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TRANSCRIPT
Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: 73185-NP
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED LOAN IN THE AMOUNT OF US$15.0 MILLION
AND A
PROPOSED GRANT
IN THE AMOUNT OF US$16.0 MILLION
FROM
THE PILOT PROGRAM FOR CLIMATE RESILIENCE (PPCR) OF THE STRATEGIC CLIMATE FUND (SCF)
TO NEPAL FOR A
BUILDING RESILIENCE TO CLIMATE-RELATED HAZARDS
DECEMBER 6, 2012
Sustainable Development Department Nepal Country Management Unit South Asia Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
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CURRENCY EQUIVALENTS
(Exchange Rate Effective
Currency Unit = Nepali Rupee (NPR) NPR 85.9 = US$ 1
FISCAL YEAR
July 16 to July 15
ABBREVIATIONS AND ACRONYMS
ADB Asian Development Bank IWRMP Irrigation and Water Resources Management Project
AIREP Air Reports LAN Local Area Network LCS Least-Cost Selection AMDAR Aircraft Meteorological Data
Relay M & E Monitoring and Evaluation
AMIS Agriculture Management Information System
MFDR Managing for Development Results
API Application Programming Interface
MoAD Ministry of Agriculture Development
ARCS Audit Report Compliance System
MoSTE Ministry of, Science, Technology & Environment
ARD Agriculture and Rural Development
MoF Ministry of Finance
ASOS Automated Surface Observing System
MoGA Ministry of General Administration
AWS Automated Weather Station MoHA Ministry of Home Affairs BEC Bid Evaluation Committee MoU Memorandum of Understanding CA Constituent Assembly MPSC Ministerial Project Steering Committee CAAN Civil Aviation Authority of
Nepal MW Mega Watts
CAP Corrective Action Plan NAPA National Action Plan for Adaption CB Cell Broadcast NARC Nepal Agriculture Research Council CBS Central Bureau of Statistics NASA National Aeronautics and Space
Administration CIAA Commission for the
Investigation of Abuse of Authority
NCIST National Center for Information Technology
CIF Climate Investment Fund NCB National Competitive Bidding CQS Selection Based on the
Consultants’ Qualification NCS National Climate Service
DALY Disability Adjusted Life Year NGO Non Governmental Organization DDC District Development
Committee NLSS National Living Standard Survey
DEWN Disaster and Emergency Warning Network
NMS National Weather Service
ii
DHM Department of Hydrology and Meteorology
NOAA National Oceanic and Atmospheric Administration
DRM Disaster Risk Management NPC National Planning Commission DTCO District Treasury Controller
Office NRB Nepal Rastra Bank
EA Environmental Assessment NWP Numerical Weather Prediction EIA Environmental Impact
Assessment O&M Operations and Maintenance
EMF Environmental Management Framework
OAG Office of Auditor General
EMP Environmental Management Plan
OHP Operational Hydrology Program
ENSO El Nino Southern Oscillation PACT Project for Agriculture Commercialization and Trade
EOC Emergency Operations Centre PAD Project Appraisal Document ESMF Environmental and Social
Management Framework PDO Proposed Development Objectives
FBS Selection under a Fixed Budget PIM Project Implementation Manual FCGO Financial Comptroller General’s
Office PMU Project Management Unit
FM Financial Management PPA Public Procurement Act FMI Finnish Meteorological
Institution PPCR Pilot Program for Climate Resilience
FNEP Finnish Nepalese Project PPMO Public Procurement Monitoring Office GAFSP Global Agriculture and Food
Security Program PSC Project Steering Committee
GAP Governance and Peace Action Plan
PWS Public Weather Services
GCOS Global Climate Observing System
QCBS Quality- and Cost-Based Selection
GDF Gender Development Framework
QMS Quality Management System
GDP Gross Domestic Product RDBMS Relational Database Management System
GFCS Global Framework for Climate Services
RML Reuters Market Light
GFDRR Global Facility for Disaster Reduction and Recovery
RPF Resettlement Policy Framework
GIS Section
Geographical Information System Section
RPLAF Resettlement Policy and Land Acquisition Framework
GLOF Glacial Lake Outburst Flood RTI Right to Information GoN Government of Nepal SA Social Analysis GRC Grievance Redress Cell SAARC South Asian Association for Regional
Cooperation GTS Global Telecommunication
System SADIS Satellite Distribution Information
System IA Implementing Agency SCF Strategic Climate Fund
IBRD International Bank for
Reconstruction and SIGMET Significant Meteorological Information
Report
iii
Development ICAO International Civil Aviation
Organization SIL Specific Investment Loan
ICB International Competitive Bidding
SOE Statement of Expenditure
ICT Information Communication Technology
SOP Standard Operating Procedures
IDA International Development Association
SPCR Strategic Program for Climate Resilience
IEE Initial Environmental Examination
SSNP Social Safety Nets Project
SSS Single-Source Selection IFC International Finance
Corporation TC Technical Committee
IHP International Hydrological Program
TOR Terms of Reference
ILO International Labor Organization
UNDP United Nations Development Program
IMD Indian Meteorological Department
UNESCO United Nations Educational, Scientific and Cultural Organization
IMF International Monetary Fund VCDF Vulnerable Community Development Framework
INGO International Non Governmental Organization
VDC Village Development Committee
IPCC Intergovernmental Panel on Climate Change
WAMIS World Agrometeorological Information Service
IPR Implementation Progress Report WB World Bank ISN Interim Strategy Note WMO World Meteorological Organization IT Information Technology WRF Weather Research and Forecasting
Regional Vice President: Isabel M. Guerrero Country Director: Ellen A. Goldstein
Sector Director: John Henry Stein Sector Manager: Bernice K. Van Bronkhorst
Task Team Leader: Claudia W. Sadoff
iv
.
PAD DATA SHEET
Nepal Building Resilience to Climate Related Hazards (P127508)
PROJECT APPRAISAL DOCUMENT .
SOUTH ASIA
SASDC
.
Basic Information
Project ID Lending Instrument EA Category Team Leader
P127508 Specific Investment Loan
B - Partial Assessment Claudia W. Sadoff
Project Implementation Start Date Project Implementation End Date
01-Mar-2013 30-Jul-2018
Expected Effectiveness Date Expected Closing Date
28-Feb-2013 30-Nov-2018
Joint IFC
No
Sector Manager Sector Director Country Director Regional Vice President
Bernice K. Van Bronkhorst
John Henry Stein Ellen A. Goldstein Isabel M. Guerrero
.
Borrower: Government of Nepal
Responsible Agency: Department of Hydrology and Meteorology
Contact: Dr. Rishi Ram Sharma Title: Director General
Telephone No.:
(977-1) 425-6193 Email: [email protected]
Responsible Agency: Ministry of Agriculture Development
Contact: Mr. Shibnandan Prasad Shah Title: Under Secretary (Technical)
Telephone No.:
977-14211832 Email: [email protected]
.
Project Financing Data(US$M)
[X] Loan [X] Grant [ X ] Other The loan has a final maturity of 40 years, including a grace period of 10 years. The Service Charge payable by the Borrower is equal to one-tenth of one percent per annum.
[ ] Credit [ ] Guarantee
v
For Loans/Credits/Others
Total Project Cost (US$M): 31.30
Total Bank Financing (US$M):
0.00
.
Financing Source Amount(US$M)
Borrower 0.30
Strategic Climate Fund Grant Strategic Climate Fund Loan
16.00 15.00
Total 31.30 .
Expected Disbursements (in USD Million)
Fiscal Year
2013 2014 2015 2016 2017 2018 2019 0000 0000
Annual 3.00 3.00 4.00 9.50 7.50 4.30 0.00 0.00 0.00
Cumulative
3.00 6.00 10.00 19.50 27.00 31.30 31.30 0.00 0.00
.
Project Development Objective(s)
Project Development Objective: The main objective of the proposed project is to enhance government capacity to mitigate climate related hazards by improving the accuracy and timeliness of weather and flood forecasts and warnings for climate-vulnerable communities, as well as developing agricultural management information system services to help farmers mitigate climate-related production risks. This would be achieved by establishing multi-hazard information and early warning systems, upgrading the existing hydrometeorological system and agricultural management information system, and enhancing capacity. Activities funded through the project would help improve decision-making and planning in key climate-vulnerable and water resources dependent sectors particularly agriculture, health, water and disaster management, and contribute to building climate resilience for communities at risk. .
Components
Component Name Cost (USD Millions)
Institutional Strengthening, Capacity Building and Implementation Support of DHM
5.10
Modernization of the Observation Infrastructure and Forecasting
16.75
Enhancement of the Service Delivery System of DHM 3.45
Creation of an Agriculture Management Information System 6.00 .
Compliance
Policy
Does the project depart from the CAS in content or in other significant respects?
Yes [ ] No [ X ]
vi
.
Does the project require any waivers of Bank policies? Yes [ ] No [ X ]
Have these been approved by Bank management? Yes [ ] No [ X ]
Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ]
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 .
Legal Covenants in the SCF Loan Agreement Schedule 2
Description of Covenant Due Date Frequency
Enter into a contract agreement with Nepal Agriculture Research Council (NARC) for purposes of clarifying roles under Part D of the project
No later than three (3) months after the Effective Date
Once
Establish the Grievance Redress Mechanism in DHM and thereafter maintain throughout Project implementation
No later than three (3) months after the Effective Date
Once and ongoing
Maintain an inter-ministerial Steering Committee and Technical Committees
n/a Throughout implementation
Maintain PMUs in DHM and MoAD n/a Throughout implementation
Ensure that a financial management system is maintained
n/a Throughout implementation
Ensure that the Project is implemented in accordance with the Project Implementation Manual, including the Governance and Peace Action Plan and Anti-Corruption Guidelines
n/a Throughout implementation
Ensure that the Project is implemented in accordance with all Safeguard Instruments
n/a Throughout implementation
vii
including: the ESMF, GRM, Resettlement Action Plan, Gender Action Plan and Vulnerable Community Development Plan
Ensure that each contract for civil works includes the obligation of the relevant contractor to implement, monitor and evaluate the Safeguards Instruments
n/a Throughout implementation
Regularly collect, compile, and submit to the Bank, as part of the Project Reports, information on the status of compliance with the Safeguards Instruments
n/a Throughout implementation
.
Conditions
Name Type
A technical coordinator, a financial consultant and a procurement consultant will be hired for the DHM Project Management Unit, and a procurement consultant will be hired for the MoAD Project Management Unit, all with terms of reference and qualifications acceptable to the World Bank
Disbursement
The Borrower will prepare and adopt a Project Implementation Manual acceptable to the World Bank
Disbursement
Team Composition
Bank Staff
Name Title Specialization Unit
Claudia W. Sadoff Lead Economist Team Lead SASDI
Vladimir V. Tsirkunov Senior Environmental Engineer
Hydromet GFDRR
Pai-Yei Whung Adviser Adviser ARD
Stephanie Borsboom Operations Officer Operations SASDI
Minneh Kane Lead Counsel Country Lawyer LEGES
Abedalrazq F. Khalil Water Resources Spec. Water Resources SASDI
Tenzin Dolma Norbhu Senior ICT Policy Specialist
Telecom/ICT TWICT
Saurabh Suresh Dani Disaster Risk Management Specialist
Disaster Risk Management
SASDC
Anil Pokhrel E T Consultant Disaster Risk Management
SASDC
Bigyan B. Pradhan Sr Financial Financial Management, SARFM
viii
Management Specialist Implementation
Shambhu Prasad Uprety Procurement Specialist Procurement SARPS
Hiramani Ghimire Senior Governance Specialist
Governance SASGP
Drona Raj Ghimire Environmental Specialist Environment SASDI
Parthapriya Ghosh Social Development Specialist
Social Development SASDS
Bandita Sijapati Consultant Gender SASDS
Purna Bahadur Chhetri Senior Rural Development Specialist
Rural Development SASDA
Sulochana Nepali Team Assistant Team Assistant SASDI
Non Bank Staff
Name Title City
David Rogers Hydromet Expert Geneva
Harlan Shannon Agricultural Expert Washington, DC
Clyde Fraisse Agricultural Expert Gainesville
Aurora Bell Nowcasting Expert Bucharest
Spreafico Manfred Hydrologist Berne .
Locations
Country First Administrative Division
Location Planned Actual Comments
Nepal Nationwide .
Institutional Data
Sector Board
Environment .
Sectors / Climate Change
Sector (Maximum 5 and total % must equal 100)
Major Sector Sector % Adaptation Co-benefits %
Mitigation Co-benefits %
Water, sanitation and flood protection General water, sanitation and flood protection sector
70 100
Agriculture, fishing, and forestry General agriculture, fishing and forestry sector
30 100
Total 100
ix
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 %
Environment and natural resources management
Climate change 34
Environment and natural resources management
Water resource management 33
Social protection and risk management Natural disaster management 33
Total 100
x
NEPAL Building resilience to Climate-Related Hazards
Page
Contents
I. STRATEGIC CONTEXT .................................................................................................1
A. Country Context ............................................................................................................ 1
B. Sectoral and Institutional Context ................................................................................. 2
C. Higher Level Objectives to which the Project Contributes .......................................... 6
II. PROJECT DEVELOPMENT OBJECTIVES ................................................................7
A. PDO............................................................................................................................... 7
B. Project Beneficiaries ..................................................................................................... 7
C. PDO-Level Results Indicators ...................................................................................... 7
III. PROJECT DESCRIPTION ..............................................................................................8
A. Project Components ...................................................................................................... 8
B. Project Financing ........................................................................................................ 11
C. Lessons Learned and Reflected in the Project Design ................................................ 12
IV. IMPLEMENTATION .....................................................................................................13
A. Institutional and Implementation Arrangements ........................................................ 13
B. Results Monitoring and Evaluation ............................................................................ 15
C. Sustainability............................................................................................................... 16
V. KEY RISKS AND MITIGATION MEASURES ..........................................................16
A. Risk Ratings Summary Table ..................................................................................... 16
B. Overall Risk Rating Explanation ................................................................................ 17
VI. APPRAISAL SUMMARY ..............................................................................................18
A. Economic and Financial Analyses .............................................................................. 18
B. Technical ..................................................................................................................... 20
C. Financial Management ................................................................................................ 21
D. Procurement ................................................................................................................ 21
E. Social (Including Safeguards) ..................................................................................... 22
xi
F. Environment (Including Safeguards) .......................................................................... 23
G. Governance and Peace Action Plan ............................................................................ 25
Annex 1: Nepal’s Strategic Program for Climate Resilience (SPCR) .....................................26
Annex 2: Results Framework and Monitoring .........................................................................28
Annex 3: Detailed Project Description ......................................................................................36
Annex 4: Implementation Arrangements ..................................................................................64
Annex 5: Operational Risk Assessment Framework ................................................................85
Annex 6: Implementation Support Plan ....................................................................................91
Annex 7: Team Composition.......................................................................................................94
Annex 8: Governance and Peace Action Plan ...........................................................................95
Annex 9: Economic and Financial Analysis ............................................................................104
Annex 10: Debt Sustainability Analysis ...................................................................................110
1
I. STRATEGIC CONTEXT
A. Country Context
1. Nepal is a small land-locked country in the heart of the Himalayas, with China on its northern border and India to the south. The country is about 850 km across along its east-west axis, and about 200 km north to south. It can be divided into three ecological regions that run like horizontal strips dividing the country into three roughly equal areas: (i) the high mountains (35% of total area), (ii) the middle hills (42% of total area), and (iii) the lower altitude Terai (23% of total area). Each region has distinct altitude and climatic characteristics, varying from alpine to sub-tropical conditions. Altitudes range from over 8800 meters in the north at the peak of Mount Everest, to just 60 meters above sea level in the southern plains. Although Nepal only comprises about 0.1% of Earth’s terrestrial area, it harbors a high share of the world’s biodiversity, confirming its unique geographic nature. A total of 118 ecosystems have been identified, with 75 vegetation types and 35 forest types. Both its floral and faunal diversity is notable.1
2. In 2006, Nepal emerged from a prolonged internal conflict with the signing of the Comprehensive Peace Accord laying out a roadmap to a lasting peace and the construction of a new governance structure. In 2008, a constituent assembly (CA) was voted into power, the monarchy was abolished, and a president and a prime minister were formally elected. A series of coalition governments have been formed and the process of writing a new constitution remains underway. The CA was dismissed in May 2012 without completing the constitution. New elections are yet to be announced.
3. Nepal is making marked gains in eradicating poverty, but remains one of the poorest countries in the world. Nepal attained the first Millennium Development Goal – reducing extreme poverty by 50% – ahead of time,2 and broader poverty measures have also declined from 31% in 2003/2004 to 25% in 2010/2011. Still, GDP per capita remains low at US$712 (2011).3 Poverty varies widely across geographic location, ethnicity, caste and gender. The population is largely rural and heavily dependent upon agriculture. About 82%4 of the population (currently estimated at around 26.6 million) lives in rural areas and agriculture contributes 35% of GDP. Poverty is much more severe in rural areas (27%) compared to urban areas (15%) and particularly severe in mountainous areas (42%)5. Real GDP growth in FY11 was 3.886 percent, with agriculture, construction, financial and other services, and consumption being the major sources of growth.
4. Nepal has water and hydropower potential on a scale relevant for the region. The Himalayan region is the most glaciated area outside of the Polar Regions, 1 Nepal Biodiversity Strategy, HMG/MFSC, 2002 2 WB, 2012. 3 CBS and NRB 4 Government of Nepal. http://census.gov.np/ and http://devdata.worldbank.org/AAG/npl_aag.pdf 5 NLSS III 6 CBS and NRB
2
and is often referred to as the “Third Pole.” It is the source of major rivers that flow as far west as Iran, and east to the China Sea. All of Nepal’s rivers flow into the Ganges, a river of great cultural and religious significance and the most populous river basin in the world. Some 650 million people live in the Ganges basin, shared by Bangladesh, China, India and Nepal. Over 40% of Ganges waters rise in Nepal making the country’s climate and hydrology significant for the region as a whole.7 In addition, more than 43,000MW of economically feasible hydropower potential have been identified in Nepal. Less than 2% of this potential is currently developed and domestic demand is projected at less than 2,400 MW8 for the coming decade, suggesting that Nepal could earn significant export revenues and serve as an important source of clean energy exports for this fast growing, energy hungry region.
B. Sectoral and Institutional Context
5. In 2011, the global risk analysis firm Maplecroft ranked Nepal the 4th most climate-vulnerable country in the world.9 Nepal’s extremely varied and challenging geography, its poor, resource dependent population, and its weak institutional capacity all combine to create this vulnerability. Climate projections for the country predict increases in temperature and increases in the frequency of extreme events. A climate risk assessment carried out specifically for the Nepal Strategic Program for Climate Resilience (SPCR) at the sector, district and community levels identified the following critical risks: (a) water quantity and quality, (b) food security (c) eco-system health, (d) animal and human health, (e) vulnerable groups, and (f) economic growth and sustainability. Although these risks are experienced differently across the country, some common themes are evident from the assessment including focuses on natural resources management and the protection of vulnerable groups.
6. The greatest influence on Nepal's climate is the South Asian monsoon, which will likely become more intense and less predictable. The monsoons enter Nepal from the southeast, with precipitation beginning as they reach the lower hills of the Churia range which act as the first monsoon barrier. The high mountains of the Himalayan range act as a final barrier to the monsoon, creating a rain shadow to the north in the Himalayan Plateau. Average annual rainfall is approximately 1800 mm. The SPCR risk assessment found that the priority concerns of all communities were in securing water for drinking and agriculture, and protecting themselves from flood and water-borne diseases. These concerns directly affect agricultural productivity and food security, and often disproportionately impact women and vulnerable groups. More specifically, greater water scarcity was anticipated in the high mountain region; water quality and availability were the most pressing concerns in the middle mountains; and water-related disasters (i.e., drought, flooding, landslides, sedimentation and water-borne diseases) were priorities in the Churia/Terai region.
7 Nepal: Strategic Program for Climate Resilience (SPCR) 8 Nepal Electricity Authority, 2011 9 http://maplecroft.com/about/news/ccvi.html.
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7. The Himalayan glaciers are another prominent feature of Nepal’s climate. In addition to the effect of the high mountain range on the monsoon, the snow and ice of the glaciers act as natural water storage. Glacier melt is an important contributor to base flows in the Himalayan rivers and changes in the snow line and glacier melt dynamics could have serious effects on high altitude ecosystems and mountain communities. The melting of glaciers has also led to the growth of numerous glacial lakes in Nepal. Glacial lakes form when glaciers melt and water is captured behind the glacier’s terminal moraine (a natural dam of rubble and ice that forms at the tongue of a glacier.) As the pressure of the growing glacial lake increases, these natural dams can become unstable causing Glacial Lake Outburst Floods (GLOFs).
8. Water resources are among Nepal's major strategic assets, but their extreme variability undermines growth in several ways. Nepal is drained by a dense network of about 6,000 rivers and rivulets. Together with groundwater, these substantial water resources underpin key growth sectors including agriculture, industry and hydropower, as well as providing essential water supplies for domestic use. But 80% of rainfall is concentrated during the summer monsoons, between the months of June and September, bringing devastating floods and mudslides. During the remaining eight months there is very little precipitation and the country often suffers drought. Agriculture, which contributes 35% of the country’s GDP and provides employment to 80% of the population, is predominantly rain-fed and especially vulnerable to changes in weather patterns and extreme events. Variability in water flow and availability also has a significant impact on the hydropower sector which provides most of the nation's power. Insecure water supplies at the household level can also be extremely costly in terms of health impacts and the need for women and girls to spend additional time fetching water from more distant sources.
9. Food security, which is tenuous at present, could be further undermined. Climate change is expected to affect agricultural productivity through three primary channels: (i) rising temperatures, (ii) climate variability and related changes in the timing, intensity, and volume of rainfall, and (iii) rising carbon dioxide levels. The magnitude and consequences of these changes on agriculture is currently highly uncertain because of the extreme complexities of downscaling global climate models and in particular for projecting changes at high elevations and in monsoonal climates. Nevertheless, evidence suggests that the observed changes in temperatures and soil moisture are negatively affecting agriculture in many parts of Nepal. The 2008-2009 winter drought, one of the worst in the country's history, saw wheat production fall by 14% and barley production by 17%. Some districts in the mid-west and far-western regions received less than 50% of average rainfall for the November 2008 to February 2009 period, and their crop yield dropped by more than half. More than two million people were at risk of starving.
10. The threat of climate change on Nepal’s rich biodiversity is evident in the shifting of agro-ecological zones, prolonged dry spells, encroachment of alien and invasive species, and increased prevalence of disease and pests. Globally, temperatures appear to be rising faster at higher altitudes. Ecological belts are expected to shift upward with the rise in temperatures. A similar upward movement of species, however, may be limited by environmental circumstances, such as soil and moisture conditions and hostile
4
topographies. Tree lines will likely shift slowly because of the limited natural dispersal of seeds. Reduced snowfall, untimely rains, and increased dryness may alter the flowering and fruiting behavior of plants. Many observations suggest that recent climatic changes have already influenced animal and plant populations in a number of ways: the timing of seasonal events (e.g. flowering, migration), growth and reproduction rates, and in the distribution of species. Ultimately, these changes are likely to lead to species and habitat loss.
11. Poor and rural populations, and women, are the most vulnerable to climate risks in Nepal. The poor are largely dependent upon subsistence agriculture for their livelihoods. Climate change is expected to increase floods, droughts, and ecosystems degradation, directly affecting these livelihoods. More than any other group, poor subsistence farmers are unable to cope with such changes. These and other pressures force large numbers of people in Nepal (mostly men) to move out of their rural communities and augment their livelihoods with income earned in large cities and abroad. In Nepal nearly 19%10 of GDP is from remittances. This leaves women with additional burdens to manage their households, the elderly, the sick, and the young while continuing the farming operations needed to sustain the family. Even in the absence of the additional challenges posed by out-migration, women's daily activities are closely related to natural resources and are vulnerable to climate variability. Changes in precipitation and temperature patterns affect the availability of fuel wood, fodder, grasses and drinking water, all resources that women typically collect for their homes and families. Women will likely face longer distances and greater scarcity when collecting such supplies. These factors add to the daily drudgery that women face particularly in high and mid-mountain regions.
12. Vulnerability to weather-related hazards is an important obstacle to growth and one that disproportionately affects women and children. Estimates by the Ministry of Home Affairs suggest that of all the disasters reported, floods and landslides are the most devastating in terms of the number of deaths that occur and the damages they cause. Between 2001 and 2008, floods and landslides killed 1,673 people, affected 221,372 families, killed 33,365 livestock, destroyed 52,007 houses and washed away or destroyed over 22,000 ha of land. UNDP (2009) reported that the direct economic losses associated with natural disasters for the period of 1977–2003 averaged NPRs 16,120 million (apparently USD $200m in 2004 values.) Studies in Bangladesh have shown that women and children are 14 times more likely to die in the event of a natural disaster than men.11 GoN highlighted Nepal’s vulnerability in the National Strategy for Disaster Risk Management. In order to support GoN in developing a long term Disaster Risk Reduction Plan, a unique institutional arrangement that unites development and humanitarian partners, was set up, namely the Nepal Risk Reduction Consortium. The Consortium has identified five flagship areas of immediate action in disaster risk management12.
10 CBS and NRB. 11 Neumayer and Plumper, 2007. 12 The five flagship areas of immediate action for disaster risk management in Nepal are: 1) school and hospital safety, structural and non-structural aspects of making schools and hospitals earthquake resilience, 2) emergency preparedness and response capacity, 3) flood management in the Kosi River Basin, 4)
5
13. Recent records in Nepal show increasing incidents of droughts, floods, hailstorms, landslides and crop disease. The Intergovernmental Panel on Climate Change's (IPCC) Fourth Assessment Report13 indicated that Nepal would suffer increased flooding due to changes in patterns and intensity of rainfall, leading to an increasing loss of life and decrease in crop yields. In addition, the IPCC also stressed the existence of a 'white spot' over Nepal and much of the region, indicating that the available data are inadequate for the development of reliable climate models.
14. The need for a well-functioning early warning system was identified as a key priority in the GoN's National Strategy for Disaster Risk Management. Key elements of a well-functioning modern hydrometeorological system include efficient data collection, transmission, storage, processing, use and dissemination to the public, government agencies and targeted user groups. In Nepal, the Department of Hydrology and Meteorology (DHM), which is under the Ministry of Science, Technology and Environment (MoSTE), is mandated to collect, process and disseminate hydrological, meteorological and climate information to a range of users. Much of Nepal's hydrological and meteorological system relies on manual data collection with infrequent and unreliable reporting. There is real time access to some data and a limited automated hydrological network that is operated by a local private sector company on behalf of DHM. Transmission of data from the existing observation networks is also irregular and mainly relies on mobile telephones with information redistributed through the internet. From a service delivery standpoint, there is no system in Nepal for issuing authoritative warnings for weather and weather extremes to government authorities and key user groups, nor a system for issuing timely and targeted warnings to communities at high risk. Some civil society organizations are exploring the potential of mobile phone networks in transmitting early warning messages to people at risk14. For local communities, the implications of a weak early warning system have extraordinary costs in terms of the likely impact on their lives, livelihoods and management of assets.
15. Agro-meteorological information is another urgent priority to manage and mitigate climate risk in Nepal's large and highly climate-vulnerable agriculture sector, and to underpin the country’s food security efforts. A science-based agriculture information system is needed to deliver information and climate risk management tools that will provide the agricultural sector with a decision support information system to mitigate climate-related agricultural production risks. Seasonal climate predictions are currently not available in Nepal, but should be developed. Other priority climate change adaptation information tools include an agro-weather and agro-climate advisory system (Agricultural Management Information System). These could provide (i) an agricultural drought reference index to inform farming communities whether the amount of water in a root zone is sufficient or not to meet the needs of a crop at a particular time; (ii) pesticide
integrated community disaster risk reduction/management, and 5) policy/institutional support for disaster risk management. 13 http://www.ipcc.ch/publications_and_data/publications_ipcc_fourth_assessment_report_synthesis_report.htm 14 This is under flagship 4 (integrated community based disaster risk reduction/management) of the Nepal Risk Reduction Consortium
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application advisories on how, when and when not to apply pesticides as part of Integrated Pest Management strategies; (iii) crop planting advisories that can deliver timely information about when to plant in order to achieve higher outputs; (iv) pest and disease information to provide farmers and agricultural extension workers with targeted and timely information on the likely risks of specific pests and plant diseases; and (v) data and models required for climate and weather risk transfer.
16. Transformation of Nepal’s hydrometeorological services into a modern, service-oriented system will build resilience today as well as adaptive capacity for the future. Nepal today is hard pressed to cope with the current extremes of weather and climate variability. Existing natural variability is much greater than potential long-term climate changes. Increasing resilience to the existing climate and weather extremes will be a first order adaptation measure. A transformation of the system is urgently needed to cope with existing variability, as well as to prepare for the consequences of climate change. Strong capacity to monitor and forecast water, weather and climate variability, and to deliver this information in timely and usable ways is essential to improving climate resilience in water and weather-dependent sectors and in climate-vulnerable communities. The envisioned system will also have significant benefits for the aviation sector. Advanced information on weather conditions could enhance safety and reduce financial loss. Given its unique geographic position, modernization of the hydrometeorological system in Nepal will also generate water, weather and climate information that can be of substantial regional and global value. In turn, improved regional and global climate forecasts will benefit Nepal.
C. Higher Level Objectives to which the Project Contributes
17. Weather shocks undermine growth, food security and the livelihoods of climate-vulnerable communities and women in particular. By strengthening Nepal’s capacity to predict and cope with weather and hydrological extremes, the project will contribute to making Nepal’s communities and economy more resilient to climate change thereby enabling sustained growth and poverty alleviation. The proposed project is thus consistent with the FY12-13 Interim Strategy Note (ISN), in particular the second pillar “reducing vulnerability and building resilience.”
18. This project also aligns with the World Bank’s commitment as an implementing agency of the Climate Investments Fund’s Pilot Program for Climate Resilience (PPCR). The proposed project is one of the five Program Components identified in Nepal's Strategic Program for Climate Resilience (SPCR). The SPCR was developed by the Government of Nepal with support from the Asian Development Bank (ADB), the International Finance Corporation (IFC) and the World Bank, and was approved on June 28, 2011 by the Pilot Program for Climate Resilience (PPCR) Sub-Committee of the Climate Investment Funds. The five SPCR Program Components are now being prepared as five independent (but coordinated) investment projects, two of which will be administered by the ADB, two by the World Bank and one by the IFC.
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II. PROJECT DEVELOPMENT OBJECTIVES
A. PDO
19. Proposed Development Objective(s): The main objective of the proposed project is to enhance government capacity to mitigate climate related hazards by improving the accuracy and timeliness of weather and flood forecasts and warnings for climate-vulnerable communities, as well as developing agricultural management information system services to help farmers mitigate climate-related production risks.
20. This would be achieved by establishing multi-hazard information and early warning systems, upgrading the existing hydrometeorological system and agricultural management information system, and enhancing capacity. Activities funded through the project would help improve decision-making and planning in key climate-vulnerable and water resources dependent sectors particularly agriculture, health, water and disaster management, and contribute to building climate resilience for communities at risk.
B. Project Beneficiaries
21. The immediate beneficiaries of the project will be DHM and Ministry of Agriculture Development (MoAD). DHM will be able to enhance its effectiveness as a modern organization that provides reliable, useful and timely information on weather, climate and hydrological events. The warnings and advisory services that DHM provides will benefit the general population and climate-vulnerable communities in particular, as well as the range of weather and water dependent sectors including disaster management, aviation, water resources, health and energy. The enhanced capability of MoAD will enable them to provide information to agricultural extension services, and onward to farmers.
C. PDO-Level Results Indicators
22. Progress towards enhanced government capacity to mitigate climate-related hazards by improving the accuracy and timeliness of weather and flood forecasts and warnings for climate-vulnerable communities countrywide as well as to develop an agricultural management information system services to help farmers mitigate climate-related production risks, would be demonstrated with the following indicators:
(a) Increased financial sustainability of DHM operations
(b) Increased accuracy and timeliness of weather forecasts
(c) Increased satisfaction of users with DHM services
(d) Introduction of an Agricultural Management Information System
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III. PROJECT DESCRIPTION
A. Project Components
23. The Project has four components:
A. Institutional strengthening, capacity building and implementation support of DHM;
B. Modernization of observation networks and forecasting; C. Enhancement of the service delivery system of DHM; and D. Creation of an agriculture management information system (AMIS).
24. Component A: Institutional Strengthening, Capacity Building and Implementation Support of DHM [$5,100,000]. This component aims to develop and /or strengthen DHM’s legal and regulatory frameworks, improve institutional performance as the main provider of weather, climate and hydrological information for the nation, build capacity of personnel and management, ensure operability of the future networks, and support project implementation. There are three sub-components:
• Sub-Component A.1 – Institutional Strengthening (US$570,000), which includes: (1.1) DHM institutional development and strategic planning; (1.2) development and/or strengthening of a legal and regulatory framework for DHM operations, including development of standard operating procedures, assessment of new business models and enhancing public private partnerships; and (1.3) “twinning” operational support from advanced NMSs and WMO.
• Sub-Component A.2 – DHM Capacity Building (US$1,050,000) which includes: (2.1) Development and implementation of a DHM capacity building program including (i) DHM personnel training and retraining, (ii) professional orientation for DHM senior staff; (iii) education in universities and training in WMO regional training centers; and (2.2) Implementation of training activities (workshops, round tables, etc.) for major users (i.e., agriculture, water resources management, health, energy, transportation).
• Sub-Component A.3 – Systems Design and Integration, Project Management and Monitoring (US$ 3,480,000), which includes: (3.1) Provision of support for detailed design, procurement and implementation of DHM systems (General Consultant/Integrator); (3.2) Project management, reporting, monitoring and evaluation for Components A, B and C (which are the components managed by DHM); (3.3) Development of a needs assessment and design for air quality, water quality and sediment monitoring networks; (3.4) Development of design documents for reconstruction/refurbishment of DHM’s headquarters and regional offices; and (3.5) Support for environmental and social due diligence and protection.
25. Component B: Modernization of the Observation Networks and Forecasting (US$16,450,000). This component aims to modernize DHM observation
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networks, communication and ICT systems, improve hydrometeorological numerical prediction systems and refurbish DHM offices and facilities. This component has the following five sub-components:
• Sub-Component B.1 – Technical Modernization of Observation Networks (US$10,700,000) which includes: (1.1) rehabilitation and technical re-equipment of the hydrological network; (1.2) Improvement of the environment of the hydrological stations (bank stabilization, improvement of flow conditions, engineering works, etc.); (1.3) Special equipment for hydrological stations (current meters, sediment samplers, tracer laboratory equipment, training, staff gauges, boats); (1.4) Delivery and installation of weather radar for detection of heavy precipitation and other meteorological phenomena; (1.5) Renewal of temperature-wind sounding of the atmosphere; (1.6) Upgrade and expansion of automated surface observing systems for aviation safety; (1.7) Surface meteorological and lightning detection networks; (1.8) Glacier and snow monitoring (equipment and surveys); (1.9) Establishment of DHM calibration facilities; and (1.10) Vehicles to support DHM field operations, maintenance and inspections.
• Sub-Component B.2 – Modernization of DHM’s Communication and ICT Systems (US$1,250,000) which includes: (2.1) Communication equipment (DHM networks); (2.2) Archiving and data base development; and (2.3) Satellite receiving system, remote sensing and GIS laboratory.
• Sub-Component B.3 – Improvement of the Numerical Hydrometeorological Prediction System (US$400,000) which includes: (3.1) Modern computer equipment for numerical weather prediction.
• Sub-Component B.4 – Design and Pilot Operation of an Environmental Monitoring Network (US$1,000,000) which includes: (4.1) Pilot operation of air quality, water quality, and sediment monitoring networks.
• Sub-Component B.5 – Refurbishment / Reconstruction of DHM Offices and Facilities (US$3,100,000) which includes (5.1) Refurbishment/ reconstruction of DHM offices and facilities including access to uninterrupted power supply.
26. Component C: Enhancement of the Service Delivery System of DHM (US$3,450,000). The objective of this component is to enhance the service delivery system of DHM by creating a public weather service that provides weather and impact forecasts, and information services for climate-vulnerable communities and the key weather dependent sectors of economy. The main sub-components are:
• Sub-Component C.1 – Introduction of a Public Weather Service (US$1,025,000) which includes: (1.1) Forecaster workstations; (1.2) Specialized communications instruments including TV studio, radio alert services, internet websites; and (1.3) Development and operationalization of a forecast accuracy verification system and survey of forecast utility.
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• Sub-Component C.2 – Strengthening of Disaster Risk Management (DRM) Operations including piloting of “end-to-end” early warning systems in two river basins in the western and eastern parts of Nepal (US$1,175,000) which includes: (2.1) Development of Standard Operating Procedures (SOPs), early information protocols and signals agreed with all basin and DRM stakeholders including Emergency Operations Centers and DDCs/VDCs; (2.2) Forecaster workstations, communication systems and software development; and (2.3) Operational training and drills with government stakeholders, non-government stakeholders and communities.
• Sub-Component C.3 – Improvement of Service Delivery (i.e., warnings and advisories) to communities including introduction of mobile applications (US$250,000).
• Sub-Component C.4 – Establishment of a National Climate Service (US$1,000,000) which includes: (4.1) Computer systems to access climate information; (4.2) Support for the development of a National Framework for Climate Services and sectoral working groups; (4.3) Development of a digital library of climate-relevant information from all sectors for Nepal; (4.4) software development to downscale climate forecasts and (4.5) Operational support and information exchange between water resources, public health and climate data bases.
27. Component D: Creation of an Agriculture Management Information System (AMIS) at MoAD ($6,000,000). The objective of this component is to provide critical and timely agro-climate and weather information to farmers in order to increase productivity and reduce losses from meteorological and hydrological hazards. The main sub-components are:
• Sub-Component D.1 – AMIS Portal, Hardware and Software (US$2,125,000) which includes: (1.1) Detailed design of the AMIS Portal and assessment of information requirements; (1.2) Acquisition and installation of AMIS Portal (e.g., software, data and web server, computer, monitor, printer, digital color scanner, plotter) at MoAD; (1.3) rehabilitation of the offices of the MoAD Geographical Information System (GIS) Section to facilitate communication with the AMIS Portal; (1.4) acquisition of vehicles and motor bikes to support field operations including outreach to farmer communities and data collection; (1.5) Acquisition and installation of communication links to district level extension offices and outreach stations of NARC; and (1.6) AMIS infrastructure (software and hardware) at NARC’s central office.
• Sub-Component D.2 – Information Products (US$1,730,000) which includes: (2.1) Agricultural and spatial data digitizing and archiving; (2.2) Development of agriculture monitoring products and decision support tools such as mapping of climate-vulnerable farming communities and establishment of a crop monitoring system; and (2.3) Exploratory research to develop financial risk transfer instruments for the agriculture sector, such as agricultural insurance.
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• Sub-component D.3 – Information Dissemination (US$675,000) which includes: (3.1) Development of mobile applications based on data from AMIS; (3.2) Production and dissemination of advertisements for mass media (FM radio, TV channels); (3.3) Production and dissemination of publications; and (3.4) Feasibility studies for AMIS Portal product dissemination.
• Sub-Component D.4 – Capacity Building (US$1,065,000) which includes: (4.1) Provision of training to staff of selected agencies in weather data analysis, including short term training and advanced degrees; (4.2) Provision of training to staff of selected agencies at the regional, district and community level in the use of AMIS Portal tools and in awareness of climate resilience; (4.3) Building partnerships with farmers to raise awareness and capacity, including provision of basic thermometers and rain gauges to selected farmers; and (4.4) Organization of agro-climate workshops at the regional and district levels.
• Sub-Component D.5 – Support for project management and monitoring, and for social outreach, communication, and evaluation activities under Part D (US$405,000).
B. Project Financing
28. Lending Instrument. The proposed lending instrument is a Specific Investment Loan (SIL), financed through a mix of grants and loans provided by the Pilot Program for Climate Resilience (PPCR) which is one of the targeted programs of the Strategic Climate Fund (SCF). For this Project, the International Bank for Reconstruction and Development (IBRD) is acting as an implementing entity of the Strategic Climate Fund. The estimated project cost is $31.3M (US$16 million in SCF-PPCR grants and US$15 million in SCF-PPCR loans and $0.3 million in counterpart financing.) The implementation period is five years.
29. Project Cost and Financing. Tables 1 and 2 provide an overview of project costs by component, and a financing plan by source.
Table 1 Project Costs Table 2 Financing Plan
Project Components Total (USD m) Financing Plan Total
(USD m) A. Institutional Strengthening,
Capacity Building & Implementation Support of DHM
5.10
Government of Nepal 0.30
B. Modernization of the Observation Networks and Forecasting
16.75 SCF-PPCR Grant 16.00
C. Enhancement of the Service Delivery System of DHM
3.45 SCF-PPCR Loan 15.00
D. Creation of an Agriculture Management Information System
6.00
Total Financing Required 31.30 Total Financing 31.30
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C. Lessons Learned and Reflected in the Project Design
30. Procurement. The project requires the purchase of significant, sophisticated equipment. Experience with other Bank projects in Nepal suggests an early emphasis on procurement is needed to avoid delays in implementation. This issue will be mitigated by DHM and MoAD hiring consultant procurement specialists who will help to update procurement plans and develop TORs and bid documents for priority procurement packages. Early procurement of the services of a General Consultant/Systems Integrator will be undertaken with the objective of having a General Consultant / Systems Integrator on board in the first months of implementation.
31. Implementation Capacity. There is limited national experience in Nepal with large-scale hydromet modernization. Given the importance of a fully integrated operational system, the project calls for a General Consultant/Systems Integrator to work with DHM staff to develop and implement the new DHM system. Designing a system which will link the DHM's networks and ensure their connectivity and interoperability is a technically challenging task. The General Consultant will assist DHM in development of the detailed technical design of the future DHM systems and development of technical specifications and bid documents, and provide implementation support until the end of the project.
32. Sustainability. Hydromet projects in developing countries have a poor record of sustainability. Designing an appropriate system with equipment well-suited to the geography, needs, and capacities of the country is essential. The General Consultant/Systems Integrator described above should help strengthen sustainability in this regard by backstopping technical design. In addition, however, the project emphasizes the need to transform the DHM into a modern service oriented agency, delivering products of immediate value to a wide range of users. Ultimately, it is the demand for useful end-products from other government agencies and the public at large that will ensure sustainability of the investment. It is expected that by the end of the project DHM should have a budget sufficient to cover all operational and maintenance needs of its regular operations.
33. Institutions. The institutional relations in hydromet projects are often complex because there are many disparate uses for water, weather and climate services. Unclear roles, weak capacity and insufficient cooperation and coordination among agencies can diminish project effectiveness. Within Nepal, coordination between Ministries has posed challenges for multi-sectoral projects. The first component of this project is designed to redress this concern, clarifying the mandate of DHM in relation to other government agencies and strengthening capacity and coordination of stakeholder agencies. In particular, coordination between DHM and MoAD is a focus of the project’s design, to ensure effective delivery of services to farmers.
34. Relevant ongoing projects. There are several World Bank projects currently under preparation or ongoing that will benefit from alignment with this project. The AMIS is being developed to align with and leverage the proposed Nepal Agriculture and Food Security Project (NAFSP) and the Zoonoses Control Project in Nepal (zoonoses are
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diseases such as avian flu that can spread from animals to humans.) Specifically, AMIS is being designed to link with the NAFSP’s proposed components on technology development and adaptation, and technology adoption; as well as the Zoonoses Control Project’s component on climate sensitive disease risk mitigation. The World Bank’s Global Facility for Disaster Reduction and Recovery (GFDRR) is funding the development of a pilot probabilistic risk assessment for floods and landslide hazards in the Kosi River Basin15. Building on improved hydromet data, and combined with flood risk modeling, exposure and vulnerability mapping, the risk assessment should provide additional information towards the development of a real-time flood early warning and decision support system for the Kosi which is also a goal of this project. Ongoing World Bank supported projects such as the Project for Agriculture Commercialization and Trade (PACT) and the Irrigation and Water Resources Management Project (IWRMP) will benefit from this project through better weather, water and agricultural information services. In addition, this project also has the potential to leverage proposed investment activities under the Nepal Risk Reduction Consortium and projects proposed under Nepal’s National Action Plan for Adaptation (NAPA).
IV. IMPLEMENTATION
A. Institutional and Implementation Arrangements
35. Project Implementation. The project will be coordinated by MoSTE and implemented by DHM and MoAD. DHM will implement three components: Institutional Strengthening, Capacity Building and Implementation Support of DHM (Component A), Modernization of Observation Networks and Forecasting (Component B), and Enhancement of the Service Delivery System of DHM (Component C). MoAD will manage Component D: Creation of an Agriculture Management Information System (AMIS).
36. Project implementation arrangements. In order to provide oversight and guidance for all climate related projects in the country, the GoN established a Climate Change Coordination Committee, chaired by the Honorable Minister for Science, Technology and Environment and the National Planning Commission (NPC) Member responsible for Environment. In addition, for this Project specifically:
(a) Overall coordination for this project and the other four PPCR projects will be provided by MoSTE as the focal Ministry for the PPCR.
(b) An inter-Ministerial Project Steering Committee will be established, chaired by the Secretary, MoSTE, and including representatives from MoF, National Planning Commission (NPC), DHM, MoAD and other key stakeholders, to provide policy guidance and ensure coordination across Components A, B, C and D.
15 This is under flagship 3 (flood management in the Kosi River Basin) of the Nepal Risk Reduction Consortium
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(c) Two Technical Committees will be maintained, one chaired by DHM focusing on Components A, B and C, and the other chaired by MoAD focusing on Component D. The Technical Committees will be chaired by Joint Secretaries/Directors General and include relevant technical experts to strengthen project implementation. The two committees will coordinate as needed to support effective implementation of the Project.
(d) Project Management Units (PMUs) will be maintained in each of the two implementing agencies (DHM and MoAD) in order to provide focused attention to achieving desired results. Given the highly technical nature of the projects and the need for coordinated efforts, fully dedicated PMUs will be needed to ensure smooth implementation, facilitation and coordination of the project activities. The PMUs will need to be appropriately staffed with qualified and experienced staff including technical, financial, procurement, monitoring and evaluation, environment and social specialists as needed. The PMUs will report to their respective Technical Committees, and liaise with the Mainstreaming Climate Change Risk Management in Development Project of the Nepal PPCR to ensure knowledge management across the five SPCR program components16. The General Consultant/System Integrator will provide assistance to DHM and the DHM PMU in developing the detailed technical designs of the future systems. This includes providing assistance to MoAD and the MoAD PMU, and helping to link DHM and AMIS operations.
(e) The project will be implemented in accordance with the implementation arrangements as detailed in the Project Implementation Manual (PIM) and all relevant legal documents. The PIM will include: (i) detailed descriptions of project components; (ii) a funds operating manual; (iii) implementation arrangements and agreed guidelines for different project components; (iv) detailed project cost estimates; (v) a procurement plan; and (vi) an Environmental and Social Management Framework (ESMF). The PIM will be amended periodically to incorporate adjustments during project implementation in agreement with the Bank.
(f) The DHM PMU will include a Project Director, a Technical Coordinator, a Financial Consultant, a Procurement Consultant, a Social, Training and Communications Consultant, an Environmental Consultant, and a Monitoring and Evaluation Consultant. All PMU staff except the Project Director will be consultants. In addition, officials of the Accounts Section in DHM will provide support to the PMU. The DHM PMU will work closely with the General Consultant/ Systems Integrator.
16 Mainstreaming Climate Change Risk Management in Development is Component 3 of Nepal’s SPCR and is administered by the ADB (annex 1).
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(g) The MoAD PMU will be set up in the GIS Section and will include a Project Director, a Technical Coordinator (Agriculture Officer), an Accounts Officer, a Procurement Consultant, Social and Communications Consultant, and a Monitoring and Evaluation Consultant. The PMU will be responsible for administrative and financial management and for overall coordination of Project Component D.
37. Partnership Arrangements. The five components of the Nepal SPCR were designed and are implemented through a partnership of the World Bank, ADB and IFC. In addition, under this specific project, strong partnerships will be established with WMO, the Global Framework for Climate Services (GFCS), DFID, UNDP, United Nations International Strategy for Disaster Reduction (UN ISDR), Finland (FMI), USAID, GIZ, ICIMOD, China Meteorological Administration (CMA), India Meteorological Department (IMD) and others who have expressed willingness to support priority activities for climate resilience. The project will seek to liaise with partners both to capture and mainstream the valuable information generated by their activities, and to explore opportunities for generating information useful to their efforts.
B. Results Monitoring and Evaluation
38. DHM and MoAD will be responsible for monitoring and reporting on the progress of their respective components. Each agency will submit trimesterly implementation progress reports in an agreed format to the World Bank no later than 45 days after the end of each trimester. The trimesterly reports will cover the progress and expected completion dates for works and equipment supply contracts, progress on institutional components, implementation of the ESMF and GAP, and technical assistance and capacity building activities funded under the project.
39. The third trimester report by each agency will be the annual report that will need to be submitted to the Bank no later than 45 days after the end of the fiscal year. The reports will cover: (a) comparison of actual outputs with forecasts, (b) project financial statements including sources and application of funds, expenditures by category statement, and special accounts reconciliation statement; (c) a procurement management report, showing status and contract commitments; (d) the progress of each component, implementation of key features of the ESMF and GAP and key performance indicators; and (e) the Annual Work Plan for implementation, funding requirements, an updated disbursement profile, and target indicators for the coming year. The mid-term review of the project is planned for 2015. Each agency will submit to the Bank an Implementation Completion and Results Report (ICRR) for its respective component(s) within three months of the project closing date.
40. In addition, because this project is part of the Nepal SPCR, DHM and MoAD will coordinate with the SPCR’s 'Mainstreaming Climate Change Risk Management in Development Project' that will be implemented by MoSTE. The SPCR Mainstreaming Project is mandated with monitoring results across all five SPCR projects in accordance
16
with an agreed SPCR-wide results framework, and gathering and disseminating lessons learned and good practices from all five SPCR component projects as well.
C. Sustainability
41. Demand. Ultimately, the sustainability of this investment will rest on whether or not there is continued demand for weather, water and climate products such as warnings, forecast and advisories. Many hydromet projects have failed due to a focus on data collection only. Unless data are analyzed and transformed into actionable information, there is little appreciation of their value – and therefore very little demand. Globally, there has been a decline in the availability of water resources data over the past few decades. At national level, particularly in many poorer countries, hydrological information systems have often been among the first functions to be sacrificed when budgets pinch,17 with little outcry. The project has therefore been designed to transform the current system from a traditional data gathering organization into one that is modernized and service-oriented. Reliable forecasts and advisories delivered to farmers (i.e., advisories on planting and harvesting dates, seasonal forecasts to better inform cropping decisions), disaster risk managers (i.e., early warnings for flash floods, hailstorms and landslide risks), and civil aviation (i.e., weather advisories that could significantly diminish the current high costs of diverting planes unable to land in Kathmandu due to weather conditions) could immediately save lives and money, and generate strong sustained demand for the upgraded system.
42. Design and affordability. Another threat to the sustainability of hydromet systems is inappropriate and unaffordable design. Systems must be designed to utilize equipment that is well-suited to the geography, climate and communities in which they will be installed. Similarly the sustainable operations and maintenance (O&M) of the system must also be designed in context, ensuring in particular adequate skills and financing. Nepal has a promising track record of engaging in public private partnerships for hydromet systems maintenance, and this option will be considered in the final systems design. With regard to financing, the GoN will assume O&M responsibility of the system during project implementation and thereafter. The annual incremental O&M costs are estimated at this stage in the range of USD 1.5-2.5 million and considered affordable based on international comparators. A more precise estimate of the O&M costs of the future modernized DHM system will be developed with the help of the General Consultant / Systems Integrator during the first year of project implementation.
V. KEY RISKS AND MITIGATION MEASURES
A. Risk Ratings Summary Table
Table 3 Risk Ratings Summary
17 “Water Management, Water Security and Climate Change Adaptation: Early Impacts and Essential Responses” Claudia Sadoff and Mike Muller. Global Water Partnership Technical Committee Background Paper. Global Water Partnership: Stockholm. 2009.
Risk Rating
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B. Overall Risk Rating Explanation
43. Overall risk ratings of this project are substantial. The design is moderate, as it is based on well-tested approaches using a combination of techniques that have been demonstrated at scale in other countries.
44. One risk relates to the complexity of the design, installation and operations and maintenance of the hydromet system in Nepal due to its topography and weather. This risk will be mitigated by ensuring that the technical specifications of the system align with the geographic, financial and capacity constraints facing Nepal. To this end, experienced international experts will work hand-in-hand with national experts to design an affordable modernization and expansion of the existing systems and to ensure interoperability of modernized systems.
45. Another potential risk is the relative inexperience of DHM to implement a project of the scale proposed. To mitigate this risk, a major component of the project will focus on capacity strengthening of agency staff through training, peer-to-peer learning, and institutionalizing managerial procedures for maintaining the quality and sustainability of the proposed interventions. Capacity building will also be needed at the village and district levels to ensure adequate implementation and monitoring of project activities.
46. Ensuring the sustainability of the investment will be a major challenge as discussed above. Additional allocations from the government’s budget will be necessary to cover O&M costs of a modernized DHM system. To mitigate this risk the new DHM system will be designed to minimize incremental O&M costs. It is also hoped that the project can demonstrate significant value to the economy and the society, which will motivate the government to allocate additional budget resources. Increasing DHM revenues might be another option to mitigate this risk.
47. DHM faces constraints in recruiting and retaining a qualified workforce, and thus risks losing the qualified staff that is needed to successfully run a modernized
Stakeholder Risk M
Implementing Agency Risk S
- Capacity S
- Governance S
Project Risk S
- Design M
- Social and Environmental M
- Program and Donor L
- Delivery Monitoring and Sustainability S
Overall Implementation Risk S
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hydromet system. To mitigate this risk DHM is working with the Ministry of Finance (MoF) and the Ministry of General Administration (MoGA) on an “Operations and Management” study that should inform future staffing needs. It is also proposed that DHM considers a performance-based scheme in which staff would be remunerated based on their contributions to tangible outputs.
48. The GIS Section of MoAD has the baseline capacity for AMIS. In order to fully effectively and sustainably implement AMIS, three additional staff positions (an agro-meteorologist, and agronomist, and a computer engineer) are needed. MoAD is working with MoF and MoGA to develop a “creation of positions” plan.
49. Weak implementation capacity and coordination is a substantial risk area due to the lack of experience that DHM has in implementing World Bank projects and the potential complexities of interactions between DHM and MoAD, PMUs and other stakeholders. The risk will be mitigated by hiring a General Contractor/Systems Integrator with international experience in developing integrated hydrometeorological systems.
VI. APPRAISAL SUMMARY
A. Economic and Financial Analyses
50. Significant gains are anticipated both from reduced disaster losses and enhanced economic productivity, particularly in agriculture. Nepal is starting from a very low base. Currently, the country does not issue any official severe weather warnings. This leaves enormous potential for diminishing the loss of lives, livelihoods and assets in this highly climate-vulnerable country. Similarly, there are no official seasonal forecasts or timely planting and harvesting advisories that could enhance the productivity of farmers, particularly as climate change undermines the predictive value of historical climate knowledge and associated traditional practices. These key services, among others, would be delivered under this Project.
51. To assess this project, two methodologies were applied: a benchmarking methodology and a sector specific methodology.
52. Benchmarking Methodology. The benchmarking methodology follows Hallegatte (2012).18 Two categories of benefits are quantified:
• Assets: Reduced asset losses from disasters • Productivity enhancement: Other economic benefits
53. Assets. Hallegatte found that well-functioning, modern early warning systems reduce disaster-related asset losses by between 0.003% and 0.017% of GDP. Current 18 Hallegate (2012), S. A Cost Effective Solution to Reduce Disaster Losses in Developing Countries. Hydro-meteorological Services, Early Warning and Evacuation. World Bank, Policy Research Working Paper 6058
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natural disaster damage losses in Nepal appear to be on the order of 0.5% of GDP. Using the likely global benchmark (0.017% of GDP) as a lower bound and the actual loss figures for Nepal (0.10%) as an upper bound, and applying the methodology proposed by Hallegatte, potential benefits are estimated to be USD $2.9 - $17 million.
54. Economic benefits. In addition to saving lives and property, modernized hydromet systems can significantly enhance economic productivity. A conservative global benchmark is that 25% of world GDP is generated in climate sensitive sector, and that that modern forecasts add value of 0.1% to 1% in weather-sensitive sectors or 0.025% and 0.25% of GDP. In Nepal, climate sensitive sectors represent an even larger share of the economy. Agriculture alone represents about 35% of GDP. Using the likely global benchmark (25% of GDP) as a lower bound for the share of climate sensitive activities in the economy and the actual share of agriculture in GDP (35%) as a high (but still conservative bound), potential benefits are estimated to be USD $42.5 - $59.5 million.
55. A benchmarking analysis of the benefits of a modernized hydromet system in Nepal therefore suggests total returns of USD $45.4 – $76.5 million per year. The benefit-cost ratio for the life of the project ranges from 8.7 to 14.6.19
56. Sector Specific Approach. The economic cost of natural disasters in Nepal is estimated to be roughly USD $25 million.20 MoHA21 and UNDP22 estimate that 75%-80% of all economic damages arise from flood and weather related disasters such as thunderstorms and hail. Weather and climate related damages can therefore be estimated at about USD $18.75 - 20 million. Experience in other countries suggests that a conservative estimate of the benefits of a modernized system would be a reduction of 5-10% in economic damages caused by natural hazards. This would correspond to an average annual benefit of USD $0.9-1.8 million. This reflects only economic damages averted, it does not address morbidity or mortality, and is therefore very conservative.
57. The investments under this project would also help to enhance productivity for example in agriculture, hydropower optimization, and transportation. The Project’s focused effort to provide productivity enhancing information directly to farmers can be expected to increase agricultural output by 0.5% to 1% from its current low base. If agriculture’s share of GDP is 35% then agricultural output is USD $6.6 billion. Looking only at agricultural benefits, an increase in productivity of 0.5% to 1% would correspond to benefits ranging from USD $33 - $66 million.
58. Taking into account only the benefits from natural disaster losses averted and enhanced agricultural productivity, economic benefits would be USD $34 - $68 million per year. The Project benefit-cost ratio (assuming a 15-year time horizon, replacement
19 Assumes a 15-year time horizon, replacement costs equivalent to 10% of investment costs after the 5-year project investment period, and an incremental operating and maintenance budget. 20The EM-DAT International Disaster Database. 21 Ministry of Home Affairs, Government of Nepal. Nepal Disaster Report 2009: the Hazardscape and Vulnerability. 22 UNDP 2009.
20
costs equivalent to 10% of investment costs after the 5-year project investment period, and a full operating budget of USD $3 million) would be 5 – 10.
59. Both methodologies suggest that investment is economically attractive with benefit-cost ratios ranging from 5-15.
Study Benefit-Cost Ratio Benchmarking Methodology 8.7 – 14.6 Sector Specific 5– 10 60. Debt Sustainability. In addition to an economic analysis, a debt sustainability analysis was carried out in accordance with PPCR requirements. 61. According to the most recent IMF/World Bank Article IV Debt Sustainability Assessment, Nepal remains at moderate risk of debt distress23. Nepal’s total public debt stock was estimated at US$ 5.6 billion (36 percent of GDP) at the end of 2009–10. This reflected a decline from 60 percent of GDP in 1999-2000. External public debt at the end of 2009-10 was estimated to be US$ 3½ billion (22½ percent of GDP). These indicators are well below the indicative thresholds and resilient to standard stress tests. In the near term, the present value of public debt is expected to rise gradually under a baseline scenario. But debt ratios are set to improve over the long term. 62. The impact of this Project’s debt on Nepal’s debt sustainability would be marginal. The loan that will be taken with this project is US$ 15 million. The loan terms are highly concessional and generate a grant element of 75 percent, meaning that the present value of the amount to be repaid is anticipated to be just 25 percent of the value of the loan today. This would represent an increment of US$ 3.75 million to the current debt stock – less than one-tenth of one percent of the total debt stock (0.07 percent of the total public debt stock, or 0.11 percent of the external public debt stock.) The time scale and structure of the PPCR loan also align favorably with Nepal’s declining debt burden because the bulk of the repayment will be made in outer years when Nepal’s debt ratios are projected to ease.
B. Technical
63. Modernization of the DHM infrastructure will focus on structural and non-structural measures. There is a need to improve both the physical and management systems of the DHM in order to provide reliable information to the public and climate sensitive sectors to enhance their resilience to climate-related hazards. The modernization program will conform to best practices established by the WMO, which is the intergovernmental body responsible for coordinating the international exchange of information needed to maintain and improve weather, water and climate services. The
23 The risk rating is determined using the Low-Income Country Debt Sustainability Analysis (LIC-DSA) framework. Nepal’s fiscal years starts mid-July.
21
project will be supported by a contractor selected based on international selection criteria with proven experience in the implementation of similar projects, knowledge of WMO practices, and engineering skills in systems integration. The project will also benefit from the infrastructure already in place in the National Data Center managed by the National Information Technology Center in Kathmandu, which can house the more sensitive equipment essential for the improved forecasting of weather, water and climate hazards.
C. Financial Management
64. Both DHM and MoAD will follow the government’s Financial Administration Regulations, which is adequate to ensure appropriate controls over project transactions. The project will rely heavily on the procurement of consulting services and on procurement of specialized equipment and goods. In order to expedite early procurement of key goods and services, provision for retroactive financing will be made to cover some of the initial costs such as hiring an experienced procurement expert. A procurement expert/consultant will be immediately hired for each PMU to support priority procurement activities under DHM and MoAD. Other critical activities are forming the Project Management Units in both DHM and MoAD GIS Section, recruiting the General Consultant / Systems Integrator, developing design documents for building refurbishment/reconstruction, launching priority training activities, buying office equipment, etc.
65. From the financial management perspective, the overall risk at the time of appraisal is “high”. The residual risk after adopting mitigating measures is “substantial”. DHM has no prior experience working with the World Bank. MoAD, on the other hand, has experience implementing Bank financed projects. PMUs will be established in both agencies to support implementation of their respective component(s). In addition to these, some initial activities as listed above are important for timely project implementation. Preparation and finalization of detailed Project Implementation Plans which include procurement plans for at least the first 18 months and detailed project cost tables are a priority. The GoN will provide funds to pre-finance expenditures such as procurement consultants for project start-up, which can later be reimbursed through retroactive financing. Budget requests have been prepared and submitted by DHM and MoAD for the Government of Nepal’s Fiscal Year 2012-13 and dedicated budget lines in the Red Book (one for DHM and one for MoAD) will be created. The project will also provide resources for capacity building in technical areas as well as overall project management including procurement and financial management. Risk Mitigation Action Plans have been agreed that will reduce risks during implementation.
D. Procurement
66. Procurement for the proposed operation will be carried out in accordance with the World Bank's "Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" published by the World Bank in January 2011 ("Procurement Guidelines"), in the case of goods, works and non-consulting services; and "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank
22
Borrowers" published by the World Bank in January 2011 ("Consultant Guidelines") in the case of consultants' services, and the provisions stipulated in the Legal Agreement. For each contract to be financed under the Loan/Grant, procurement methods or consultant selection methods, the estimated costs, prior review requirements, and time frame will be agreed between the Borrower and the Bank in the Procurement. The Procurement Plans will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.
67. A procurement capacity assessment was carried out in December 2011. On the basis of that assessment, the overall procurement risk for the project was rated "High", and the residual risk was "Substantial" after establishment of the PMU, preparation and finalization of a checklist for the procurement process, development of procurement plans, and appointment of a procurement officer/consultant to support the project staff. The detailed procurement assessment is available in the project files.
E. Social (Including Safeguards)
68. The project is expected to generate positive social impacts through its efforts to deliver improved warnings of meteorological hazards and better agrometeorological data to improve agricultural management among farmers throughout Nepal. But the implementation of specific project investments could lead to some adverse social impacts.
69. Environmental and Social Management Framework (ESMF): A preliminary Social Assessment (SA) conducted as part of the ESMF for the Project identified potential adverse impacts, and proposed appropriate measures for avoiding or mitigating them. These have now been incorporated in the Project design. Potential adverse social impacts during the construction phase of investments include loss of land or structures, loss of income or access to areas for livelihood support and public safety issues. Site selection for observation stations may potentially be controversial among directly affected people and other stakeholders. The ESMF prepared for the Project acknowledges these issues and integrates the measures for addressing them in the Project implementation process. The ESMF has been developed as a decision making tool to ensure that the activities selected and implemented under the Project are socially responsive. This framework will serve as a tool to guide the Project implementers in selecting the optimal project interventions required to address social concerns, prepare mitigation plans, and ensure complete integration of social concerns and mitigation measures in the design of the project activities.
70. The ESMF recognizes the need for an early social assessment during the pre-planning stage of activities to identify any adverse impacts, plan for mitigation measures and help in mainstreaming this aspect throughout the implementation phase. The ESMF has been prepared based on GoN regulatory/policy requirements and the World Bank’s Operational Polices 4.12 (involuntary resettlement) and 4.10 (indigenous peoples). The ESMF includes frameworks for resettlement, vulnerable community development, gender, and consultation and information dissemination. The ESMF also details the
23
institutional arrangements for implementation and monitoring. The ESMF specifically includes:
(a) Resettlement Policy Framework: As per the social assessment carried out for the ESMF, there may be need for involuntary land taking for the installation of AWS/AHS/WRS which may result in displacement and loss of livelihoods. Though the scale of involuntary resettlement at the individual sub-project sites is likely to be negligible, given the nature of investment, the ESMF includes a Resettlement Policy Framework (RPF) which specifies the procedures, eligibility, grievance redress and other measures to be followed in the event that resettlement or land taking is required for any sub-project. The sub-projects will consider alternative designs (especially during site selection) in order to avoid land acquisition and minimize adverse social impacts. A resettlement action plan with the cost of land acquisition will be prepared during implementation after screening subcomponents as per the RPF. The RPF will apply to parallel activities undertaken by the executing agencies if these activities are found to be (a) directly and significantly related to the Bank-assisted project or sub-projects, (b) necessary to achieve its objectives as set forth in the project documents; and (c) carried out, or planned to be carried out, contemporaneously with the Project.
(b) Vulnerable Community Development Plan: As part of the ESMF, a Vulnerable Community Development Framework has been prepared, with the objective of including vulnerable communities in the Project in order to achieve the highest possible positive impact of the interventions to improve their quality of life. The key issues to be addressed, apart from mitigating any adverse impact that may occur, include inclusion in the project benefits and involvement in capacity building processes. Fair, free and prior informed consultations will be carried out with the vulnerable communities throughout the project cycle.
(c) Gender: Apart from low level of participation of women members in the project, most of the women’s status indicators (including those pertaining to health, literacy, work force participation, spousal abuse) show that gender equity and empowerment remain serious issues. As part of the ESMF, a Gender Development Framework has been designed which will help to identify and analyze gender issues during the preparation stages of the sub-project, and to design interventions to address women’s needs. Gender analysis will be part of the social assessment at the sub-project level.
F. Environment (Including Safeguards)
71. Most of the activities funded by the Project are in the nature of technical assistance with minimal adverse environmental impacts. The Project will finance moderate civil works and refurbishment of existing facilities and structures.
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Environmental concerns of the Project are mainly related to Component B (Modernization of the Observation Networks and Forecasting). The activities envisaged under this component include automation and improvement of hydrological stations/sites (re-equipping, facilities and site improvements), installation of Weather Radar Units/System, installation of up to 100 automated weather and climate stations (AWS), and computers and software.
72. The location of these stations and sites were not known during the preparation of the Project, the borrower, therefore, has prepared an ESMF to address environmental and social issues that might arise during implementation. This framework will ensure compliance with key safeguards issues that are triggered by the Project.
73. The assessment made as part of the ESMF preparation identifies potential adverse environmental impacts. These typically include the following: (i) tree/ vegetation loss associated with (5m x 5m) gauge houses, (8m x 8m) cable houses, and (25m x 25 m) automated weather stations may require clearing of forest and vegetation if they are located in the forest land; (ii) health and pollution risks from dry-cell batteries (dry-cell batteries are the most commonly used power supply system to operate hydrological and meteorological sensors in automated operations mode); (iii) damage to agriculture due to movement of observers and gauge readers in and around stations located in or near agriculture land; (iv) generation of e-wastes and its impacts; and (v) erosion, particularly of the hill top where radar is located (installation of radar may affect around 60 to 100 square meters of area due to vegetation loss and construction activities). However, none of the adverse impacts identified are likely to be highly significant or irreversible. The potential impacts are small in scale, limited to the sites and their vicinity and readily manageable or mitigated by simple measures. Hence the Project is classified as Category B.
74. The Project aims to make hydrological, meteorological and weather information more accurate, credible and available. This is likely to be helpful in developing effective strategies for mitigating environmental degradation and for developing appropriate adaptation in addition to early warnings for managing disasters.
75. The ESMF requires each sub-component to go through an environmental screening, considering the location and type of activity, in order to identify relevant environmental concerns. The screenings also suggest if further investigation is necessary. Highly sensitive locations and activities are ineligible, such as activities in core protected areas, world heritage sites, and conflicted/disputed territory. The ESMF also suggests that activities should not be implemented in areas with high risks of landslides and erosion. Each subproject/activity will be subjected to six-monthly compliance monitoring, and the project will be subjected to two evaluations/audits (in the second year and last year of implementation).
76. The ESMF indicates that the implementing agencies’ environmental management capability is constrained by lack of human and financial resources, and by lack of specific skills. The ESMF has included a plan for addressing this issue, and suggests capacity strengthening measures including orientations and trainings, and
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provision of human resources (e.g. an environmental specialist in the Project Management Units). PMUs will include full-time environmental specialists in the early stages of implementation, at later stages when the environmental management system in the project is effective, these specialists may be brought in intermittently.
Other Safeguards Policies Triggered
Table 4: Safeguards Policies by Project
Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [X] [ ] Natural Habitats (OP/BP 4.04) [X] [ ] Pest Management (OP 4.09) [ ] [ X] Indigenous Peoples (OP/BP 4.10) [X] [ ] Physical Cultural Resources (OP/BP 4.11) [ ] [X] Involuntary Resettlement (OP/BP 4.12) [X] [ ] Forests (OP/BP 4.36) [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]
77. The Project received an exception to the riparian notification requirement under paragraph 7(a) of OP7.50. The Project interventions relate only to monitoring international rivers and are non-abstractive in nature. It was therefore determined that these activities will not adversely change the quality or quantity of water flows to the other riparian countries; Bangladesh, China and India. There is also no requirement for notification under any of the international treaties existing between Nepal and co-riparian countries.
G. Governance and Peace Action Plan
78. A Governance and Peace (GAP) Action Plan has been developed and its implementation will be monitored during the project period. In general, it seeks to ensure good governance, conflict-sensitivity, transparency and accountability, and inclusion in the management of Project activities. In doing so, it identifies and addresses key peace and governance related risks and critical operational concerns related to the sector and project management and implementation. In addition, the World Bank’s Access to Information Policy and Anti-Corruption Guidelines have been incorporated into the framework. The GAP will be periodically revisited and strengthened as necessary, based on lessons learned during project implementation (Annex 8).
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ANNEX 1: NEPAL’S STRATEGIC PROGRAM FOR CLIMATE RESILIENCE (SPCR)
NEPAL
Pilot Program for Climate Resilience - Building resilience to climate-related hazards
1. Nepal was selected as one of the nine pilot countries for the Pilot Program for Climate Resilience (PPCR). The PPCR is a program of the Climate Investment Funds (CIF), administered by the Multilateral Development Banks (in Nepal the Asian Development Bank, the International Finance Corporation and the World Bank) to support implementation of country-led programs and investments. The overall objective of the PPCR is to demonstrate ways to integrate climate risk and resilience into core development planning. Nepal accepted the offer to participate in the PPCR on May 13, 2009.
2. The first step in the PPCR process was the development of a Strategic Program for Climate Resilience (SPCR). Nepal’s SPCR was developed by the Government of Nepal in partnership with the World Bank, IFC and ADB. The SPCR preparation process was designed by a group of consultants (one competitively recruited international consultant and three competitively recruited national consultants) that were hired and supervised by MoSTE, financed through an advance of PPCR funds. The proposed approach was reviewed and approved by a large stakeholder group, including (I)NGOs, Government Ministries, development partners, private sector and academicians.
3. In order to identify investment priorities, the consultant team undertook an extensive consultation process that included over 850 people at national, district and community level, and included (I)NGOs, Government Ministries, development partners, private sector, academicians, women, and disadvantaged groups.
4. This project (Building Resilience to Climate-Related Hazards) is one of five activities identified in the Nepal SPCR. The other projects under the SPCR are:
a) Building Resilience of Watersheds in Mountain Eco-Regions (to be implemented by the ADB),
b) Mainstreaming Climate Risk Management in Development (to be implemented by the ADB),
c) (iii) Building Climate Resilient Communities through Private Sector Participation (to be implemented by the IFC), and
d) (iv) Enhancing Climate Resilience of Endangered Species (to be implemented by the WB).
A schematic of the SPCR is presented below.
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Investment Project: Building Resilience to Climate Related Hazards
PPCR Program Components
Strategic Program for Climate Resilience
Component 1Building Resilience of
Watersheds in Mountain Eco-Regions(ADB)
Component 2 Building Resilience to
Climate-Related Hazards(WB)
A. Institutional & Capacity Strengthening (DHM )
B. Modernization (DHM)
C. Services (DHM)
D. AMIS (MoAC)i. infrastructureii. productsiii. disseminationiv. capacity building
Component 3Mainstreaming Climate
Change Risk Management in Development
(ADB)
Component 4Building Climate Resilient
Communities through Private Sector
(IFC)
Component 5Enhancing Climate
Resilience of Endangered Species
(WB)
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ANNEX 2: RESULTS FRAMEWORK AND MONITORING
NEPAL
Pilot Program for Climate Resilience - Building resilience to climate-related hazards
.
Project Development Objectives .
PDO Statement
Proposed Development Objective(s): The main objective of the proposed project is to enhance government capacity to mitigate climate related hazards by improving the accuracy and timeliness of weather and flood forecasts and warnings for climate-vulnerable communities, as well as developing agricultural management information system services to help farmers mitigate climate-related production risks.
This would be achieved by establishing multi-hazard information and early warning systems, upgrading the existing hydrometeorological system and agricultural management information system, and enhancing capacity. Activities funded through the project would help improve decision-making and planning in key climate-vulnerable and water resources dependent sectors particularly agriculture, health, water and disaster management, and contribute to building climate resilience for communities at risk. .
Project Development Objective Indicators
Cumulative Target Values Data Source/
Responsibility for
Indicator Name Core Unit of Measure
Baseline YR1 YR2 YR3 YR4 End
Target Frequency
Methodology
Data Collection
Increased financial sustainability of DHM operations
Percentage of allocation of public funds in relation to essential operational needs
40 % 50 % 60 % 70 % 85 % DHM budget sufficient to cover 100 % O & M for
Baseline, annually, end of project
DHM reports, PMU
DHM/PMU
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essential operational needs
Increased accuracy and timeliness of weather forecasts (verified using standard methods for forecast verification - WMO WWRP/WCRP)
Skill (0-1) of weather forecasts of 24 hours lead time (1 is perfect score, verification measures)
No verification system in place - no skill
Introduce verification forecast verification system
24h: 0.55
24h: 0.6 24h: 0.65
24 h: 0.75
Increased satisfaction of users with DHM services
Composite satisfaction index expressed as a %, where 100 % is completely satisfied
Establish baselines prior to introduction of new services
30 % 40 % 50 % 65 % Assessed annually after initial baseline
Public surveys, conforming with WMO methodologies, disaggregated where possible for gender and vulnerable groups
Consultant
Introduction of a sustainable AMIS that systematically streams and
Composite satisfaction index expressed as a %, where
0 Establish baselines prior to introduction of
65 % (at least 40 % of this is poor, disadvan
Annually Surveys of farmers, disaggregated where possible for
MoAD GIS Section
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archives agriculture relevant hydromet and agromet data and information
100 % is completely satisfied
new services
taged groups, women, etc) of farmers surveyed satisfied with AMIS services
gender and vulnerable groups
.
Intermediate Results Indicators
Cumulative Target Values Data Source/
Responsibility for
Indicator Name Core Unit of Measure
Baseline YR1 YR2 YR3 YR4 End
Target Frequency
Methodology
Data Collection
New DHM regulations and business practices
Approved documents, guidelines or regulations
Existing operating procedures are inadequate to meet DHM mission
Develop Draft Concept for overall DHM development, SOPs and options for new business models for value-
Pilot testing of new regulations and guidelines in line with new concept, develop and explore new business models for
DHM new regulations and operational guidelines developed in line with new concept, modernized observation
"Fee-for-service" arrangement piloted in few sectors
DHM Regulations and operational guidelines fully functioning and support DHM mission
Bi-annually Government decree or resolution, DHM Reports
DHM
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added services
value-added services
infrastructure and technologies
Improved access to and use of training opportunities
% of DHM professional staff trained and/or retrained
Current number
30 % 60 % 75 % 90 % 100 % Bi-annually Based on DHM & WMO reports and integrator verifications
DHM/PMU
Improved transmission of data to WMO GTS/WIS
% of essential data reported to WMO via GTS/WIS in time
% of data from synoptic stations and future upper-air stations reaching GTS/WIS
50% 65 % 80 % 90 % 95 % Bi-annually DHM reports and annual WMO reports from World Weather Watch
DHM/PMU
Improved status of surface meteorological observation network
% AWS operating in line with standard operating procedures (SOPs) in total network
10 % 20 % 40 % 50 % 80 % 90 % Bi-annually DHM reports
DHM
Improved status of surface hydrological
% hydro stations operating in
10 % 20 % 30 % 50 % 70 % 80 % Bi-annually DHM reports
DHM
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observation network
line with SOP in total network
Provision of real-time or near real-time data to the users
Number of stations providing reliable and uninterrupted real-time information in an appropriate form to the users
10 % 15 % 20 % 40 % 70 % 80 % Bi-annually DHM reports
DHM
Development and reliable operation of an authoritative public weather service providing meteorological and hydrological warnings for extreme and high impact events reaching climate-vulnerable communities
Satisfaction index (for climate- vulnerable communities)
No assessment
Satisfaction index developed
Satisfaction index tested
50 % 55 % 65 % of population surveyed in pilot regions are satisfied with public weather service
Annually Public survey, disaggregated where possible for gender and vulnerable groups
Consultant
Establish National
Establishment of National
None Development of
Climate impact
Climate impact
Climate impact
Climate impact
Quarterly Report of DHM
DHM
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Framework for Climate Services
Climate Center within DHM
National Framework for Climate Services. Engagement of national stakeholders (Semi-annual or more frequent stakeholder meetings- Climate outlook Fora)
assessment by sector
assessment by sector
assessment by sector
assessment by sector
Improved access to AMIS data
Number of centrally located AMIS portal established and frequency updates and improvements of portal
0 1 once per year
1 once every six months
1 once every three months
1 once every month
1 once every month
Monthly – annually
MoAD report
MoAD GIS Section
Improved linkage between
Percentage of AMIS
0 10 % 20 % 40 % 65 % 85 % Annually MoAD and WMO
GIS Section and DHM AMIS
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AMIS and WMO AMIS
products link to WMO WAMIS
Reports Representative
Increased extension service and community training
Percentage of extension service and community leaders were certified to train farmers on climate resilient agriculture
0 5 % 10 % 15 % 20 % 25 % Annually MoAD reports, data disaggregated for gender and vulnerable groups
GIS Section
Improved infrastructure development
Percentage of AMIS infrastructure completed
0 25 % 80 % 90 % 95 % 100 % Annually MoAD reports
GIS section
Increased adoption of AMIS tools by farmers
Number of agro-weather and agro-climate information and risk management products developed and used in farming community
0 4 (including digitizing data, weather/climate informed crop maps)
6 6 7 7 Annually MoAD reports, data disaggregated where possible for gender and vulnerable groups
GIS section
Improved access to and use of
Percentage increase in
0 30 % 50 % 70 % 90 % 100 % Annually MoAD reports and
GIS section
35
training opportunities
number of professional AMIS staff (GIS Section and NARC) receiving training and advanced degree
staff verification
Improved efficiency to disseminate and obtain feedback of agro-weather and agro-climate information
Percentage of farm ICT users receive AMIS info
0 0 20 % 30 % 50 % 65 % Annually MoAD reports
Department of Agriculture and GIS Section
Increased satisfaction of users with AMIS services
Composite satisfaction index, including number of visits of AMIS portal, expressed as a %, where 100 % is completely satisfied.
0 Establishment of baselines prior to introduction of new services
30 % 40 % 50 % 65 % Assessed annually after initial baseline
Public surveys, WMO methodology, data disaggregated for gender and vulnerable groups
Consultant
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ANNEX 3: DETAILED PROJECT DESCRIPTION
NEPAL
Pilot Program for Climate Resilience - Building resilience to climate-related hazards
Project Background
1. The Government of Nepal started hydrological and meteorological activities in an organized way in 1962. These activities were initiated as a section under the Department of Electricity. The section was subsequently transferred to the Department of Irrigation and was ultimately upgraded to Department status in 1988.
2. DHM is under the MoSTE. The Department is headquartered in Kathmandu and has three basin offices: the Karnali Basin Office in Nepalganj, the Narayani Basin Office in Narayangath, and the Kosi Basin Office in Biratnagar. The Bagmati Basin Office is administrated by the Hydrology Division of the Department in Kathmandu. The Department also has three regional climatological offices: the Mid and Far Western Regional Climatological Office in Surkhet, the Western Climatological Office in Pokhara, and the Eastern Regional Climatological Office in Dharan. The Central Regional Climatological Office is administered by the Climate Division of the Department in Kathmandu.
3. DHM has a mandate from the Government of Nepal to monitor all the hydrological and meteorological activities in Nepal. No agency is entitled to carry out such activities without a proper liaison with DHM. The scope of work includes the monitoring of river hydrology, climate, agro-meteorology, sediment, air quality, water quality, limnology, snow hydrology, glaciology, and wind and solar energy. General and aviation weather forecasts are the regular services provided by DHM. As a member of the World Meteorological Organization (WMO), DHM contributes to the global exchange of meteorological data on a regular basis.
4. DHM actively participates in the programs of relevant international organizations, such as UNESCO's International Hydrological Program (IHP) and WMO's Operational Hydrology Program (OHP). In the past, DHM has hosted several regional and international workshops, symposia, seminars and meetings on different aspects of meteorology, hydrology, sediment, and snow hydrology. The Department is also a focal point for the Intergovernmental Panel on Climate Change (IPCC) and for the meteorological activities of the South Asian Association for Regional Co-operation (SAARC). The International Civil Aviation Organization (ICAO) has recognized DHM as an authority to provide meteorological services for international flights.
5. Principle Activities of DHM are to:
• Collect and disseminate hydrological and meteorological information for water resources, agriculture, energy, and other development activities.
• Issue hydrological and meteorological forecasts for the general public, mountaineering expeditions, civil aviation, and the mitigation of natural disasters.
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• Conduct special studies required for policy makers and for the development of hydrological and meteorological sciences in the region.
• Promote relationships with national and international organizations in the field of hydrology and meteorology.
6. Organization. The Director General heads DHM. The present organizational structure has four divisions headed by Deputy Directors General: (i) the Hydrology Division, (ii) the Climate Division, (iii) the Weather Forecasting Division and (iv) the Climate Network Division.
7. The Hydrology Division has five sections: (i) Flood Forecasting, (ii) Hydrological Data Management, (iii) River Network, (iv) Technical Relations and Facilitation, and (v) Snow, Water Quality and Environment. The Climate Division includes (i) Agro-Meteorology, (ii) Climate, (iii) Meteorological Data Management, and (iv) Instrument. The Weather Forecasting Division has three sections: (i) Weather, (ii) Aviation Weather, and (iii) Communication. The Climate Network Division is primarily responsible for developing policies and coordinating all the departmental activities including financial and administrative matters. Along with the three Regional Climate Offices (Eastern Regional Office, Western Regional Office and Mid & Far Western Regional Office), the Planning and Network Section is under the Climate Network Division. The Network Division also provides support to the following sections and activities: Data Management, Planning, Instrument and training activities. Similarly, the River Network Section coordinates the three Basin Offices: (i) Koshi Basin Office, (ii) Narayani Basin Office and (iii) Karnali Basin Office.
8. Technical Resources. DHM maintains nation-wide networks of 337 precipitation stations, 154 hydrometric stations, 20 sediment stations, 68 climatic stations, 22 agrometeorological stations, 9 synoptic stations and 6 aero-synoptic stations. Data are made available to users through published reports, bulletins, and computer media outputs such as hard copies or diskettes. DHM publishes data on an annual basis. Most of the sections under DHM are equipped with personal computer systems connected through a network. The computers are not only used for database management but also for hydrological and meteorological modeling and analyses. Hydrological and meteorological studies are produced as reports every year. Recent publications include the reports on low flow analyses, flood risk assessments and integrated database developments.
9. DHM is equipped or has been equipped with several data collection facilities based on different technologies, such as wireless communication, meteor burst, radio-sounding, Satellite Distribution Information System (SADIS), weather fax, and satellite picture receiving systems. Wireless systems connect Kathmandu to 54 stations spread over Nepal for climatic and hydrological data whereas the Global Telecommunication System (GTS) links DHM to the global meteorological community.
10. Human Resources. DHM employs a staff of 238 personnel. Eighty-four people are employed at field offices, 48 at basin offices, and 130 at the headquarters. Thirty-four administrative staff supports sixty professional staff and 143 technicians in the
38
Department. However, many of these posts are unfilled and many of the listed facilities, such as radio-sounding stations and automated stations are not functioning.
11. Observation Networks. Overall DHM’s hydrological and meteorological observing network is in a poor state despite the addition of some donor-supported systems. Much of the system relies on manual data collection with infrequent reporting. Synoptic stations provide reports every three hours but only during daytime (from 8 am to 7 pm). Incentives to maintain high quality record keeping are weak. There, however, is real-time access to a limited automated hydrological network. This network includes both hydrological sensors and meteorological sensors. The system was developed by a local IT company, which operates and maintains the network on behalf of DHM. During field visits, several automated stations were not functioning and some of the WMO recommendations concerning the procedures of measurements are not fulfilled, i.e., the height of the temperature measurements, presence of trees and bushes around the stations, and lack of paper for sun illumination measurements. There remain considerable challenges to maintaining automated systems. However, there is a need for real-time data for forecasts and warnings that can only be met with automation.
12. Data Collection and Transmission/Dissemination Systems, and IT. The current data collection system is adequate for the quantities of data currently retrieved but this amount of data is not adequate for sound decision making. Network management and IT is outsourced. A new message switching system and a more powerful and robust communication network will be needed if the system is expanded from its current capacity.
13. Maintenance and System of Metrologic Support for Instrumentation. No instrument calibration is currently conducted. For the modernized system it will be necessary to have a calibration department at DHM in order to ensure that observations are correct.
14. Service Provision System. DHM’s current service provision and stakeholder engagement is limited. Some important steps towards better service provision could be undertaken immediately. A daily meteorological and hydrological bulletin with information including diagnoses of the previous day and forecasts for up to three days with an emphasis on touristic regions and main cities could be produced and delivered to the public and users and posted on DHM’s website.
15. Staff Capacity. The staffing levels of DHM fall far short of the number of posts shown in their organization chart and this will need to be addressed both prior to and during the Project. The skills profile and staffing needs of DHM will change as the system is upgraded. DHM has few technical support staff and outsources most of these functions. Staffing levels are limited, which means that when some are away for training or education, key personnel are missing. Meteorological and hydrological training is available in Nepal, and Universities and colleges also provide well-qualified IT specialists and other technical skills. But international recruitment attracts staff away from DHM and IT specialists have more opportunities in the private sector and elsewhere. The more highly trained technical staff needed to run an upgraded system could prove particularly difficult to retain. In order to provide consistent service delivery, it is important to consider the main domains where permanent staff and shift
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work is needed (e.g. forecasting room, IT and communications maintenance). This is valid for a future national center and for regional offices as well.
16. DHM budget, its status, main items and recent trends. Until 2010, DHM’s budget was extremely low and stayed at the level of US$1.2 million. In the current year 2011/2012, the budget is US$1.8 million divided in five major categories: DHM, mostly administrative expenditures (22%); hydrology program (31%); meteorology program (24%); weather forecasting (4%); and flood forecasting (20%). The budget is inadequate for current operations and even more limited for the proposed future operations. Options are needed for streamlining and consolidating budgeting and reporting system, which will reduce unnecessary workloads for DHM staff.
Project Components
(a) Institutional strengthening, capacity building and implementation support of DHM
(b) Modernization of observation networks and forecasting
(c) Enhancement of the service delivery of DHM; and
(d) Creation of an agriculture management information system (AMIS)
Component A. Institutional Strengthening, Capacity Building and Implementation Support of DHM (US$5.100,000)
17. This component aims to develop and/or strengthen DHM’s legal and regulatory frameworks, improve institutional performance as the main provider of weather, climate and hydrological information for the nation, build capacity of personnel and management, ensure operability of the future networks, and support project implementation. There are three sub-components:
(a) Sub-Component A.1 – Institutional Strengthening (US$570,000), which includes: (1.1) DHM institutional development and strategic planning; (1.2) development and/or strengthening of a legal and regulatory framework for DHM operations, including development of standard operating procedures, assessment of new business models and enhancing public private partnerships; and (1.3) “twinning” operational support from advanced NMS and WMO.
(b) Sub-Component A.2 – DHM Capacity Building (US$1,050,000), which includes: (2.1) Developing and implementing a DHM capacity building program including (i) DHM personnel training and retraining, (ii) professional orientation for DHM senior staff, (iii) education in universities and training in WMO regional training centers; and (2.2) Implementing training activities (workshops, round tables, etc.) for major users (i.e., agriculture, water resources management, health, energy, transportation).
(c) Sub-Component A.3 – Systems Design and Integration, Project Management and Monitoring (US$ 3,480,000), which includes: (3.1) Provision of support for detailed design, procurement and implementation
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of DHM systems (General Consultant/ Systems Integrator); (3.2) Project management, reporting, monitoring and evaluation for Components A, B and C; (3.3) Development of a needs assessment and design for air quality, water quality and sediment monitoring networks; (3.4) development of design documents for reconstruction/refurbishment of DHM headquarters and regional offices; (3.5) support for environmental and social due diligence and protection.
18. Sub-Component A.1 will enable DHM to develop a strategy for future institutional development and the sustainability of the proposed modernization program. Improving the legal and regulatory framework, in line with other countries NMSs, will strengthen DHM’s mandate to provide authoritative hydrometeorological alerts and warnings. It should confirm the role of DHM as the institution with the responsibility for issuing warnings of hydrometeorological hazards. Regulation will also codify the responsibilities of other government agencies and organizations, which are affected by hydrometeorological hazards, ensuring more timely and effective responses that will help mitigate weather-related disasters. There are a number of examples of legal and regulatory frameworks that have been developed by other countries that could be instructive (e.g., Australia, China, Germany, and the United States.) Attention must be paid to ensure all relevant international commitments are supported.
19. Standard Operating Procedures (SOPs) enable the DHM to codify how alerts, warnings, and other operation products are issued. They also enable stakeholders to define their responses to the various levels of alerts and warnings improving the response to hydrometeorological hazards. SOPs should be constructed to align with WMO guidelines.
20. In addition to its role as a public service provider, DHM is required to recover costs and provide a return on investment to the government. At present DHM does not retain any of this revenue. This could be a means of providing supplemental financial support to the institution’s costs, but must be managed carefully to ensure that the public mission is achieved. In most countries, basic weather services are provided as a public good supported by the government.
21. If value added services are developed, they should not be at the expense of restricting access to basic information. It is important to ensure that commercial data policies adhere to the international policy (World Meteorological Congress XII Resolution 40) on the free and unrestricted international exchange of meteorological and related data and products, which are required to describe and forecast accurately weather and climate. This will also increase the visibility of DHM in the society and trust in this organization. Visibility and trust are crucial for early-warning activities.
22. Value-added services should be piloted. This could be done with the mobile telecommunication sector to provide value-added services to specific clients. One option is to develop public private partnerships, which enable revenue sharing and provide access to technologies and know-how not available within the DHM. These partnerships should be consistent with public function and principles of the DHM for better quality of service.
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23. The option to develop twinning or pairing arrangements with other NMSs and advanced institutions should be developed. This approach could provide more intensive on-the-job training, personnel exchanges as well as operational support to DHM. Support will be particularly critical during the first years of implementation and will help DHM overcome initial difficulties to move to a full 24/7 operational weather forecasting service. WMO has numerous examples where this has worked effectively. Ideally it would be most practical to twin with operational institutions (NMSs and NHSs) in the region (WMO Region II), especially India and China. By pairing it should be possible to accelerate the introduction of public weather services.
24. Sub-component A.2 will build capacity through training and take advantage of cooperation with other WMO Members to improve the sustainability of the modernization program. A strong and effective DHM depends on continuous access to new skills, opportunities to evaluate and refresh existing staff skills, provide short/long-term courses and on-the-job training. Some of these skills can be provided by the WMO Regional Training Centers, while universities and technical institutes in Nepal and elsewhere can provide other skills. A steady supply of meteorologists, hydrologists and related specialists at the B.Sc., M.Sc. and Ph.D. level are required to replace retiring staff. These new staff will need to be equipped with the skills and abilities to take advantage of the proposed advances in forecasting and observing systems at DHM. Most NMSs and NHSs develop cooperative relations with local universities so that the latter can provide qualified staff to the operational services that match current needs.
25. Capacity building should also be sought from other NMSs, which have skills relevant to Nepal and currently lacking within DHM. In particular, it is recommended that the DHM management team visit several NMSs, which have recently completed similar business transformation processes and facility improvements. This should occur during the detailed design phase of the project. It may also be beneficial for the Government of Nepal representatives to participate in these visits to understand the different legal frameworks within which NMSs operate.
26. The basic meteorological and hydrological products are likely to change so new technical and service related expertise would be needed. This will require an overall upgrading of skills and responsibilities and a long-term plan for staffing, which should be defined in the context of the technical refurbishment and service delivery strategy. This should be reviewed in the context of other modernization efforts currently underway.
27. DHM should consider developing a capacity building plan (initial and on-going) to ensure that all needs are covered before new operations and activities start. This would build-up confidence and motivation inside the actual staff. Strengthening national universities’ capacity to provide academic programs for new DHM staff and to retrain existing staff is recommended. There is precedent for this in other countries where university departments specializing in atmospheric sciences and hydrology have become centers of excellence as a result of the needs of the NMHSs.
28. Areas requiring enhancement:
• Project management • Technical skills to support observing networks • Enhanced skills in weather forecasting using numerical methods
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• Enhanced skills in weather forecasting based on remote-sensing • Mesoscale meteorology • Verification and statistics methods • Data base management • Instruments and detectors maintenance and engineering • Knowledge of social, environmental, and economic sectors sufficient to
provide consulting services to their users • Enhanced skill in climate prediction using numerical methods • Greater computer literacy for all staff • Public education and outreach • IT management skills
29. It is recommended that DHM work with WMO to identify immediate opportunities for the technical training of staff within the current roster of training activities. Leadership and management training should be fast-tracked to facilitate the rapid development of high quality management processes with DHM near the start of the project. Team building workshops to build strong team performance in DHM should also be conducted. One approach would be to use leadership coaching, which will build the confidence of the DHM management team.
30. Education and training is also needed within the user community to improve the capacity and capabilities of various sectors to utilize weather, climate and water-related data and information. This will also help these sectors act as effective translators of DHM products and services to ensure that those who need the information can use it effectively.
31. Sub-component A.3 will support the design and integration of the various systems and project management. Given the limited experience of the DHM and the importance of a fully integrated operational system, it proposed to use a General Consultant/Systems Integrator to work with DHM staff to develop and implement the new DHM system. Designing a system, which will link the DHM’s networks and ensure their connectivity and interoperability is a technically challenging task. There is limited national experience in Nepal on large-scale hydrometeorological modernization, therefore the General Consultant will be selected through an international competition to assist DHM in development of the detailed technical design of the future DHM systems, development of technical specifications and bid documents, and provide implementation support until the end of the project. The General Consultant / Systems Integrator will support the detailed design, procurement and implementation of the various systems.
32. This sub-component will also support Project management, reporting, and monitoring and evaluation for components A, B, and C, including support for the Project Management Unit (PMU) to be established in DHM, which will provide assistance in the project implementation. The DHM PMU will include a Project Director, a Technical Coordinator, a Financial Consultant, a Procurement Consultant, a Social, Training and Communications Consultant, an Environmental Consultant, and a Monitoring and Evaluation Consultant. The PMU will be headed by a Director (the Director General of DHM). All PMU staff except the Project Director will be consultants. In addition,
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officials of the Accounts Section in DHM will provide support to the PMU. The DHM PMU will work closely with the General Consultant/ Systems Integrator.
33. Two consultancy assignments included in this sub-component will develop assessments and studies necessary for implementation of complex activities of Component B. These are: (i) Development of a needs assessment and design of air quality, water quality and sediment monitoring networks; and (ii) Development of design documents for reconstruction/refurbishment of DHM’s current headquarters and other offices and facilities. Finally, this sub-component will support environmental due diligence and environmental and social protection oversight activities aimed at minimizing potential negative environmental and social impacts of the project activities.
Component B. Modernization of the Observation Networks and Forecasting (US$16,450,000)
34. This component aims to modernize DHM’s observation networks, communication and ICT systems, improve hydrometeorological numerical prediction systems and reconstruct / refurbish DHM offices and facilities. This component comprises the following five sub-components:
(a) Sub-Component B.1 – Technical Modernization of Observation Networks (US$10,700,000), which includes: (1.1) rehabilitation and technical re-equipment of hydrological network; (1.2) Improvement of the environment of the hydrological stations (bank stabilization, improvement of flow conditions, engineering works, etc.); (1.3) Special equipment for hydrological stations (current meters, sediment samplers, tracer laboratory equipment, training, staff gauges, boats); (1.4) Delivery and installation of weather radar for detection of heavy precipitation and other meteorological phenomena; (1.5) Renewal of temperature-wind sounding of the atmosphere (includes expendables for 1 year); (1.6) Upgrade and expansion of automated surface observing system for aviation safety; (1.7) Surface meteorological and lightning detection networks; (1.8) Glacier and snow monitoring (equipment and surveys); (1.9) Establish DHM calibration facilities; and (1.10) Vehicles to support DHM field operations, maintenance and inspections.
(b) Sub-Component B.2 – Modernization of DHM’s Communication and ICT Systems (US$1,250,000), which includes: (2.1) Communications equipment (DHM networks); (2.2) Archiving and data base development; and (2.3) Remote sensing and GIS laboratory.
(c) Sub-Component B.3 – Improvement of the Numerical Hydrometeorological Prediction System (US$400,000), which includes: (3.1) Modern computer equipment for numerical weather prediction.
(d) Sub-Component B.4 – Design and Pilot Operation of an Environmental Monitoring Network (US$1,000,000) which includes: (4.1) Pilot operation of air quality, water quality, and sediment monitoring networks.
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(e) Sub-Component B.5 – Refurbishment / Reconstruction of DHM Offices and Facilities (US$3,100,000) which includes DHM headquarters and possibly other DHM offices and facilities.
35. Sub-component B.1 will support the technical modernization of the observing networks. Extensive consultations with DHM hydrologists were undertaken to determine the current status of hydrological monitoring stations, monitoring methods, transmission of observations, data processing, data archiving and delivery of services. The hydrological network at all river basins was reviewed and it was decided to refurbish or enhance 74 hydrological sites. Based on this preliminary assessment, necessary new equipment at the monitoring stations and at DHM Kathmandu including telecommunication issues have been defined. The improvement of data processing and data management procedures has been discussed and priority actions agreed. In addition to re-equipment of stations necessary measures of reparation at the stations and improvements of the flow conditions at the stations are needed. This includes such activities as river bank stabilization and associated engineering works. No provision for opening new hydrological stations has been made.
36. Measures for the improvement of monitoring methods such as the rehabilitation of the tracer laboratory and tracer field equipment for discharge measurement are included. Special equipment is required for the hydrological stations. This includes current meters, sediment samplers, tracer laboratory equipment, boats and specialized training to operate the equipment.
37. Providing warnings of flash floods and creating a high-resolution climatology of precipitation requires the introduction of technologies such as radar, which are now in routine use by both of Nepal’s neighbors.
38. It is recognized that introducing new technologies, such as radar, will need a phased approach with this project contributing to the first phase through the installation of one radar unit. This will enable DHM to develop the capacity to provide warnings in parts of the country affected by flash floods and other high impact hydrometeorological events. The skills acquired during this phase will enable DHM to develop a more comprehensive system covering the entire country at a later time.
39. The major climatologic risks of Nepal are floods and flash floods in highly populated areas (valleys) produced by intensive or extensive rainfalls. The most effective way of providing efficient water management is using a network of weather surveillance radars that covers the entire country of Nepal. For the size (approximately 1000 km in length), elongated shape and complex terrain of the country and very heavy precipitation in the basins with the highest risks, a minimum of three Doppler radars, S-band, would be required for full national coverage. Additional shorter range radar might also be required in the mountainous regions where blocking is likely.
Very careful analysis of site selection is needed, for which a digital terrain model will be used, together with establishing the priority of the basins and sub-basins that need surveillance. The Indian Meteorological Department (IMD) has proposed sharing their radar data that covers the Terai. If this is confirmed, the radar siting should take this into consideration to maximize the utility of these data for protecting climate-vulnerable territories or basins.
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40. Internationally recognized experts have assessed the radar requirements and concluded that the S (10 cm) band is the optimum choice to avoid the attenuation in intensive rainfall (values of 100 mm/h have been often recorded in Nepal), for better detection of hail which is an important risk for agriculture and high wind measurements (that can reach up to 60 m/s); an important advantage of S band is the bigger range coverage both in reflectivity (460 km) and velocity (230 km). This needs to be further assessed during implementation of the project, based on the coverage of IMD radars, access to these data, and the affordability of the S-band system. The radar should be a complete, fully coherent, Doppler weather radar consisting of a transmitter, receiver, antenna and servo system, signal processor, radar monitoring system, product generation and display system, power system and accessories.
41. Hydrologic applications, especially flash flood warning, are the main goal of the radars, thus specific robust and mature algorithms that have proven forecasting results over complex terrain are needed. The radar algorithms should provide derived products for severe weather, automatic alerts and rainfall accumulation for 1-hour, 3-hours, and 24 hours. Detection and analysis of weak signals is necessary for outflows, boundaries and other structures in the layers near the surface and superior clutter suppression ability is needed for intensive rainfall episodes.
42. High frequency stability is needed for detection of large rainstorms, cyclones and strong convective precipitation while also detecting the weak dispersion signals from low level wind shear and dry downbursts in clear air-mode is necessary for aviation purposes.
43. The radar’s technical specifications have to be in line with Nepal’s national Frequency Allocation Table as published by the Government’s Ministry of Information and Communications criteria for the transmitter and receiver.
44. The radar should give the forecaster the possibility to adjust the volume coverage patterns to the current type of weather, to cover the observation volume effectively and overcome the range/ velocity ambiguity problems. It should ensure high data accuracy and reliability through the use of accurate on-line calibration, built-in test and monitoring functions, and data quality control algorithms and it should be fully integrated into the forecasting suite.
45. Due to the specific constraints of Nepal, remote control and 24-hour unattended operation with accurate and reliable data is needed. The entire system operation, status monitoring and fault isolation/location must be computer software controlled automatically and safely operated.
46. Upper air measurements (vertical profiles of temperature, humidity, and wind) are essential to initialize models at global scale and Nepal should provide information through WIS/GTS for at least one representative location (Tribhuvan International Airport in Kathmandu). The number of soundings per day can be adjusted according to the climatological conditions. For example, during the monsoon, two soundings per day are recommended. The system uses costly expendables (balloons, gas, and sensors) for which a specific operating and maintenance budget will be needed from DHM’s annual allocation. This is a very important, but high maintenance item. Ideally a second
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sounding site should be established for the western part of the country with a different climate.
47. In addition, DHM should request the AMDAR Asian group to access commercial aircraft measured profiles of temperature and moisture from the aircrafts that land and takeoff from Kathmandu. These data will supplement the sounding information.
48. Continuous profiles of wind and temperature are also possible from commercially available wind profilers (temperature profiles are also possible). These are commonly located in the vicinity of airports for the detection of wind shear as well as providing data to rapidly update numerical predictions on shorter timescales than is possible with balloon soundings alone. The utility of such a system should be considered alongside the investment in soundings and radar to identify the clear added value of the profiler. The WRF model has the capability to assimilate profiler data as part of a rapid update cycle to improve the prediction and analysis of high impact mesoscale weather events. It is recommended that the feasibility of using such a network be explored after the introduction of WRF as an operational tool.
49. Aviation is particularly vulnerable to adverse weather conditions in Nepal. Flight diversions are frequent both for domestic and international airlines due to a lack of terminal area forecasts for fog and other high impact weather, and for sightseeing flights curtailed due to poor visibility in the high mountains. The International Civil Aviation Organization (ICAO) conducted an audit of aviation meteorology in Nepal in 2000 with the latest review in 2010 and has continuously recommended significant improvement in timely provision of significant weather information reports (SIGMETs), which are critical for aviation safety and efficient operations. The Meteorological Authority (DHM) has been requested to take urgent actions to implement the SIGMET procedures, but has been non-compliant since at least 2000 and has not filed a Corrective Action Plan (CAP) with ICAO.
50. As the designated Meteorological Authority for Nepal within the ICAO framework, DHM has the responsibility and mandate to provide aviation weather services for the Civil Aviation Authority of Nepal. Supporting civil aviation safety through improved observations and forecasts and the introduction of a Quality Management System (QMS), which is a new regulatory requirement of International Civil Aviation Organization (ICAO), is critically important. Upgrading of DHM aviation forecasting capability and aero-meteorological observing systems at Tribhuvan International Airport is a high priority. By international agreement, it is common practice in most countries for the recurrent costs of Aviation Weather Services to be supported on a full cost recovery basis through fees levied on civil aviation. Making these funds available to DHM should help to ensure sustainability and ongoing upgrades required by ICAO to ensure flight safety. The introduction of a QMS, for example, is eligible for financial support through cost recovery.
51. High priorities are the automation of weather information for air traffic services at Tribhuvan International Airport in Kathmandu and at the proposed regional international airport. These upgrades and new capabilities should be consistent with the expected level of aviation meteorological services at an international airport, complying with current ICAO Annex III standards and practices, including the capability to provide:
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• Aerodrome forecast (TAF) • Aviation Weather Report (METAR/SPECI) • Significant Weather Information (SIGMET) • Weather Forecast for Local Aviation • Flight Documentation consisting of weather forecasts for departure,
destination and alternate aerodromes, forecast charts of significant weather en route, and forecast charts showing wind and temperature data appropriate for the cruising level of aircraft.
• Air-reports (AIREP) • Aerodrome warnings • Wind shear and Turbulence alerts
52. This can be achieved through the overall planned upgrade to the national meteorological observing network, improvements in short-range weather forecasting, and the installation of ICAO/WMO recommended meteorological observing capability at CAAN priority airports. Currently, there are 34 operational airports in Nepal and every effort should be made to provide a minimal level of automated observations and human observer support.
53. High quality Automated Surface Observing Systems (ASOS) are designed to meet international civil aviation standards. These stations have the capability to provide information on current weather conditions including visibility and can be accessed directly from aircraft via air-band frequencies. There is also the capacity for limited prediction based on extrapolation of current and immediately past conditions. The system can also be interrogated by telephone and other means. These systems automate the production of meteorological notifications for pilots and can provide direct input into air traffic services for onward dissemination to pilots, airline operators and for pre-flight briefing. They can also provide input to internet-based Aviation Meteorological Dissemination Systems enabling crew and airline operators to retrieve flight documents and other weather information from their own offices. Half-hourly broadcasts of weather information should be available to aircraft in flight.
54. The ASOS is complemented by an extensive national network of surface observations, a radiosonde station at Kathmandu airport, radar and potentially wind profilers. The radio sounding will provide data at least twice per day, which will help improve forecasts over the entire country when assimilated into global and regional numerical weather prediction models. The data can also be used directly or in conjunction with other measurements to identify significant atmosphere layers of cloud and turbulence. These data can also be supplemented by flight level temperature and moisture data from the AMDAR systems installed on many modern aircraft and which can be made available to DHM through a request to AMDAR Asian group to access commercial aircraft measured profiles of temperature and moisture from the aircraft that land and takeoff from Kathmandu. AMDAR might also be considered for installation on smaller domestic airline carriers and could be funded by a public private partnership. The latter is out of the scope of the present project, but a feasibility study should be conducted once there is experience in using WRF operationally as a part of a future upgrade to capabilities.
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55. CAAN has proposed a network of real-time cameras to supplement the basic meteorological data. These would be installed throughout the national surface network.
56. Maintenance of a network of automated stations, radar and profilers is difficult. Adequately trained personnel must be available to ensure the integrity and reliability of the system. It is recommended that a concept of operations be developed between DHM and CAAN at manned airports to share technical expertise. It is also recommended that shared training be offered to CAAN and DHM personnel involved in the production and use of aviation meteorological services in air traffic services.
57. The overall surface meteorological network will be enhanced with automation permitting access to more frequent hydrometeorological information needed to improve short-range forecasts. Up to 100 automated weather stations capable of measuring meteorological parameters to the standards recommended by WMO will be installed. Up to 20% of these stations could be equipped for agro-meteorological purposes, including soil moisture. Fifteen of these sites are currently designated as synoptic stations (those designed according to WMO standards for use in large scale and global weather forecasts) and could be refurbished accordingly. Three stations could provide representative climate information for three major climatic regions of Nepal (high mountains, hills and Terai) and comply with the standards set by the Global Climate Observing System (GCOS). The feasibility of including at least three high altitude stations linked to the hydrological network should also be considered. These stations will most likely be at existing sites with some provision for new locations as needed. Lightning detection should also be considered as a part of this network.
58. There is a need to build capabilities to measure snow depth and density, which is needed to forecast seasonal flows and avalanches. Combining in situ and remote sensing techniques can do this. DHM should consider close partnerships with regional institutions, which have a mandate to monitor the Himalayan mountain areas. Every effort should be made to avoid developing multiple overlapping networks particularly in these difficult mountain areas.
59. Calibration facilities are essential to ensure the accuracy of observed variables from the meteorological and hydrological networks. This may include a combination of fixed and mobile facilities.
60. Specially equipped vehicles are needed to support the field operations, maintenance and inspections.
61. Sub-component B.2 focuses on the modernization of the communication and ICT systems. This sub-component consists of communications equipment to establish a modern software-hardware environment, which provides efficient and timely collection of data from the observational network and receives and processes information products from leading international meteorological centers. This upgrade will also ensure that DHM meets Nepal’s international obligations for the timely transmission of synoptic information to the WMO through the WIS/GTS. This in turn will enable better quality and longer lead time of storm warnings and forecasts and as a result improve the quality of hydrometeorological services delivered to various authorities.
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62. The amount of data that will need to be ingested into the meteorological and hydrological operational chain together with the enhanced need for climatological information requires advanced archiving and data base management. Full digitization of data from paper records including hydrological, agrometeorological parameters and meta data is an essential first step to development of a complete database.
63. A remote sensing and GIS laboratory will be established to provide access to modern instruments and technologies dealing with geospatial data and information. This will significantly increase the utility of DHM’s products to its clients.
64. Sub-component B.3 focuses on improving Numerical Weather Prediction (NWP). NWP is the foundation of modern forecasting systems. It is essential therefore that DHM has access to NWP from leading national meteorological centers and develops its own capability. DHM has some experience with the Weather Research and Forecasting (WRF) Model, which is used operationally by many countries including Nepal’s neighbors. It is therefore desirable to continue to pursue model development using WRF. Operational guidance and assistance should be sought as a part of the twinning processes described in Sub-component A.2. DHM will need to install the operational model on a computing system that is maintained in an appropriate environment. The National Center for Information Technology (NCIST) in Kathmandu is the most appropriate choice for hosting the system and servers which will need to be accessed remotely from DHM.
65. Sub-component B.4 addresses GoN’s request to establish environmental monitoring networks for basic air and water quality parameters. Taking into account the complexity of the issue and limited resources and experience in DHM, the project will undertake a needs assessment, a preliminary evaluation of water and air quality, and design an air and water quality monitoring network for possible future investment24. A pilot program will be undertaken to measure air quality at 6-8 synoptic stations located in urban centers. They will be equipped to measure PM10, SOx, NOx, ozone, possibly black carbon, UV, and other parameters. Basic water quality parameters such as conductivity, temperature, pH, DO, COD, BOD, will be measured at 10-15 hydrological stations located on the main and/or most polluted rivers. It is anticipated that DHM staff will be responsible primarily for sampling, data collection and management; chemical analysis will be outsourced to the existing environmental and public health laboratories.
66. Sub-component B.5 supports DHM’s need to refurbish several offices in Kathmandu, and the regions. The building foundation of DHM’s current headquarters does not meet engineering standards for safety, and the design of the office is incapable of supporting the required communications and computing networks. Modernization of the system requires significant refurbishment / reconstruction and upgrading of DHM’s headquarters building. In addition, new facilities are needed for balloon launching (to conduct radiosonde soundings launches) in the vicinity of the airport and radar installation in the Kosi basin or another suitable place. Consolidation of offices may be an option and will be explored.
24 This assessment will be undertaken within the scope of sub-component A.3.
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Component C. Enhancement of the Service Delivery System of DHM (US$3,450,000) 67. The objective of this component is to enhance the service delivery system of DHM by creating a public weather service that provides weather and impact forecasts, and information services for climate-vulnerable communities and the key weather dependent sectors of economy. The main sub-components are:
(a) Sub-Component C.1 – Introduction of a Public Weather Service (US$1,025,000) which includes: (1.1) Forecaster workstations; (1.2) Specialized communications instruments including TV studio, radio alert services, internet websites; and (1.3) Development and operationalization of a forecast accuracy verification system and survey of forecast utility.
(b) Sub-Component C.2 – Strengthening of DRM Operations including piloting of “end-to-end” early warning systems in two river basins in the western and eastern parts of Nepal (US$1,175,000), which includes: (2.1) Development of Standard Operating Procedures (SOPs), early information protocols and signals agreed with all basin and DRM stakeholders including Emergency Operations Centers and DDCs/VDCs; (2.2) Forecaster workstations, communication systems and software development; and (2.3) Operational training and drills with government stakeholders, non-government stakeholders and communities.
(c) Sub-Component C.3 – Improvement of Service Delivery (i.e., warnings and advisories) to communities including introduction of mobile applications (US$250,000).
(d) Sub-Component C.4 – Establishment of a National Climate Service (US$1,000,000), which includes: (4.1) Computer systems to access climate information; (4.2) Support for the development of a National Framework for Climate Services and sectoral working groups; (4.3) Development of a digital library of climate-relevant information from all sectors for Nepal; (4.4) software development to downscale climate forecasts; and (4.5) Operational support and information exchange between water resources, public health and climate data bases.
68. Sub-component C.1 supports the establishment of a public weather service. The Public Weather Service (PWS), as defined by WMO, is the primary means by which a National Meteorological Service forecasts and communicates weather information and warnings to the general public. The service should be permanent and available 24 hours a day, 7 days per week at full capacity each day of the year with enhanced capacity during emergency situations. This service should cover the entire country. During emergency situations, the PWS should ensure enough dedicated personnel to communicate with relevant authorities.
69. The PWS is responsible for liaising with the public, media and weather, climate and water-sensitive sectors. It is the principal interface between the technical provider of products and the users. It should be responsible for the development and implementation of Standard Operating Procedures (SOPs) developed in partnership with authorities such
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as MoHA as part of service quality management. This ensures that warning information is consistent and applicable, permitting clear decisions and timely action. Information provided by DHM should enable other sectors to issue their own specific watches and warnings for their own users (e.g., health warnings, transportation advisories, air quality alerts).
70. The PWS produces, interprets and translates technical meteorological forecasts into socially and economically relevant and understandable information, and provides this information to all actors. An understanding of social and economic applications and benefits of weather, climate and water providers is needed to improve services. In the case of Nepal, the PWS of DHM would be the primary means of interacting with stakeholders. These stakeholders normally play an active role in the development and implementation of SOPs and decision support systems in partnership with the NMS, with special attention to warnings and watches.
71. Hydrometeorological warnings are an essential function of a National Meteorological or Hydrometeorological Service and should be developed and issued jointly by the NMS and the relevant authorities responsible for emergency management and response. This ensures a single voice in an emergency. At the highest level of warnings, dissemination to the public should use all available information channels (radio, TV, SMS, internet, etc.).
72. PWS should ensure that all users receive timely information at all ranges available (very short, short, medium and long-range). For each time range, there should be specific outlooks, watches, or warnings to enable all users to have effective and efficient use of meteorological information. Color-coded information and pictograms are often the most effective way of communicating warnings.
73. At the heart of the forecasting system are servers, which collect observational data and products from global networks, including model products, upper air data and satellite observations. These are combined with data from national networks to provide comprehensive input to the forecaster on duty. The forecaster accesses this information though forecaster workstations, which enable information from multiple sources to be combined, displayed, overlaid and analyzed. At the upstream end, the system is aimed to provide the forecaster a user-friendly interface for visualizing and analyzing all meteorological data, charts and products.
74. The forecasting system connects to workstations, for specific user applications enabling the meteorological forecast to be interpreted and translated into impact forecasts and analyses for specific applications. These services should be developed with input from users and users’ representatives. In the case of agriculture, this will take place within the Agricultural Management Information System (AMIS).
75. DHM should also have the capability to generate its own broadcast quality TV and radio bulletins and maintain a high quality operational website. The capability will also enable DHM to provide presentation quality information to the TV networks suitable for broadcast.
76. The quality and utility of the forecasting services needs to be measured frequently. This is common and standard practice. Forecast verification is done using
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methods approved by the WMO. The utility of the services should be examined annually through surveys of users including the general public and target groups receiving special products.
77. Sub-Component C.2 focuses specifically on disaster risk management and civil protection through two “end-to-end” pilots in western and eastern river basins. In Nepal, the Ministry of Home Affairs (MoHA) is the focal ministry for disaster management including dissemination of early warning systems, emergency response and early recovery. An Emergency Operations Center (EOC), managed by MoHA was established in Kathmandu in early 2011 to strengthen communication between the center and districts across Nepal. Regional EOCs are currently being planned to further strengthen this communication linkage and facilitate better dissemination of information for early warnings and emergency response.
78. This sub-component focuses on strengthening the institutional and technical capacity of the DHM in enhancing its short to medium term forecasting for the selected river basins. Reliable and frequent real-time data for precipitation, river flow, temperature and wind speeds along with climate forecasting modeling capabilities will allow the DHM to issue early warning bulletins for hydro-meteorological disasters with sufficient lead time. The Flash Flood Guidance System (FFGS), developed for WMO Members and implemented by many NMHSs, is applicable for Nepal.
79. Strengthening the linkages between the EOC and DHM will enable the Government of Nepal in helping disseminate early warnings issued through DHM in a timely manner down to the district and VDC level local government officials. In turn, strengthening the “last-mile” connectivity between the VDC level and communities will allow communities to be better prepared and respond to potential disaster threats. In order to make this early warning system more effective and useful to communities (as end users), DHM and MoHA will have to work together with stakeholders at the local government and community level in order to develop products and operating protocols, translated from DHM bulletins, that will be easily understood by communities and allow local government officials and community leaders towards taking appropriate actions. The translation of DHM scientific information into early warning bulletins, and close communications between DHM and MoHA technical staff, will be key towards making a community-oriented EWS truly effective. Standard Operating Procedures will be needed.
80. Forecaster workstations will be needed at the two Basin Offices, as well as at the EOC so that forecasters can be deployed to support DRM operations or can push forecast products to DRM staff. Each of the remote stations will receive their primary information from the DHM Central Forecast Office.
81. Planning and implementation of frequent drills and training with government stakeholders and communities is required.
82. Sub-Component C.3 focuses specifically on mobile applications, which is now becoming the easiest way to communicate warning information. The wide reach and use of mobile telephones in Nepal creates an opportunity for DHM to mainstream the use of mobile telephone-based applications (mobile applications or m-apps) across its programs to improve service delivery to a variety of users. Various mobile applications are being
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used both in the region and globally for disaster and emergency management purposes, providing agriculture market information and weather information. For example, the Disaster and Emergency Warning Network (DEWN) in Sri Lanka, uses widely available mobile communication technologies such as short messages (SMS) and cell broadcast (CB) to create a cost-effective and reliable mass-alert system. The network connects mobile subscribers, police stations, religious/social community centers and the general public to a national emergency center. In India, Reuters Market Light (RML) provides a personalized professional information service for farmers. Farmers subscribe to get SMS alerts a few times a day on market and crop content. RML provides farmers information on market prices, weather information, and agricultural practices and farming strategies.
83. DHM is currently using mobile phones for limited data capture and dissemination. However, the meteorological and hydrological data is not being developed into water, climate and weather products that can be delivered on the mobile platform. In order to enhance service delivery by DHM, data will be made available for the development of mobile applications in partnership with the private sector, academia, NGOs. This Project will support the scaled up use of mobile phones for data capture by DHM observers. The Project will also pilot the development of mobile applications that use DHM data for the provision of meteorological information services and other products.
84. Sub-component C.4 is aimed at improving the National Climate Service. A particularly important enhancement of the mission of any NMS is the addition of a dedicated climate service, which should be viewed as an equal to the traditional weather forecasting and hydrological service missions. A National Climate Service (NCS) transforms the traditional climatological role of an NMS, which focuses on the collection and mapping of meteorological data to a full user-oriented service, which can be provided as an integral part of the services delivered by the NMS. It will require computers to access climate information from global and region centers.
85. The NCS should be developed within a National Framework for Climate Services to ensure broad stakeholder engagement from all climate-sensitive sectors. This should be developed in cooperation with WMO, which is currently developing a Global Framework for Climate Services (GFCS) and piloting national applications through a national framework. A preparatory workshop was held in July 2012. The NFSC provides a platform for the exchange of knowledge, know-how, and climate information needs among all national stakeholders. Essential for an effective climate service is the connection with the end users – communities and individuals, and ensuring that information is properly translated into an understandable form that can be used for everyday decisions by users. It is anticipated that the NFCS will become a permanent forum for interchange between all climate sensitive sectors.
86. Climate information is needed for planning and construction of buildings and facilities, and for the assessment of the impact of climate variations and change on the Nepal economy and to provide a sound scientific basis for adaptation. The NCS will be responsible for developing a digital library of climate-relevant information from all sectors for Nepal, including software development to downscale climate forecasts.
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87. Climate change risk reduction is a priority for development and therefore particularly important in developing and transitional economies. This requires adequate monitoring and dissemination programs at the national level to assess risks, and the institutional capacity to develop the national capability to transform climate data, which will enable the government to include climate information in economic development programs.
88. In general, the NCS function of the NMS should include key users who have responsibility for the application of climate information within their specific sector. This will help to establish the appropriate roles and responsibilities of the NMS versus other organizations that have responsibility for climate change policy. As in other countries, climate change policy-makers should rely on the NMS for the provision of climate data and information relevant to their decisions.
89. The NCS would have primary responsibility for services to climate-sensitive sectors, although both weather and climate information are required by most. These sectors include development, finance, energy, water resource management, agriculture, urban planning and health, amongst others. Many of these sectors overlap and interact. For example, public health includes food security, access to clean water and sanitation – each dependent on the climate and weather extremes. The NCS will organize frequent stakeholder meetings to determine user requirements for climate information.
90. Additionally, this sub-component will provide operational support and information exchange between water resources, public health and climate data bases. This will help in establishing regular operational linkages between DHM, water resources management and public health agencies and will provide better access to information necessary for “climate-proofing” decision making in these important sectors.
Component D. Agriculture Management Information System (AMIS) at MoAD (US$6,000,000)
91. The objective of this component is to provide critical and timely agro-climate and weather information to farmers in order to increase productivity and reduce losses from meteorological and hydrological hazards. The main sub-components are:
(a) Sub-Component D.1 – AMIS Portal, Hardware and Software (US$2,125,000), which includes: (1.1) Detailed design of the AMIS Portal and assessment of information requirements; (1.2) Acquisition and installation of AMIS Portal (e.g., software, data and web server, computer, monitor, printer, digital color scanner, plotter) at MoAD; (1.3) rehabilitation of the offices of the MoAD GIS Section to facilitate communication with the AMIS Portal; (1.4) acquisition of vehicles and motor bikes to support field operations including outreach to farmer communities and data collection; (1.5) Acquisition and installation of communication links to district level extension offices and outreach stations of NARC; and (1.6) AMIS infrastructure (software and hardware) at NARC’s central office..
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(b) Sub-Component D.2 – Information Products (US$1,730,000), which includes: (2.1) Agricultural and spatial data digitizing and archiving; (2.2) Development of agriculture monitoring products and decision support tools, such as mapping of climate-vulnerable farming communities and establishment of a crop monitoring system; and (2.3) Exploratory research to develop financial risk transfer instruments for the agriculture sector, such as agricultural insurance.
(c) Sub-component D.3 – Information Dissemination (US$675,000), which includes: (3.1) Development of mobile applications based on data from AMIS; (2) Production and dissemination of advertisements for mass media (FM radio, TV channels); (3.3) Production and dissemination of publications; and (3.4) Feasibility studies for AMIS-Portal product dissemination via different means (e.g., mobile, TV, etc.)
(d) Sub-Component D.4 –Capacity Building (US$1,065,000), which includes: (4.1) Provision of training to staff of selected agencies in weather data analysis, including short term training and advanced degrees; (4.2) Provision of training to staff of selected agencies at the regional, district and community level in the use of AMIS Portal tools and in awareness of climate resilience; (4.3) Building partnerships with farmers to raise awareness and capacity, including provision of basic thermometers and rain gauges to selected farmers; and (4.4) Organization of agro-climate workshops at the regional and district levels. .
(e) Sub-Component D.5 – Support for Project management and monitoring, and for social outreach, communication, and evaluation activities under Part D (US$405,000)
92. Sub-Component D.1 focuses on the AMIS-Portal and includes data, information, decision support tools (drought reference index, climate-weather risk maps), and other products and services such as seasonal outlooks and daily bulletins that will be made available to stakeholders on the web. Improvements to DHM operational monitoring and forecasting capabilities in Component A, B and C can significantly benefit the farming community. These data and information, however, must be integrated with agriculture and interpreted and developed into agro-weather and agro-climate decision tools to be useful for the farming community. More importantly, the decision support tools must be communicated to farmers in user-friendly and timely formats and languages. The MoAD-managed AMIS will help bridge the gap between DHM and the farming community by creating weather and climate products that cater to the specific needs of the farming community and by taking advantage of an extensive network of national, regional, district, and local government agriculture offices and farmer organizations to help disseminate this information.
93. The AMIS will provide data (archived historical and new data) and information and deliver products and services to farmers to better manage weather and climate risks. AMIS will also provide open data access to the public and private sector for their use.
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94. To deliver AMIS, IT and computing capabilities will need to be strengthened. Most technical staff are equipped with personal computers and some have laptops, but the majority of these computers are outdated. Database capabilities tend to be limited (e.g., MS Access) or non-existent. Most facilities are also subject to frequent power outages. The hardware and software necessary to perform statistical analyses and numerical modeling is mixed, with some strong computing capabilities at the national- and regional-level offices versus district level and smaller offices. Despite this disparity in computing capabilities, Internet communications between the more centralized national and regional offices and offices located in the field (e.g., MoAD service centers) appear to be adequate.
95. Sub-Component D.2 focuses on the development of information products. The list of potential “products” to be included in the AMIS portal is based on consultations with stakeholders. It is important to highlight that some products such as the determination of best planting dates based on expected climate conditions require specific expertise and research and cannot be implemented without adequate capacity building (sub-component D.4).
96. Climate and Weather – Climate resiliency in agricultural systems needs to take into account two main categories of information products: (i) Climate information products that are based on the understanding of the climatology of the region, the drivers of climate variability such as the El Niño Southern Oscillation (ENSO) phenomenon, and seasonal climate outlooks; and (ii) Weather information products that based on monitoring of current conditions and short-term (3-5 days) forecast.
97. Climate Information Products – There are currently 21 agrometeorological stations in Nepal, most of them have been in operation since 1960-70s. Data quality and gaps most probably vary and must be investigated. Nevertheless this information can be used to define the climatology for different areas of the country and furthermore investigate the extent of the ENSO effects across different regions of the country. Previous research has shown that La Niña years are wetter than normal and El Niño years are drier than normal in Nepal. The following products can be generated based on this historical database:
• Basic climatology for the existing stations including monthly and annual rainfall and temperature “normals”;
• ENSO-based climatology to detect expected rainfall and temperature during different phases including expected anomalies in rainfall and temperature. This kind of product can be generated for agrometeorological stations in Nepal, provided that the historical data include at least 30 years of records;
• Selection of optimal planting dates based on expected climate conditions: This type of product can be generated but requires expertise in crop modeling and data availability including weather, soils, and crop management practices. This type of information product depends on capacity building on crop modeling and is listed here only as an example of what can be achieved in terms of climate related information systems for agriculture;
• Seasonal outlooks to be delivered by the MoAD Service Centers highlighting expected climate for the season and potential impacts on crops: Seasonal outlooks
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must be a joint production of meteorological and agriculture experts and should be delivered in accordance to the agricultural calendar providing farmers with enough lead time to make adjustments to their management practices when possible.
98. Weather information products – Weather-based products will depend on the availability of real time information from the proposed upgrading of the monitoring system, short-term forecast, and potentially external sources of remote sensing products.
99. Weather-based products will be mostly used for tactical or operational decisions such as planting when adequate soil moisture is present or forecast, harvesting before damaging rainfall or hail storms, crop protection measures when risk of pests is elevated or even planning of perishable produce transportation to markets, avoiding rainfall that could damage the produce and difficult transportation due to poor road conditions and threat of landslides.
100. Stakeholders identified early warning systems for drought and floods as extremely useful for the agricultural sector in Nepal.
101. Sub-component D.3 facilitates the dissemination of agrometeorological information. Dissemination of the information is a key component of AMIS and without it there is no value in the system. The existing infrastructure can be strengthened:
• There is already an existing network of Agricultural Service Centers and district offices under MoAD providing information to farmers, this network is in place and should be used to disseminate the information produced by AMIS;
• There is a well-established connection between NARC and the other members of this network. NARC scientists participate in three extension stakeholder meetings that take place each year disseminating technology for improved crop production, learning about knowledge gaps and research priorities as identified by MoAD and farmers;
• Seasonal outlooks and related products could be released and presented during extension stakeholder meetings. These outlooks require in-depth discussion and could be jointly developed and presented by agro-meteorologists and agronomists to the agricultural sector. Hardcopies should be made available in service centers, district offices, farmers groups, and perhaps also released via FM radio by extension personnel. There is already a weekly radio program directed to farmers and seasonal outlooks could be disseminated via this radio program. Electronic copies should be posted in the AMIS internet portal for broad distribution;
• Distribution of daily agricultural weather bulletins could also take advantage of the MoAD extension network, FM radio stations and also existing cell phone services.
102. This network should not only be used to distribute weather and climate-related information to farmers but also be a channel for feedback from stakeholders to the system creating a two-way communication mechanism that helps with strengthening and sustaining the overall system.
103. Sub-component D.4 recognizes the central importance of capacity building. Capacity building as a significant requirement in the development of an effective AMIS. Three important areas were identified as most in need of capacity building:
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• As noted above, the computing capabilities within several government organizations are currently inadequate to deploy and sustain an effective AMIS. Hardware, software, and related upgrades are necessary to enable these organizations to download, archive, and analyze data; prepare agrometeorological products that cater to the farming community, and to disseminate these products;
• There are likely many weather and climate impacts on agriculture in Nepal that are not fully understood. Further research is needed to better understand these interactions and to help develop agrometeorological products, which could help farmers better mitigate potential threats to agriculture and improve their overall productivity;
• A key step in developing an effective AMIS is ensuring that the agricultural community understands how to use the weather and climate information that is provided to them. An equally important step in this process is introducing a feedback mechanism so that farmers can communicate their agricultural weather data requirements to government agencies. Direct interactions between farmers and agricultural weather information providers can help educate both groups about each other’s services and requirements.
104. Vision for the system and recommendations – The vision for this project is an integrated system in which the meteorological community in Nepal (DHM) and the agricultural community represented by MoAD, NARC, and farmers work together to produce and disseminate climate and weather information relevant to agriculture thus enhancing climate resiliency and food security in the country. 105. MoAD, in coordination with DHM, NARC and other relevant organizations, would benefit from building on existing capacity and consider recruiting one additional agro-meteorologists, agronomist and information communication technology (ICT) expert, to routinely download and archive weather, climate, and agricultural data for Nepal, operationally monitor weather and climate impacts on agriculture, and regularly provide agricultural weather data, products, and services to farmers, government policy makers, and others in the agricultural community to help reduce farmer vulnerability to weather and climate extremes and thus improve the overall productivity and sustainability of agriculture. 107. To create and maintain an effective and sustainable AMIS, the following should be considered:
• Conduct a feasibility study for the design of the portal, web system and dissemination
system. • Liaise with DHM to upgrade selected hydromet stations to meet agromet
requirements. • Assemble the hardware, software, and other technological components necessary to
create and maintain an effective and sustainable AMIS. At a minimum, these components should include:
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o One computer for each of the three new proposed MoAD agricultural meteorologists. Because MoAD offices already use ESRI ArcGIS software, each new computer should meet the recommended system requirements for operating this software (http://resources.arcgis.com/content/arcgisdesktop/10.0/arcgis-desktop-system-requirements).
o Four new computers for the MoAD GIS section to replace the out-dated Pentium IV computers they are currently using. Thus, it would be beneficial for all personnel to be using similarly configured computers.
o ArcView 10 and ArcGIS Spatial Analyst software installed on each computer to facilitate the analysis and display of geospatial data and to aid in the preparation of agricultural weather products and assessments.
o Appropriate Computer Operating System and Office Processing Software installed on each computer to facilitate word processing, additional data analysis, and presentation development. The word processing capabilities, in particular, are beneficial for generating agrometeorological bulletins.
o One relational database management system (RDBMS), and suitable backup system, for archiving and disseminating agrometeorological data. It is recommended that the RDBMS is located at the National Information Technology Center (NITC) because this facility has the resources necessary (e.g., environmental controls, secure access, reliable power supply) to manage and sustain a robust RDBMS. One terabyte of disk space is recommended.
o Database software (e.g., mySQL) to administer the database. o A dedicated web server to create an AMIS Internet portal. The web server
should be co-located with the RDBMS at the NITC. o A dedicated fiber optic line between MoAD and NITC to ensure high speed
access to the RDBMS and web server. o An additional computer to automate routine data downloads (i.e.,
meteorological, climatological, and agricultural data) from various sources (e.g., DHM, NOAA, NASA) via the Internet and ftp. This computer should have the same specifications as the other computers.
o An additional computer to help format data for archival in the RDBMS and to help manage database access. This computer should have the same specifications as the other computers.
o One laser black & white printer and one laser color printer. Each printer should have a reasonably fast printing speed (e.g.30 pages/min).
o All nine computers and the two printers should be connected to each other via a local area network (LAN).
o It is recommended that the agricultural weather unit use the Internet and ftp capabilities to download and disseminate all agrometeorological data and products. Such services enable data to be shared among an infinite number of sources and tend to be user-friendly to operate.
o One upgraded computer, one copy of appropriate computer operating system and office processing software , and a laser color printer for each of the 75 Department of Livestock district offices to help facilitate the electronic
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dissemination of agricultural weather bulletins and products from the MoAD AMIS unit (in Kathmandu) to local communities.
o One upgraded computer, one copy of appropriate computer operating system and office processing software, and a laser color printer for each of the 75 Department of Agriculture district offices to help facilitate the electronic dissemination of agricultural weather bulletins and products from the MoAD AMIS unit (in Kathmandu) to local communities.
o One upgraded computer, one copy of appropriate computer operating system and office processing software, and a laser color printer for each of the 25 NARC Research Stations to help facilitate the electronic dissemination of agricultural weather bulletins and products from the MoAD AMIS unit (in Kathmandu) to local communities and to support NARC research activities.
o Establishment of agro-information call center in 25 pilot districts, supporting a call-free service as a pilot.
In order to develop an effective and value-added AMIS-Portal, it is important to: • Digitize and archive historical and new data, including crops, soil, price information,
agromet data, livestock, livestock and crop diseases. • Research and develop agriculture monitoring products, including drought indices,
growing degree days, chill hours, plant disease and pest infection indices, livestock comfort indices
• Assess information requirements and methodologies needed to deliver and obtain feedback for AMIS-portal products
• Conduct exploratory research for developing agriculture insurance options and schemes
• Design and program the AMIS-Portal • Produce a feasibility study to identify options and mechanisms to disseminate AMIS
information and products to farmers at the community level 108. Capacity building within Nepal is a critical component to ensure a sustainable AMIS and to build a foundation for climate resilient agriculture. The following capacity building activities at central, regional and community levels should be considered:
• Professional training – improve agriculture and agrometeorological modeling and data analysis capability (i.e., short courses and advanced degree programs in climate change related to agriculture, agriculture extension in agroclimate for AMIS portal)
• WMO Regional Training Centers – agrometeorological training • GIS and remote sensing – data analysis and modeling in GIS (i.e., Environmental
System Research Institute regional offices and ESRI on-line training and advance degree)
• Roving seminars to bring DHM, MoAD (including AMIS experts, agriculture extensions, NARC) and farmers groups together to raise the awareness of weather and climate impacts on agriculture, communicate the use of AMIS decision support tools, and solicit feedback from farming communities to improve the tools
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• Building partnership with farmers to raise the awareness and capacity of farming communities by providing 13,000 farmers working with extension services with basic thermometers and rain gauges. As part of capacity building, up to five Stevenson screen like housed thermometers and rain gauges can be set up for training purpose. The farmers can use the information resulting from these simple instruments to improve their on-farm decision making. Furthermore, they can provide their measurements, once validated, to the group center and agriculture extension to enhance the data base in AMIS. This has been done successfully in other IAD countries.
• Create a daily agrometeorological bulletin that regularly communicates relevant weather and climate information to the farming community and other agricultural decision makers in a user-friendly format. A basic bulletin could include a national map of an agriculturally important weather variables (e.g., yesterday’s rainfall, current cloud cover, forecast rainfall), a text summary of the current weather across Nepal and the impacts this weather is having on agriculture, and a weather forecast for the next day that includes advice to farmers on how to proceed based upon the anticipated weather. MoAD should consider providing agricultural weather forecasts on a regional basis (e.g., the Terai portion of three adjacent districts, the Hills portion of four adjacent districts), highlighting how the weather is likely to impact specific commodities within that region. MoAD is strongly encouraged to visit the World Agrometeorological Information Service (WAMIS) web site (www.wamis.org) to obtain ideas on how Nepal can develop their own agrometeorological bulletins. Should Nepal begin publishing agrometeorological bulletins, these bulletins would be a welcome addition to WAMIS, providing Nepalese agrometeorological services with international exposure.
• Undertake a research effort to better understand the effects of climate cycles such as the El Niño Southern Oscillation (ENSO) phenomenon on climate variability patterns and crop production across the various regions of Nepal. This research effort should also include an evaluation of potential adaptation strategies to mitigate production risks associated with climate variability.
• Create a seasonal climate outlook to communicate anticipated conditions (e.g., drier/wetter, cooler/warmer) to the farming community. Seasonal outlooks should describe potential impacts on crop production and adaptation strategies identified by the research effort described in item 5.
• Use the Internet to communicate agrometeorological information among the national and regional government offices and the agricultural services centers. Given that many farmers have limited Internet access, we recommend that FM radio and cell phones (e.g., SMS technology) are also used to communicate agricultural weather information at the local level, directly to the farmers. Person-to-person dialog is also encouraged to facilitate information dissemination and feedback which could help improve the AMIS over time.
• Conduct a series of one-day seminars in local communities to help bridge the knowledge gap between MoAD, DHM, extension agencies, and farmers. These
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seminars would (1) help farmers better understand how weather and climate information can be used to improve decision making on the farm and (2) help MoAD, DHM, and extension personnel better understand farmer data and information requirements. These seminars could be modeled after previously successful WMO/CAgM Roving Seminars on Weather, Climate, and Farmers.
• Develop a diverse array of user-friendly agrometeorological products and services that would (1) help agricultural meteorologists to better monitor and forecast weather and climate impacts on agriculture and (2) empower farmers to make decisions that would help reduce their vulnerability to weather and climate extremes. Such products could include:
• Maps of major and minor crop areas on a commodity-by-commodity basis • Updated crop calendars for each commodity • Routinely updated GIS maps of agriculturally important weather variables • Analyses illustrating climate patterns in agricultural areas • Maps that overlay weather, climate, and agricultural data to help users better
visualize observed or anticipated agricultural impacts • Time series analyses of relevant agrometeorological variables • Simple agricultural weather models for monitoring crop development • More robust models to aid irrigation scheduling, pest management, and yield
forecasting 109. AMIS Products and Information Dissemination. An ICT-based system can be developed to enhance agriculture data collection and dissemination, especially to farmers and cooperatives, The pilot in 25 districts has three intermediate objectives: 1) develop a mobile phone based tool that will allow farmers to receive and query information and advice; 2) create a web based dashboard displaying actionable information and tools for MoAD; 3) utilize SMS to push relevant local weather information and aggregated survey responses to farmers as an incentive for participation.
The ICT-based system will include a functional open source software product: A mobile based application or system (e.g., SMS, IVR and USSD) which will be able to feed data into the proposed Agricultural Management Information System (AMIS). The tools shall be developed with abstraction for use across different subsectors in the Agriculture sector. It also needs to address issues of robustness and scalability. The software must be open source, ideally based on mature existent open source projects, if so the software shall contribute all improvements back to the project it was forked from. All code will be kept in a public repository and comprehensive documentation of the code of the software product both with in-line doc strings and supporting documentation shall be written. The system shall be built in accordance with principles and the licensing provisions described below.
The ICT tool will need to include: • Registration features that can segment and identify groups
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• The ability to create polls that can be pushed to mobile phones • The ability to collect structured and unstructured information through the mobile
channel • The ability to collect information from existing API’s (such as market prices,
weather) and push it to localized audiences • The ability to send aggregated feedback to the users who contributed to it • The ability to display and visualize the information from the system on the web • The ability export data in usable formats to the stakeholders of the pilots • A documented Application Programming Interface (API) that will allow other
services to interact with the data produced by the tool • The ability to be able to support Devanagiri script and the Nepali language. • A complete set of training materials (visual aids for communities, guides of trainers
of trainers, posters, fliers, etc) that are developed in conjunction with the ICT tool that can be utilized to train additional users of the system. These shall include materials both for beneficiaries of the services and the recipients of the information (for users).
• A Security Plan that addresses any and all security concerns related to any personal data collected intentionally or unintentionally shall be analyzed and presented to the team with appropriate safeguards suggested. It is acknowledged that this project is not anticipated to include sensitive information but shall be carefully analyzed to address any unanticipated consequences for users. Security from online threats shall be analyzed as well (cross-scripting, SQL-injection, etc).
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ANNEX 4: IMPLEMENTATION ARRANGEMENTS
NEPAL
Pilot Program for Climate Resilience - Building resilience to climate-related hazards
A. Project Institutional and Implementation Arrangements
The GoN has established a Climate Change Coordination Committee, jointly chaired by the Minister of the MoSTE and the NPC Member responsible for Environment, to provide oversight and guidance for all climate related projects in the country.
For this Project specifically, MoSTE is responsible for overall coordination. Components A, B and C will be implemented by DHM and Component D will be implemented by MoAD. The governance structure of the Project is as follows:
1) Overall coordination for this project and the other four PPCR projects will be provided by MoSTE as the focal Ministry for the PPCR.
2) An inter-Ministerial Project Steering Committee (MPSC) will be established, chaired by the Secretary, MoSTE, and including representatives from Ministry of Finance (MoF), NPC, DHM, MoAD and other key stakeholders, to provide policy guidance and ensure coordination across Components A, B, C and D.
3) Two Technical Committees will be maintained, one chaired by DHM focusing on Components A, B and C, and the other chaired by MoAD focusing on Component D. The Technical Committees will be chaired by Joint Secretaries/Director Generals and include relevant technical experts to strengthen project implementation. The two committees will coordinate as needed to support effective implementation of the Project.
4) Project Management Units (PMUs) will be maintained in each of the two implementing agencies (DHM and MoAD) in order to provide focused attention to achieving desired results. Given the highly technical nature of the projects and the need for coordinated efforts, fully dedicated PMUs will be needed to ensure smooth implementation, facilitation and coordination of the project activities. The PMUs will need to be appropriately staffed with qualified and experienced staff including technical, financial, procurement, monitoring and evaluation, environment and social specialists as needed. The PMUs will report to their respective Technical Committees, and will liaise with the Mainstreaming Climate Change Risk Management in Development Project of the Nepal PPCR to ensure results monitoring and knowledge management across the five SPCR Program Components. The General Consultant/System Integrator will provide assistance to DHM and the PMU in developing the detailed technical designs of the future systems, and providing support for procurement and technical implementation to ensure interoperability and efficient performance of the future systems. This assignment includes providing assistance to MoAD and the PMU, and helping to link DHM and AMIS operations.
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(a) The DHM PMU will include a Project Director, a Technical Coordinator, a Financial Consultant, a Procurement Consultant, a Social, Training and Communications Consultant, an Environmental Consultant, and a Monitoring and Evaluation Consultant. All PMU staff except the Project Director will be consultants. In addition, officials of the Accounts Section in DHM will provide support to the PMU. The DHM PMU will work closely with the General Consultant/ Systems Integrator.
(b) The MoAD PMU will be set up in the GIS Section and will include a Project Director, a Technical Coordinator (Agricultural Officer), an Accounts Officer, a Procurement Consultant, Social and Communications Consultant, and a Monitoring and Evaluation Consultant. The Project Director is responsible for administrative and financial management and for overall coordination of Project Component D. One full-time dedicated Accounts Officer will be deployed to manage this component.
The project will be implemented in accordance with the Project Appraisal Document (PAD), the Project Implementation Manual (PIM), which is being prepared, and all associated legal agreements. The PIM will include: (i) a detailed description of project components; (ii) a funds operating manual; (iii) implementation arrangements and agreed guidelines for different project components; (iv) detailed project cost estimates; (v) the procurement plans; (vi) an Environmental and Social Management Framework (ESMF) and (vii) guidelines for coordinating with the other components of the Nepal PPCR, in particular with regard to knowledge management. The PIM will be amended periodically to incorporate adjustments during project implementation in agreement with the Bank.
B. Financial Management, and Disbursements
Background on the Implementing Agency and Program
MoSTE is the core implementing agency for this project as well as the coordinating agency for the entire PPCR. In addition to DHM and MoAD who will be directly implementing components of the project, other stakeholders include all other ministries responsible for weather and climate-sensitive sectors. In particular, the Ministry of Home Affairs (MoHA), which is responsible for disaster risk management, is a key beneficiary and likely to participate in the project. Currently MoSTE is not managing World Bank-financed projects and MoAD is managing two IDA-financed projects.
Adequacy of Financial Management Arrangements
The GoN’s Financial Administration Regulations will be used as the basis to exercise appropriate controls over project transactions, supplemented by the PIM. The PIM will be approved by the MPSC and subject to periodic updating. Independent review by the Bank will also be part of the supervision plan and provide additional assurance towards the credible use of funds. Performance Audits will be undertaken to measure success and/or
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identify areas for timely improvement. In addition, a Governance and Peace Action Plan (GAP) has been agreed upon to address issues that relate to peace and good governance.
Risk Analysis
From the financial management perspective, overall risk is currently “High” and the residual risk is “Substantial”. All governance arrangements, such as the inter-Ministerial Coordinating Committee and Technical Committees, need to be established. Further, the PMU will need to be fully staffed and the PIM will need to be prepared, approved and adapted. Project risks will be reassessed as risk mitigation measures are implemented. Timely recruitment of the core project team and the continuity of key staff are major risks.
Finalization of the PIM will be a condition of disbursement. Concerted efforts will be made in both technical and managerial (i.e., procurement and financial management) capacity building. To address gaps that have been identified during the assessment, risk mitigation Action Plans have been agreed.
Planning and Budgeting
The central level budgeting procedures for preparation, approval, implementation, and monitoring are elaborated in the GoN’s Financial Administration Regulations (FAR). The annual work program and budget will be prepared by DHM for Components A, B, and C, and MoAD for Component D. DHM will submit its budget through MoSTE. MoSTE and MoAD will submit their annual work programs and budget to the NPC and the MoF for discussion. Work programs will be prepared based on the guidelines provided by NPC and budget preparation guidelines provided by MoF. MoF releases authorizations for expenditure to respective Ministries, which in turn release authorizations to respective Departments and then to spending Units. This program is a priority (P1) program of the government; hence funds will be promptly released as soon as the authorizations from respective Ministries to Departments are received accompanied by the annual work plans.
For components A, B and C, the central level is responsible for preparing their annual work programs and budgets based on Ministry directives and guidelines, in coordination with the respective regional and basin offices. In case of Component D, execution is mainly at the central level, in coordination with regions and districts, through MoAD working closely with NARC and DHM. Any financial arrangements between NARC and MoAD will be carried out through a contract agreement. All fund flow arrangements would be carried out through MoAD as the implementing agency.
Funds Flow Arrangements
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GoN, in accordance with its fund release procedures, will release budget as per the approved work programs to DHM and MoAD in three tranches. The budget approved by GoN will be indicated in the government’s budget (Red Book) under separate budget heads for each implementing agency. Prior to the approval of the work program and budget, one-third release of the previous year expenditures or projected expenditures for the first trimester, whichever is greater, will be made to the respective agency through the concerned District Treasury Controller Office (DTCO). Funds release for IBRD/SCF’s share of expenditures for recurrent and operating costs will be pre-financed through GoN’s consolidated fund. For big contracts, payments can be made by direct payments either through the Designated Accounts to be provided to DHM and MoAD or by request to IBRD for making direct payments. Upon approval of the work program and budget, appropriate adjustment will be made against the advance for the first trimester release. Subsequent second and third trimester releases are based on performance reflected by the physical progress reports as required by Schedule 2 of the FAR.
For reimbursement of IBRD/SCF’s share of expenditures to GoN’s consolidated fund, two Special Designated Accounts (one each for DHM and MoAD) will be established at the Nepal Rastra Bank to facilitate quick payments of various activities under the project including reimbursement under terms and conditions acceptable to IBRD. DHM and MoAD will designate the signatories to operate these accounts; they will normally be the Project Directors and Accounts Officers. Transaction based disbursement procedures (traditional disbursement) will be applied for withdrawal of funds from IBRD/SCF. Reporting formats for Implementation Progress Reports have been prepared, discussed and agreed with the Bank prior to negotiations.
Project Financial Accounting, Reporting and Internal Controls
DHM and MoAD will maintain books of accounts and prepare their project accounts on a cash basis. DHM will coordinate activities under Components A, B and C and MoAD will coordinate activities under Component D. There will be two sets of Implementation Progress Reports and Audit Reports – one, a consolidated report for Components A, B and C to be managed by DHM; and the other for Component D to be managed by MoAD. Each of the two implementing agencies will compile monthly statements of expenditures (SOEs) within seven days following the end of each month. Both DHM and MoAD will be adequately strengthened to maintain accounting information using spreadsheets or appropriate software.
Accounting information will be regularly updated in the DHM and MoAD system to generate timely financial reports. As required by government systems, both agencies will maintain Main Loan Ledgers, Subsidiary Loan Ledgers, Withdrawal Monitoring Registers, Special Designated Accounts Ledgers and other ledgers. Each unit – DHM and MoAD – will also separately maintain these ledgers. GoN’s internal control system will be applied to monitor the progress of the Project in accordance with sound accounting practices. Arrangements will be made for third party technical review of the implementation of the program, as this is a highly specialized area. Activity-based
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subsidiary records for monitoring the detailed accounts/key indicators will also be maintained by both agencies. The accounting systems contain the following features: (i) application of consistent cash accounting principles for documenting, recording, and reporting its financial transactions; (ii) a well-defined chart of accounts that allows meaningful summarization of financial transactions for financial reporting purposes; (iii) maintenance of withdrawal monitoring register, the record of Statement of Expenditures (SOEs) and Designated Accounts register; (iv) the asset register; (v) monthly closing and reconciliation of accounts and statements; and (vi) the production of annual financial statements.
Financial Management Staffing
PMUs will be maintained in executing agencies (DHM and MoAD GIS Section) for implementation and management of project activities. The PMUs will have a qualified full-time dedicated Project Director, one Procurement Expert (consultant), one Accounts Officer, and one Financial Management Expert (consultant). A number of specialized technical positions will be required which will be assessed separately. DHM may either depute its accounts staff (one Accounts Officer and one Accountant) from its existing stock or may create separate positions for the Project and then request the Financial Comptroller General officer (FCGO) to assign accounting staff for the Project. One of the technical staff can be designated as the Procurement Specialist to be backed up by a Procurement Consultant. For Component D, MoAD will have a qualified full-time Project Director, one Accounts Officer, and a part time Procurement consultant. The Project Director is responsible to manage and coordinate the project. The Accounts Officer needs to be deployed for the project who will be an integral member of the PMU at MoAD. Since MoAD does not have adequate numbers of accounts staff, the position will need to be created and FCGO requested to assign a competent Accounts Officer to manage this component. The procurement consultant will be hired by MoAD to provide procurement services to Component D.
Internal Audit
District Treasury Controller Offices (DTCOs) in districts are responsible to carry out the internal audits of all cost centers operating in the districts. Internal audits are generally carried out on a monthly basis. Concerned cost centers of DHM will need to forward the monthly expenditure statements to DHM, which then will prepare their consolidated expenditure statements.
Implementation Progress Reports (IPRs)
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Total project costs are US$31.3 million to be financed from the Climate Investment Funds Pilot Program for Climate Resilience Trust Fund in the form of loan and grant, and from Government contributions. Government counterpart contributions will be in the form of all form of taxes, staff costs, office space and other logistics. When developing annual work programs and budgets, each implementing agency will formulate programs that clearly distinguish between activities or costs that be funded by the World Bank with associated counterpart funds.
The interim Financial Reports or Financial Monitoring Reports of the IPRs will report total investments separated by specific activities, so that total investments as envisaged can be tracked and monitored. The PMUs under DHM and MoAD will separately produce IPRs for their respective components showing the sources and uses of funds, output monitoring report, procurement management report and narrative progress report in agreed formats. To match the public sector planning and reporting cycle, the IPRs will be produced on a trimesterly basis and submitted within 45 days from the end of the preceding trimester.
External Audit There are no ongoing projects implemented by DHM. However, there are three projects (IWRMP, PACT and SSNP) implemented by the Department of Agriculture, which is under MoAD. There are no outstanding audit reports from the ongoing project. The following is the audit25 requirement under the Project: Annual consolidated project financial statements and Designated Accounts statements (one set of reports for the three DHM-managed components A, B and C combined; and one set for the MoAD-managed component D) will be audited by OAG, which is considered acceptable by IBRD for this purpose, and submitted to IBRD within six months after the end of the fiscal year – January 15. The following audit reports would be monitored in the Audit Report Compliance system (ARCS):
Implementing
Agency Audit Auditors Audit Due Date
DHM Project Consolidated Financial Statement (for components A, B and C)
OAG 6 months after the end of fiscal year (January 15th)
MoAD Project Financial Statement (for Component D)
OAG 6 months after the end of fiscal year (January 15th)
25 Terms of reference acceptable to IDA need to be discussed and agreed with OAG.
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Financial Management Action Plan
Action Responsibility Completion Date
Submit Annual Work Program and Budget for FY2012/13 to include this Project in the “Red Book”, and request MoF to assign separate budget codes for the project for DHM and MoAD.
DHM
MoAD
MoF
November 1, 2012
Request budget for initial work on project activities and budget assigned by GoN to be retroactively financed.
DHM
MoAD
MoF
August 31, 2012
Recruit procurement expert(s) to start initial stage of procurement activities.
DHM
MoAD
Prior to disbursement of Category 1
Form the core Project Management Unit (PMU) comprising of a Project Director, a Finance Officer, and a Procurement Officer.
DHM
MoAD
Prior to disbursement of Category 1
Develop a financial management information system using appropriate software or excel spreadsheet to convert the manual system to a computerized system to track project expenditures and produce timely financial statements.
DHM
MoAD
June 30, 2013
Develop and agree on the formats for Implementation Progress Reports and Project Financial Statements.
DHM, MoAD and IBRD
Prior to Negotiations
Disclosure of Information and Corporate Governance
Disclosure requirements will be complied with to make information transparent and readily available for public disclosure. DHM and MoAD will post in their websites all available guidelines, procedures, and other key information related to this Project.
For data sharing, given the importance of hydro meteorological data and information for public safety, economic growth and climate resilience, it is important to formulate data sharing policies that meet the country’s interests. All data required from DHM to operationalize Agriculture Management Information System (AMIS) will be made available in a timely manner at no charge.
Supervision Plan
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Project implementation progress will be closely monitored by the PMUs of DHM and MoAD, and by IBRD. IBRD will provide project implementation support in particular relating to the fiduciary aspects of both procurement and financial management. The PMUs of DHM and MoAD will report on project implementation progress through trimesterly reports, the IPRs. The agreed action plans will be closely monitored to ensure appropriate actions are being taken. Key FM fiduciary work includes: (i) periodic visits to cost centers for ex-post reviews, (ii) reviews of implementation progress reports and audit reports and preparing summaries of such reports; and (c) participating in supervision missions and keeping the team informed of financial management issues or improvements. Initially the focus of supervision will be on implementing agreed actions and facilitating DHM and MoAD in maintaining sound financial management arrangements. From the second year of implementation, IBRD will from time to time field an independent consultant or consulting firm for ex-post reviews of financial management arrangements.
Allocation of Grant/Loan Proceeds Disbursement under the proposed Grant/Loan will be made as in Table C, which indicates the percentage of financing for different categories of expenditures under the project. The total project is US$31.0 million, which is fully funded by the SCF with IBRD acting as the implementing entity. Government counterpart contribution is in the form of all taxes, staff salaries, office space and related operating costs. The detailed cost sharing arrangement is reflected in the Project Cost Tables, and will be explained in the Project Implementation Plan. It is expected that IBRD/SCF funds will be disbursed over a period of five years. The Closing Date of the Grant is November 30, 2018.
Table C: Allocation of Loan/Grant Proceeds
(Amount in US$ Million)
Expenditure Category Loan Amount
Grant Amount
Financing Percentage (exclusive of taxes)
DHM Goods and works under Parts A, B and C of the Project Consultants’ services, non-consulting services, Capacity Building and Operating Costs under Parts A, B and C of the Project
15.0
0
4.0
6.0
100%
100%
MoAD Goods, works, consultants’ services, non-consulting
0
6.0
100%
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services, Capacity Building and Operating Costs under Part D of the Project Total 15.0 16.0 Disbursement Arrangements
Disbursements from IBRD/SCF will be made based on full documentation for contracts above the Prior Review threshold or for SOEs. To facilitate disbursements, two Designated Accounts will be established – one for DHM and the other for MoAD. Program costs are implemented through contractual services with firms or individuals and hence payments can be made directly from the Designated Accounts. For large value contracts, a direct payment method will be used for disbursements. Small value contracts, goods of small values, training, workshops, incremental Operating Costs and Project management costs will first be pre-financed by the government, and once the accounts are consolidated and approved, funds will be transferred from the Designated Accounts to the government’s consolidated fund. Adequate counterpart funds will be provided to cover all form of taxes, staff salaries, office space and related operating costs.
Retroactive Financing
Retroactive financing will be provided for all components effective from September 1, 2012 and not exceeding US$ 500,000.
Use of Statement of Expenditures (SOEs).
SOEs will be used for the following expenditures: (i) contracts for works costing less than US$ 500,000 equivalent per contract; (ii) contracts for goods costing less than US$ 400,000, (iii) contracts for services of consulting firms costing less than US$ 100,000 equivalent per contract; (iv) contracts for services of individual consultants costing less than US$ 25, 000 equivalent per contract; (v) all training; and (vi) all incremental operating costs. During supervision, IBRD will closely review SOE claims to ensure that funds are utilized for the intended purposes. Any ineligible expenditure identified during such reviews will need to be refunded to IBRD.
Designated Accounts
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Two separate Designated Accounts in US Dollars will be established, on terms and conditions satisfactory to IBRD, one each for DHM and MoAD. Designated Accounts in US Dollars will be established at the Nepal Rastra Bank for utilization of IBRD/SCF’s share of project expenditures, on terms and conditions satisfactory to IBRD. The authorized allocation for Designated Account for DHM will be US$5.0 million, and the allocation for MoAD will be US$1.0 million. Each designated account will be operated under joint signatures of the respective component Project Directors and Accounts Officers.
Both DHM and MoAD will ensure that the bank/cash books are reconciled with bank statements every month. They will separately submit replenishment applications for their respective Designated Accounts on a trimesterly basis, and replenishment applications will be accompanied by reconciled statements from the bank in which the account is maintained, showing all Designated Account transactions. Supporting documentation will be maintained by the respective cost centers for at least one fiscal year after the year in which the last disbursement from the grant took place, and will be available for review by IBRD staff and independent auditors.
C. Procurement Arrangements
Procurement for the proposed operation will be carried out in accordance with the World Bank’s “Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers” published by the World Bank in January 2011 (“Procurement Guidelines”), in the case of goods, works and non-consulting services; and “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers” published by the World Bank in January 2011 (“Consultant Guidelines”) in the case of consultants’ services, and the provisions stipulated in the Legal Agreement. For each contract to be financed under the Loan/Grant, procurement methods or consultant selection methods, the estimated costs, prior review requirements, and time frame will be agreed between the Borrower and the Bank in the Procurement Plans. The Procurement Plans will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. The procurement plans will indicate all contracts that are subject to the Bank’s prior review. All other contracts will be subject to post review.
Summary description of the anticipated procurement requirements under the various components of the project are provided in Table C below:
Component Component Description Procurement requirements will include, inter alia26:
A. Institutional Strengthening, Capacity Building and Implementation
Systems Integrator/General Consultant (Company) to manage integration of the entire system, provide technical support for procurement and implementation; Individual
26 In addition to the above, the Project will support incremental operational costs such as operation and maintenance of vehicle, vehicle and office rentals, rentals for IT services such as internet connection, hiring of incremental staff, utilities, office consumables required for the day-to-day running of the PMU.
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Support of DHM consultants for drafting institutional development and business plans; Consultants for project management, national workshops; Contract to establish and manage twinning arrangements and training programs; Equipment (Office IT, computers);
B. Modernization of Observation Infrastructure and Forecasting
Equipment (automatic weather stations, hydrological stations, radar, sounding system, glacier and snow monitoring, air and water quality monitoring, calibration facilities), civil works for instrument installation and refurbishment of offices and facilities, IT (communication and computers – hardware and software), Equipment (vehicle)
C. Enhancement of the Service Delivery System of DHM
Contract for training in the development of weather and climate services; Equipment for visualization, media presentation, displays and computers, communication with end users (software and mobile phones); Consultants for workshops, public and sector specific user surveys.
D. Creation of an Agriculture Management Information System
Consultants for system design; Equipment (computers, displays, Office IT, mobile phones, rain gauges, temperature sensors, vehicle); Upgrading of facilities; Consultants for workshops, farmer surveys.
The following table indicates procurement plans for the major contracts to be launched during first 18 months of implementation. The detailed Procurement Plan is available in the project files. Goods, Works and Non-Consulting Services Implementing
Agency Contract (Description)
Estimated Cost (US$ million)
Procurement Method
Review by Bank (prior/post)
Expected Bid Opening Date
1 DHM Construction of the central DHM office (Works)
3.1 ICB Prior November 2013
2 DHM Improvement of the environment of the existing hydrological stations (bank
1.15 NCB Prior February 2013
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stabilization etc) (Works)
3 DHM Vehicles for DHM field operations, maintenance and inspections (Goods)
0.150 NCB Prior January 2013
4 DHM Capacity Building (Non consulting services)
0.250 TBD (several activities)
Prior/Post Project period
5 MoAD Equipment and system update required for AMIS operation (Goods)
0.195 NCB Post March 2013
6 MoAD Mobile phones for farmer representatives and extension workers (Goods)
0.2 NCB Post December 2013
Consulting Services Implementing
Agency Description of Assignment Estimated
Cost (US$ million)
Selection Method
Review by Bank (prior/post)
Expected Proposal Opening Date
1 DHM General Consultant/ Systems Integrator for the detailed design of the DHM systems, procurement, and implementation support
2.15 FBS Prior January 2013
2 DHM Detailed design and supervision of DHM building construction
0.2 QCBS Prior January 2013
3 DHM Design of an environmental monitoring network
0.2 QCBS Prior July 2013
4 DHM Development/strengthening of a legal and regulatory framework for DHM operations
0.2 QCBS Prior July 2013
5 MoAD Initial assessment on information requirement to frame AMIS portal
0.15 CQS Prior November 2012
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6 MoAD Development of weather & climate informed agriculture map
0.25 QCBS Prior March 2013
The following table specifies methods of procurement, other than Quality and Cost-based Selection, which may be used for consultants’ services. The Procurement Plans shall specify the circumstances under which such methods may be used:
Procurement Method
(a) Selection under a Fixed Budget
(b) Least Cost Selection
(c) Selection based on Consultants’ Qualifications
(d) Single-source Selection of consulting firms
(e) Procedures set forth in paragraphs 5.2 and 5.3 of the Consultant Guidelines for the Selection of Individual Consultants; and
(f) Single-source procedures for the Selection of Individual Consultants
Under both the DHM and MoAD PMUs, procurement consultants will be recruited with responsibility for initiating all procurement activities. Decisions on procurement proceedings will be taken by the Project Directors or by other officials as per the delegation of authority. Some of the staff currently in the Procurement Unit have some knowledge of procurement of office consumables and some have been involved in World Bank financed procurement, but most do not have adequate procurement knowledge, experience and training to implement this project. There is an internal manual prepared for overall work flow within DHM, but it is not a procurement-specific manual. Consultant support to the PMU and the preparation of a checklist of the procurement process are therefore being prepared to ensure smooth implementation of the procurement activities. Considering the inadequate procurement experience, substantial procurement scope under the Project and given the complexity of the procurement activities including procurement of radar and other sophisticated equipment, a procurement consultant will be required to be engaged from the beginning of the project to expedite procurement process and to provide expert procurement support to the project team and also capacity building of the project staff involved in procurement management. It is equally important to plan a phase-wise procurement training program and provide training to the project staff involved in procurement management.
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While MoSTE and DHM have no experience with World Bank procurement, MoAD has three projects (IWRMP, PACT, and SSNP) that are currently implementing World Bank financed projects and their performance has been satisfactory. On the basis of the procurement assessment of the DHM and MoAD, the overall procurement risk for the project was rated “High”, and the residual risk was “Substantial” after establishment of the PMU, preparation and finalization of a checklist for the procurement process, development of procurement plans, and appointment of procurement advisor/consultant to support the project staff. Procurement Risk and Mitigation Measures Summary: Risk Factor Risk Mitigation Measures Risk Factor 1: Accountability for Procurement Decisions in the Implementing Agency or Agencies
Likely delay in making procurement decisions as the procurement process has to be initiated by different sections, pass through different divisions, procurement unit and DHM’s decision making authority. Rating: HIGH
A checklist of the procurement process is prepared and made available to all the staff of the PMU and division heads who will be involved in the procurement process. This checklist should include key procurement steps, responsible staff (position) for each step and timeline for completion. Ensure that procurement decision-making is fully covered in the checklist. The checklist should also mention backup staff so that decisions can be made without any delay in case of absence of the primary staff.
Risk Factor 2: Internal Manuals and Clarity of the Procurement Process
Staffs have inadequate practical or hands-on guidance/ experience on the procurement process. Rating: Substantial
Enforce the checklist of the procurement process and decision- making as prepared for the risk factor-1 above.
Risk Factor 3: Record Keeping & Document Management Systems
Practically none. Rating: Low
• Original bills/invoices and vouchers to be kept by Account/ FM section,
• Copies of these documents and all other original procurement documents (procurement plan, estimate, notice, bid doc, bid evaluation reports, decision files, contracts, etc) to be kept by PMU.
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Risk Factor 4: Staffing
Likelihood of improper implementation of procurement activities, implementation delays and inadequate quality of contract deliverables due to involvement of various staff from different sections and inadequate experience of project implementing staff in procurement management. Rating: Substantial
• Deploy a dedicated procurement consultant as an expert and extended hand of the DHM to provide support in preparing bid/RFP documents, bid/proposal evaluation reports, contract documents, etc. The need for a procurement consultant is high in the first year of the project to expedite procurement and start capacity building of the concerned PMU staff.
• Recognizing the need to
procure highly sophisticated goods including radar, DHM will engage the services of specialized consultants for technical support, including specification writing, under the General Consultant/ Systems Integrator contract.
• Procurement training for the
project staff to be involved in or associated with procurement management. A phase-wise training program should be reflected in the procurement plan.
Risk Factor 5: Procurement Planning
Less competition or delay in procurement processing due to lack of proper market survey, planning or detailed procurement plan with proper slicing and packaging arrangements and methods of procurement. Rating: High
• Preparation of a master procurement plan for the project covering the entire project period. This is a list of procurement activities with year of procurement initiation/ implementation.
• Procurement plans for the first 18 months of the project were prepared and accepted, and will be updated periodically.
Risk Factor 6: Less or unbalanced • Ensure that appropriate
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Bidding documents,(pre-qualification, short listing, and evaluation criteria)
competition, chances of rebidding due to improper qualification and evaluation criteria, technical specifications, contract conditions. Rating: High
standard bidding documents or requests for proposals are adopted.
• Ensure that qualification and evaluation criteria and specifications are set based on adequate market study of potential bidders/ suppliers/ consultants/ service providers and goods available in the market.
• Engage support of in-house staff involved in previous World Bank financed project.
• Engage support of procurement consultant and specialized technical experts/consultants to prepare bidding/RFP documents, technical specifications and bid/proposal evaluation reports.
Risk Factor 7: Advertisement, Pre-bid/proposal Conference and Bid/Proposal Submission
Reduced competition due to unclear criteria or unattractive slicing and packaging. Rating: Moderate
Ensure conducting pre-bid or pre-proposal meetings for potential bidders/ consultants during bidding period for complex procurement activities.
Risk Factor 8: Evaluation and Award of contract
Difficulty in evaluation and/or delay in decision making due to inadequate or improper qualification and evaluation criteria and specifications, and inadequate procurement experience especially in the case of complex procurement. Rating: High
• Discuss criteria with bid evaluation committee (BEC) members while setting them during bidding document preparation.
• Include related experts in the BEC.
• Engage the support of the procurement consultant.
• Use standard templates for bid/ proposal evaluation.
Risk Factor 9: Review of Procurement Decisions and Resolution of
There is no practice of review of procurement decisions in-house or by the ministry, and no
Devise a mechanism of complaint receiving and handling by assigning the job to a dedicated staff for registering,
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Complaints complaint receiving and handling protocol. This may be because of the small scale procurement jobs handled in the past. Rating: Moderate
record keeping and forwarding the complaint for decision making. Ensure that the checklist prepared for the risk factor-1 above includes this provision too.
Risk Factor 10: Contract Management and Administration
Likely delay in project implementation due to involvement of different sections, unit in the procurement process and inadequate experience of in procurement and contract management. Rating: Substantial
Ensure that the checklist prepared for the risk factor-1 above is strictly enforced and project director conducts regular monitoring of the procurement process and contract management.
Risk Factor 11: Procurement Oversight
Practically no risk. Rating: Low
NA
D. Management of Environmental and Social (including safeguards)
The Project is classified as Category B as per OP/BP 4.01. Most of the activities funded by the Project are in the nature of technical assistance with minimal adverse environmental impacts. The Project will finance moderate civil works, refurbishment of existing structures, and modernization/automation of observation networks and forecasting which will include use of information technologies and batteries for backup power supply. The Project is expected to benefit the communities, but the implementation of the proposed sub-projects might lead to adverse impacts on people and environment including local land and water resources. Such potential social impacts during the construction phase of subprojects include loss of land or structures, loss of livelihood or access to areas for livelihood support, deteriorated public safety, noise and other disruptions at sensitive receptors such as schools and health facilities. Site selection for the stations could become locally controversial among people if private land is taken or government or community land is encroached upon. Based on examination of a sample of possible subproject areas and discussion with the community, the typical adverse impacts associated with the project would include: (i) potential loss of land due to acquisition/transfer of private holdings; (ii) full or partial loss of residential/commercial/mixed use buildings associated with potential land acquisition/transfer; (iii) potential loss of livelihood or distancing from sources of livelihood if displacement takes place; (iv) temporary loss of access to private and common properties or public infrastructure during construction; (v) tree/ vegetation loss construction/ improvement of Gauge Houses (5m x 5m), Cable Houses (8m x 8m), and Automated Weather Stations (25m x 25m) if these are located in the forest lands, (vi)
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health and pollution risks from dry-cell batteries; (iii) damage to agriculture due to movement of observers and gauge readers; (iv) generation of e-wastes and its impacts; and (v) erosion, particularly on the hill top where radar is located. Avoidance and minimization of each of these potential direct and indirect impacts is the basis on which the ESMF and the program guidelines had been prepared.
Environmental and Social Management Framework (ESMF)
Given the distributed nature of the proposed interventions and the overall frame work approach being followed for the Project, an ESMF, has been developed to ensure management of environmental and social issues in the project. The ESMF supports the three important goals of the project: (a) to ensure the social and environmental sustainability of the subprojects, (b) to comply with the national environmental and social legislation, and (c) to comply with the World Bank Environmental and Social Safeguards Policies. The ESMF details out the policies, procedures and institutional responsibilities for assessing and managing the potential environmental and social risks and impacts that may come up throughout the project cycle.
The ESMF has been prepared based on: (a) an assessment of the existing environmental and social features and sample potential subproject; (b) careful examination of a sample interventions and (c) detailed consultations with key stakeholders in what are expected to be the key cities. The objective of the ESMF is to provide a management instrument that provides technical guidance on applicable legal and regulatory requirements, institutional responsibilities, methodologies, instruments, and procedures in order to ensure adequate analysis, mitigation, and management of social and environmental risks and impacts during the entire project cycle.
Involuntary resettlement and land acquisition/transfer
According to an examination of the potential subprojects, there may be need for private land acquisition/transfer for the installation of AWS/AHS/WRS. Although small in size (maximum 0.06 ha), the land is of great importance to the community in terms of livelihoods and social security. Involuntary land taking might therefore result in involuntary resettlement and potential loss of livelihood. Nonetheless, such land acquisition and resultant involuntary resettlement is likely be on a very small scale, and unlikely to trigger any need for a full-scale resettlement action plan. The analysis of alternatives for the site selection will be carried out to ensure that acquisition of private landholding is absolutely minimized. To the extent possible, the project will be carried out on government land. However, there is also a strong possibility that some of the land parcels earmarked for public use are already encroached. To cope with such possibilities, the Project has prepared a Resettlement Policy and Land Acquisition Framework (RPLAF), included in the ESMF.
The RPF specifies procedures to be followed in the event that resettlement or land acquisition is required for any subproject, including procedures for identification of persons entitled, their entitlement for compensation and/or resettlement assistance, and the consultation and grievance redress mechanisms. Once the sites of the sub-project
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works are known during the project implementation period, individual resettlement and/or land acquisition plans will be prepared, in the event that any person is displaced or is likely to suffer adverse livelihood impacts after a detailed site level assessment. These resettlement action plans will be reviewed and accepted by the client and the Bank in advance of the commencement of subproject works in each specific site.
Vulnerability Communities
As part of the ESMF a Vulnerable Community Development Framework (VCDF) has been prepared by the Project. Implementation of the VCDF will ensure that (a) participation of the vulnerable community will be effectively promoted in preparation, implementation and operation of the subprojects; (b) inclusion of the neighboring communities in the design process, as and when they are located in close proximity of the subprojects to achieve the maximum possible positive impact of such communities; (c) the design, execution and operation of the subprojects are culturally appropriate; (d) the subprojects including the works and services associated with these do not inadvertently induce inequality by limiting subproject benefits to the elites of the community; (e) that executing agencies engage with communities through a consultation process appropriate to the local cultural context and local decision-making processes; and (f) the sub-project activities including the resettlement action plans, wherever relevant, establish appropriate information, communication, and inclusion measures targeted at the vulnerable sections of the communities.
Mainstreaming gender equity and empowerment
This is a focus area in the project. The specific processes and guidance is described in a Gender Development Framework (GDF) prepared as part of the ESMF. Application of the GDF which prescribes specific gender analysis as part of subproject social analysis will help analyze gender issues during the preparation of subprojects. The subproject gender analysis will based on gender specific surveys during primary data collection process and available secondary data, and identify issues related to gender disparity, needs, constraints, priorities, and an understanding whether there subprojects would have any scope to address inequitable risks, benefits and opportunities of women. Based on this analysis, specific interventions will be designed and incorporated in the design of subprojects. The overall social impact monitoring plan for the Project will have relevant indicators for measuring impacts on and participation of women.
Social accountability and the grievance redress mechanism in the Project
The social accountability mechanism for the Project will cover all subprojects. The key processes for ensuring social accountability would be any or a combination of participatory processes such as social audit, citizen scorecards or community report-cards that would acquire feedback on performance of the subprojects and of the agency involved in planning, execution and operation of the subprojects. Summaries of these will be prepared and the correction or improvement measures will be incorporated as part of the succeeding annual action plans. These accountability mechanisms will be further strengthened by implementation of a strong and uniform grievance redress mechanism.
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As part of GRM, a Grievance Redress Cell (GRC) will be set up at the district level wherever subprojects have been or will be planned. The GRC will have representation from DHM, community members (women and vulnerable community members must be represented) and a local NGO. The head of the cell will be a person of repute but not in the government service. The GRC will only deal with the issues related to R&R and individual grievances; and will give its decision/verdict within 15 days after hearing the aggrieved PAPs.
The draft Environmental Management Framework (EMF) requires that subproject and activity be subjected to environmental screening and necessary level of assessment before implementation, and monitoring during implementation. Activities located in core protected areas, world heritage sites, and conflicted/disputed territories are ineligible under the project. Subproject/activity located in the protected areas, but out of core areas, may be permitted on written permission from the competent authority. Preliminary or full environmental assessments may be necessary for subprojects/activities, and management/safeguard plans need to be prepared. The ESMF provides general guidelines for the screening and assessment for each subcomponent/ investment, and institutional arrangement for implementing the EMF.
The Project Management Unit (PMU) will coordinate the overall ESMF implementation in cooperation with technical teams. PMU will include at least one environment specialist and one social specialist. PMU will facilitate all the processes to complete the project cycle: screening, planning, assessment, Implementation, and monitoring & compliance. It will coordinate with the beneficiaries, collaborate with line agencies of government and non-government working in social and environmental management, assess the possible environmental and social issues, and develop ToRs for necessary out-sourcing of social and environmental assessments/studies. PMU will commission quarterly compliance monitoring and report to DHM/MoAD as well as final monitoring after completion of an activity/ sub-project.
Preliminary information on environmental and social setting of sub project areas will be collected during subproject identification. Environmental and Social Officers at the PMUs are responsible for collection of environmental and social information for screening and proposing categorization. The screening and categorization will be endorsed by DHM/ MoAD, and approved by MoSTE. Certain activities are generally not eligible (or not permitted), for example activity in the Ramsar sites, protected area, conflict area (disputed territory), historical monument site, site for migratory species, ozone depleting substance emission, severe landslide and flood prone area. If the screening result shows an activity/subproject requires an IEE or EIA or a detailed social impact assessment, respective ToR and a report will be approved by the concerned line ministry or by MoSTE. Prior written permission from the competent authority is necessary for any activity/subproject located in the forest or protected/ conservation area. The Detailed Subproject/Activity Report will contain necessary permissions, EMP or environmental mitigation measures. Follow-up will be done to confirm the implementation effectiveness of the mitigation measures. Monitoring will be carried out in accordance with the Environmental Management Plan (EMP). The EMP will be prepared for each subcomponent by PMU including the monitoring indicators for the subcomponents. Early in the first year of implementation the Project will develop and put
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in place collection, recycling and management systems for managing batteries and e-wastes. Internal monitoring of social and environmental activities will be carried out by the PMU periodically and reported to the Director of the Project. The Project will carry out environmental compliance reviews through consultants every six months. Social and environmental audits/evaluations will be done two times during the project period (during second year and last year of implementation).
The project's beneficiaries and affected local population and NGOs will be consulted at all stages of subproject planning and implementation. Consultations will be done during screening, subproject formulation, impact assessment, and implementation & monitoring. Representatives of local communities affected by the project will be involved in consultations.
E. Monitoring and Evaluation (M&E)
The responsibility for overseeing and coordinating all M & E activities under the project will be with the M & E consultant in each of the PMUs who will work actively with supported agencies and training providers to ensure that sufficient, and reasonably complete and accurate information on project inputs, outputs and outcomes data are collected and submitted in a timely manner. Data analysis and findings on project performance will be disseminated to all stake-holders and will be the basis for remedial activities if any for improved performance.
Project M&E will be guided by the Results Framework developed for it. This framework specifies the indicators to be monitored, their base-line and target values, frequency of monitoring, source of data and instrument through which data will be collected.
Monitoring and reporting on implementation of the ESMF. The DHM will monitor all the approved subprojects to ensure conformity to the requirements of the ESMF. The monitoring will cover all stages of construction, operation and maintenance. Regular monitoring will be through the social compliance reports that will form a part of quarterly progress reports. These reports will be based on regular site visits and investigations by social development officers (to be appointed). In addition, the DHM will undertake an annual social audit of all subprojects. The terms of reference for this social audit are already included in the ESMF. Based on these audit reports, DHM will identify all technical, managerial, policy or procedural improvements that would be required to be incorporated in the action plan. Further, external evaluation of implementation of all resettlement action plans prepared in the subprojects will be undertaken twice during the project implementation period, one before the planned mid-term review of the project, and other before the close of the Project.
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ANNEX 5: OPERATIONAL RISK ASSESSMENT FRAMEWORK
NEPAL Pilot Program for Climate Resilience - Building resilience to climate-related hazards
Project Stakeholder Risks
Stakeholder Risk Rating Moderate
Description: 1. The improvements in warning services do not have the expected impact on the most disadvantaged because they cannot act on the information.
Risk Management:
1. Work closely with civil society including community based-NGOs, women and vulnerable groups to ensure that products and services are appropriately designed and accessible, and effectively aligned with community-level programs.
Resp: Both Stage: Both Recurrent:
Due Date:
Frequency:
Status: In Progress
Risk Management:
2. Ensure stakeholder engagement from the start of the project so that products and services are appropriately designed and warning services are built into all vulnerable sectors' decision making.
Resp: Both Stage: Both Recurrent:
Due Date:
Frequency:
Status: In Progress
Risk Management:
3. Service delivery emphasizes importance of working with rural and remote populations and women. Survey tools will be developed to measure frequently the impact of the new services on society through face-to-face interviews
Resp: Client Stage: Implementa
Recurrent:
Due Date:
Frequency:
Status: Not Yet
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tion Due
Implementing Agency (IA) Risks (including Fiduciary Risks)
Capacity Rating Substantial
Description: 1. Capacity of DHM is low in project management, financial management, and procurement. 2. The PMU may lack adequate project implementation, financial management, procurement and safeguards expertise 3. DHM has no demonstrated capacity for financial management for a project of this size
Risk Management:
1. The capacity development plan put in place and the extensive oversight built into the project design. Leadership and management coaching using existing methods applied to developing country NMHSs. Technical assistance may be provided to DHM by cooperation agreements with universities and other decentralized public agencies. Public private partnerships will be explored.
Resp: Both Stage: Implementation
Recurrent:
Due Date:
Frequency:
Status: In Progress
Risk Management:
2. During project preparation and appraisal, the Bank will encourage identification of qualified PMU staff. Where necessary, consultant support will be provided by the Project, i.e. for procurement and safeguards.
Resp: Bank Stage: Preparation
Recurrent:
Due Date:
Frequency:
Status: In Progress
Risk Management:
3. The following measures are proposed to mitigate the main FM risks of this project: - The preparation of an project implementation manual which will document the fiduciary procedures - Ensure that procurement and finance staff/consultants are on board before effectiveness - Ensure that environmental and social safeguard staff/consultants are on board in the early stages of implementation
Resp: Both Stage: Preparation
Recurrent:
Due Date:
Frequency:
Status: In Progress
Risk Management:
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4. Assessment of agreements to guarantee compliance and reasonability of fees. Project to consider medium and long term sustainability of DHM
Resp: Both Stage: Both Recurrent:
Due Date:
Frequency:
Status:
Risk Management:
5. Terms and conditions and eligibility of this agreement has to be justified and determined during appraisal
Resp: Both Stage: Both Recurrent:
Due Date:
Frequency:
Status:
Risk Management:
6. Assess compliance with procurement guidelines
Resp: Both Stage: Both Recurrent:
Due Date:
Frequency:
Status:
Governance Rating Substantial
Description: Risk Management:
Overall political uncertainty and the operational environment in the country pose a moderate risk to project implementation. This includes frequent reassignment of senior government officials, slow decision-making processes that can slow down project implementation.
Close follow up, focused and regular supervision, and an ongoing dialogue with government counterparts that will be sustained between missions by the Resident Mission-based staff of the project team.
Resp: Both Stage: Implementation
Recurrent:
Due Date:
Frequency:
Status: Not Yet Due
Project Risks
Design Rating Moderate
Description: Risk Management:
The complex project design comprising a complete overhaul and modernization of
Capacity development is built into the project, for example: - Institutional twinning arrangements
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the DHM presents implementation risks - Training opportunities - Guidance on service delivery - Guidance on numerical weather prediction
Resp: Both Stage: Both Recurrent:
Due Date:
Frequency:
Status: In Progress
Social and Environmental Rating Moderate
Description: Risks of inadequate assessment or improper handling of safeguards aspects could delay project preparation and approval; and during implementation could negatively impact the local area and affected population. Policies triggered include OP 4.01, OP4.12, OP 4.36, OP4.12, OP 4.04, OP 4.10 and OP4.11.
Risk Management:
An ESMF has been prepared. Careful attention will be paid to the social and environmental aspects identified in the ESMF during project preparation and implementation.
Resp: Both Stage: Both Recurrent:
Due Date:
Frequency:
Status: In Progress
Risk Management:
Sustained communication initiatives will be undertaken by the PMUs to inform the affected stakeholder groups about the possible impacts of the project and the mitigation measures taken to address these impacts.
Resp: Both Stage: Implementation
Recurrent:
Due Date:
Frequency:
Status: Not Yet Due
Risk Management:
Applicable elements from the Governance and Peace Action Plan will be examined for incorporating into the social safeguards.
Resp: Both Stage: Both Recurrent:
Due Date:
Frequency:
Status: In Progress
Program and Donor Rating Low
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Description: Risk Management:
No specific risk has been identified as there has been strong donor coordination in the preparation of the Nepal PPCR and follow-on projects linked to it.
Continued coordination among the donor partners and liaison through PPCR coordination mechanisms.
Resp: Both Stage: Both Recurrent:
Due Date:
Frequency:
Status: In Progress
Delivery Monitoring and Sustainability
Rating Substantial
Description: 1. The accuracy and timeliness of the information procured under the project does not reach standards and consumer expectation and needs. 2. MoF does not support increase in DHM budget to cover additional O&M
Risk Management:
Participation of qualified consultants, third-party supervision, and collaboration of WMO in the preparation and implementation of the project with emphasis on M&E
Resp: Both Stage: Both Recurrent:
Due Date:
Frequency:
Status: Not Yet Due
Risk Management:
Confirm budget implications and expectations prior to start of implementation based on current estimates of additional O&M costs
Resp: Client Stage: Implementation
Recurrent:
Due Date:
Frequency:
Status: In Progress
Overall Risk
Implementation Risk Rating: Substantial
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Description: Implementation risks arise from the relative inexperience of the DHM to implement a project of the scale proposed. To mitigate this risk, a major component of the project will focus on capacity strengthening of agency staff through training, peer-to-peer learning, and institutionalizing managerial procedures for maintaining the quality and sustainability of the proposed interventions. Capacity building will also be needed at the village and district levels to ensure adequate implementation and monitoring of project activities. Ensuring sustainability of the investment will be a major challenge. Additional allocations from the government budget will be necessary to cover O&M costs of a modernized DHM system. To mitigate this risk the new DHM system will be designed to minimize incremental O&M costs. It is also hoped that the project can demonstrate significant value to the economy and the society which will convince the government to allocate additional budget resources. Increasing DHM revenues might be another option to mitigate the risk. Overall political uncertainty and the operational environment in the country also pose a modest risk to project implementation. This includes frequent reassignment of senior government officials, slow decision-making processes that can slow down project implementation. This will be minimized through close follow up, focused and regular supervision, and an ongoing dialogue with government counterparts that will be sustained between missions by the Resident Mission-based staff of the project team.
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ANNEX 6: IMPLEMENTATION SUPPORT PLAN
NEPAL Pilot Program for Climate Resilience - Building resilience to climate-related hazards
The strategy for implementation support for the project has been developed based on the nature of the project and its risk profile. This strategy aims at making implementation support to the client flexible and efficient. Along with regular implementation support described below, there will be continuous interaction with the implementation agencies to provide support and guidance on issues and challenges that may arise during implementation. Project Implementation Arrangements. Two separate Project Management Units (PMUs) will be maintaind under DHM and MoAD respectively. The PMUs are responsible for the day-to-day implementation of the project by will be staffed by dedicated Government officials as well as additional full-time professionals who are hired for their skills against a set of clear terms of references as agreed with the Bank. Additionally, DHM will receive the support of a General Consultant / Systems Integrator (consulting firm) selected to coordinate and implement project activities to build a functional, integrated water and weather observation and forecasting system. This consulting firm, to be funded through project funds, will be located at the DHM PMU. The Bank implementation support team will interact frequently with the respective PMU staff. Additionally, the Bank team will meet regularly with the chairs of the two Technical Committees to be set up for each PMU and the Project Steering Committee that will bring both PMUs together, to discuss the progress and issues that affect project implementation. Project Implementation Manual: A Project Implementation Manual (PIM) will be prepared before disbursement of Category 1: Goods and Works under Parts A, B, and C of the Project with complete details of roles and responsibilities of the implementing agencies, the management structure, processes and procedures for the implementation, monitoring and evaluation of the project. The PIM that includes all other relevant documents, such as the Governance and Peace Action Plan and procurement plans, will be made available both in the English and Nepali. Implementation Support Plan. The implementation support plan for the project includes semi-annual joint reviews by the GoN and the Bank. These reviews will include field visits and intensive evidence-based discussions on project performance, and will be used as a forum for providing constructive and corrective technical guidance. The findings of the joint reviews will also be used to identify gaps constraining implementation and support will be provided to the DHM and MoAD for the same.
• Technical support to the PMUs. The Bank team (which includes a strong complement of field based staff) will provide technical support to the implementing agencies as needed to support the PMUs to implement all project activities.
• Monitoring and Evaluation: Capacity building of the implementing agencies in monitoring and evaluation is a key aspect of project supervision and implementation support. The DHM and MoAD will be supported in developing monitoring and reporting formats for all components and activities to be undertaken by the project, and analysis of
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data collected and presentation and use of findings. In addition, DHM and MoAD will benefit from independent monitoring and verification undertaken by external consultants.
• Fiduciary issues. Training of the implementing agencies’ staff on financial management
and procurement procedures will take place in the first six months of project implementation. Project level service standards will be developed for disbursement against financial and results reporting. A financial management specialist and procurement specialist will be part of all the joint reviews and provide a review of the quality of fiduciary management practices under the project and recommend any needed remedial actions.
• Safeguards: The GoN has prepared an Environment and Social Management Framework
(ESMF) to guide environmental and social safeguard issues triggered by the project. The Bank’s environmental and social safeguard specialists will participate regularly in the implementation review missions to provide technical support and to assess the adequacy of the implementation of the environmental and social management activities.
The Bank’s implementation support requirements are summarized in the following table:
Time Focus Skills Needed Resource Estimate First twelve months
Technical support Expertise in hydromet, AMIS, institutional development and skills development training
18 staff weeks
FM training and
Financial Management 3 staff weeks
Procurement training and support
Procurement 3 staff weeks
M & E support Monitoring and Evaluation, Impact Evaluation
4 staff weeks
Environment and Social Management Support
Environment; Social Development
2 staff weeks each
Tea m Leadership Management and Operational experience
18 staff weeks
12-48 months Technical support Expertise in hydromet, AMIS, institutional development and skills d l i i
12 staff weeks/year
FM training and support
Financial Management 2 staff weeks/year
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Procurement training and support
Procurement 3 staff weeks/year
M & E support Monitoring and Evaluation, Impact Evaluation
4 staff weeks/year
Environment and Social Management Support
Environment; Social Development
3 staff weeks each / year
Tea m Leadership Management and Operational experience
12 staff weeks/year
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ANNEX 7: TEAM COMPOSITION
Name Title Unit
Claudia W. Sadoff Lead Economist SASDI
Vladimir V. Tsirkunov Sr. Environmental Engineer GFDRR
Pai-Yei Whung Adviser ARD
David Rogers Lead Technical Specialist Consultant
Stephanie Borsboom Operations Officer SASDI
Saurabh Suresh Dani Disaster Risk Management Specialist
SASDC
Anil Pokhrel Disaster Risk Management Specialist
SASDC
Abedalrazq F. Khalil Water Resources Specialist SASDI
Sulochana Nepali Team Assistant SASDI
Bigyan B. Pradhan Sr. Financial Management Specialist
SARFM
Shambhu Prasad Uprety Procurement Specialist SARPS
Tenzin Dolma Norbhu Sr. ICT Policy Specialist TWICT
Drona Raj Ghimire Environmental Specialist SASDI
Hiramani Ghimire Sr. Governance Specialist SASGP
Bandita Sijapati Consultant SASDS
Parthapriya Ghosh Social Development Specialist SASDS
Purna Bahadur Chhetri Sr. Rural Development Specialist SASDA
Minneh Kane Lead Counsel LEGES
Mei Wang Senior Counsel LEGES
Harlan Shannon Agricultural Expert Consultant
Clyde Fraisse Agricultural Expert Consultant
Aurora Bell Nowcasting Expert Consultant
Spreafico Manfred Hydrologist Consultant
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ANNEX 8: GOVERNANCE AND PEACE ACTION PLAN
NEPAL Pilot Program for Climate Resilience - Building resilience to climate-related hazards
The project preparation team has developed this Governance and Peace (GAP) Action Plan to address critical operational concerns related to project management of the Building Resilience to Climate-Related Hazards Project. The GAP Action Plan seeks to ensure good governance, conflict-sensitivity, transparency and accountability, and inclusion in the management of the project. The Action Plan is based on Nepal’s existing governance and policy framework. In addition, elements of World Bank’s social, governance and access to information policies have been incorporated into this document. Further, the Action Plan is also informed by the workshop conducted on governance and peace, social assessments, and others, conducted during project preparation, as well as lessons learnt from other Bank-funded projects in Nepal and elsewhere. The GAP Action Plan will be a living document and will be strengthened, as necessary, based on lessons learned during the implementation of the project. I. Key governance issues in PPCR Institutional arrangements The project brings together two important GoN entities: DHM under MoSTE and MoAD, to work together to improve the accuracy, frequency and timeliness of weather and flood forecasting and warning systems for climate-vulnerable communities countrywide; as well as developing an agricultural information management system to help farmers manage and mitigate climate-related production risks.
The project will be coordinated by MoSTE and implemented by DHM and MoAD. In terms of the project’s governance arrangements, the GoN is establishing a Climate Change Coordination Committee, chaired by the Minister for Environment and the NPC member responsible for Environment, to provide oversight and guidance for all climate related projects in the country.
In addition, for this project specifically, the overall coordination will be provided by MoSTE as the focal Ministry for the PPCR. An inter-Ministerial Project Steering Committee will be established, chaired by the Secretary, MoSTE, and include representatives from the Ministry of Finance (MoF), NPC, DHM, MoAD and other key stakeholders, to provide policy guidance and ensure coordination across project components. Two Technical Committees will be established, one chaired by DHM, and the other chaired by MoAD. Further, Project Management Units (PMUs) will be maintained in each of the two implementing agencies (DHM and MoAD) and will include technical, financial, procurement, environment and social specialists as needed. The PMUs will report to their respective Technical Committees, and will liaise with the Mainstreaming Climate Change Risk Management in Development Project of the Nepal PPCR to ensure knowledge management across the five SPCR Program Components.
The immediate beneficiaries of the project will be DHM and MoAD. While the project has been designed to ensure strong ownership both by DHM and MoAD, continued efforts required to ensure that the project is viewed as a partnership that strengthens the relationship between the
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agencies. Further, one of the key reforms required under the project relates to the institutional reform of the DHM from its current organizational focus on data collection to service provision. Lack of adequate human resource capacity at the DHM even in the technical fields, and possibilities of reduction of workforce at the local levels due to automation of the information systems, are issues of major concerns and hence central focus of the project. The complexity of the project, and the relative inexperience of DHM in managing systems modernization, is a potential concern for project success. Other areas to improve include information management and the capacity to provide support to local bodies. Transparency and accountability With the enactment of the Right to Information Act in 2007, GON agencies are required to disclose information on their businesses except for pre-defined 'sensitive' transactions. But, enforcement of the Act has remained weak, which is perhaps reflected in the growing number of complaints filed with the Information Commission formed under RTl. There are three basic challenges: (i) public officials tend to be too cautious in disclosing information within their jurisdiction (an RTI-inconsistent attitude), (ii) there are skills gaps in terms of handling information, and (iii) logistical problems (eg, physical facilities) stand in the way of effective management of information. These challenges need to be addressed to improve enforcement. Improved transparency is also needed for the project to be consistent with the World Bank's recently adopted access to information policy. Despite GoN's intention to promote Managing for Development Results (MfDR) across the board, many agencies are struggling to put this into effect. Defining 'results' has been a challenging task; agreeing on time-bound indicators for them has also been a difficulty. This limits the effectiveness of whatever monitoring arrangements are in place. Conflict and peace-building
The current transition to peace and democracy has been marked by political instability and a lack of trust among key political players. Coalition governments of the recent past have not been able to show 'unity of purpose' in the functioning of ministries under different parties. With the dissolution of the CA in May 2012, introduction of any new legislation has become a difficult issue. The project's plan to see new policies and measures adopted by GON to improve weather and flood forecasting and warning systems, and develop an agricultural management information system could therefore be affected by political events.
Gender and social inclusion
The project is expected to generate positive social impacts through its efforts to increase resilience to climate-related hazards by improving the accuracy and timeliness of weather and flood forecasts and warnings for climate-vulnerable communities countrywide; and develop an agriculture management information system to help farmers mitigate climate-related production risks. The Project seeks to pay special attention to women and other vulnerable communities in particular, as well as to agricultural extension services, and onward to farmers. By strengthening Nepal’s capacity to predict and cope with weather and hydrological extremes, the project hopes to contribute to making communities and economy more resilient to climate change thereby enabling sustained growth and poverty alleviation. However, there is a risk that the improvements in warning services do not have the expected impact on the most disadvantaged
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because they either remain uninformed about the services, or are unable to act on the information. II. Objectives of GAP Action Plan
The objective(s) of the GAP Action Plan is to contribute towards strengthening governance, peace and social cohesion in the project activities. It will achieve these objectives by:
- Ensuring resources allocated by GoN and the Bank are spent for the intended purposes and directed to the beneficiaries of the project;
- Developing mitigation measures to address risks related to conflict, governance, accountability, and inclusion;
- Strengthening coordination between different GoN agencies and other stakeholders;
- Improving feedback mechanisms between beneficiaries and service providers.
III. Scope Several areas for governance improvement have been identified: political environment, organizational arrangements, inclusion, monitoring, and accountability arrangements. The GAP Action Plan proposes actions for each of these issues, timeline for each action, and responsible agency for implementation. There are also some 'early warning indicators' which, if monitored properly, would enable timely actions for course correction. IV. Monitoring arrangements The GAP Action Plan will be monitored regularly against agreed actions which will be reflected in the project’s periodical progress reports and aide-memoires. This will be a joint responsibility of the Project Management Units (PMUs) established in each of the two implementing agencies (DHM and MoAD), other project entities, and the Bank. The GAP matrix will be used widely for monitoring purposes. If any 'red flag' is triggered, the respective PMU will consider initiating enhanced supervision, i.e., through specific third-party audits, reviews by sector experts, training workshops, and joint interim missions with the Bank and partners. If the investigation confirms corrupt, fraudulent or collusive practices at any stage of the project, appropriate sanctions will be applied by the relevant agency depending on the nature of the case. In addition, any ‘early warning’ indicators of governance, conflict, inclusion, and accountability will be monitored regularly so that corrective measures can take place in time. While the DHM and MoAD will have the overall responsibility for this GAP Action Plan, the two PMUs located in DHM and MoAD will be responsible for implementing project-specific actions included in the GAP matrix and will also act as a nodal point to co-ordinate with other agencies for effective implementation of the GAP Action Plan. The key person in charge of this GAP will be the Project Director. This action plan will also be monitored as part of the implementation support missions.
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PPCR: Governance and Peace (GAP) Framework
Issues Focus areas Actions Responsible
agency Timeline Early
indicators (TBD)27
Institutional arrangements Inter-departmental cooperation and coordination between GoN agencies
Addressing weak coordination and collaboration between GoN agencies at policy level
• An inter-ministerial
project steering committee (PSC) will be established under MoSTE Secretary with representation from NPC, MoAD, and DHM to ensure coordination across all project activities.
• The PSC will meet every six months to review project performance and provide policy guidelines to the project
• Technical Committees at DHM and MoAD will meet every three months (at a minimum – and once a month based on technical progress/issues) to discuss project coordination activities
MoSTE DHM and MoAD
Within six months after project effectiveness Biannually Every 3 months
Capacity building
Improving institutional capacity at DHM and MoAD
• Institutional development plans will be prepared at DHM and MoAD covering aspects of:
o organizational restructuring (including O&M study)
o staffing capacity and skills including training needs assessment
o work processes o communications
outreach
DHM and MoAD
Within one year of project effectiveness
27 The ‘Early Indicators’ will be filled in during the early phases of project implementation. This will help ensure that the indicators are able to reflect the actual progress of the project.
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Issues Focus areas Actions Responsible
agency Timeline Early
indicators (TBD)28
• DHM will include one communications person (preferably with background in social development) in the PMU
• Relevant provisions of Civil Service Act will be enforced to retain project staff and use their skills acquired through training and observation
• At least 75 percent of key staff positions in the project will be filled.
DHM DHM and MoAD DHM and MoAD
Three months Ongoing Within three months
Transparency and accountability Access to information
Improving people’s access to information about project activities
• All project information
will be available on DHM and MoAD websites
• Other media, including newspapers and electronic media, will also publicize project information
• The DHM-based communications expert will finalize a strategy for outreach and communications including: the design of IEC materials and their audience
• RTI-consistency of project operations will be assessed every six months.
• An Information Officer will be designated to facilitate public’s access to information
DHM and MoAD DHM and MoAD DHM DHM and MoAD DHM and MoAD
Within three months Ongoing Within three months Biannually Ongoing
28 The ‘Early Indicators’ will be filled in during the early phases of project implementation. This will help ensure that the indicators are able to reflect the actual progress of the project.
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Issues Focus areas Actions Responsible
agency Timeline Early
indicators (TBD)29
Stakeholder participation and consultation
Responding to community needs and suggestions
• Consultations will be
carried with potential project beneficiaries (eg, farmers) on their needs/preferences for weather information
• A grievance handling system will be put in place with tracking mechanisms for actions on public grievances/suggestions
• Third-party verification, including public audit, public hearing and social audit, of project activities will be encouraged to address fraud and corruption risks
• Project outputs and outcomes will be publicized widely with lessons learned.
• Accountability relationships between project entities at different levels will be defined clearly
DHM and MoAD DHM and MoAD DHM and MoAD DHM and MoAD DHM and MoAD
Every year Within six months Every year Ongoing Within three months
Conflict and Peace building Conflict/Peace sensitivity
Enhancing peace opportunities/peace dividends
• During the selection of
project and while implementing project activities, to the extent it is technically feasible, priority will be given to conflict affected areas
• Prior to project implementation, consultations will be
DHM and MoAD DHM and MoAD
Ongoing Ongoing
29 The ‘Early Indicators’ will be filled in during the early phases of project implementation. This will help ensure that the indicators are able to reflect the actual progress of the project.
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held with local A Issues Focus areas Actions Responsible
agency Timeline Early
indicators (TBD)30
stakeholders (e.g., district and VDC officials/members, local politicians, community groups, farmers organizations) to explain key policy issues, timing considerations and mitigate any potential misperceptions the project
• A grievance handling system, with a tracking system, will be put in place to allow for individuals/groups to seek effective redress of their complaints, and to facilitate timely corrective actions, if required.
DHM and MoAD
Within six months
Local Ownership
Improving local ownership to create demand for the hydro-met and agro-met related services
• The communication
strategy developed by the Information Officer deputed for the project will include options for periodic consultation with local communities
• Consultations will be held with local stakeholders (e.g., district and VDC officials/members, local politicians, community groups, farmers organizations) on a periodic basis
• PMUs at DHM and MoAD will work closely with civil society including community groups, local NGOs, existing network of Agricultural Service Centers and district offices under MoAD in
DHM and MoAD DHM and MoAD DHM and MoAD
Within three months Ongoing Ongoing
30 The ‘Early Indicators’ will be filled in during the early phases of project implementation. This will help ensure that the indicators are able to reflect the actual progress of the project.
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Issues Focus areas Actions Responsible
agency Timeline Early
indicators (TBD)31
order to maximize project benefit through their community level programs
• Capacity of local communities will be improved by conducting roving seminars, entering into partnerships with farmers to raise awareness and capacity of farming communities, and organizing seminars in local communities to help bridge the knowledge gap between MoAD, DHM, extension agencies, farmers, and local communities.
• Public surveys/assessments will be carried out to measure the local communities’ satisfaction with the new services
MoAD and DHM DHM and MoAD
Bi-annually Annually after initial baseline
Gender and Social Inclusion Participation of vulnerable groups, including women
Enhancing project benefits to women and other vulnerable groups
• Everything else equal, the selection of project areas will be done in a way that enhances immediate project benefits to women and excluded groups
• A social development expert will be requisitioned for each PMUs
• Communication strategy in the project will include specific measures targeted towards consulting and ensuring that the poor, disadvantaged groups,
DHM and MoAD DHM DHM and MoAD
Ongoing Within three months Within three months
31 The ‘Early Indicators’ will be filled in during the early phases of project implementation. This will help ensure that the indicators are able to reflect the actual progress of the project.
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Issues Focus areas Actions Responsible
agency Timeline Early
indicators (TBD)32
women, etc., are aware of the information systems and their benefits
• During consultations with local stakeholders, special attention will be paid to ensuring the participation of women and other vulnerable groups
• During project implementation, the respective PMUs will work closely women’s groups, farmer’s groups, local NGOs, network of Agricultural Service Centers to maximize project benefits to women and other vulnerable groups
• Specific communities will be targeted for agro-met systems and agriculture
DHM and MoAD DHM and MoAD MoAD
Ongoing Ongoing Identification of communities within three months
Monitoring inclusion
Ensuring that traditionally excluded groups are benefitting from new services
• The implementation
progress report will incorporate progress on reaching women and other vulnerable groups
• Public surveys and farmers surveys will be carried out to measure the satisfaction/impact of new services
• The reporting formats developed for monitoring and evaluation will include specific indicators on women, poor farmers and vulnerable groups
DHM and MoAD DHM and MoAD DHM and MoAD
Trimester Annual Within three months
32 The ‘Early Indicators’ will be filled in during the early phases of project implementation. This will help ensure that the indicators are able to reflect the actual progress of the project.
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ANNEX 9: ECONOMIC AND FINANCIAL ANALYSIS
NEPAL
Pilot Program for Climate Resilience - Building resilience to climate-related hazards
Economic Analysis Context and Comparators Investment in hydromet services is rapidly becoming a priority climate adaptation investment, particularly in countries like Nepal that have weak hydromet services and are extremely climate-vulnerable. Methodologies to assess the economic benefits of hydromet investments are still evolving. The broad range of estimates currently in the literature suggest that these investments can be extremely beneficial in terms of averting losses associated with climate hazards and enhancing the productivity of climate-dependent sectors such as agriculture, hydropower and transport. Global studies have found high returns to investment in hydromet. Hallegatte (2012)33 estimated the potential benefits of upgrading all developing country hydro-meteorological information production and early warning capacities to developed-country standards. Total benefits were estimated to be between USD 4 and 36 billion per year globally, with benefit-cost ratios between 4 and 36. Country specific analyses find benefit-cost ratios across a similar range:
• China: benefit-cost ratio for 1994-1996 of 35-4034 • Mozambique: benefit-cost ratio of 70 for investment in meteorological services35 • US: benefit-ratio of 6 for forecasting36 • Russia: benefit-cost ratio of 4.5-1037 • Kyrgyz Republic: benefit-cost ratio of 238 • Tajikistan: benefit-cost ratio of 2.239
33 Hallegatte, Stéphane, 2012. A Cost Effective Solution to Reduce Disaster Losses in Developing Countries: Hydro-Meteorological Services, Early Warning, and Evacuation, World Bank Policy Research Working Paper #6058. 34 Guocai, Z and H. Wang, 2003. Evaluating the Value of Meteorological Services in China. WMO Bulletin 53(4): 383-7. 35 World Bank, 2008. Weather and Climate Services in Europe and Central Asia: A Regional Review. Working Paper 151. 36 Rogers and Tsirkunov, 2010. Costs and Benefits of Early Warning Systems. Global Assessment Report on Disaster Risk Reduction. ISDR and the World Bank. 37 World Bank,2005. Russia National Hydromet Modernization Project. Project Appraisal Document. 38 World Bank, 2009. Improving Weather, Climate and Hydrological Services Delivery in Central Asia (Kyrgyz Republic, Republic of Tajikistan and Turkmenistan. 39 Ibid.
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In Nepal significant gains are anticipated both from reduced losses and enhanced productivity, particularly in agriculture. Nepal is starting from a very low base. Currently, the country does not issue any official severe weather warnings which leaves enormous potential for diminishing the loss of lives, livelihoods and assets in this highly climate-vulnerable country. Similarly, there are no official seasonal forecasts or timely planting and harvesting advisories that could help enhance the productivity of farmers. These key services, among others, would be delivered under this Project. Assessing the specific costs and benefits of this Project is a challenge for many reasons, chief among them are limitations of information. For example, until the mid of 1980s most disaster data were classified and disaster losses were generally unreported if there were no deaths. As a consequence, numerous disaster events especially in remote Himalayan regions are simply not recorded. Still, the reported scale and costs of natural disasters are quite high. Nepal has “alarmingly high levels” of vulnerability to floods and earthquakes, relative to South Asia and to the rest of the world.40 Moreover the range of benefits and beneficiaries of hydromet and forecasting services is very broad both in terms of diminishing weather and climate related losses such as floods and droughts, as well as enhancing productivity in weather and climate related sectors such as agriculture and hydropower. Despite these limitations, several methodologies can be employed to broadly assess the economics of a transformational investment in Nepal’s hydromet and forecasting services. A recent study on the value of investment in Nepal’s hydromet system was conducted by FMI as part of the Finnish Nepalese Project (FNEP).41 It found a benefit-cost ratio of 9, with the majority of benefits deriving from enhanced agricultural productivity. The study assessed the potential benefits of “The establishment of an up-to-date meteorological observation network and the provision of regional weather forecast services on the basis of that network provides benefits for day-to-day activities, for preparing for weather related natural hazards, and for planned adaptation to climate change.” The study looked across a range of sectors: agriculture, power, public health, civil aviation, tourism and road transport. For agriculture and power, assumptions were made regarding the improvements that could be achieved with an investment in hydromet and forecasting services so that economic benefits could be calculated. For the other sectors the author felt it was not credible to make such assumptions. He did, however, perform a qualitative analysis to indicate the probably order of magnitude of expected benefits. While the investment program described under the FMI analysis differs from the current Project, the benefit-cost ratio can still be seen as a useful benchmark. The FMI analysis assumed an investment of roughly USD $19 million (investment and incremental operations.) Based on global experience and expert opinion, an increase of 0.5% in
40 Ibid. 41 Perrels, Adriaan (2011). “Social Economic Benefits of Enhanced Weather Services in Nepal.” An FMI report for the Finnish Nepalese Project (FNEP).
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agricultural productivity was assumed in the FMI study. Given the very low base in Nepal, both in terms of available agrometeorological information and current agricultural productivity, there is clear potential for gains of well over 0.5% to be achieved if accurate forecasts and effective advisories can be delivered. FMI’s benefit-cost ratio can therefore be considered conservative. With reference to the current project, it’s investment of USD $31 million includes an agricultural management information system that delivers targeted, timely and usable information to farmers to enhance their productivity. The FMI investment scenario did not include specific activities to develop water, weather and climate products for agriculture. Given the prominence of agriculture in the benefits stream of this investment, the current project would likely result in greater benefits than the investment assumed under FMI’s analysis. However, even if the FMI benefit stream were assumed against the higher investment costs of this Project, the benefit-cost ratio under the FMI methodology would be over 5. To assess this project, two additional methodologies were applied: a benchmarking methodology and a sector specific methodology. Benchmarking Methodology The benchmarking methodology follows Hallegatte (2012).42 This methodology for calculating the potential benefits of investment in hydromet services and early warning is based on a country’s GDP and current level of hydromet and warning capacity. The methodology points out that to achieve the assumed benefits. Investment would be required in: (1) local observation systems; (2) local forecast capacity; (3) increased capacity to interpret forecasts and translate them into warnings; (4) communication tools to distribute and disseminate information, data, and warnings; and (5) institutional capacity building and increased decision-making capacity by the users of warnings and hydro-meteorological information. The current project will deliver significant investment in all of these critical areas. Three categories of benefits are examined (two of which are quantified):
• Assets: Reduced asset losses from disasters • Productivity enhancement: Other economic benefits • Lives: Reduced human losses from disasters
Assets. Hallegatte found that well functioning, modern early warning systems reduce disaster-related asset losses by between 0.003% and 0.017% of GDP. He posits that the potential benefit of an investment in hydromet and warning systems is therefore the difference between the current protection provided by hydromet and forecasting systems in a country, and the potential reduction in asset losses if the system were modernized. Under this benchmarking methodology Nepal would be considered a low-income country
42 Tsirkunov, V. and S. Ulatov, M. Smetanina, A. Korshunov (2008)
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with a weak system, and would therefore be assumed to capture only 10% of the asset-saving benefits achievable today in a country with a high functioning hydromet and warning system. Potential benefits would thus be calculated as the difference between the potential reduced losses (0.003% and 0.017% of GDP, assuming Nepal corresponds to the global benchmark) and the actual reduced losses which in the case of Nepal would be 10% of that value. For countries like Nepal that are highly vulnerable, global benchmarks based on European information will be underestimates. In addition, in countries with weak safety nets natural disasters have long lasting, indirect consequences when assets are lost or health is undermined leaving households and/or communities significantly disadvantaged. In these cases, better hydromet, forecast and warning systems could also reduce indirect losses, and amplify benefits. We can thus be very confident that global benchmarks are a lower bound for Nepal. Actual natural disaster damage losses in Nepal are estimated to be on the order of 0.13% of GDP.43 Using the likely global benchmark (0.017% of GDP) as a lower bound and a conservative figure of actual losses in Nepal (0.10% of GDP) as an upper bound, and applying the methodology proposed by Hallegatte, potential benefits are estimated to be USD $2.9 - $17.0 million. Economic Benefits. In addition to diminishing disaster losses, modernized hydromet systems can significantly enhance economic productivity. Hallegatte finds that about 25% of world GDP is generated in climate sensitive sectors, i.e., agriculture, mining and energy, construction, and transport. Modernized hydromet and warning systems can benefit these sectors in many ways – from immediate warnings, to seasonal advisories, to infrastructure design and spatial planning. A conservative global benchmark is that modern forecasts add value of 0.1% to 1% in weather-sensitive sectors, which would translate into gains of approximately 0.025% and 0.25% of GDP. In Nepal, climate sensitive sectors represent an even larger share of the economy. Agriculture alone represents about 35% of GDP. Using the likely global benchmark (25% of GDP) as a lower bound for the share of climate sensitive activities in the economy and the actual share of agriculture in GDP (35%) as a high (but still conservative bound), potential benefits are estimated to be USD $42.5 - $59.5 million. Lives. This analysis does not attempt to assign a value to the lives potentially saved by this Project. It is clear, however, that the Project has significant potential to save lives. The UNDP (2009) reports that floods and landslides kill an average of more than 300 people each year in Nepal. This does not include deaths associated with epidemics or fires which could also be mitigated by a modernized hydromet system with targeted forecasts and communications. Fires kill half as many people in Nepal as floods and landslides. Epidemics kill twice as many.
43 The EM-DAT International Disaster Database indicates an average of $25 million in disaster losses over the last ten years, which would be 0.13% of 2011 GDP.
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A benchmarking analysis of the benefits of a modernized hydromet system in Nepal suggests total returns of USD $45.4 – $76.5 million per year. The benefit-cost ratio for the life of the project ranges from 8.7 to 14.6. Type of Benefit
Annual Benefit (USD millions)
Annual Cost (USD millions)
Benefit-Cost
Reduced asset losses from disasters
2.9 - 17
4.9* 8.7 – 14.6 Other economic benefits
42.5 – 59.5
Total 45.4 – 76.5
* Assumes a 15-year time horizon, replacement costs equivalent to 10% of investment costs after the 5-year project investment period, and an incremental operating and maintenance budget. Sector Specific Approach Fires, floods, landslides, epidemics, and thunder/hail storms are the most frequent disasters in Nepal. Modernized hydromet monitoring, forecast and warning systems could help reduce the impacts of all of these events. Over the past three decades, the occurrence and intensity of disasters has increased as well as mortality and injury from natural hazards. The economic cost of natural disasters in Nepal is estimated to be roughly USD $25 million.44 MoHA45 and UNDP46 estimate that 75%-80% of all economic damages arise from flood and weather related disasters such as thunderstorms and hail. Weather and climate related damages can therefore be estimated at about USD $18.75-20 million. Experience in other countries suggests that a conservative estimate of the benefits of a modernized system would be a reduction of 5-10%47 in economic damages caused by natural hazards. This would correspond to an average annual benefit of USD $0.9-1.8 million. This reflects only economic damages averted, it does not address morbidity or mortality, and is therefore very conservative.
44 EM-DAT International Disaster Database 45 Ministry of Home Affairs, Government of Nepal. Nepal Disaster Report 2009: the Hazardscape and Vulnerability. 46 UNDP 2009. 47 This corresponds to the anticipated decline in losses associated with a similar World Bank investment in Russia.
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The investments under this project would also help to enhance productivity for example, in agriculture, hydropower optimization and transportation. In addition it would provide the official data upon which climate risk insurance or agricultural insurance schemes could be built to enhance the resilience of farmers, and encourage greater investment and risk taking to improve agricultural productivity. The Project’s focused effort to provide productivity enhancing information directly to farmers can be expected to increase agricultural output by 0.5% to 1% from its current low base. If agriculture’s share of GDP is 35% then agricultural output is USD $6.6 billion. Looking only at agricultural benefits, an increase in productivity of 0.5% to 1% would correspond to benefits ranging from USD $33 - $66 million. Taking into account only the benefits from natural disaster losses averted and enhanced agricultural productivity, economic benefits would be USD $34 -$68 million per year. The Project benefit-cost (assuming a 15-year time horizon, replacement costs equivalent to 10% of investment costs after the 5-year project investment period, and a full operating budget of USD $3 million) ratio would be 5 – 10, meaning that each dollar invested generates 5 to 10 dollars in benefits. Conclusion Given the scarcity of information and complexity of valuing the economic benefits of hydromet and forecast modernization in Nepal, two different methodologies were applied in the economic analysis of this Project. Both suggest that investment is economically attractive with benefit-cost ratios ranging from about 5-15. Study Benefit-Cost Ratio FMI Analysis, adjusted for project costs 5.2 Benchmarking Methodology 8.7 – 14.6 Sector Specific 5-10
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ANNEX 10: DEBT SUSTAINABILITY ANALYSIS
NEPAL
Pilot Program for Climate Resilience - Building resilience to climate-related hazards 1. The most recent IMF/World Bank Article IV Debt Sustainability Assessment was finalized September 26, 2011. The findings were as follows: Nepal remains at moderate risk of debt distress.48 The baseline external public debt sustainability indicators are more favorable compared to the previous Debt Sustainability Analysis (DSA), and external debt dynamics are resilient to standard stress tests, however total public debt ratios increase gradually over the projection period. External debt indicators breach the thresholds under an alternative scenario developed to analyze risks arising from heightened financial sector stress, highlighting the urgent need to address financial sector vulnerabilities. A prudent fiscal stance remains appropriate, and net domestic financing of deficits should be contained to around 2½ percent of GDP or less. Stronger efforts to improve the absorption capacity for foreign financing would release pressure on the domestic debt market, while structural reforms to boost long-run growth and revenue generation would improve overall public debt sustainability. The DSA results would change if large-scale external borrowing on commercial terms were to arise, for example to fund hydro development. 2. Nepal’s total public debt stock was estimated at US$ 5.6 billion (36 percent of GDP) at the end of 2009–10. This reflected a decline from 60 percent of GDP in 1999-2000. External public debt at the end of 2009-10 was estimated to be US$ 3½ billion (22½ percent of GDP). 3. Under the IMF/World Bank baseline debt projections, Nepal’s debt indicators are well below the indicative thresholds and resilient to standard stress tests. In the near term, the present value of public debt is expected to rise gradually under a baseline scenario. As a share of GDP, the present value of public debt is projected to increase from 28 percent in 2010-11 to 35 percent by the end of 2030. IMF/World Bank projections indicate that debt ratios are set to improve over the long term. 4. The impact of this Project’s debt on Nepal’s debt sustainability would be marginal. The loan that will be taken with this project is US$ 15 million. The loan terms are highly concessional and generate a grant element of 75 percent, meaning that the present value of the amount to be repaid is anticipated to be just 25 percent of the value of the loan today. This would represent an increment of US$ 3.75 million to the current debt stock – less than one-tenth of one percent of the total debt stock (0.07 percent of the total public debt stock, or 0.11 percent of the external public debt stock.)
48 The risk rating is determined using the Low-Income Country Debt Sustainability Analysis (LIC-DSA) framework. Nepal’s fiscal years starts mid-July.
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5. The time scale and structure of the PPCR loan also align favorably with Nepal’s declining debt burden. The terms of repayment (see table below) include a modest service charge of 0.10 percent rather than an interest rate payment, and a repayment period of 40 years with a graduated payment schedule so that the bulk of the loan is repaid in years 20-40. The 10-year grace period and graduated payment schedule mean that the bulk of the repayment will be made in outer years when Nepal’s debt ratios are projected to decline.
a) The service charge is charged on the disbursed and outstanding loan balance. Principal and service charge payments accrue semi-annually to the PPCR trust fund. Service charge is similar in concept to an interest rate b) Grant element is calculated using the IDA methodology (assumptions: 6.33% discount rate for harder loans; 6.43% discount rate for softer loans; semi-annual repayments; 8-year disbursement period) 6. The loan portion of the PPCR will be used to finance durable assets including sophisticated hydrometeorological equipment and the upgrading of buildings, facilities and IT systems required to run a modernized monitoring and observation system.
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This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.
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