FOR OFFICIAL USE ONLY INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROJECT PAPER ON A PROPOSED SECOND ADDITIONAL GRANT

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1 Public Disclosure Authorized Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD2206 Public Disclosure Authorized Public Disclosure Authorized INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROJECT PAPER ON A PROPOSED SECOND ADDITIONAL GRANT IN THE AMOUNT OF US$30 MILLION EQUIVALENT TO THE HASHEMITE KINGDOM OF JORDAN FOR A MUNICIPAL SERVICES AND SOCIAL RESILIENCE PROJECT December 28, 2017 Public Disclosure Authorized Social, Urban, Rural and Resilience Global Practice MIDDLE EAST AND NORTH AFRICA This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank s policy on Access to Information.

2 CURRENCY EQUIVALENTS (Exchange Rate Effective NOVEMBER 30, 2017) Currency Unit = Jordanian Dinar (JOD) JOD = US$1 US$1.41 = JOD 1 FISCAL YEAR January 1 December 31 AF AfD CBO CITIES CPF CVDB DA ESMF ESSRP IBRD IDA IDP ILO FM GOJ IF JRP MDTF MENA MoMA MOPIC MNAF MSSRP MST NGO PM PMU POM SC USAID UNDP WBG YM ABBREVIATIONS AND ACRONYMS Additional Financing Agence Française de Développement (French Development Agency) Community-Based Organization Cities Implementing Transparent, Innovative and Effective Solutions Country Partnership Framework Cities and Villages Development Bank Designated Account Environmental and Social Management Framework Emergency Social Services and Resilience Project International Bank for Reconstruction and Development International Development Association Internally Displaced Person International Labor Organization Financial Management Government of Jordan Innovation Fund Jordan Response Plan Multi-Donor Trust Fund Middle East and North Africa Ministry of Municipal Affairs Ministry of Planning and International Cooperation Middle East and North Africa Vice President Unit for Free-Standing Trust Funds Municipal Services and Social Resilience Project Municipal Support Team Non-Governmental Organization Participating Municipality Project Management Unit Project Operations Manual Steering Committee United States Agency for International Development United Nations Development Programme World Bank Group Youth Monitoring

3 Vice President: Country Director: Senior Global Practice Director: Practice Manager/Manager: Task Team Leader: Hafez Ghanem Saroj Kumar Jha Ede Jorge Ijjasz-Vasquez Ayat Soliman Lina Abdallah Saeed Abdallah, Phoram Shah

4 HASHEMITE KINGDOM OF JORDAN MUNICIPAL SERVICES AND SOCIAL RESILENCE PROJECT TABLE OF CONTENTS I. Introduction... 1 II. Background and Rationale for Additional Financing in the amount of US$ 30 million... 2 III. Proposed Changes IV. World Bank Grievance Redress Annex I: Results Framework and Monitoring Annex II : Procurement Assessment and Mitigation Measures Annex III: Component 1: Municipal Grants Annex IV: Component 1: Innovation Fund Annex V - List of Eligible Municipalities under MSSRP Annex VI Summary of Public Consultations... 46

5 PHApp AuthTbl. ADDITIONAL FINANCINGDATA SHEET Jordan Municipal Services and Social Resilience Project ( P ) MIDDLE EAST AND NORTH AFRICA GSU05 Basic Information Parent Parent Project ID: P Original EA Category: B - Partial Assessment Current Closing Date: Project ID: 31-Dec-2017 Basic Information Additional Financing (AF) P Regional Vice President: Hafez Ghanem Country Director: Senior Global Practice Director: Practice Manager/Manager: Team Leader(s): Approval Authority RVP Decision Please explain Saroj Kumar Jha Additional Financing Type (from AUS): Proposed EA Category: Expected Effectiveness Date: Ede Jorge Ijjasz-Vasquez Expected Closing Date: Restructuring, Scale Up 02-Feb Dec-2020 Ayat Soliman Report No: PAD2206 Lina Abdallah Saeed Abdallah, Phoram Shah Approval Authority The proposed Second Additional Financing (and Restructuring) is fully funded by donor contributions through a Multi-Donor Trust Fund (MDTF). The Parent project was also funded by donor contributions through a MDTF, as well as the State and Peace Building Fund. As such, the Parent project was also approved at the RVP level. Borrower Organization Name Contact Title Telephone Ministry of Planning and International Cooperation (MOPIC) Imad Najib Fakhoury Minister (962-6) minister@mop.gov.jo Project Financing Data - Parent ( Jordan- Emergency Services and Social Resilience- P ) (in USD Million) i

6 Key Dates Project Ln/Cr/TF Status P P TF TF-A3529 Effectiv e Effectiv e Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date 12-Oct Oct Oct Dec Dec Dec Jan Jan Dec Feb-2018 Disbursements Project Ln/Cr/TF Status Currency Original Revised Cancelled Disburse d P P TF TF-A3529 Effectiv e Effectiv e Undisbu rsed % Disburse d USD USD Project Financing Data - Additional Financing Municipal Services and Social Resilience Project ( P )(in USD Million) [ ] Loan [X] Grant [ ] IDA Grant [ ] Credit [ ] Guarantee [ ] Other Total Project Cost: Total Bank Financing: Expected Donor Funding: 8.88 Financing Source Additional Financing (AF) Amount MNA VPU Free-standing Trust Funds Expected Donor Funding 8.88 Total Policy Waivers Does the project depart from the CAS in content or in other significant respects? Explanation No Does the project require any policy waiver(s)? Explanation No Team Composition ii

7 Bank Staff Name Role Title Specialization Unit Lina Abdallah Saeed Abdallah Team Leader (ADM Responsible) Sr Urban Spec. Urban Specialist GSU11 Phoram Shah Team Leader Urban Specialist Urban Development Specialist Lina Fares Jad Raji Mazahreh Amer Abdulwahab Ali Al-Ghorbany Andrianirina Michel Eric Ranjeva Anton Karel George Baare Balakrishna Menon Parameswaran Procurement Specialist (ADM Responsible) Financial Management Specialist Environmental Safeguards Specialist Senior Procurement Specialist Sr Financial Management Specialist Environmental Specialist Procurement Expert FM Expert Environmental Safeguards GSU11 GGO05 GGO23 GEN05 Team Member Finance Officer Disbursement Officer WFALN Team Member Consultant Community Driven Development Team Member Lead Urban Specialist Institutional Development and Governance GSU07 GSU12 Charlene D'Almeida Team Member Program Assistant Operational Support GSU11 Ghada Abdel Rahman Shaqour Team Member Consultant Operational Specialist GSU11 Ibrahim Khalil Dajani Peer Reviewer Program Leader Program Leader MNC02 Julie Rieger Counsel Senior Counsel Senior Counsel LEGAM Mariana T. Felicio Social Safeguards Specialist Senior Social Development Specialist Social Development Specialist GSU05 Marie Roger Augustin Team Member Legal Analyst Legal Analyst LEGAM Neha Dhoundiyal Gupta Team Member Financial Management Specialist Sima W. Kanaan Team Member Lead Social Development Specialist Disbursement Lead Social Development Expert WFALN GSU05 Tobias Lechtenfeld Team Member Social Development Monitoring and GSU05 iii

8 Victoria Ahlonkoba Bruce-Goga Extended Team Specialist Evaluation/Youth Team Member Program Assistant Operational Support GSU05 Name Title Location Locations Country First Administrative Division Location Planned Actual Comments Jordan Ma an Ma an X Added in the 2nd year of implementation Jordan Irbid Irbid X Jordan Zarqa Zarqa X Added in the 2nd year of implementation Jordan Tafielah Tafielah X Jordan Mafraq Al Mafraq X Jordan Karak Karak X Jordan Balqa Balqa X Added in the 2nd year of implementation Jordan Ajloun Ajloun X Added in the 2nd year of implementation Jordan Jerash Jerash X Jordan Madaba Madaba X Added in the 2nd year of implementation Institutional Data Parent ( Jordan- Emergency Services and Social Resilience-P ) Practice Area (Lead) Social, Urban, Rural and Resilience Global Practice Contributing Practice Areas iv

9 Additional Financing Municipal Services and Social Resilience Project ( P ) Practice Area (Lead) Social, Urban, Rural and Resilience Global Practice Contributing Practice Areas Consultants (Will be disclosed in the Monthly Operational Summary) Consultants Required?Consultants will be required v

10 I. INTRODUCTION 1. This Project Paper seeks the approval of the Regional Vice President to provide an additional grant in an amount of US$ 30 million equivalent 1 to Jordan s Emergency Services and Social Resilience Project (P147689). 2. Responding to the request of the Government of Jordan (GOJ) to address the impact of the large influx of Syrian refugees on Jordanian host communities, the World Bank launched the Emergency Services and Social Resilience Project (ESSRP). The project was approved on October 11, 2013 for US$ 52.7 million, with the objective of helping Jordanian municipalities and host communities address the immediate service delivery impacts of Syrian refugee inflows and strengthen municipal capacity to support local economic development. The first additional financing of US$ 10.8 million was approved in December 2016 to scale up project activities, which increased the total project amount to US$ 63.5 million, contributed by six donors over four years. Both the parent grant and the first additional financing grant are almost fully disbursed. Overall, performance has been at least moderately satisfactory. 3. The proposed second additional financing (AF) entails a scale up and a restructuring aimed at continuing the support to deliver municipal services in communities that are hosting large numbers of Syrian refugees. The proposed second AF will also: (i) expand the project's scope to include additional municipalities that have been impacted by the crisis but did not receive any financial support under the ESSRP (Annex 5 provides a full list of municipalities to be included); (ii) place increasing focus on deepening the capacity strengthening efforts to achieve more sustainable, transparent and accountable service delivery; and (iii) focus on financing investments that provide employment opportunities for Syrians and Jordanians and foster collaboration with non-governmental organizations (NGOs) and the private sector through an additional sub-window, innovation funds, under municipal grants that provides project based financing to municipalities on a competitive basis. As such, the proposed second AF will help further achieve the project s objectives while also supporting the Government s commitment towards turning the Syrian crisis into a development opportunity and rebuilding Jordanian host communities 2. To better reflect this developmental approach and added emphasis on enhancing the quality of service delivery and its impact on longer-term development, the revised PDO is to Support Jordanian municipalities affected by the influx of Syrian refugees in delivering services and employment opportunities for Jordanians and Syrians. It is also proposed to change the title of the parent project from Emergency Services and Social Resilience Project (ESSRP) to Municipal Services and Social Resilience Project (MSSRP). The proposed second AF will be financed through donor contributions to a new Multi- Donor Trust Fund the Municipal Services and Social Resilience Project Trust Fund (TF072798) 3. 1 Subject to funding being provided to the World Bank through the Multi-Donor Trust Fund (TF072798). 2 The Jordan Compact, To date, Administrative Agreements have been signed with the Governments of the Netherlands (US$6 million), the United Kingdom (DFID) (US$12.4 million), and the Government of Canada (CAD 15 million, or US$11 million equivalent). In addition, contributions from the United States Agency for International Development (USAID) of US$3 million are imminent. It is expected that the project may receive further additional contributions of US$23 1

11 II. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING IN THE AMOUNT OF US$ 30 MILLION A. Country and Sector Background 4. The latest Jordan census records of 2015 indicate that Jordan is currently hosting nearly 1.3 million Syrian refugees, 80 percent of whom live in host communities. This number represents about 13 percent of Jordan s population. During the first two years of the Syrian refugee crisis which began in 2011, the international community s response focused almost exclusively on providing humanitarian assistance to the refugees, including to those who fled to Jordan. As the numbers of Syrian Refugees joining host communities in Jordan gradually increased, this increase significantly strained the country s systems and structures, adding pressure on basic service delivery in water, sanitation, electricity, solid waste management, and overstretching health and education systems. Gradually, the impact of the crisis on municipal infrastructure deepened, and the socioeconomic impact across Jordan and in particular within host communities worsened. 5. The deepening of the Syrian crisis required an approach that recognized the protracted nature of the crisis and sought to address its impact on the development prospects of the country. The longevity of the crisis will likely translate into mounting costs and ever-increasing challenges to the social and economic fabric of the country. One such challenge is related to mitigating social tensions and fostering social cohesion between refugees and host communities in non-camp, urban contexts. In response, the GOJ took the lead in preparing annual rolling Jordan Response Plans (JRPs) which identified the country s humanitarian and medium-term resilience needs in an integrated fashion. The JRPs serve as a platform for coordinating donor support to the country s response plan to the crisis. Concurrently, the international community started shifting away from short-term assistance towards building resilience of host communities and mitigating the socioeconomic impact on the country s population. B. Relationship to Country and Bank Strategies 6. Consistent with this shift in the overall approach to addressing the Syrian crisis, in February 2016, the GOJ signed the Jordan Compact which put forward a more holistic framework for addressing the crisis; an approach that (i) addresses the wellbeing of the Syrian refugees while responding to the immediate needs of the host communities; and (ii) supports Jordan s growth agenda and longer-term resilience and economic stability. In addition, through the Jordan Response Plan, the GOJ has put together a strategy that combines for the refugee crisis response and long-term resilience into a single plan for each sector, including the municipal sector. 7. Moreover, the Jordan Economic Growth Plan , recently released by the GOJ, aims to put Jordan on a sustainable growth trajectory and ensure its economic resilience in the face of regional turmoil. The objectives include: active citizens with a sense of belonging; safe and stable society; dynamic and globally competitive private sector; efficient and effective government. Bank s engagement through ESSRP has been relevant to the Economic Growth Plan, million (Government of Netherlands US$6 million, Government of United Kingdom US$5 million and USAID US$12 million) in the foreseeable future. 2

12 in terms of improvements in access and quality of basic services and capacity building of municipalities. 8. To help meet the commitments under the Jordan Compact and Jordan Response Plan, the GOJ has requested the World Bank to extend and scale up the ESSRP. The donor community has also expressed its interest in sustaining the Multi-Donor Trust Fund (MDTF) as a critical platform for providing coordinated financing and institutional support to municipalities affected by the crisis. 9. The MSSRP aligns with the World Bank Group (WBG) Middle East and North Africa (MENA) Regional Strategy resilience to Internally Displaced Persons (IDP) & refugee shocks pillar, and adopts a resilience and risk-based approach to social cohesion in urban areas. With the goal of promoting peace and stability in MENA, the WBG s Regional Strategy works on two fronts: (i) addressing the underlying causes of violence and conflict in the region; and (ii) mitigating the urgent consequences, such as the refugees and IDPs, and the destruction caused by wars The MSSRP is also in line with the World Bank Group s Country Partnership Framework (CPF) for Jordan for FY17-22 (Report No JO) discussed by the Board of the Executive Directors on July 14, The CPF acknowledges the challenges facing Jordan as a result of the Syrian crisis and focuses one of its pillars on supporting improvements in the quality and equity of service delivery. As such, a scale up of the ESSRP is fully aligned with the CPF and its targets. 11. Jordan s CPF places high emphasis on gender as a key constraint to achieving shared prosperity in Jordan. Gender disparities underlie a range of issues, from poverty and inequality to labor market dynamics. This operation will seek to contribute to the WBG s effort to mainstream gender and ensure equal opportunities for women and men. The project will ensure that investments financed include investments that will empower women and enhance their agency and capacity to participate in the labor force through skills development and engagement in decision making in the selection of priority sub-project investments. C. Rationale for Additional Financing 12. The proposed second AF is aligned with the Government s commitment under the Jordan Compact, and the JRP to respond to the protracted nature of the crisis. In particular, the MSSRP aligns with the JRP objectives to: (i) strengthen resilience of local governance systems and communities to crisis with a particular focus on social cohesion, and (ii) to create short-term employment opportunities in host communities. The MSSRP operationalizes its support to GOJ priorities as follows. First, by generating employment opportunities and by contributing to the Government s efforts to regularize the work force through alignment with ongoing initiatives. Second, by placing a premium on addressing risks to social cohesion in response to tensions between refugee and host communities and between local communities and administrative authorities. 4 An Exposition of the New Strategy Promoting Peace and Stability in the Middle East and North Africa, WBG/ Shanta Devarajan. December

13 13. The parent ESSRP was successful in supporting PMs to respond to the most pressing municipal services needs, helping them address the most immediate impact of the Syrian crisis. However, given years of under-investment, many of the PMs continue to lack the resources to sustain their services and the quality and efficiency of municipal services continues to suffer from lack of adequate human, financial and planning capacity. In addition, ESSRP was successful in taking into account the needs of host communities by emphasizing community consultations as a basis for making decisions for investments. While the quality of community consultations has improved over the course of the project, such processes have not yet been adequately institutionalized within the PMs. 14. It is with this in mind that the proposed second AF intends to enhance the project s focus on deepening the capacity of PMs to achieve more sustainable, transparent and accountable service delivery, while continuing to support local service provision in the most affected municipalities. The second AF will also expand its coverage to include additional municipalities that were not targeted under the parent ESSRP, but currently face considerable pressure on their services due to an increase in the percentage of Syrian Refugees as per the recent census data. Expanding the scope to include new municipalities will also serve to further institutionalize the project s model of providing multi-year predictable financing to a larger number of municipalities. Finally, it will allow for financing investments that generate employment opportunities for both Jordanians and Syrians. D. Parent Project Status and Performance 15. At this advanced stage of project implementation, ESSRP has already met all, but one of the PDO and intermediate outcome indicator targets, and project implementation has been overall satisfactory. Project supported services have reached 2,036,204 beneficiaries (surpassing the original target of 1,800,000), of whom 253,147 were Syrian refugees, and at least 45 percent of these beneficiaries were females (target 45%). All municipalities that have been participating in the project since the first year have reached their pre-crisis level of per capita investments in roads and solid waste management, and all (100%) PMs have also been clearing annual financial and technical audits without adverse opinion (meeting the respective outcome indicator targets). To date, a total of US$63.15 million has been disbursed, representing 99 percent of donor contributions. The closing date of the ongoing grant was extended from December 31, 2017 to February 28, The indicator Participating municipalities and governorates having emergency management plans was partially achieved: only two municipalities ended up implementing Emergency Management Plans: Irbid and Mafraq. This corresponds to 10 percent of the total 16 PMs. It was agreed to support these two PMs on a pilot basis, with the option to roll out the pilot based on the results of the pilot. Delays in implementing the pilots prevented rolling out in other municipalities. 17. Municipal grants were invested across a range of assets including rehabilitated roads and basic infrastructure, constructed or rehabilitated community spaces including parks, community centers, soccer fields and knowledge centers, and service equipment, basic infrastructure and 4

14 community spaces, enhancing local service delivery. Given the acute shortages in capital investments prior to the crisis, the project provided a critical opportunity for municipalities to upgrade their equipment fleet to be able to address their biggest challenge: managing the substantial increase in the volume of solid waste and wastewater generated by the host municipalities, and the associated public health and environmental implications. Investments in equipment represented an estimated 35 percent of the total value of grants. The remaining funds were used to invest in upgrading strained basic infrastructure including roads maintenance and construction of sidewalks, water drainage systems, retaining walls, and culverts. Opening of new roads was also supported to keep up with the expansion of municipal areas due to construction of new housing units for refugees. Municipalities also invested in building social spaces for youth and children, including soccer fields and parks. Women were particularly targeted through investments in skills development using spaces financed by the project. Several hangers were financed, offering spaces for employing women in sewing workshops and providing spaces for marketing home-based products. A few projects invested in economic activities that generated employment opportunities. 18. Well into its fourth year of implementation, the impact of the ESSRP has become visible in improving municipal services, particularly in smaller municipalities where small investments had a relatively large impact. The project also provided a critical injection of funds that helped offset a significant funding gap that for years has undermined the ability of municipalities to deliver on their basic services. Additionally, the visible improvements helped restore trust between communities and their Mayors. For example, Mayors and municipal council members expressed were more empowered to implement service delivery investments that were proposed and prioritized by the communities, and to have a sense of predictability of funds, for improved municipal budgeting. 19. Despite positive impacts, the findings of independent monitoring reviews (see below) indicate the need to further promote and institutionalize citizen engagement practices. In general, smaller municipalities like Ma an, Sahab, and Naour showed higher levels of satisfaction than some of the large municipalities like Greater Irbid, Mafraq and Ramtha. Independent monitoring points to the need for more rigorous consultation processes that also account for constraints on women s participation in the decision-making process. The new phase will emphasize further institutionalization of these consultation processes. 20. Lessons Learnt: Throughout the four years of the ESSRP implementation, two Government-led joint reviews were conducted - one at the end of the first year of implementation (October 2014) and the other towards the end of the second year of implementation (September 2015). In addition, two independent monitoring reviews were completed by REACH 5, and two post-procurement reviews were carried by the World Bank, in addition to periodic supervision missions. These reviews helped identify implementation bottlenecks such as procurement delays, weak monitoring and general capacity constraints across all levels of project implementation. Such issues were addressed by adjusting thresholds for procurement at different levels of implementation, and the recruitment in the second year of implementation of the Municipal 5 REACH is a sub-division of IMPACT - a leading Geneva-based think-and-do tank, its sister Agency for Technical Development and Cooperation (ACTED), and the United Nations Operational Satellite Operations Programme. REACH was contracted under ESSRP to provide third party monitoring support. 5

15 Support Team (MST) and a Monitoring and Evaluation Specialist. Although the project procured the services of United Nations Development Programme (UNDP) to strengthen the community consultations process, responding to a need reflected in the findings of the independent monitoring, the quality of community consultations varied widely across the different municipalities. Hence, alignment with community needs was not always very evident for the types of investment projects financed. The World Bank addressed this by putting in place a framework to guide a uniform consultation process for identifying investment priorities for the third year of implementation. Both the ESSRP Project Management Unit (PMU), and MST teams supported this process and an additional requirement was introduced under the project, requiring PMs to allocate 15 percent of their grant allocations towards projects that demonstrated direct benefits to the community. 21. Overall, there has been considerable progress over the lifetime of the project in terms of: (i) the quality of consultations; (ii) alignment of investments with community needs; and (iii) quality of monitoring, supervision and reporting. However, several issues emerged that will need to be addressed more systematically in the new phase of the project; namely (i) the need for improvements in the quality and efficiency of service delivery (ensuring allocation of sufficient funding for operations and maintenance O&M) through better project and financial planning; (ii) the need to improve communications around the project s objectives and activities both internally across the different levels of implementation but, more importantly, vis-à-vis the targeted communities and the public at large; (iii) the need to introduce additional measures for strengthening consultation and outreach activities and to ensure that investments are more directly linked with improved social cohesion and resilience; (iv) improved targeting towards women and youth and the integration of the voice of Syrian refugees amongst the served communities; and (v) institutionalizing mechanisms for citizen feedback. 22. To address the issue of better targeting of resources towards services that benefit the community and facilitate investment by the private sector in productive activities, the new phase of the ESSRP will introduce a new sub-window for innovative projects. Funds under this subwindow will only be accessed by municipalities who put forward proposals that meet specific criteria to ensure that outcomes achieved through these investments correspond more directly to the overarching objective of the project. Capacity, efficiency and sustainability issues will be addressed through additional investments in capacity building and institutional support and the provision of additional support to municipalities in areas of community outreach, gender, and project planning. Communications will also be strengthened through the development and implementation of a communications strategy. 23. Since its launch in 2013, the ESSRP s implementation progress has been consistently rated by the Bank s team as Moderately Satisfactory or higher. In addition, all the covenants have been complied with under ESSRP, including audit and financial management reporting requirements. The proposed second AF will build on the capacities vested in the existing institutional arrangements of ESSRP in terms of project management. However, it would augment the monitoring and reporting capacity of the implementing partners through a targeted capacity building plan that includes stronger focus on communications, municipal services delivery management, job creation, oversight of works, and specific attention to gender differentiated needs and demands. The ESSRP has no outstanding covenants and the client has complied with all the fiduciary arrangements required by the Bank. 6

16 E. Consideration of Alternative Funding 24. The main components of the parent project: i) Municipal Grants and ii) Institutional Support and Project Management remain the same under the proposed second AF. The processes for selecting and implementing sub-projects will be strengthened and the nature of sub-projects will focus more on ensuring that services are sustainable and inclusive. In addition, there will be a new sub-component introduced under municipal grant component that will provide project-based financing to PMs selected on a competitive basis depending on a set criteria. However, this does not change the nature or the over-arching objective of the component or the project. In light of this, it is proposed that this new proposed phase of the project be processed as an AF, as opposed to a new stand-alone project. F. The Municipal Services and Social Resilience Project (MSSRP) Theory of Change, Objectives and Project Design. 25. The MSSRP aligns with the WBG MENA Regional Strategy resilience to IDP & refugee shocks pillar, and adopts a resilience and risk-based approach to social cohesion in urban areas. With the goal of promoting peace and stability in MENA, the WBG s Regional Strategy works on two fronts: (i) addressing the underlying causes of violence and conflict in the region; and (ii) mitigating the urgent consequences, such as the refugees and IDPs, and the destruction caused by wars. The two goals are related. If neglected, social tensions between refugees and host communities could erupt into another cycle of conflict; poorly planned and delayed reconstruction could trigger new cycles of conflict and violence The MSSRP responds to drivers of social tensions caused by the local impact of the influx of Syrian refugees at the municipal level, through enhancements in the relevance and quality of municipal services. Foremost, the proximate causes of these tensions include decreasing access to affordable quality housing; economic competition regarding jobs; and perceptions of bias in the responsiveness of the international community. Perceptions of differences in cultural and social norms between refugee and host communities also constitute socio-economic causes of risks to social cohesion. Meanwhile, social tensions also influence access to basic goods and services and livelihood opportunities. As tensions rise, a vicious cycle may be set in motion that works against social inclusion. For example, isolation may become an unfortunate coping mechanism for displaced populations keeping women at home and from accessing the space for participation included in the MSSRP. With economic competition leading to frustration, resentment against refugees is exacerbated. 27. Peoples perception of key issues matters in mitigation of risks to social cohesion. This includes perceptions of how aid is delivered and to whom, and how government systems are seen as being associated with equitable support issues of equity and gendered and generational inclusion, access, fairness of targeting and distribution, quality, appropriateness, and quantity. These public perception aspects and their potential impact on relationships between refugees and 6 An Exposition of the New Strategy Promoting Peace and Stability in the Middle East and North Africa, WBG/ Shanta Devarajan. December

17 host communities place a premium on communication and outreach within the purview of the project and PMs. 28. Activities under the MSSRP are primarily aimed at (re)building trust between urban residents (host and refugee communities) and municipal authorities, in order to address social tensions and, in turn, promote peace and stability. For the purpose of the MSSRP, social cohesion is understood as the nature and set of relationships between individuals and groups (horizontal social cohesion); and between those groups and the institutions that govern them (vertical social cohesion). 7 The focus of MSSRP is on tensions between urban communities and municipal administrative authorities (risks to vertical social cohesion). The proposed second AF furthermore takes account of tensions between refugee and host communities (risks to horizontal social cohesion), to the degree that inclusive community consultations, transparent community decision making, and conflict sensitive communication and outreach can mitigate these risks Under the Theory of Change and Results Framework for the proposed MSSRP, assumptions and indicators have been put in place to track and report on indicators that are associated with the WBG s MENA Regional Strategy Results Framework 9, especially on beneficiary satisfaction with services delivered, access to basic services, and citizen engagement. The proposed second AF level theory of change is as follows: Service delivery: if communities experience improvements in access to (and quality of) services, grievances over resource competition will be addressed, and there will be a corresponding increase in positive perceptions of the other community. Municipal governance: if the municipalities are responsive to the local needs of Jordanian host communities and Syrians, then individuals will be less likely to allow grievances related to perceptions of inequity to exacerbate fault lines of social tensions; Participation, engagement and voice: if the social and economic interactions of Jordanians and Syrians improve, then their mutual positive perceptions and trust will improve. 30. Project Development Objective: The objective of the MSSRP is to Support Jordanian municipalities affected by the influx of Syrian refugees in delivering services and employment opportunities for Jordanians and Syrians. 31. Project Beneficiaries: The project will target 21 municipalities: 14 participating PMs that are already part of the parent ESSRP and an additional 7 municipalities. Therefore, it is expected that the total number of beneficiaries will reach around 3 million, including more than 500,000 Syrians, who represent over 70 percent of Syrians living in host communities other than the Greater Amman Municipality (or 44 percent of Syrians living across the country). 7 Social Cohesion between Syrian Refugees and Urban Host Communities in Lebanon and Jordan, World Vision Some dynamics that may impact on social cohesion, including public media and developments in political and security domains, are outside the MSSRP remit and sphere of direct impact but, as explained, are relevant in the context of the overall goal and aims of the MENA regional Strategy. 9 & MENA Regional Strategy Results Framework 8

18 32. Project Components: The proposed second AF will maintain the parent project s two main components: (i) Municipal Grants; and (ii) Institutional Support and Project Management. There are no major changes to the activities financed under each of these components. The only adjustments with respect to the parent project pertain to the way in which these activities are selected and delivered (including introducing an element of competition for accessing grants and placing greater focus on labor intensive works, in line with lessons learned from ESSRP implementation, as explained below). Component 1: Municipal Grants (estimated US$27 million) 33. Municipal grants will be provided annually for a total of 21 municipalities. While the focus under the parent ESSRP was on the provision of timely delivery of services as an emergency response, the proposed second AF will place higher emphasis on sustainability, responsiveness, and efficiency of services in a way that promotes longer-term resilience 10 and mitigates risks to social cohesion at local levels. This will be achieved by: (i) focusing on more inclusive community consultations to ensure that investments better reflect Jordanian and Syrian women s and men s needs and priorities; (ii) emphasizing that investments made through sub-projects are aligned with municipal strategic planning over the medium-term; (iii) ensuring predictability of funding to allow for better planning that takes into account the cost of operating and maintaining procured assets and longer-term sustainability and resilience needs; and, (iv) encouraging municipalities to use labor-intensive techniques for public works to support the generation of jobs for Jordanians and Syrian refugees. 34. Given the amount of funding that the 14 PMs under ESSRP have already received over the past three years, their allocations under MSSRP, will be set at a reduced per capita amount and the focus will be on maintaining viable levels of service delivery and adequate operation and maintenance of capital investments financed under the ESSRP. The allocations will be further reduced in subsequent years with a view to gradually phase out external assistance and have municipalities better manage their own resources over the course of the second AF. To maximize the efficiency of investments amongst municipalities that have benefited from the ESSRP, the renewal of their eligibility for second and third year grants would be conditioned upon achieving a certain minimum percentage of commitments. New municipalities will receive higher per capita municipal grants commensurate with their needs to rapidly improve their highly stressed local services. In the same vein, new municipalities would benefit from more flexibility in prioritizing their investments. 35. Such sub-projects could focus on, inter alia: (a) enhancements in basic infrastructure including rehabilitation and maintenance of road networks and other urban infrastructure, buildings, parks and economic and social infrastructure; (b) procurement of equipment to support a range of municipal services including solid waste management, maintenance works and sanitation; and (c) delivering improved social services to the community with special focus on women, youth and vulnerable groups. Examples of sub-projects to be financed through municipal grants will include, but not be limited to, procuring solid waste equipment, equipment for improved collection and disposal, small recycling activities, investing in alternative, energy-efficient energy sources, roads improvement, social services and skills development training, particularly those 10 Social, political, economic and physical resilience, including potential impacts of climate change. 9

19 targeting youth and women, recreational and community facilities, public leisure spaces (e.g., tree planting), etc. 36. Under the component, additional efforts will be made to strengthen the processes of planning, implementing and monitoring the proposed investments/sub-projects and to ensure that sub-projects take into account gender-specific needs of targeted communities and incorporate improved design and operations and maintenance plans including on the principle of building back better, to ensure physical sustainability of services and infrastructure against time and natural hazards, particularly flooding. The proposed second AF will provide the municipalities with an opportunity to work on their medium-term strategies linked with investment plans. This will ensure that the proposed investments are aligned with municipalities medium-to-long term vision that takes into account current challenges, such as expansion and highly strained services, as well as potential for city growth and planned development. 37. Municipal investment plans will be presented to the communities during community consultations and the proposed interventions will be prioritized with the communities. The emphasis will be on inclusive community consultations, where women, youth, refugees and other marginalized groups are well represented and their voices are heard. The proposed second AF will also encourage and implement tools for citizen engagement and beneficiary feedback in selected municipalities. The municipalities will be encouraged to include management plans to ensure quality and monitoring of service delivery as well as operating and maintenance plans to ensure sustainability of investments. In addition, municipalities will be encouraged to apply labor intensive techniques in the proposed activities and investments. The process for selection of municipal investments to be financed by the proposed second AF, including guidelines on the consultation process and appraisal criteria, will be detailed in the Project Operational Manual, which will be completed by February 28, An Innovation Fund (IF) will be introduced under Component 1. The IF will finance demand-driven projects that may be multi-year and may involve inter-municipality collaboration. IF projects shall adhere to the following set of principles: (i) robust and inclusive participatory consultations and planning, (ii) provide innovative solutions to local challenges faced by communities, and (iii) contribute directly to the project s outcomes. The IF will also encourage municipalities to (iv) leverage resources and expertise by partnering with CBOs, NGOs, and private sector in promoting improved services and employment opportunities for Syrians and Jordanians. Municipalities will furthermore be encouraged to consider project ideas that have surfaced through other donor-financed engagements, including the USAID-funded Cities Implementing Transparent, Innovative and Effective Solutions (CITIES) project and other similar consultative planning initiatives supported by the European Union, the French Development Cooperation (AfD), and International Non-Governmental Organizations (NGO). 39. Innovation Fund processes and procedures. Initially, the IF will be launched as a pilot during the first year and, subject to availability of additional funds, it could be replicated in a second round. The IF cycle would have a two-step prioritization and selection process. Both steps would require that projects be prioritized and selected based on the following criteria: (i) higher focus on gender-mainstreaming; on females, youth, and marginalized populations as direct beneficiaries; (ii) higher labor content (labor intensive works); (iii) employment generation 10

20 potential for Jordanians and Syrians; (iv) established partnerships with private sectors, NGOs, etc.; (iv) inter-municipal cooperation: and, (v) ensured mechanisms for citizen engagement and grievance redress. It is proposed that US$5 million be allocated for the pilot for an estimated average grant size amounting to US$250,000. Technical support and backstopping to MoMA, CVDB, PMs, and contractors will be provided by the International Labor Organization (ILO), through a contractual arrangement funded under the MSSRP. Component 2 Institutional Support and Project Management (Estimated Amount US$3.0 million) 40. Activities under this component will include: (i) institutional strengthening with Specialists support, (ii) capacity building and trainings, and (iii) technical assistance. Under institutional strengthening, local specialists will be hired (Annex II), to support and strengthen the oversight and monitoring capacity of the PMU and CVDB while providing implementation support to PMs. The 26 PMs will also benefit from customized technical assistance and training to improve the quality and efficiency of their services, focusing on the following key aspects: (i) improved strategic, financial planning, investment/project planning, and safeguards focus, (ii) improved accountability vis-à-vis the communities through the use of citizen outreach and citizen engagement tools with focus on gender-streamlining, (iii) targeting youth and females through inclusive practices and projects in order to strengthen social cohesion between Syrians and Jordanians. Finally, this Component will finance contracts with other organizations for supporting implementation, including contracts with experts in labor-based works investments and YM. The ILO has already produced a range of manuals and instructions tailored to the types of municipal service activities typically implemented in Jordan, and specifically based on a sampling review of implemented activities under ESSRP. Given ILO s unique expertise, it was agreed that the PMU would contract ILO, to develop guidelines and specifications on labor based methodologies for different categories of works in municipal services; (b) provide capacity building for MoMA, CVDB, PMs, and contractors, and technical support on labor-based technology during implementation of works, and monitor progress in achieving the objective of the labor-intensive activities. 41. The MSSRP will closely coordinate with other projects whose aim is to improve municipal governance and enhance financial management capacity. Those include USAID s CITIES and the World Bank financed Advisory Services and Analytics on Strengthening Financial Management Systems to Sustain Service Delivery in Municipalities affected by the crisis. The MSSRP will leverage interventions proposed through these projects targeting many of the PMs under MSSRP, to support its efforts to build the capacity of PMs particularly in areas related to improved financial and strategic management, asset management, accountability, urban development and resilience, community engagement and citizen feedback and any other areas where the existing capacity of MSSRP implementing agencies is not particularly strong. To facilitate that, the MSSRP will ensure that opportunities for capacity building and technical assistance provided by these two activities are extended to all PMs MSSRP PMs. 42. Coordination and synergies with other donor and World Bank financed initiatives: The World Bank is part of an informal donor group that is coordinating donor-financed projects supporting national decentralization efforts and providing institutional support to the municipal 11

21 sector, particularly in the context of the refugee crisis. Through this platform, complementarities between the different interventions are discussed and efforts are made to ensure synergies at the activity level, particularly with the referenced USAID and the AfD financed investment program and sector policy loans. The MSSRP is still seen as the instrument of choice for small-scale interventions that support improvements in community services with opportunities for boosting economic activity and small-scale employment generation initiatives in refugee -impacted communities. An AfD operation, and possibly a future World Bank-financed project aimed at promoting local economic development and addressing marginalization in lagging regions, will focus on larger scale investments and a broader planning approach to promoting regional development. With respect to the Bank s own portfolio, the proposed second AF will leverage a grant-financed project to support improvements in fiscal management working with municipalities impacted by the crisis while looking at vertical municipal financing arrangements. The proposed second AF will also benefit from an ongoing World Bank-supported assessment of gaps in housing stock for different population groups and opportunities for improved housing planning, taking into account the exponential rates of growth of urban centers. The Bank s efforts to support youth engagement will also be addressed by introducing, for the first time across the World Bank portfolio in Jordan, a youth-monitoring component of labor-intensive works and services financed through the proposed second AF. G. Implementation Arrangements 43. The proposed second AF will use the same implementation arrangements as the parent project. The ESSRP is implemented by MoMA with the support of CVDB on fiduciary and safeguards aspects. Adhering to the ESSRP institutional setup, the second AF will be implemented according to the following arrangements: An Inter-Ministerial Steering Committee (SC): The SC will continue to provide strategic direction and exercise overall coordination and oversight at the national level. It will be headed by the Secretary General of MoMA and include key ministries and agencies such as Ministry of Planning and International Cooperation (MOPIC), MoMA, and CVDB. It will continue to include representatives of participating governorates and municipalities (on a rotating basis). The PMU will function as the Secretariat to the SC. The SC will meet at least once every six months to endorse selection of targeted municipalities and list of sub-projects to be financed. The TOR for the SC is being discussed and establishment of the SC for MSSRP will be maintained as a condition of effectiveness. Overall Project Coordination: MoMA will continue to be responsible for overall project coordination, management and reporting. The PMU within MoMA, comprising of a Project Director, a Deputy Director (from CVDB), and a team of specialists in project coordination, M&E, Public Awareness and Communication, Inclusion and Gender, Community Outreach and Citizen Engagement, Field Based Financial management, Project Planning, Procurement, and Project Field Supervision, will be responsible for dayto-day project coordination, management and implementation oversight. These specialists have been hired by the PMU. A Coordinator for the IF will also be placed in the PMU to ensure the successful implementation of this pilot initiative. The overall PMU responsibilities will include: (i) providing support to the SC, overseeing the planning and 12