development Specialist MNSSD
Wael Ahmed Elshabrawy Financial Management
Analyst
Financial Management Analyst MNAFM
Amr S. Moubarak E T Consultant Social Protection Economist MNSSP
Moustafa Abdalla Operations Officer Operations Officer MNSSP
Fareeba Mahmoud Sr. Operations Officer Sr. Operations Officer MNADE
Locations
Country First
Administr
ative
Division
Location Planned Actual Comments
Arab Republic of
Egypt
Districts The poorest
districts
Districts will be
identified based
on poverty
mapping using
national data
Districts will be
identified based on
poverty mapping using
national data
1
I. STRATEGIC CONTEXT
A. Introduction
1. The proposed Emergency Employment Investment Project (EEIP) is a grant in the amount of
EUR 67.62 million (US$93.32million equivalent) to be financed by the European Union (EU), as
stand-alone complementary financing to the World Bank-funded Emergency Labor Intensive
Investment Project (ELIIP; Ln. 8173 in the amount of US$200 million). The need for this
complementary support stems from the ongoing political and economic situation that has
exacerbated existing unemployment, particularly among women and youth who have been
disproportionately affected, and heightened the risk of causing further deep divisions to develop
throughout society. The operation, while self-standing, is directly built on by the approach
adopted in the World Bank’s ongoing intervention under ELIIP, and is intended to coordinate
donor assistance effectively. The proposed project will generate short-term employment,
particularly for the population in poor regions and targeted youth.
B. Country Context
2. Since the revolution, Egypt’s political instability has contributed to economic turmoil where
prospects remain uncertain. Since the removal of President Morsi in July 2013, a new political
roadmap has been set in motion with an ambitious timeline of twelve months that includes
amendments to the suspended 2012 constitution, holding a referendum to approve the amended
constitution, and conducting parliamentary and presidential elections. The referendum on the
amended constitution was carried out on January 14-15, 2014, while more recently some changes
have been introduced in the political roadmap sequence, with presidential elections preceding
parliamentary elections. The amended constitution leaves the decision to the interim president on
when to hold elections, yet it states that both elections must take place within six months (by
mid-July 2014). The uncertain outcomes of these political developments are affecting the
economic outlook.
3. Although financial market uncertainty has been partly mitigated by a package of financial
assistance pledged by Arab Gulf states, expected economic growth remains weak. An
unprecedented series of aid packages totaling US$16 billion have been earmarked in support of
Egypt. These include cash grants of US$4 billion, interest-free deposits of US$6 billion with the
Central Bank of Egypt, and project financing of US$3 billion. The impact of such packages can
be seen in the short-term fiscal planning where a stimulus approach has been signaled by the
current government.
4. Economic performance continues to underperform in the short-term, while prospects remain
uncertain. Output growth remained subdued during fiscal year 2013 at 2.1 percent, similar to the
year before (approximately 2.2 percent). This has pushed up the unemployment rate, which
reached over 13.3 percent in June 2013. Sizeable stimulus packages totaling about three percent
of GDP are being implemented or have been announced, mainly through a sharp increase in
public investment and a near doubling of the minimum wage for public sector workers. These
commitments would entail substantial additional fiscal costs, and any spill-over could negatively
impact private sector growth.
2
5. Against a back-drop of shrinking investments and growth in real terms, the employment and
poverty situation is expected to deteriorate, and human capital indicators are at risk of worsening.
As has traditionally been the case, the working poor make up the majority of the poor in Egypt.
Those who are vulnerable (about 17 percent) are dependent on unreliable sources of income and
seasonal work. This is especially evident during crises. During the fuel and food crisis in
2008/2009, as many as 5.1 million Egyptians were severely food deprived. Furthermore, 31
million (around 40 percent of the population) were poor or near poor.
6. The Government of Egypt (GoE) aims to smooth consumption for the poor and vulnerable,
increase the skills and employability of low-skilled labor, and to promote social inclusion. The
Government aims to raise human capital formation through training programs and by increasing
labor productivity. The GoE has initiated a program for short-term employment creation in poor
areas to increase access to income opportunities and maintain social stability during the
transition period. This programmatic approach has already begun through the ongoing ELIIP.
The ELIIP supports the implementation of a public works and community service program
which adopts labor-intensive methods to address Egypt’s short-term employment needs. The
proposed EEIP will similarly support the creation of short-term employment opportunities for
unemployed workers in selected locations in Egypt, as well as lay the foundation for the creation
of more sustainable jobs. This will be carried out through the creation and/or maintenance of
community services and infrastructure using labor-intensive techniques and through
employability programs for youth in urban and rural areas.
C. Situations of Urgent Need of Assistance or Capacity Constraints
7. The proposed operation is being processed under emergency procedures based on the
“Fragility within a non-fragile country” policy (as defined in paragraph 11 of World Bank
Guidelines for OP. 10.00: Situations of Urgent Need of Assistance or Capacity Constraints). This
recognizes the fragility of the situation in Egypt which is experiencing instability and rapidly
changing conditions. The nature of these conditions in Egypt has deepened the ongoing
economic crisis and amplified overall fragility, leading to high unemployment and heightening
the risk of deep divisions developing further throughout society. The proposed project is highly
relevant and planned activities to generate short-term employment, particularly for the targeted
youth, are urgently needed.
D. Sectoral and Institutional Context
8. Egypt’s social protection system, broadly defined, accounts for a substantial share of public
spending, but does not have a commensurate impact on poverty reduction or human capital
development. Energy subsidies, although not strictly considered as social protection measures,
are available for all consumers and producers, and account for the largest share of spending at
around six percent of GDP, followed by food subsidies at around two percent of GDP. Spending
on ration card subsidies comprised about 0.5 percent of GDP, while expenditures on cash
transfers to the poor were about 0.1 percent of GDP in 2010. Despite these expenditures, Egypt’s
human development indicators remain poor and close to half of the population (49 percent)
remains poor or vulnerable, with a large number of people clustered just above the poverty line.
3
9. Even before the food, fuel and financial crises hit, the Government had taken measures to
expand its cash transfer programs; however, policies aimed at helping households withstand the
effects of the crisis were not sufficient to prevent an increase in poverty. The Government
increased both the number of beneficiary households in the social solidarity program (the
unconditional cash transfer program) and the value of their monthly cash payment. It also
extended additional cash assistance to beneficiary families with children enrolled in school (EGP
20 per child for a maximum of four children). However, the number of beneficiaries remained
far below the estimated poverty headcount, and the amount of cash benefits well below what was
needed to lift many of the recipients out of poverty. Furthermore, the targeting approach (which
is largely a mixture of self-targeting, income and categorical targeting) does not address errors
around inclusion of the non-poor and exclusion of the poor.
10. Egypt’s labor market continues to face many difficulties. Official unemployment figures in
Egypt reached 13.3 percent in June 2013—more than four percentage points higher than its level
in the second quarter of 2010. Out of the 3.6 million unemployed persons in Egypt, around
74 percent are youth aged 18-29 years. By June 2013, male and female unemployment rates had
increased to 9.8 percent and 25 percent, respectively. Furthermore, the informal sector is
estimated at 58 percent of total private sector employment, having risen sharply between 1998
and 2006. Although it can be assumed that the impact is larger on the informal sector given that
it is private, less information is available on the extent to which the sector and the informally
self-employed are impacted.
11. The current objectives of the interim government, following the July 2013 events, signal a
commitment to generate jobs for low-income families. A statement by the deputy Prime Minister
for Economic Affairs and the Minister of International Cooperation highlighted the need to
create jobs for low income families as one of six main priorities, while a labor-intensive Job
Creation Program through the Social Fund for Development (SFD) was part of the Package of
Urgent Benefits for Citizens, one of the five pillars of the Government’s Program for Economic
Development and Social Justice during the transitional period.
12. The proposed EEIP supports the scaling-up of Egypt’s public works and community services
programs, and the implementation of programs that would complement the cash-for-work
activities by facilitating transitions into wage- and self-employment. Even though the majority of
the project activities are aimed at meeting the needs of the emergency situation, the project will
also pilot programs to support the employability of unemployed rural and urban youth. In
addition, the project will help build the institutional capacity for public works and community
services programs in Egypt, a tool that is likely to be used frequently in the medium term. The
GoE is discussing and exploring options for the inclusion of public works programs as an
essential part of Egypt’s safety net system, to be scaled up or down quickly to respond to shocks
based on the country’s situation, and which continues to be a tool for smoothing consumption,
providing temporary income to the working poor, and an opportunity for skills development.
E. Higher Level Objectives to which the Project Contributes
13. While the project is expected to achieve immediate results in terms of the provision of short-
term employment opportunities and safety nets to the targeted group, it also supports instituting
and building national capacity in the design and delivery of labor-intensive works as a key tool
4
for a targeted safety net. This will assist Egypt to move away from an inefficient and untargeted
social protection system to a more cost-effective and targeted one, which would potentially have
a higher impact on poverty reduction and protect against falling into extreme poverty. By
targeting the poorest districts, the project would make higher investment in Upper Egypt,
contributing to the inclusion agenda and to the World Bank’s twin goals of reducing extreme
poverty and promoting shared prosperity.
14. This intervention establishes a clear line of sight to the World Bank’s twin goals. Activities
target poor and most vulnerable Egyptians and aim to provide short-term employment for the
growing ranks of unemployed, unskilled and semi-skilled workers. The project also aims to
provide the young people and women, who comprise a disproportionate share of the
unemployed, with the skills and training needed to help them to secure longer-term employment.
Finally, the project aims to help boost the income of the poorest in society by supporting the
development and maintenance of community assets that increase physical capacity and that
encourage local economic development.
15. The expansion of labor-intensive public works projects and community service projects
would also enhance the social and economic infrastructure base. In partnership with non-
governmental organizations (NGOs) and the private sector, the youth employability program
supported by the project would be tested and evaluated for its impact and scalability to address
the challenging issue of youth unemployment and idleness, a significant problem in Egypt and
several other countries in the region. The project is consistent with the existing Egypt ISN
(Report no. 66443-EG, May 31, 2012), MNA Regional Strategy Update (Report no. 59364,
January 22, 2013), and contributes to objective 3.4 “develop targeted and sustainable safety
nets” of the third Strategic Objective – Inclusion – in the proposed Country Partnership Strategy
(2015-18).
16. Project activities will be conducted in selected poor urban and rural areas nationwide. The
locations will draw on Egypt’s poverty map and other poverty targeting tools, as well as
locations with the highest rates of unemployment.
II. PROJECT DEVELOPMENT OBJECTIVES (PDO)
17. The project objectives are to: i) create short-term employment opportunities for the
unemployed, unskilled and semi-skilled workers in selected locations in Egypt; ii) contribute to
the creation and/or maintenance of community infrastructure and services; iii) improve access to
basic infrastructure and community services among target population; and iv) improve the
employability of young men and women through short-term training or other support services to
facilitate transitions to wage and self-employment.
Project Beneficiaries
18. The main project beneficiaries will be the unemployed, unskilled and semi-skilled, poor and
vulnerable, including youth and women.
5
PDO Level Results Indicators
19. The outcome indicators are:
a. Number of direct beneficiaries of the workfare2 programs
3 (disaggregated by
gender and age group)
b. Number of person-days of work created through workfare sub-projects
(disaggregated by gender and age group)
c. Job placement rate (wage or self-employment) of those enrolled in the youth
employability programs (gender and age disaggregated)
III. PROJECT DESCRIPTION
A. Project Components
20. The project consists of four components:
Component 1: Employment-intensive Small-scale Infrastructure Sub-projects (EUR 0.980
million or US$1.35 million equivalent)
21. This component will finance employment-intensive small infrastructure. Specifically, the
project will support labor-intensive small scale local public works sub-projects which could
include, but are not limited to: canal weed reduction; Nile River bank protection; pavement of
rural roads; and school rehabilitation. These sub-projects could be demand-driven, requested by
the local government at the governorate level, or supply driven, requested by a central ministry
based on needs, depending on the proactivity of local governments. Priority will be given to sub-
projects with higher levels of labor intensity. Implementation of the sub-projects will be
contracted out to private contractors. Beyond the geographical targeting, the operations adopt
self-targeting methodologies via wage monitoring to ensure that they do not attract the non-poor.
Infrastructure operations and maintenance procedures will be defined and agreed upon with
beneficiaries and other stakeholders during the sub-project design phase (e.g., between SFD,
ministries and governorates).
Component 2: Intensive Community Service Sub-projects and Youth Employment
Activities (EUR 56.863 million or US$78.47 million equivalent)
22. This component will support labor-intensive community service sub-projects through the
provision of grants to local communities (NGOs and Community Development Associations
(CDAs)) for sub-projects addressing areas including, but not limited to: (a) cleanliness and
environmental awareness campaigns in villages and local areas; (b) early childhood education;
(c) mother and child health support, e.g., facilitating access to health services, awareness and
home visit programs; (d) illiteracy eradication activities; and (e) youth engagement in
community initiatives (e.g., community mobilization and citizen engagement activities) in rural
2 Workfare is defined as the labor-intensive infrastructure and community service sub-projects.
3 Same as World Bank core indicator “Beneficiaries of Social Safety Nets programs”.
6
and urban areas. A high share of female beneficiaries can be expected, given that social service
sub-projects tend to employ unemployed women. Priority will be given to sub-projects with
higher levels of labor intensity.
Component 3: Improving Workers’ Employability (EUR 5.882 million or US$8.12 million
equivalent)
23. This component will finance the piloting of two types of youth employment support
activities, one aimed primarily at youth in urban areas and the second for youth in rural areas, to
facilitate transitions into wage- or self-employment. A comprehensive package of training (basic,
technical, life skills, and on-the-job), job-search assistance, and wage or training subsidies to
facilitate the transition into wage-employment will be piloted for urban youth, in close
collaboration with employers. For rural youth, the component will finance an integrated set of
services (training, financing, advisory, and access to markets and value chains) to facilitate the
transition into self-employment. These services will be developed based on market research or
feasibility studies already available or to be carried out during the preparation of the respective
sub-projects.
24. Sub-projects will be implemented by NGOs in urban and rural areas. Beneficiaries will be
primarily young men and women in the project’s targeted districts who are out of school and out
of (full time) work. Young women will be specifically targeted by making female participation
an evaluation criterion during the request for proposals, and assessing proposed design features
to attract female participants (e.g., female-only classes, child care, and parent outreach). Further
details are available in Annexes 2 and 3.
Component 4: Project Implementation and Capacity Building (EUR 3.43 million or
US$4.73 million equivalent)
25. The implementation support program for the project includes: (a) training and consultancies
to support project management, monitoring and evaluation, financial management and
procurement; (b) financing of public information activities, EU visibility, communication and
social mobilization strategy development and implementation; (c) technical verification for
project outputs, and compliance of services provided for the above three project components; and
(d) capacity building as needed for SFD and governorate staff, as well as for the implementing
NGOs. Training may be provided nationally through consultants or training institutions or
internationally for specialized topics. The component may finance: consultancy, training cost
(tuition, travel, accommodation, per diem, etc.), non-consultancy services, material, office
supplies, etc.
Project Financing
26. The proposed EEIP will be financed by an EU grant in the amount of EUR 67.626 million as
stand-alone complementary financing to the World Bank-funded ELIIP (US$200 million).
7
Project Cost and Financing
27. The table below provides the distribution of project funds between components:
Project Components
Project cost
(EUR ’000) Financing
(EUR ’000)
Project
Cost (US$
‘000)
%
Financing
1.Employment-intensive Small-scale
Infrastructure Sub-projects
2. Intensive Community Service Sub-
projects and Youth Employment Activities
3. Improving Workers’ Employability
4. Project Implementation and Capacity
Building
- EU Visibility
Contingency*
980
56,863
5,882
2,941
490
470
980
56,863
5,882
2,941
490
470
1,352
78,471
8,117
4,059
676
649
100
100
100
100
100
100
Total Financing Required 67,626 67,626 93,324 100
*The utilization of the contingency budget is subject to the EU Delegation written prior approval.
B. Lessons Learned and Reflected in the Project Design
28. The project builds on lessons learned from previous World Bank projects around the
world, as well as from the early lessons of ELIIP and SFD’s historical experience in
implementing public works projects. In the last decade, public works programs have become
one of the preferred instruments to address temporary work shortages brought after a shock. The
public works programs launched in response to the macroeconomic crisis in East Asia in 1997
and in Latin America in 2002, and those established after the 2005 tsunami that affected many
Asian countries, are examples of programs set up to mitigate the negative effects of a shock
among the most vulnerable populations. Evidence from evaluations of these projects points to the
ability of public works and employment training programs to mitigate covariate shocks,
idiosyncratic shocks, and smooth consumption.
29. Though it is argued in the literature that the wage rate is a critical design feature in
public works programs, conclusions from international experience related to setting the
wage rate as a means to improve targeting are mixed and context specific. In principle, self-
selection of the most in need can be encouraged if the wage paid by the public works program is
set at slightly below the market wage for unskilled labor. In large scale programs in Chile, South
Africa, or India, governments vary widely in their ability to set a wage rate that is consistent with
self-selection. Egyptian experience to date (including ELIIP) shows that dependence on “self-
selection” or self-targeting alone as the key method of targeting is not feasible because
contractors may not have the capacity to target and because of the high rate of unemployment
and poverty. A combined targeting mechanism will be used in EEIP to target project
8
interventions, including geographic targeting, selection of small sub-projects of the type that
creates employment that is less attractive to the less in need, as well as wage setting below the
local market rate (where credible information is available and can be monitored by SFD).
Additionally, experience from many similar programs, including ELIIP, is showing that it is
difficult to achieve more than a 25-30 percent labor share in certain types of infrastructure sub-
projects (e.g., housing, school construction). The project has therefore set a labor share of 40
percent in the case of infrastructure and 70 percent in the case of social services as determining
criteria in the selection of sub-projects.
30. The implementation arrangements build on SFD’s historic experience in implementing
public works projects, whereby partnership with local implementing agencies (NGOs,
CDAs and local governments) has been a major strength of the program. Over the years and
through ELIIP, SFD partnership with these agencies has contributed to building capacity and
outreach to local communities. This has also enabled Egypt to respond faster to the recent crisis
(ELIIP) and expand coverage under EEIP. This is consistent with international experience
following the global food crisis in 2008 when it was found that countries with established safety
net institutions were more capable of responding to the crisis than those who did not have such
institutions.
31. Investments in monitoring and evaluation systems facilitate the sub-project evaluation
process, provide feedback, and are an essential management and planning tool. In order to
address the weaknesses in monitoring and evaluation (M&E) experienced under previous
projects, SFD’s management information system (MIS) has been upgraded and continues to
improve as experience from ELIIP is being accumulated. For example, expanding the MIS to
monitor individual beneficiary data (rather than just aggregate data) in EEIP will support
monitoring, improve beneficiary targeting, and inform evaluation design. Continuous
improvement of the monitoring tools, including MIS, enables users to receive real-time
information through the entire sub-project cycle.
32. With regard to promoting wage-employment interventions as planned in this project,
evaluations from Latin America’s Jovenes en Accion program targeted to vulnerable youth
suggest that vocational and life skills training combined with internships in private firms
have the potential to improve employment and earnings. For instance, the Jovenes en Accion
program in Colombia reached over 20,000 youth per year, and increased earnings by 10-20
percent. Similarly, comprehensive entrepreneurship support programs are showing promising
results in many countries. For example, the Girls Empowered by Microfranchise program
targeted at girls aged 17-19 in Kenya and elsewhere provides business and life skills training,
mentoring, access to financial services, and start-up grants, and links beneficiaries directly to
markets. This evidence is in line with SFD’s recent on-the-ground assessments of its skills
training programs, which suggest that life skills and other support services need to be part of
youth employment programs to meet employer needs and increase youth retention.
9
IV. IMPLEMENTATION
A. Institutional and Implementation Arrangements
33. The implementation arrangements for this project will be similar to those of ELIIP, with the
SFD as the main implementing agency for the proposed project. The SFD was established as a
legally autonomous development organization and has over 20 years track record of providing
support to needy and under-deserved communities. Established in 1991, the initial key objective
of SFD was to help mitigate the negative effects of Egypt structural adjustment programs. In
1999, the SFD obtained a permanent mandate to focus on job creation.
34. The SFD will be responsible for the overall project, using its own fiduciary management
systems that are in compliance with World Bank regulations and procedures. The SFD will rely
on its Human and Community Development Central Sector (HCD) and the capacities of the
Financial Management Department, the Internal Audit Department, the Environmental
Department, and the Planning, Monitoring, and Evaluation Department in implementing this
project. The SFD will be responsible for implementing and coordinating the activities of the
project with the support of its 27 regional offices which will monitor and report on project
progress.
35. As with the ELIIP, the SFD will be responsible for financial management and reporting,
using systems and procedures acceptable to the World Bank. For the procurement of
infrastructure activities, SFD will be co-responsible with the sponsoring agencies (ministries and
governorates), whereas works contracts will be co-signed. As for the procurement under
Components 2 and 3, similar to ELIIP, SFD will provide grants and/or procures contractual
services of NGOs and CDAs.
B. Results Monitoring and Evaluation
36. Monitoring will be carried out by the SFD’s internal monitoring system using the SFD MIS.
The Project will finance support to conduct mid-term and end-of-project evaluations.
Evaluations will cover: a) targeting, processes and beneficiary satisfaction evaluation of
Components 1 and 2; and b) impact and cost effectiveness evaluation of the pilot youth
employability programs (Component 3), to assess the effectiveness of different approaches in
securing employment and increasing incomes of the beneficiaries. These evaluations will serve
the purposes of correcting processes as needed (in the case of Components 1 and 2), and assist
the GoE in assessing the potential for scaling up the workfare activities as an essential part of
Egypt’s social safety net program.
37. Periodic technical verification will be carried out on a semi-annual basis during the life of the
Project, using an Independent Verification Expert (IVE) and NGOs. The IVE will verify: (i) the
intermediate sectoral outcomes; and (ii) the output indicators. Additionally, the project will
undertake a client satisfaction and process evaluation, which will assess the processes of
implementing the program, as well as client satisfaction rates for community social services sub-
projects. Social accountability measures, as described in section E, will also provide tools for
monitoring performance from the beneficiary perspective so that corrective measures can be
introduced as appropriate.
10
C. Sustainability
38. The GoE is committed to extending services to all poor citizens, using the SFD as a major
instrument. The sustainability of SFD investments are ensured by features like community
engagement, partnership with local governments and ensuring that relevant sectoral authorities
agree to and provide recurrent cost and maintenance of services supported by SFD. Furthermore,
the GoE is committed to expanding pro-poor safety nets programs and addressing the short-term
as well as the longer-term challenges of unemployment, especially among the poor youth. The
project provides the opportunity to put in place and build national capacity to design and
implement best practice programs’ approaches. These programs will be evaluated to inform
policy on the most effective and efficient approaches to address the poverty and unemployment
challenges of the poor.
V. KEY RISKS AND MITIGATION MEASURES
A. Risk Ratings Summary Table
Risk Category Rating
Stakeholder Risk Substantial
Implementing Agency Risk
- Capacity Moderate
- Governance Substantial
Project Risk
- Design Substantial
- Social and Environmental Low
- Program and Donor Moderate
- Delivery Monitoring and Sustainability Moderate
Overall Implementation Risk Substantial
B. Overall Risk Rating Explanation
39. The overall risk rating for this Project is expected to be Substantial. The Project will be
implemented in a country where the political environment is still in transition. Mitigating
measures to address these risks include inter-alia: (i) a project design that focuses on poor areas
where the risk of major disruptions to project activities is lower; and (ii) selection of the SFD as
implementing agency—the SFD has considerable prior experience with implementing Bank-
financed projects, and is familiar with Bank policies and procedures; and (iii) fiduciary
safeguards are in place for the project to ensure effective oversight of the flow of funds and
procurement procedures. The procurement risk rating is ‘Moderate’ since capacity to carry out
procurement has been built within the SFD under the ongoing ELIIP. Moreover, an experienced
procurement advisor was hired under the ELIIP to help build procurement capacity and monitor
conformity with procedures used for selection of consulting services; and the SFD procurement
manual was updated to ensure clear definitions of roles and responsibilities and consistent
application of procedures.
11
VI. APPRAISAL SUMMARY
A. Economic and Financial Analysis
40. The EEIP aims to create short-term employment opportunities for vulnerable groups
including women and youth, improve access to community infrastructure and services and to
provide short-term training and employment services to facilitate the transition to wage and self-
employment. The project provides substantial resources that will directly complement the
ongoing World Bank-financed Emergency Labor Intensive Investment Project (ELIIP) and
which will, in the interests of sustaining an efficient and rapid response, adopt the approach and
proven implementation mechanisms developed under ELIIP.
41. Labor-intensive public works programs have been used in diverse country contexts
worldwide. There is increasing evidence that such counter-cyclical safety net instruments can
make an important contribution in mitigating a range of economic shocks that disproportionately
affect the poorest and most vulnerable. These programs can play an important role in reducing
vulnerability and provide immediate income support to poor families where there are large
numbers of unemployed or underemployed workers. An important complementary benefit of
public works projects is the generation of public goods and community assets for poor and
deprived communities. As in this case, public works and community service projects can
complement short-term employment opportunities with training and skills development to help
workers make the transition to longer-term or self-employment. Finally, international experience
indicates that public works programs can provide pathways that promote voice and participation,
improve social inclusion and equality particularly for women and youth, and smooth social
tensions.
42. There is a powerful rationale for public intervention to insure social risk, including the risk of
poverty, through the public provision of safety nets such as this program. The operation
addresses a market failure that stems from three interrelated factors: information asymmetries;
coordination failure; and, inability to achieve returns to scale. Information asymmetries exist
because an individual will always know more than a private insurer regarding their risk of
poverty and actions that might increase that risk. Without access to this information, a private
insurer would attempt to insure only the best risks (i.e. those at lowest risk of poverty) and
exclude those at the highest risk of poverty. This would result in a socially inefficient outcome.
Coordination failure in this instance is characterized by a situation where risk pooling would
result in a more socially beneficial outcome than individually insured risks. Failure to achieve
returns to scale results since the cost of risk-bearing cannot easily be reduced by sharing the risk
burden across a large population.
43. The World Bank has long been engaged in providing assistance the development and
strengthening of national social safety net programs worldwide. The impetus for both the
ongoing ELIIP project and this intervention stems from government requests for the Bank’s
technical and financial support in the design of social safety net mechanisms able to address the
country’s urgent need for short-term employment opportunities. In addition, the successful
implementation of ELIIP has helped to catalyze the grant support provided under this project,
enabling the expansion of ELIIP/EEIP activities in both scale and scope and in a coordinated
manner. While the SFD has a tradition of implementing public works programs, Bank expertise
12
will ensure the improvement of critical design features, such as labor intensity and targeting
accuracy.
44. Based on an analysis of wages for unskilled labor in rural and urban areas, the gross wage to
workers under EEIP is estimated at EGP 300, as this wage or below is unlikely to be attractive to
currently employed poor workers (i.e., below market wage). Assuming that targeted beneficiaries
cannot find work outside of EEIP and a wage ratio of 50 percent, it would take EGP 2 of
government funds to transfer EGP 1 to beneficiaries, i.e., a benefit-to-cost ratio of 50 percent.
This ratio is about double the country’s current poverty rate of 26 percent (2012/2013); that is,
the EEIP would provide more immediate benefit to the poor than a uniform, untargeted
allocation of the same budget across the population. This ratio further improves if accounting for
indirect benefits to the poor through the assets created. Adopting the same calculations carried
out for ELIIP, it would take EGP 1.04 in rural areas and EGP 1.4 in urban areas to increase
income of the poor by EGP 1. This ratio compares favorably with similar workfare programs
such as Argentina’s Trabajar, where it cost EGP 2.5 to improve incomes by EGP 1. Moreover,
since poverty rates have further increased since the preparation of ELIIP, the poor people would
benefit relatively more from the indirect benefits from assets created, thus further improving the
estimated benefit-cost ratio for EEIP.
45. With regards to Component 3, a comprehensive ex-ante analysis of beneficiaries who will be
supported is not possible. However, benefits from project investments are expected through
increases in employment rates, productivity, and income. While the evidence of active labor
market programs for youth is heterogeneous, similar interventions targeting low-income youth
have been able to achieve significant impacts. To measure project benefits, an impact evaluation
will be carried out for the youth employability component. The evaluation will quantify changes
in income and other economic benefits among participating youth compared to non-participants,
as well as potential effects on non-labor market outcomes (e.g., human capital investments,
mental health, etc.). The results from the impact evaluation will also feed into an ex-post cost-
benefit analysis of the supported subprojects to assess whether social benefits outweigh the costs
in order to inform potential scale-up. Overall, it is expected that average unit costs will range
between US$500 and US$1,500 for different subprojects. These costs are fully in line with
similar interventions to promote wage- and self-employment for vulnerable youth in other
countries4.
4 Latin America’s Jovenes programs had a unit cost between $600 and $2000. WB funded youth employment and
entrepreneurship projects in Morocco and Lebanon have estimated unit cost of approximately $800 and $1300
respectively. Liberia’s Empowerment of Adolescent Girls Programs has a unit cost of $1221 per girl for business
skill training and $1678 per girl for job skills training.
13
B. Technical
46. Global experience indicates that labor-intensive works programs can be an important
component of a safety net in response to a rapidly deteriorating employment and poverty
situation. Both ELIIP and EEIP are the main targeted safety net projects, and ELIIP experience is
demonstrating high demand that could not be met with ELIIP resources, thus, EEIP will provide
additional funds to the program. Experience has shown that, for the same level of investment in
local infrastructure and community services, the use of labor-based methods can create between
two and four times more employment (mostly unskilled), drop foreign exchange requirements by
50 to 60 percent, decrease overall costs by 10 to 30 percent, and reduce environmental impacts.5
The employment multiplier effect of such projects is at least 1.5 because of the injection of
money into the local economy (use of local materials and other inputs, salaries mainly spent on
basic needs). Many public works projects (PWPs) are now being established with a long-term
vision of being an integral part of the country’s social safety net (scalable PWPs that can be
extended during crises).
47. The project aims to accomplish other goals that go beyond the traditional role of PWPs. This
includes the delivery of community and social services, like mother and child health, illiteracy,
youth engagement, and skills training and employability services that will support the transition
of their participants into longer-term wage and self-employment opportunities. Therefore, the
program is not only a vehicle for short-term employment and infrastructure development, but
also offers its participants skills and experience which could enable them access future labor
market opportunities. For such linkages to be useful, it is important to undertake careful
assessment of the demand for skills, gender differentiated, so that the trained workers are
absorbed. The project aims to ensure this by involving the private sector as well as the NGO
sector in the identification of the demand and the delivery of services.
48. Targeting and Allocation of Funds. To increase the chances that the sub-projects will
improve living conditions for those least able to protect themselves against the economic shocks,
the locations for the sub-projects will be selected using Egypt’s poverty map taking into
consideration the readiness for implementation and the intensity of labor of the proposed sub-
projects. Geographic targeting is guided by the Egypt Poverty Map, which uses data from the
poverty survey and census. These have been used to generate SFD’s Poverty Targeting Toolkit,
which is being updated using the latest data of the 2010/11 Household Income and Expenditure
and Consumption Survey (HIECS) and the population projections of 2011 (from 2006 census).
Districts (Markaz) are ranked accordingly and a cut off line is determined by an index that is
weighted to the national poverty level. The ranking includes both rural and urban areas. Within
the selected districts, individual beneficiary targeting will be done by a combination of pre-
defined eligibility criteria and self-selection. The careful setting of the wage rate and
identification of sub-projects should ensure that project benefits favor poorer areas and
activities/sectors and are less attractive to non-target populations..
49. Private Contracting. In Egypt, it is common practice to use contractors to execute PWPs. The
Project will introduce one or more new methods for using contractors, including: (i) defining the
share of labor in each specific contract during the tendering process, and enforcing it;
5 Employment Intensive Investment Program, ILO, April 2005.
14
(ii) providing a list of laborers in each locality whom contractors could hire for any specific
activity; and (iii) asking contractors to specify percent of labor cost in each sub-project that they
plan to execute. Alternative ways to allow the Government to fix the wage level for contractors
to abide by will be explored. Contractors will be asked to ensure that the majority of their labor
is from within the area. Only if local labor is unavailable (as verified by SFD branch offices) will
contractors be permitted to use labor from nearby communities/areas, but not to exceed 50
percent. These arrangements are provisioned in the contracts, and regularly monitored by SFD
branch offices and, as well as by the IVE.
50. Flexibility and Quick Scale-Up. The team examined the suggested design features that would
enable flexibility and quick scaling up of workfare programs during periods of economic
hardship. The most important opportunity that the proposed project provides is the potential to
move toward greater efficiency, targeting accuracy, and labor intensity. This will then be
evaluated, in the case of a need to scale-up so that the SFD, as a potential organization to
implement this safety net approach, would be in a position to respond quickly. Given its
implementation track record, existing regional offices and name recognition, scaling up would
not be a challenge.
51. Technical viability of SFD. Technical viability has been demonstrated by over 20 years of
successful public works, community and local development activity in Egypt. Investment cost
estimates, physical contingencies, prices and estimates of inputs and outputs are based on actual
historical data under the three previous IDA-financed projects, as well as other donor financed
projects. For public works, the SFD uses standardized designs which have been approved by the
relevant line ministries. These standardized designs include engineering, technical, financial, and
economic feasibility aspects, operations and maintenance, simple environmental guidelines and
cost parameters. Field evidence demonstrates that these simple, practical standards have
enhanced sub-project quality, sustainability and cost-effectiveness. All sub-projects will be
screened by SFD staff and intermediary agencies. The sponsoring agency will be able to contract
technical assistance to help in the design and implementation of sub-projects, as needed.
Training programs are also being offered to develop the capacity of the implementing partners to
prepare, implement, operate, and maintain sub-projects as well as to acquaint them with the
Egypt Environmental Affairs Agency’s environmental regulations.
C. Financial Management
52. SFD will be responsible for financial management and reporting, using systems and
procedures acceptable to IBRD. Complete accounting records will be maintained for daily
management and for periodic audits and reviews. Financial statements will be audited annually,
following international standards on auditing, by qualified independent external auditors
acceptable to the Bank. The Bank expects the SFD to submit terms of reference for the project
external audit for the World Bank’s prior review within three months of effectiveness. Audit
reports will be submitted to the World Bank within six months from the end of each fiscal year
(January 1 to December 31). There were no outstanding audit reports under World Bank-
financed projects implemented by the SFD at the time of EEIP’s preparation.
15
D. Procurement
53. Procurement will be the responsibility of the Sponsoring Agencies, which will be the
ministries, governorates, or NGOs; and the Intermediary Agencies, which will be the technical
directorates of the governorates and NGOs/CDAs. For labor intensive sub-projects, procurement
is a co-responsibility of the Sponsoring Agencies (SA), which are ministries, governorates, or
NGOs, and their technical directorates (Intermediary Agencies); and the SFD. The SFD will use
the same procedures and modalities in procurement, awarding and contracting as used in the
ELIIP, the only difference being that the SFD will co-sign the works contracts (local contractors)
together with the sponsoring agencies in the case of the sub-component on small-scale
infrastructure works.
54. An updated assessment of the methodology and the applied procurement procedures of SFD
to implement and monitor procurement actions for the project were carried out by the World
Bank during the preparation of the ELIIP in 2011and remain relevant to EEIP. The assessment
reviewed the organizational structure, the applied procedures and the matrix of responsibility for
implementing the Project. The key issues and risks concerning procurement for implementation
of the Project have been identified and included in Annex 3. The main mitigation measures are
maintaining qualified procurement staff, extending the contract of the procurement adviser, and
updating of the procurement manual to reflect the new procurement arrangement as explained
above to avoid any confusion with the ongoing project ELIIP.
55. The majority of the funds would be used for procurement activities under the Consultant
Qualification Selection (CQS) for consulting services, with a threshold of US$500,000 for the
selection of NGOs. The Procurement Department of the SFD and its officers in the regional
offices will ensure that procurement is carried out according to the updated Procurement Manual
regulations and procedures agreed upon with the World Bank. For that purpose, the SFD will
continue conducting ex-post reviews, assess the capacity of the intermediary agencies, and
conduct capacity building activities using as a basis the updated SFD Procurement Manual for
the Labor Intensive Sub-projects.
E. Social (including Safeguards)
56. From a social perspective, the Project’s impact is likely to be positive. With the emphasis on
rural areas and the targeting of districts in the lowest 35 percent of the poverty map, the poorest
and most vulnerable groups are likely to see an increase in employment, social and economic
opportunities. The youth are likely to be the primary beneficiaries of employment opportunities,
as they have higher unemployment rates. Females also will be targeted through supporting
community services sub-projects. The impact on women will be positive, especially from the
social services sub-projects, where women would be more likely to be among beneficiaries of the
services, as well as more likely to be employed to deliver the services. The gender differentiated
impacts will be monitored by the monitoring and evaluation framework and will be a special
focus of the social accountability measures to allow for adjustment during implementation to
improve the impact on women.
57. Social Accountability. This will be taken into consideration through different mechanisms as
follows: (i) a grievance and transparency mechanism that allow citizens to provide feedback to
16
the SFD about project implementation and to allow potential beneficiaries who were not
included in the program to seek redress; (ii) public information on the availability of employment
opportunities created by the project at relevant levels of implementation; (iii) client satisfaction
surveys especially for community social services sub-projects; and (iv) independent verification
of results of project implementation using NGOs.
F. Environment (including Safeguards)
58. The proposed environmental category is “B.” OP 4.01 is triggered. The EEIP provides
substantial resources that will directly complement the ongoing ELIIP and which will, in the
interest of sustaining an efficient and rapid response, adopt the approach and proven
implementation mechanisms developed under ELIIP, including environmental and social
safeguards.
59. The EEIP project will use the same Environmental and Social Screening and Assessment
Framework (ESSAF), as well as sectoral Environmental Management Plans (EMPs) that have
been developed and cleared by the World Bank to ensure environmental due diligence for similar
sub-projects funded under the ELIIP.
60. The ESSAF addresses, in a sound environmental manner and in line with the World Bank’s
safeguard policies, any likely negative environmental impacts potentially resulting from the sub-
project activities. It includes a screening tool to ensure that the sub-projects will not entail the
triggering of any World Bank safeguards policies except for OP 4.01 Environmental Assessment.
Also, the project, through the utilization of the screening tool included in the ESSAF, will
exclude any category "A" sub-projects from being funded through this project. Category "B"
projects will be subject to the national laws and regulations with regard to the preparation of an
Environmental and Social Impact Assessment (ESIA)/EMP to mitigate any negative
environmental impacts. The World Bank team, however, through supervision as well as regular
monitoring and follow-up activities, will conduct post-reviews for a selected sample of the
Environmental Assessment documents of the sub-projects. The ESSAF also includes examples
of the typical environmental impacts and the relevant mitigation measures of some of the sub-
projects that could be potentially funded by the project.
17
Annex 1: Results Framework and Monitoring
ARAB REPUBLIC OF EGYPT
Emergency Employment Investment Project
.
Project Development Objectives
The proposed Project Development Objectives are to i) to create short-term employment opportunities for the unemployed, unskilled and semi-
skilled workers in selected locations in Egypt; ii) to contribute to the creation and/ or maintenance of community infrastructure and services; iii) to
improve access to basic infrastructure and community services among target population; and iv) to improve the employability of the young men
and women through short-term training or other support services to facilitate transitions to wage and self-employment.
These results are at Project Level
Project Development Objective Indicators
Cumulative Target Values Data
Source/
Responsibility
for
Indicator Name Core Unit of
Measure Baseline
YR1
(2014)
YR2
(2015)
YR3
(2016)
YR4
(2017) End Target Frequency
Methodology Data
Collection
Direct project
beneficiaries of
workfare6
(core indicator:
Beneficiaries of
Social Safety Nets
programs)
of which are female
(%)
Number
Percentage
0.00
0.00
12,000
25%
24,000
30%
34,000
35%
40,000
40%
40,000
40%
Every six
months SFD MIS SFD
6 Workfare is defined as the labor intensive infrastructure and community service sub-projects
18
of which are youth
(18-29 year old)
Percentage
40%
50% 60% 60% 60%
Person days of
work opportunities
created through
workfare program
proportion of
which for females
proportion of which
are youth (18-29
year old)
Number of
person
days
Percentage
Percentage
0.00
0.00
0.00
2,500,000
25%
40%
7,500,000
30%
50%
12,500,000
35%
60%
13,580,000
40%
60%
13,580,000
40%
60%
Every six
months SFD MIS SFD
Job placement rate
(wage or self-
employment) of
those enrolled in
the employability
program
of which female
of which youth (18-
29 year old)
Percentage
Percentage
Percentage
0.00
0.00
0.00
0.00
0.00%
0.00
0.00
25%
50%
0.00
35%
60%
0.00
35%
60%
40%
35%
60%
One time
at the end
of
implemen
tation
Impact
evaluation
Consulting
firm
19
Intermediate Results Indicators
Cumulative Target Values
Frequency Data Source/
Responsibility
for
Indicator Name Core Unit of
Measure Baseline YR1 YR2 YR3 YR4
End
Target
Methodology Data
Collection
Component 1
Labor intensity of
subprojects: wage
share of total sub-
project costs
Percentage 0.00 40% 40% 40% 40% 40% Every six
months SFD MIS SFD
Small-scale
infrastructure sub-
projects
implemented
Number 0.00 0 2 4 6 6 Every six
months SFD MIS SFD
Direct sub-project
beneficiaries
satisfied
Percentage 0.00 65%
One time
during the
project
Process
evaluation
Evaluation
consultant
Beneficiaries who
receive their
wages on time7
Percentage 0.00 80%
One time
during the
project
Process
evaluation
Evaluation
consultant
River Nile banks
protected Kilometers 0.00 0 2 4 5 5 km
Every six
months SFD MIS SFD
Number of
classrooms
rehabilitated
Number 0.00
TBD once
the full
pipeline is
defined
Every six
months SFD MIS SFD
Rural roads paved Kilometers 0.00 TBC Every six
months SFD MIS SFD
7 As specified in the Operations Manual.
20
Component 2
Labor intensity of
subprojects
Wage share
of total sub-
project costs
(percentage)
0.00 60% 60% 70% 70% 70% Every six
months SFD MIS SFD
Community
services sub-
projects
completed
Number 0.00 0 100 300 500 500 Every six
months SFD MIS SFD
Direct sub-project
beneficiaries
satisfied
Percentage 0.00 65%
One time
during the
project
Process
evaluation SFD
Beneficiaries who
receive their
wages on time8
Percentage 0.00 80%
Every six
months
Beneficiary
survey
Evaluation
consultant
Villages that
received
cleanliness and
environmental
awareness
campaigns
Number 0.00 0.00 40 80 120 120 Every six
months SFD MIS SFD
Families that
received Maternal
and Child
Healthcare
visits/support
Number 0.00 0.00 200,000 400,000 600,000 600,000 Every six
months NGOs reports SFD
People
participating in
literacy classes
Number
0.00 TBC
Every six
months NGOs reports SFD
8 As specified in the Operations Manual.
21
Component 3
Individuals who
participated
(enrolled) in the
workers’
employability
programs ( core
indicators:
Beneficiaries of
Labor market
programs)
Of which are
female
Of which are
youth (18-29 year
old)
Number
Percentage
Percentage
0.00 300
25%
50%
1,000
25%
50%
2,000
30%
60%
3,125
35%
60%
3,125
35%
60%
Every six
months SFD MIS SFD
22
Annex 2: Detailed Project Description
ARAB REPUBLIC OF EGYPT
Emergency Employment Investment Project
Component 1: Employment-intensive Small-scale Infrastructure Subprojects (EUR 0.980
million or US$1.35 million equivalent)
1. This component will finance labor-intensive small infrastructure employment creation
programs. Specifically, the project will support labor-intensive small scale local public works
sub-projects which could include, but are not limited to Nile River bank protection, pavement of
rural roads, and school rehabilitation. These sub-projects could be demand-driven, requested by
the local government at the governorate level, or supply driven, requested by a central ministry
based on needs. Implementation of the sub-projects will be contracted out to private contractors.
Infrastructure operations and maintenance procedures will be defined and agreed upon with
beneficiaries and other stakeholders during the sub-project design phase (e.g. between SFD,
Ministries and Governorate).
2. Selection of labor-intensive sub-projects proposals for funding under the project will be
based on assessment criteria which include: labor intensity, activities that are less attractive to
those who have other options of access the labor market, wage rate that does not compete with
the prevailing rate in the labor market and the concentration of beneficiaries from the sub-project
location.
Component 2: Intensive Community Service Subprojects and Youth Employment
Activities (EUR 56.863 million or US$78.47 million equivalent)
3. This component will support labor-intensive community service sub-projects through the
provision of grants to local communities (NGOs and CBOs) for services like, but not limited to,
environmental awareness and cleaning campaigns in villages and local areas, early childhood
education, mother and child health support - including facilitating access to facilities, awareness,
home visits programs, illiteracy eradication activities, and youth engagement in community
initiatives in rural and urban areas (e.g. community mobilization and citizen engagement
activities). A high share of women beneficiaries can be expected, given that social services tend
to particularly attract females. Priority will be given to sub-projects with higher levels of labor
share.
4. Targeting for the workfare subprojects to be supported under Components 1 and 2 will
follow the same criteria and procedures as in the on-going World Bank-financed ELIIP.
Targeting will combine geographic targeting and self-targeting, building on the standard
mechanisms and lessons learned from the early implementation of ELIIP. Overall, eligible
districts will be determined on the basis of geographic targeting as guided by the Egypt Poverty
Map, which was updated using the latest data of the HIECS of 2010-2011, and the SFD Poverty
Targeting Toolkit. Pro-poor self-targeting is ensured by pre-identified eligibility criteria,
selecting subprojects which generate jobs that are not attractive to the non-poor, and setting wage
23
rate slightly below the prevailing market rate to discourage those who have other job options. It
is estimated that young people (18 to 29 years of age) will account for at least 60 percent of the
direct beneficiaries, given the high share of youth among the unemployed. In addition, some sub-
projects will be explicitly targeted to youth in rural and urban settings.
Component 3: Improving Workers Employability (EUR 5.882 million or US$8.12 million
equivalent)
5. This component will finance the piloting of two types of youth employment sub-projects
aimed at facilitating young people’s transition into wage- and self-employment. The pilot
programs will be demand-driven by NGOs based on a core set of interventions that are adapted
to the specific needs of youth and employers in the local context.
6. Beneficiary targeting: Subprojects to support beneficiaries in their transition to wage-
employment are more likely to be relevant in urban areas, while it is expected that interventions
to promote self-employment will primarily take place in rural areas. Beneficiaries will be young
men and women between the ages of 18-29 in the project’s target provinces who are out of
school and out of (full time) work. Program participants should not have participated in a formal
economic (full-time) activity for a period of more than six consecutive months since graduating
(or dropping out) from high-school, university, or another education institution. Disadvantaged
youth, including young women, will be specifically targeted. Implementing NGOs will be
required to openly advertise their activities in the local community according to the specific
eligibility criteria defined for the sub-projects (incl. age, gender, education and employment
status, etc.).
Component 3 will include two broad types of programs:
7. Programs to facilitate transitions into wage-employment. Pilot programs to facilitate
transitions into wage-employment can combine all or some of the following core interventions:
a) Training: The pilot programs can support different types of training conditional on the
existence of demand for the skills that will be provided. Implementation agencies are
expected to have agreements with particular employers or employer associations in terms
of available vacancies, skills to be acquired, curricula, and delivery mechanisms.
Training can include (i) technical training for job-specific skills in different occupations
and trades covering manual labor as well as administrative and office jobs; (ii) socio-
emotional and life skills; (iii) basic literacy and numeracy training; and (iv) on-the-job
training (internships or apprenticeships).
b) Intermediation and job-search assistance: Services under this category can include
(i) prospection, screening, job searching and matching of job-seekers and vacancies; and
(ii) job counselling and job-search assistance.
c) Wage and training subsidies: Where deemed necessary, implementing agencies can
make use of wage subsidies to encourage employers to hire youth and/or provide training
subsidies/stipends to encourage youth to take part in on-the-job training.
d) Social support services: As needed, implementing agencies can complement the above
activities with other support services appropriate for the respective target group, such as
child care, transportation allowances, referral services, psychosocial support, etc.
24
8. Integrated entrepreneurship programs. Pilot programs to facilitate transitions into self-
employment can combine all or some of the following core interventions:
a) Identifying business opportunities: NGOs should carry out local/regional market
assessments or feasibility studies to identify the key sectors offering promising livelihood
opportunities (as well as saturated markets), constraints of existing businesses and trades,
and possibilities for creating new and upgrading existing micro-enterprises.
b) Entrepreneurship training: In addition to the types of training that can be provided to
foster wage employment (see above), entrepreneurship training can also include skills
development in the area of business management and basic financial literacy, such as
participatory market research, determining financial risks and goals, business planning,
basic budgeting, bookkeeping, and sales and marketing. The business training can also be
used to develop some form of mini business plan that can subsequently be used to access
funding sources.
c) Financial services: Implementing agencies under this sub-component would be expected
to link beneficiaries to financial service providers or directly provide start-up financing as
needed. This might include: (i) facilitating beneficiaries’ access to individual or group
savings (formal or informal); (ii) providing start-up financing in the form of in-kind
grants; or (iii) facilitating access to credit and insurance by connecting beneficiaries with
financial institutions (e.g. Microfinance institutions).
d) Advisory services: In order to help youth sustain and grow their business, implementing
agencies are encouraged to offer business support services during the start-up and post-
creation stage. Advisory services could include: (i) facilitating group mobilization to
jointly exploit business opportunities; (ii) coaching and mentoring; (iii) administrative
assistance with regard to licensing and registration requirements; (iv) assistance with
improving production and service techniques; and (v) incubation and cluster support (i.e.
access to physical space).
e) Access to markets and value chains: In order to overcome the business limitations
resulting from a limited local market, implementing agencies are encouraged to help
beneficiaries access regional, national, and international markets. This can include
addressing issues of transportation and distribution, identifying buyers and
intermediaries, and creating brands and labels to support the marketing process.
Similarly, implementing agencies are encouraged to focus on businesses that have the
potential for integration into value chains.
Component 4: Project Implementation Support and Capacity Building (EUR 3.43 million
or US$4.73 million equivalent)
9. The implementation support program for the project includes: (i) training and consultancies
to support project management, monitoring and evaluation, financial management and
procurement; (ii) financing of public information activities, EU (donor) visibility,
communication and social mobilization strategy development and implementation; (iii) technical
verification for project outputs; and (iv) capacity building for SFD and governorate staff as
needed, as well as for the implementing NGOs.
25
10. Public Information, Communication, and Social Accountability. The component will
further support the design and implementation of the existing (under ELLIP) communication and
social mobilization strategy and detailed action plan. The objectives of the communication
strategy are: (i) promote the benefits of labor-intensive projects; (ii) raise public awareness about
the availability of the potential employment opportunities that would be created by the Project;
(iii) address areas of concern raised as the project is implemented; and (iv) create channels for
feedback from the beneficiaries and civil society that would improve implementation. The
communication strategy will propose key messages to be disseminated through
communication/media channels. The component will also finance the contingencies for the
project, as specified by the Trust Fund arrangement. Additionally, funding will be allocated for
EU visibility and branding activities for the project’s activities, as specified in the financing
agreement. In addition, the component will support the design and implementation of a
grievance and transparency mechanism that would allow citizens to provide feedback to the SFD
about project implementation and allow potential beneficiaries who have not been included in
the program to seek redress.
11. Technical Verification. Periodic technical verification will be carried out on a semi-annual
basis during the life of the Project, using an Independent Verification Expert (IVE) and NGOs.
The IVE will verify: (i) the intermediate sectoral outcomes; and (ii) compliance with the
Operations Manual.
12. Project Monitoring & Evaluation. Monitoring will be carried out by the SFD’s internal
monitoring system using the SFD management information system (MIS). The Project will
finance support to conduct a) targeting, process and beneficiary satisfaction evaluation; and
b) impact evaluation and cost effectiveness of the pilot youth employability programs
(Component 3), to assess the effectiveness of different approaches in securing employment and
increasing incomes of the beneficiaries. These evaluations are expected to assist the Government
of Egypt in improving implementation and assessing the potential for scaling up the workfare
activities as an essential part of Egypt’s social safety net program. Evaluations will be carried
out through independent consulting firms.
13. Capacity Building – for SFD and Governorate staff, as well as for the implementing NGOs -
- will be procured as needed. SFD staff will be exposed to experiences of other countries in the
design, delivery and scalability of similar programs. National and international training will be
provided as deemed to be relevant to the implementation of the project.
26
Annex 3: Implementation Arrangements
ARAB REPUBLIC OF EGYPT
Emergency Employment Investment Project
PROJECT INSTITUTIONAL ARRANGEMENTS
1. Project Implementing Agency. The implementation arrangements for this project will be
similar to those of the ELIIP, with the SFD as the main implementing agency. The SFD will be
responsible for the overall program, using its own fiduciary management systems that are in
compliance with World Bank regulations and procedures. The SFD is a legally autonomous,
permanent and well established development organization with a long track record of providing
support to needy and underserved communities. The SFD has been implementing the public
works program for the last 20 years to provide immediate short-term employment opportunities.
2. The SFD has significant experience in interventions that provide services and employment to
the poor, with an increasing focus on community participation, cooperation with NGOs, and
decentralization. Since 1992, about EGP 1.8 billion worth of projects have been implemented by
SFD in infrastructure development and EGP 0.9 billion worth of projects in community services.
Over the years, the most common sub-projects implemented were water supply and sanitation
projects, pavement of roads, cleaning of canals, public buildings, and riverbank protection.
3. Project Oversight. The Board of Directors of the SFD, which is chaired by the Prime
Minister and includes the Ministers of Finance, Planning and International Cooperation, Social
Solidarity, Trade, Industry and Investment, Local Development and Administrative
Development, Social Solidarity, Deputy Governor of the Central Bank of Egypt, in addition to 4
members representing the private sector and civil society, is responsible for project oversight.
SFD’s Managing Director will be responsible for general project coordination and
implementation.
4. Project Management. The SFD will rely on its Human and Community Development
Central Sector (HCD) and the capacities of the Financial Management Department, the Internal
Audit Department, the Environmental Safeguards Department, and the Planning, Monitoring,
and Evaluation Department in implementing this project. There will be no separate project
implementation unit (PIU) established within the SFD Headquarters. The SFD will work in close
partnership with the governorates, sectoral ministries at the governorate level, local authorities,
NGOs, and CDAs. The SFD will be responsible for implementing and coordinating the activities
of the project with the support of its 27 regional offices which will monitor and report on project
progress.
5. Implementation procedures. As in the ELIIP, the SFD will be responsible for financial
management and reporting, using systems and procedures acceptable to the World Bank.
Procurement will be the responsibility of the Sponsoring Agencies, which will be the ministries,
governorates, or NGOs; and the Intermediary Agencies, which will be the technical directorates
of the governorates and CDAs. The SFD will use the same procedures and modalities in
27
procurement, awarding, and contracting as used in the ELIIP, the only difference being that the
SFD will co-sign the works contracts (local contractors) together with the sponsoring agencies in
the case of the sub-component on small-scale infrastructure works.
IMPLEMENTATION ARRANGEMENTS
FOR COMPONENTS 1 AND 2:
6. SFD’s Roles and Responsibilities. Key SFD duties will include: (a) preparing the sub-
projects pipeline in accordance to the guidelines and eligibility criteria defined in the Operations
Manual; (b) assessing the degree of labor intensity of the proposed sub-project, (c) assessing the
degree of appropriateness of the proposed sub-projects to the local area need and community
engagement in identifying and executing sub-projects and the quality of the skills upgrading
activities proposed; (d) supervising the activities of the sponsoring agencies and the intermediary
agencies; (e) overseeing the procurement arrangements to ensure that implementing partners are
adhering to the agreed procedures; and in the case of small-scale sub-projects SFD has a co-
responsibility of the procurement process and SFD co-signs with the Sponsoring Agencies (SA)
the contracts; (f) ensuring that sponsoring agencies are actually carrying out the capacity
building activities for the implementing partners (including training on sub-project
implementation, contracting, operations and maintenance, and financial management);
(g) monitoring performance through the MIS and reporting quarterly on progress; and
(h) developing an impact evaluation process to provide information on project outcomes.
Main sub-project Partners
7. Line Ministries/Governorates and their technical directorates. Line Ministries are the
sectoral ministries at the national level that identify the types of technical subsectors to be funded
under this operation. Below the national level, the 27 governorates are the main focal points of
government development efforts. Associated with line ministries/governorates are technical
directorates (mudiriat) which represent line ministries within a particular governorate. Technical
directorates are responsible for the technical aspects of their sectors throughout the governorate.
Governorates and their technical directorates assume the technical responsibility for operation
and maintenance of most infrastructure investments.
8. NGOs/ Community Development Associations (CDAs). NGOs are registered large
experienced community development associations with a track record in implementing
community driven development projects. NGOs support the formation, capacity development,
and expansion of grass-roots CDAs at the village level. CDAs are groups of citizens from the
community with a common interest, who organize into legally constituted civil associations.
Both NGOs/CDAs will identify, prepare, implement, supervise, operate and maintain their sub-
projects, assisted both by technical specialists whom they contract directly and by technical
assistance and training made available through the Project.
28
Priority setting for allocation of funds
9. The Egypt poverty map information will be used to prioritize allocation of funds for sub-
projects geographical areas.
Sub-project implementation
10. Community Infrastructure Sub-projects:
Identification of sub-projects
The sub-projects pipeline is identified by SFD regional offices in collaboration with
sectoral line ministries, technical directorates at the governorate level, local authorities,
and in consultation with the local community.
Approvals by SFD
Once a group of sub-projects under a single framework agreement has been identified, it
is sent to the standing SFD appraisal committee at headquarters for appraisal. Upon
approval, the funds are allocated.
Signing of framework agreements
A framework agreement is signed between SFD and the governorate or line ministries
(SA). Framework agreements define the scope of the sub-project, preliminary sub-
project list, and reporting requirements, in addition to the roles and responsibilities of
the technical directorates as Implementing Agencies (IA). The IA will represent line
ministries within a particular governorate and will assume the technical responsibility
for operations and maintenance of infrastructure investments.
Setting up a Project Implementation Unit (PIU) within the SA
Based on an assessment of the strengths of the SA, a PIU will be set up within the SA.
Personnel will include a full time project manager, an accountant, and a procurement
specialist.
Signing of sub-grant agreements between SA and IA (also known as Intermediary
Grant Agreements)
A sub-grant agreement is signed between the governorate/line ministries (SA) and their
technical directorates at the governorate level (mudiriat) (IA). The sub-grant agreement
defines the roles and responsibilities of the technical directorates, contracting conditions,
and procurement procedures.
Setting up required bank accounts
A bank account for the sub-project will be set up in the name of the sponsoring agency,
with signatory delegated to the PIU and other details declared. Similarly, every
intermediary agency (technical directorate) which is expected to execute sub-projects
will also set up bank accounts.
29
Preparing detailed designs and tender documents by IA
The IA is responsible for preparing the detailed designs, bills of quantities, tender
documents, and technical daily supervision.
Physical execution of sub-projects
Sub-projects will be implemented through contracting local private civil works
contractors in accordance with SFD’s procurement manual and in compliance with
SFD’s financial management manual.
Reporting on sub-project progress
Implementation progress of sub-projects is reported by the SA as per reporting
requirements defined in SFD’s Operations Manual.
11. Community Services Sub-projects:
Selection of NGOs/CDAs
NGOs/CDAs will be selected based on the qualifications of the organization, past
experience, and implementation and fund management capacity. A long list of
NGOs/CDAs will be identified per sector for each governorate. The SFD has already a
long list of qualified NGOs/CDA, which will be updated during project implementation.
Identification of sub-projects
Qualified NGOs/CDAs per sector per geographic area will develop the sub-projects
pipeline in partnership with SFD regional offices and in collaboration and consultation
with the local authorities.
Approvals by SFD
Grant agreements for sub-projects are identified and sent to the standing SFD appraisal
committee at headquarters for appraisal. Upon approval, the funds are allocated to the
NGO/CDA.
Signing of grant agreements for sub-project implementation (also known as
Sponsoring Agencies Grant Agreements)
An agreement is signed between SFD and the implementing NGO/CDA that will define
the scope of the sub-project, the roles and responsibilities of NGO/CDA where
applicable, reporting requirements, contracting conditions, and procurement procedures.
Setting up a Project Implementation Unit (PIU) within the NGO/CDA
Based on an assessment of the strengths of the NGO/CDA, a PIU will be set up within
the SA. Personnel needed for the PIU will include a full time project manager, an
accountant, and a procurement specialist.
Setting up required bank accounts for the grant agreement
A bank account for the sub-project will be set up in the name of the NGO/CDA, with
signatory delegated to the PIU and other details declared.
30
Physical execution of sub-projects
Sub-projects will be implemented by the NGO/CDA through contracting suppliers and
consultants in accordance with SFD’s procurement manual and in compliance with
SFD’s financial management manual.
Reporting on sub-project progress
Implementation progress of the sub-projects is reported by the NGO/CDA as per
reporting requirements defined in SFD’s Operations Manual.
FOR COMPONENT 3:
12. Activities to facilitate the transition of young people to wage- and self-employment will be
managed by SFD’s Human and Community Development (HCD) Central Sector and
implemented by competitively selected NGOs.
13. Selection process: Interested NGOs can respond to an expression of interest based on which
SFD headquarters will carry out a first general capacity assessment of the respective
organizations. NGOs meeting the minimum requirements will be shortlisted and receive a
Request for proposal (RFP) that will specify in detail the required expertise of the NGO. Each
candidate will then submit a combined technical and financial proposal. These will be analyzed
and ranked according to a set of pre-identified criteria by a technical evaluation committee set up
by the SFD. Criteria will include i) the NGO’s ability to serve a minimum number of
beneficiaries; ii) track record of working with youth, including disadvantaged youth and young
women; iii) demonstrated experience in the type of youth employment programming proposed;
iv) technical quality of the proposal, including strong linkages with employers for wage-
31
employment projects and strong capacity for local market assessments for self-employment
projects; v) potential for sustainability and scaling-up; and vi) cost-effectiveness of the
intervention.
14. Implementation modalities: Applicant NGOs can choose to implement activities under
three different implementation structures.
a. Direct implementation: To the extent that NGOs meet the minimum eligibility and
quality criteria, they can apply to implement project activities independently.
b. Mother NGO: Mother NGOs would collaborate with local NGOs and/or CDAs to
implement specific services as needed. The Mother NGO would provide capacity
building and quality control to the local organizations as needed. In the eyes of the
SFD, the Mother NGO is the only legally responsible organization for the fulfillment
of the SFD grant.
c. Consortium: NGOs may also choose to form a consortium and apply for separate
grants related to the same project. In this scenario, several NGOs would agree upon a
joint project proposal, and the distribution of responsibilities, including which NGO
will be the lead NGO. Each NGO would then send a separate proposal to the SFD,
indicating that their proposal is part of a joint initiative. All proposals related to the
same initiative would then be evaluated jointly.
15. Implementing partners: As needed, the implementing NGOs are expected to enter into
partnership agreements with other agencies or experts to deliver specific parts of the services.
For example, this could include partnering with specialized training centers to deliver technical
training, with other NGOs or specialized consultants to deliver life skills training, or with
community-based organizations to enhance outreach to beneficiaries. Applicant NGOs will
specify their planned partnerships as part of their proposals. In the case of projects targeting
wage-employment, potential NGO providers will be required to partner with private sector firms
and secure their commitment to offer an internship and/or job vacancies to a certain number of
trainees graduating from the NGO’s program.
16. Performance-based contracts: Implementing NGOs will be reimbursed for the cost of
services on the basis of outputs and results. Performance-based contracts will reward
implementing NGOs for achieving the desired outcomes of the program to place a maximum
number of beneficiaries in available jobs through wage- and self-employment. The contract
mechanisms will therefore include a withheld payment that will be paid based on the
achievement of placement targets. Placements of beneficiaries into jobs will be subject to
independent verification by SFD.
MONITORING AND EVALUATION
17. Monitoring. The SFD will monitor the progress of implementation using its management
information system (MIS) which has been adapted to ensure that it will be able to respond to the
reporting requirements of the Bank and the Results Framework of the Project.
32
18. Reporting. The SFD will submit to the Bank semi-annual progress reports that provide
updates on the status of the project outcome, intermediate outcome, and output indicators. In
addition, the SFD will submit to the Bank a Mid Term Review Report and a Project Completion
Report.
19. Technical verification and quality assurance. Periodic technical verification will be carried
out on a semi-annual basis during the life of the Project, using an Independent Verification
Expert (IVE) and NGOs. The IVE will verify: (i) the intermediate sectoral outcomes; and (ii) the
output indicators. In the case of the youth employability component, the IVE will verify the
placement rates reported by the implementing NGOs. Quality assurance firms will assess: (i) the
quality of the works; (ii) whether sub-projects are operated and maintained in accordance with
SFD’s maintenance manuals; (iii) compliance with the Operations Manual; (iv) compliance with
environmental and social safeguards for community infrastructure sub-projects; and (v) client
satisfaction rates for workfare sub-projects
20. Evaluation. The Project will finance support to conduct mid-term, end-of-project, targeting
and process evaluations that will assist the Government of Egypt in assessing the potential for
scaling up the workfare activities as an essential part of Egypt’s social safety net program. An
impact evaluation will be conducted of the pilot youth employment programs (Component 3), to
assess the effectiveness of different approaches in securing employment and increasing incomes
of the beneficiaries. Evaluations will be carried out through independent consulting firms.
21. The project will be managed in accordance with SFD’s Operations Manual which at all times
will need to be acceptable to the World Bank.
FINANCIAL MANAGEMENT AND DISBURSEMENT
A. Executive Summary and Conclusions
22. An assessment of the Financial Management arrangements (FM) for the EEIP was
undertaken to assess the capacity of the implementing entity of the project and assist in
determining the required FM arrangements for the implementation of the project. A detailed FM
capacity assessment of SFD was conducted and its outcome is found to be satisfactory to the
Bank.
23. The project arrangements were discussed at length with evaluation of FM options to be
applied during implementation and their impact on the various stakeholders under the Project.
The envisaged project stakeholders were identified as: (i) SFD and its affiliated Regional
Offices (RO) (Tier 1); (ii) the SA which will be represented in the PIUs within the respective
Ministry, Governorate or NGO (Tier 2); and (iii) the IA responsible for the respective project at
the governorate level (Tier 3).
24. As it is the case with the different donor funded projects implemented by the SFD, the
current automated accounting system (i.e., Oracle) includes a separate coding system for each
project. Detailed disbursement, reporting and auditing arrangements were agreed with SFD as
detailed in the following sections in this annex.
33
B. FM Risk Assessment and Mitigating Measures
25. The diagnostic studies conducted by the Bank that covered financial management at the
country level (ROSC, CFAA, PEFA) identified some weaknesses in the reporting and auditing
environment in Egypt. The overall fiduciary risk associated with public financial management
was assessed to be significant. This was taken into consideration in assessing the project risks
and in designing the project FM arrangements.
Inherent Risks: Mitigating Measure (MM)
The diversified structure and the
multiple layers of implementation may
result in slow implementation and
difficult monitoring.
Substantial
- The SFD has prior experience with similar
Bank-financed projects.
- The OM clarifies the
relations/responsibilities of the different
implementation layers.
Moderate
Project level
Lack of coordination between the
different parties involved with the
project implementation (SFD, SAs,
Intermediary Agencies, etc.) can
negatively affect smooth project
implementation.
High
- As per the framework agreements with the
SAs the PIUs in the Ministries, Governorates or
NGOs will be responsible for sending monthly
Technical and Financial Reports to the SFD
ROs in order to be entitled to request future
tranches.
Substantial
General Risk Before MM High General Risk after MM Substantial
Control Risk
Internal Control
The existing internal controls at the
SFD should be updated to meet the
new Project’s needs (Project’s
disbursement procedures and reporting
requirements).
Substantial - SFD procedures have been amended to
capture the financial management arrangement
and disbursement requirements of the Project.
- The SFD Internal Audit Department (IA)
established a risk based audit strategy which was
reviewed, and found acceptable, by the Bank.
The audit strategy covers the IA involvement in
the evaluating the grant recipient and follow up
on activities through project implementation.
The SFD IA conducts capacity assessment of the
PIU/CDA before signing the framework
agreement.
Moderate
Funds Flow
Lengthy channels of funds from the
Bank through SFD and SAs before
arriving to ultimate beneficiaries.
SFD’s requests for replenishment for
unsettled advance payments can result
in ineligible expenditures and inflated
Bank exposure.
Substantial - The project design allows SFD to request
advances to the Designated Account up to 6
months of its estimated disbursement plan as
presented in the IFRs. Also the NGOs will be
able to request funds, in advance, based on cash
forecasts and expected commitments. Each
NGO will have a bank account to be used solely
for the project.
Moderate
34
- The SFD will continuously keep track of the
amounts actually disbursed, through the SFD
Finance Department, and not only the amounts
transferred to the NGO. The amounts actually
disbursed should represent the basis for
requesting replenishments.
Financial Reporting
The project reports need to reflect the
project finances including SAs. The
SFD financial management system
will need to be configured to become
able to compile the project financial
data and issue on quarterly basis the
project reports.
The consolidation of reporting may
not be timely.
Substantial
- As per the framework agreements with the
SAs the PIUs in the Ministries, Governorates or
NGO/CDAs will be responsible for sending
monthly Technical and Financial Reports to the
SFD ROs in order to be entitled to request future
tranches.
- The format and content of the project reports
has been agreed upon with the SFD.
- This system allows the generation of the
overall project financial reports on a timely
basis.
- The IT department at the SFD creates
separate accounting codes for each Project.
Moderate
Overall Control risk Substantial Moderate
Staffing:
26. The SFD Finance Sector structure is as per the following organizational chart. The SFD staff
capacity in the Finance and Internal Audit were found to be adequate to absorb the additional
workload of the Project. There are 27 employees in the Finance Sector and 40 employees in the
IA department, with adequate prior experience with Bank-financed projects and satisfactory FM
performance.
35
Accounting:
27. The SFD will record all project-related transactions using cash basis. Original supporting
documents will be kept at the SA level. The SFD Internal Audit and the project External Auditor
will be granted access to examine the original supporting documentation. Meanwhile, the SA
will send monthly reports to the SFD regional office. The Implementing Agency, in coordination
with the SA, is responsible for the issuance of bidding documents, the selection process,
supervision of implementation, the verification of technical acceptability of implemented
activities, and the issuance of payments to beneficiaries.
28. The SFD bookkeeping is automated through the accounting system, Oracle, which is
centralized in the SFD Head Office. The system was previously found to be acceptable by the
Bank and accordingly, it was agreed with the IT representative to establish a separate module on
the Oracle system for the sole purpose of recording the receipt of all project proceeds and
corresponding disbursements. In addition, the system is capable of generating quarterly IFRs
and annual Financial Statements as required under the Grant Agreement. In case of contracting
with PIUs working under a SA, the SFD system automation is applied to the entire recording and
reporting stream and the PIUs will be granted access to the SFD system to report on the project
activities. When contracting with NGOs, the SFD RO will be responsible for the recording and
reporting on the SFD system on behalf of the NGO. The format and content of the project reports
has been agreed with the SFD Finance and IT Departments.
29. Grants are first accounted for when granted to finance sub-projects and recorded in the
accounting system based on actual disbursement. Contracts will be kept at the SFD Headquarters
while original documentation supporting actual disbursements will be kept at the PIU/NGO level
which will also be required to scan supporting documents and send it to the ROs to request
transfer of funds. The contract with the PIU will state that the SFD IA department and the
independent external auditor will be granted access to examine the project original documents
supporting actual disbursements.
30. The SFD will continuously keep track of the amounts actually disbursed and not only the
amounts transferred to the SA. The amounts actually disbursed should represent the basis for
requesting replenishments.
Flow of Funds and Internal Controls:
31. To facilitate the flow of funds, a Designated Account (DA) will be opened at the Central
Bank to receive the grant funds that will be used for the sole purpose of executing the project
activities. The project design allows SFD to request advances to the DA up to 6 months of
estimated disbursement plan as presented in the Interim Financial Reports (IFRs) i.e., IFR based
disbursement.
32. Before signing the framework agreement with the respective SA, the IA department will
conduct a capacity assessment of the PIU/NGO. Upon the IA clearance, the framework
agreement will be signed accordingly.
33. The framework agreement signed with the SA (Governorate, Ministry, Mother NGO or
NGO) is given a unique code and entered in the SFD automated system against the financing
36
donor. For Component 1, the SFD will be directly contracting and paying subprojects
implemented under this component. For Component 2, NGO/CDA issues a disbursement request
to the SFD RO requesting the advance payment (and later subsequent tranches) to be transferred
to its bank account. The RO forwards the request to the responsible department (i.e., HCD). The
HCD fills out a disbursement form with all project information (i.e., code , name, responsible
department, sub-project start date, sub-project duration, sub-project developmental objective,
financing source, project value, total number of tranches according to the contract, previous
tranches and their respective amount, remaining amount, bank name, bank account number). The
form is signed by the responsible sub-project officer, and approved by the HCD Head of the
Department and HCD Sector Head. The form is then reviewed and signed by the Monitoring and
Evaluation Department.
34. The form is forwarded to the Finance Sector where it is reviewed, approved and authorized
for payment. The form is signed by the Head of Expenses and Transfers Department and the
Financial Follow Up of Convention Department and Finance Sector Director.
35. The Expenses and Transfers Department issues a letter to the bank to transfer the requested
and approved amount to the NGO/CDA from the DA to the respective bank account. The letter is
signed by the Head of Expenses and Transfers Department and the Manager in the Expenses and
Transfers Department.9 The same procedures apply for subsequent tranches. The following
documents are attached with the disbursement request from the NGO to the RO:
- The cumulative disbursements.
- Technical report on the project achievements.
- Plan for future disbursements and work.
36. The Financial Follow Up of Convention Department will keep track of all project
disbursements and will disburse from the grant as per the quarterly IFR which will include:
- DA balance
- Amounts disbursed to the end beneficiaries (Contactors/Suppliers)
- Upcoming six month disbursement forecast
The above is associated with a Withdrawal Application which will be signed by the project
authorized signatories.
37. The project disbursement plan will be updated periodically and will be used to reflect the
variances upon IFRs submission. It is necessary that variance analysis be prepared with each IFR
submission explaining variances that exceed 15 percent between actual and planned figures of
the reporting period.
38. The SFD has an internal audit department and adequate FM manual reflecting its operation
which was found to be satisfactory. The current Internal Audit Department includes around 40
auditors at the HQ and governorate levels. The Internal Audit Department –with its current
capacity- is responsible for conducting audit field work and related reporting for all SFD projects
all over Egypt.
9 On the SFD automated system, the related Journal Voucher is prepared by finance officer, reviewed by the finance
manager and approved by the Financial Control department Senior Manager and the Sector Director Finance and
Operation.
37
39. The SFD Internal Audit Department (IA) established a risk based audit strategy which was
reviewed, and found acceptable, by the Bank. The audit strategy covers the IA and the
independent external auditor involvement in evaluating the grant recipient and follow up on
activities being implemented. A capacity assessment of the PIU/NGO would be carried out
before signing the framework agreement. Upon the IA clearance, the framework agreement will
be signed accordingly. The IA strategy also includes the internal procedures of the SFD in the
process of appointing the external auditor for the Project, and refers to the fact that the external
auditor TOR will be reviewed and given a ‘no objection’ by the Bank. The IA audit strategy
stipulates that all projects are subject to at least two Internal Audit attestation visits, one at an
early stage of project implementation and another visit before transferring the final grant tranche.
Reporting and Auditing:
40. The SFD is subject to an external audit and to the Central Accountancy Office regular audits
as well as independent private audits. The SFD will ensure that an external auditor for the project
is appointed within three months after project effectiveness. The external auditor will conduct
quarterly reviews on the project IFRs before submission to the Bank.
41. The SFD will remit to the Bank not later than six months after the end of each year the audit
report of the Project. The external audit report shall encompass all Project activities and shall be
in accordance with International Standards on Auditing (ISA). In addition to the audit reports,
the auditor will prepare a "management letter" identifying any observations, comments and
deficiencies, in the system and controls, that the auditor considers pertinent and shall provide
recommendations for their improvements. The TOR for the auditor will be prepared and
submitted for the Bank's ‘no objection’.
42. The below table summarizes the financial reporting arrangements required under the project.
Report Due Date Responsibility Sent
to
Scope
Interim
financial
Reports
45 days from end
of quarter
External Auditor Bank Review
Annual
financial
statements
6 months from end
of the fiscal year
External Auditor Bank Audit
Supervision Plan:
43. At least two implementation support missions will be carried out annually. Follow up visits
will be conducted as deemed necessary. The review and audit reports of the interim and annual
financial statements respectively, in addition to management letter, will be reviewed on a regular
basis by the Bank FM Specialist and the results or any issues will be followed up during
implementation support missions. Also, during the Bank's missions, the Project's financial
management and disbursement arrangements will be reviewed to ensure compliance with the
Bank's requirements and to develop the financial management rating for the Implementation
Status Report (ISR).
38
PROCUREMENT
44. Procurement for the proposed Project will be carried out in accordance with the World
Bank’s “Guidelines: Procurement under IBRD Loans and IDA Credits” dated January 2011;
“Guidelines: Selection and Employment of Consultants by World Bank Recipients” dated
January 2011; the World Bank’s Anti-Corruption Guidelines (“Guidelines on Preventing and
Combating Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants), and
the provisions stipulated in the Legal Agreement. The various items under different expenditure
categories are described in general below. For each contract to be financed by the Grant, the
different procurement methods or consultant selection methods, the need for pre-qualification,
estimated costs, prior review requirements, and time frame are agreed between the Recipient and
the Bank in the Procurement Plan. The Procurement Plan will be updated at least annually or as
required to reflect the actual project implementation needs and improvements in institutional
capacity.
45. Procurement of Works: Works procured under this Project will include: small value
contracts estimated to not exceed US$350,000. Large contracts will not arise at the SA/NGO level
due to the nature of the works involved and, therefore, International Competitive Bidding (ICB) is
not foreseen. Civil works contracts will be implemented by local contractors and supervised by
the SA, the beneficiary of SFD finance.
46. Civil works contracts will include canal weed reduction and protection of river bank,
rehabilitation of rural housing, upgrading of rural roads, and school rehabilitation. Civil works
with an estimated contract value below US$350,000 would be awarded through local shopping
(small works procedures) as explained and agreed upon in the updated Operations Manual. The
Operations Manual will also include standard evaluation forms related to the set types of
procurements.
47. Civil works with an estimated contract value more than US$350,000 will be procured at the
SFD central level through National Competitive Bidding (NCB) using the modified World Bank
standard bidding document in Arabic language which is currently being used by other World
Bank financed projects in the water sector in Egypt, with advertisement in two national
newspapers. NCB procedures shall comply with the requirements stipulated in the Financing
Agreement under the Provisions for NCB.
48. Procurement of Goods: Goods procured under this Project will include: small value contracts
of less than US$100,000. The procurement will be done following the SFD updated procurement
manual as agreed upon with the Bank; this manual Includes in its annexes simplified local
shopping procedures for contracts estimated less than US$100,000 or equivalent. The manual also
includes standard evaluation forms related to these types of procurements.
49. Procurement of non-consulting services: Procurement of non-consulting services under the
project may include printing services, translation services, transportation service, catering
services, hotel services, etc.
39
50. Selection of Consultants: All consulting service contracts under this project would be
procured at the SFD central level following the World Bank’s procurement procedures by using
the Bank’s Standard Request for Proposal. Consulting services contracts would mainly comprise
hiring of an Independent Verification Expert, Evaluation, Communication, Capacity
Development, and Audits. Consulting service contracts above US$500,000 will use Quality and
Cost based Selection QCBS and/or Quality Based selection QBS. Consulting service contracts
below US$500,000 for selection of firms or NGOs may be procured using selection based on
Consultants‟ Qualification CQS, Fixed Budget Selection FBS, and Least Cost Selection LCS.
51. Single Source Selection could be used in exceptional cases subject to approval by the Bank.
The SFD updated procurement manual will include annexes of standard simplified Request for
Proposals (RFP) and contract forms as well as standard evaluation forms. Short lists of
consultants for services estimated to cost less than US$500,000 equivalent per contract may be
composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of
the Consultant Guidelines. All individual consulting assignments will be selected on the basis of
comparison of qualifications in accordance with Section V of the Guidelines for Selection of
Individual Consultants.
52. Capacity building activities to be financed by the Grant include workshops to train
beneficiaries on environmental and other aspects related to implementation of the LI subprojects.
The procurement will be done in the form of a budget covering the expenses of the workshops.
This will include trainees travel expenses, their accommodation if necessary, rental of space,
consumables and remuneration for private facilitators.
Assessment of the Agency’s Capacity to Implement Procurement
53. An updated assessment of the methodology and the applied procurement procedures of Egypt
SFD to implement and monitor procurement actions for the ongoing project were carried out by
the Bank during the preparation stage of ELIIP in 2011 and these remain to be valid under EEIP.
The assessment reviewed the organizational structure, the applied procedures and the matrix of
responsibility for implementing the Project. The key issues and risks concerning procurement for
implementation of the ongoing Project were identified and included:
Bidding Document (BD )inconsistent with World Bank Guidelines;
Inconsistent application of rules and procedures by the different implementing agencies;
Quality of selection process for NGOs yet to be improved.
Lack of standard BD, RFP, contract forms and evaluation forms;
Practice of pre/post award negotiations;
Unjustified re-bidding which may result in unnecessary delays in implementation;
Civil servants are paid out of the project proceeds.
A general practice across the country of negotiating prices with bidders or accepting
discount after bids opening.
54. The corrective measures which had been agreed were: (i) hiring of an experienced
procurement adviser for consulting services); (ii) updating of the procurement manual with
complete annexes to ensure clear definitions of rules and responsibilities and enable consistent
application of these rules (completed March 2012); (iii) reinforcement of the capacity of the
40
regional offices by the procurement adviser to monitor conform compliance to the application of
procurement procedures by the SAs and IAs ; and (v) carrying out of appropriate capacity
building for the procurement manual and annexes (completed February 2013). Since all
mitigation measures have been completed during the implementation of the ongoing project, the
overall project risk for procurement is Moderate.
55. Prior Review: Consulting services contracts above US$500,000, civil works above
US$350,000 and goods above US$100,000 would be subject to the Bank’s prior review or as
indicated in table 1 below. Rejection of all bids for rebidding purposes is subject to the Bank’s
prior review regardless of the value of the contract. All individual consultants’ contracts above
US$50,000 would be subject to the Bank’s prior review. All other contracts would be subject to
post review.
Table Summarizing Prior Review Thresholds:
56. Procurement Plan: The Recipient, at appraisal, developed a procurement plan for project
implementation which provides the basis for the procurement methods. This plan was agreed
upon between the Recipient and the Project Team before negotiation. The Procurement Plan will
be updated in agreement with the Project Team annually or as required to reflect the actual project
implementation needs and improvements in institutional capacity.
57. Frequency of Procurement Supervision: In addition to the prior review, supervision to be
carried out from the Bank office, the capacity assessment of the IA has recommended two
supervision missions to visit the field to carry out post-review of procurement actions.
Prior Review
Thresholds Proposed
(USD million) Procurement Method Thresholds Proposed (US$ million)
ICB NCB Shopping QCBS QBS CQS
Least
Cost SSS
Goods The first two NCB
contracts regardless
of their values all
ICB contracts
≥1.0 <1.0 <0.1
Works The first two NCB
contracts regardless
of their values and all
ICB contracts
≥10 >0.35 <0.35
Consulting
Services
0.5 Default TBD <0.5 TBD TBD
Rebidding All
41
Annex 4: Operational Risk Assessment Framework (ORAF)
ARAB REPUBLIC OF EGYPY
Emergency Employment Investment Project
Risks
1. Project Stakeholder Risks
1.1 Stakeholder Risk Rating Substantial
Risk Description:
a) SFD as an institution is
supported by the government
and the donor community,
and is known as an effective
employment creation and
poverty reduction instrument.
Job creation is the top
priority. Local government is
the focal point for
identification of sub-projects,
and there may be the
possibility of bias in targeting.
b) At the local level, there
may be bias in the
identification of sub-projects
to be funded.
c) Since the activities are
expected to be implemented
by NGOs, there is likely to be
fiduciary and reputational
risks to the Bank
Risk Management:
a) The project will follow agreed mechanisms for targeting, utilizing country poverty maps and combining geographic
targeting, self-targeting, and community targeting.
Resp: Client Status: Ongoi
ng Stage: Preparation and
implementation
Recurrent:
Due
Date: Frequency:
Continuous
Risk Management:
b) The sub-project types will be identified through a process of assessing all proposals against a set of selection criteria, e.g.
labor intensity, activities that prioritizes the unskilled and semi-skilled and the capacity of the sponsoring agency.
Resp: Client Status: Ongoi
ng Stage: Preparation and
implementation
Recurrent: Due
Date: Frequency: Continuous
Risk Management:
c) To mitigate these risks, NGOs will be competitively selected by the SFD based on certain selection criteria
including their experience and financial capacity. SFD will monitor NGO activities relying on its Internal Audit
department as well as tailored terms of reference when hiring the project external auditor. In addition, SFD’s
community participation approach, transparent information sharing and feedback mechanisms collectively help
in reducing this risk.
Resp: Client Status: Ongoi
ng Stage: Preparation and
implementation
Recurrent: Due
Date: Frequency: Continuous
42
2. Implementing Agency (IA) Risks (including Fiduciary Risks)
2.1 Capacity Rating Moderate
Risk Description:
a) Lack of sufficient capacity for
project management, given that SFD
has not been managing labor intensive
sub-projects, although they have
started now under the WB financed
ELIIP. There was initially
insufficient procurement and FM
capacity, including a challenging
public financial management
environment. Lack of implementing
capacity at the local levels. SFD did at
one time have an active public works
program, which the WB supported,
but the program closed in the 1990s
due to diminished demand. The
staffing, procedures and other
arrangements used during that period
are gradually coming back into place
over the past year through the
implementation of the WB funded
ELIIP. Capacity under the ongoing
ELIIP indicates that project
management and fiduciary capacity
are adequate.
b) Procurement risk is considered
‘Moderate’ because: (i) there are gaps
in procurement capacity, especially at
the local level; and (ii) all
procurement for goods will be carried
out using Shopping procedures and
NGOs will be selected using CQS.
c) Financial Management risk is
considered “Substantial” because:
Risk Management:
a) Support from the EEIP, in the form of TA to build project management capacity, including in the areas of project
management, procurement and financial management.
Resp: Both Status:
Ongoi
ng
Stage: Preparation and
implementation
Recurrent: Due
Date: Frequency:
Continuous
Risk Management:
b) Procurement: Mitigation measures include: (i) an experienced Procurement Advisor was hired under the ongoing
Bank-financed ELIIP-; (ii) the Procurement Manual with complete annexes was updated to ensure clear definitions
of roles and responsibilities, and consistent application of procedures; (iii) reinforce capacity of regional offices
through Procurement Advisor to monitor conformity with procedures used by SAs and IAs; and (iv) provide
capacity building on development of Procurement Manual and Annexes.
Resp: Both Status:
Ongoi
ng
Stage: Preparation and
implementation
Recurrent: Due
Date: Frequency:
Continuous
Risk Management:
c) Financial Management: Mitigation measures include: (i) the Operations Manual clarifies the roles/responsibilities
of the different implementation layers; (ii) Intermediary implementing entities are required to send technical and
financial reports to the SFD ROs in order to be entitled to request new payment tranches; (iii) the SFD Internal Audit
Department has established a risk based audit strategy which is acceptable to the Bank.
Resp: Client Status:
Ongoi
ng
Stage: Implementation Recurrent: Due
Date: Frequency:
Continuous
43
(i) the project involves decentralized
implementation arrangements with the
SAs and NGOs at the governorate
level managing significant funds; (ii)
there is relatively weaker capacity and
oversight at the decentralized level;
and (iii) the PFM diagnostics for
Egypt during the past years have
indicated that the PFM risk in Egypt
is Substantial, with no integrated PFM
reform agenda.
3.2 Governance Rating Substantial
Risk Description: Risk Management:
Project implementation will involve
multiple agencies at different levels,
and this could complicate the
implementation process.
Roles and responsibilities of the
different agencies and levels (central,
governorate, municipality) may not
be sufficiently clear.
Lags in decision-making.
Too few qualified staff at local level
to implement a large PWP.
TA support under the EEIP could be used to help build up the capacity at the local level. Also, the Project
Operations Manual will detail the roles and responsibilities of all the players, as well as social accountability
arrangements.
In the area of youth employment, 15-20 international and national NGOs have been pre-identified as potentially
being able to implement the planned programs. A two-stage evaluation process (EoI and RfP) will identify the most
qualified NGOs. Moreover, several arrangements are foreseen that would allow high-capacity NGOs to partner with
smaller NGOs/CBOs, e.g. mother-NGO or consortium structures. These arrangements are expected to ensure
sufficient capacity at the central level while facilitating knowledge transfer to lower capacity NGOs. The SFD with
the support of the World Bank experts will conduct a workshop for interested NGOs to provide clarity on the
program requirements, as well as governance structure, roles and responsibilities of various stakeholders.
Assessment of fiduciary risks (procurement and financial management) has been made during the project
preparation including procurement and financial management capacity assessments of the PMT and action plans for
mitigation were developed. The Bank will put in place adequate controls to ensure the project is appropriately
monitored through procurement and financial management reviews.
SFD has a long and positive history of implementing similar projects including the ongoing ELIIP project.
Resp: Both Status:
Ongoi
ng
Stage: Implementation Recurrent: Due Date: Frequency:
Continuous
44
3. Project Risks
3.1 Design Rating Substantial
Risk Description: Risk Management:
The project is complex in nature,
with weak capacity of the
implementing partners,
including CDAs and NGOs.
While envisaged PWP activities
are straight forward, the project
would provide support for the
adoption of several targeting
mechanisms. Inequitable or
skewed targeting of the poor for
participation in the public works
sub-projects. Egypt does not
have a scalable targeted social
protection system to adequately
protect the poor if a crisis
emerges. Enhanced targeting
measures are needed.
The project includes funding to build and strengthen capacity of the SFD and the implementing partners, including
fiduciary functions. For example, all CDAs and NGOs will be required to have a Project Implementation Unit (PIU)
which includes a full time project manager, an accountant and a procurement specialist.
The project includes funding to build capacity of the SFD to use available and tested targeting mechanisms, poverty maps
and other tools.
Resp: Both Status: Ongoi
ng Stage: Preparation and
implementation
Recurrent: Due
Date: Frequency: Continuous
3.2 Social and
Environmental Rating Low
Risk Description: Risk Management:
Social – Social risks are
minimal or non-existent. This
project would directly benefit
unskilled, impoverished and
largely rural population.
Environmental - there may be
some negative environmental
impacts resulting from
implementing some sub-projects
though potentially minor and not
significant. SFD has experience
An Environmental and Social Screening and Assessment Framework (ESSAF), as well as sectoral Environmental
Management Plans (EMPs) and Environmental Guidelines have been developed and cleared by the Bank to ensure
environmental due diligence for similar sub-projects funded under the Bank-financed ELIIP. It is intended to ensure that,
for all activities financed by the project, all efforts are made to avoid and minimize environmental and social impacts, and
any sub-projects that could trigger any policies that are not envisaged by the ESSAF will be excluded as ineligible.
Resp: Client Status: Ongoi
ng Stage: Preparation and
implementation
Recurrent: Due
Date: Frequency: Continuous
45
in implementing EMP as per
World Bank policies and
guidelines and has developed
them for the ongoing WB
financed ELIIP which were
revised as needed and will be
used for this project. It also has
environmental focal points and
qualified environmental
consultants.
3.3 Program and Donor Rating Moderate
Risk Description: Risk Management:
Donors may choose not to
provide funding tranches if
dissatisfied with the project.
The EU has committed to providing EUR 67.626 million to the project in full and eligibility of expenditures were
discussed in detail as part of the Administrative Agreement between the EU and the World Bank, signed on December 19,
2013. The project will entail significant interaction and oversight by the EU including direct interaction with the PIU/
Recipient.
Resp: Bank Status: Ongoi
ng Stage: Preparation and
implementation
Recurrent: Due
Date: Frequency: Continuous
3.4 Delivery Monitoring
and Sustainability Rating Moderate
Risk Description:
a) The M&E system currently in
place may not be adequate to
effectively measure project
results, including outputs and
outcomes. This risk is
considered Moderate as the SFD
has developed M&E systems to
monitor p 3evious WB-financed
projects.
b) There is a risk to
sustainability if the Government
will not provide sufficient
Risk Management:
a) The SFD MIS system has been upgraded (with EU support) and enables users to receive real time monitoring of the
entire sub-project cycle. The MIS was also modified to enable it to collect and report on project specific outputs and
outcomes in disaggregated manner. The proposed project will also include support to continue strengthening the SFD
M&E function for project monitoring, especially in the area of monitoring outcomes, project development objective
results and enhanced data collection.
Resp: Both Status: Ongoi
ng Stage: Preparation and
implementation
Recurrent: Due
Date: Frequency: Continuous
Risk Management:
b) As the project is addressing country shocks, it is not meant to be financially sustainable. However, capacity
development of the SFD as an institution that will be capable to implement this program in a scalable manner is an
essential element of program sustainability and resources are devoted under the project towards that end.
46
funding for operations and
maintenance (O&M) costs
related to the public works
activities after the project
closes, even though covering
these O&M costs is a
requirement as part of the initial
sub-project agreement with the
local government authorities.
Resp: Client Status: Ongoi
ng Stage: Preparation and
implementation
Recurrent: Due
Date: Frequency: Continuous
4. Overall Risk
Overall Implementation Risk: Substantial
Explanation: The Project will be implemented in a country where the political environment is still in transition. Mitigating measures to address these risks
include inter-alia: (i) a project design that focuses on poor areas where the risk of major disruptions to project activities is lower; and (ii) selection of the
SFD as implementing agency—the SFD has considerable prior experience with implementing Bank-financed projects, and is familiar with Bank policies
and procedures; and (iii) fiduciary safeguards are in place for the project to ensure effective oversight of the flow of funds and procurement procedures.
47