idocument of the world bank report no: icr2991 implementation completion and results ... · 2016....

iDocument of The World Bank

Report No: ICR2991

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-75630 IDA-44600)

ON A

LOAN

IN THE AMOUNT OF EURO 2.0 MILLION (US$3.0 MILLION EQUIVALENT)

AND A

CREDIT

IN THE AMOUNT OF SDR 3.8 MILLION (US$6.16 MILLION EQUIVALENT)

TO

ALBANIA

FOR A

DISASTER RISK MITIGATION AND ADAPTATION PROJECT

April 30, 2014

Sustainable Development Department South East Europe Country Unit Europe and Central Asia Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective 12/22/2013)

Currency Unit = LEK 1.00 LEK= US$0.0098 US$1.00 = 102.37 LEK

FISCAL YEAR

January 1-December 31

ABBREVIATIONS AND ACRONYMS

AL-DRMAP Albania Disaster Risk Mitigation and Adaptation Project AMDAR Aircraft Meteorological Data Relay APL Adaptable Program Loan ARC Albanian Red Cross CAS Country Assistance Strategy Cat DDO Catastrophe Risk Deferred Drawdown Option CRIF DEMA

Catastrophic Risk Insurance Facility Danish Emergency Management Agency

DFID UK Department for International Development DPL Development Policy Lending EMG Emergency Management Group EC European Community ERR Economic Rate of Return EU European Union FM Financial Management GDCE General Directorate of Civil Emergencies GDP Gross Domestic Product GFDRR Global Facility for Disaster Reduction and Recovery HI Hydrometeorological Institute IGEWE Institute for Geosciences, Environment, Water and Energy INTERREG III EC initiative for interregional co-operation IP IT

Implementation Progress Information Technology

KESH The Albanian Power Corporation MDG Millennium Development Goals MOF Ministry of Finance MOI Ministry of Interior MOPWTT Ministry of Public Works, Transport and Telecommunication MOU Memorandum of Understanding NCEP National Civil Emergency Plan NOC PDO PAD

National Operations Center Project Development Objective Project Appraisal Document

PAO Project Authorizing Official PMT Project Management Team PSC A Project Steering Committee SEE South East Europe SEE CRIF / Facility South East Europe Catastrophic Risk Insurance Facility SEE-DRMAP South East Europe Disaster Risk Mitigation and Adaptation Program SIDA Swedish International Development Agency SIL Specific Investment Loan

SME Small Medium Enterprise SOE Statement of Expenses STA Single Treasury Account SYNOP Synoptic Services TEMP WMO report format UNDP United Nations Development Programme UNDAC United Nations Disaster Assessment and Coordination UN ISDR UN International Strategy for Disaster Reduction WMO World Meteorological Organization

Vice President: Laura Tuck

Country Director: Ellen A. Goldstein Sector Manager: Sumila Gulyani

Project Team Leader: Drite Dade ICR Team Leader: Toshiaki Keicho

ALBANIA Disaster Risk Management and Adaptation Project

CONTENTS

Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph

1. Project Context, Development Objectives and Design ............................................... 12. Key Factors Affecting Implementation and Outcomes .............................................. 73. Assessment of Outcomes .......................................................................................... 124. Assessment of Risk to Development Outcome ......................................................... 165. Assessment of Bank and Borrower Performance ..................................................... 166. Lessons Learned ....................................................................................................... 177. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 18Annex 1. Project Costs and Financing .......................................................................... 20Annex 2. Outputs by Component ................................................................................. 21Annex 3. Economic and Financial Analysis ................................................................. 25Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 28Annex 5. Beneficiary Survey Results ........................................................................... 30Annex 6. Stakeholder Workshop Report and Results ................................................... 31Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ..................... 32Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 37Annex 9. List of Supporting Documents ...................................................................... 38

MAP

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A. Basic Information

Country: Albania Project Name: Disaster Risk Mitigation and Adaptation Project

Project ID: P110845 L/C/TF Number(s): IBRD-75630,IDA-44600,TF-99141

ICR Date: 04/30/2014 ICR Type: Core ICR

Lending Instrument: APL Borrower: REPUBLIC OF ALBANIA

Original Total Commitment:

USD 9.16M Disbursed Amount: USD 8.35M

Revised Amount: USD 9.04M Environmental Category: C Implementing Agencies: Ministry of Interior Cofinanciers and Other External Partners: B. Key Dates

Process Date Process Original Date Revised / Actual Date(s) Concept Review: 02/28/2008 Effectiveness: 06/18/2009 06/18/2009

Appraisal: 03/03/2008 Restructuring(s): 01/31/2012 11/19/2012

Approval: 06/19/2008 Mid-term Review: 10/18/2010 12/07/2010 Closing: 02/28/2012 06/30/2013 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Substantial Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Moderately Unsatisfactory Government: Moderately Satisfactory

Quality of Supervision: Satisfactory Implementing Agency/Agencies: Moderately Satisfactory

Overall Bank Performance: Moderately Satisfactory

Overall Borrower Performance: Moderately Satisfactory

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C.3 Quality at Entry and Implementation Performance IndicatorsImplementation

Performance Indicators QAG Assessments

(if any) Rating

Potential Problem Project at any time (Yes/No):

No Quality at Entry (QEA):

None

Problem Project at any time (Yes/No):

Yes Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Moderately Satisfactory

D. Sector and Theme Codes

Original Actual Sector Code (as % of total Bank financing) Central government administration 35 35 Flood protection 43 43 Non-compulsory pensions and insurance 22 22

Theme Code (as % of total Bank financing) Natural disaster management 67 67 Social risk mitigation 33 33 E. Bank Staff

Positions At ICR At Approval Vice President: Laura Tuck Shigeo Katsu Country Director: Ellen A. Goldstein Jane Armitage Sector Manager: Sumila Gulyani Wael Zakout Project Team Leader: Drite Dade Alison C. N. Cave ICR Team Leader: Toshiaki Keicho ICR Primary Author: Toshiaki Keicho F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The objective of the Albania Disaster Risk Mitigation and Adapation Project (AL-DRMAP) is to strengthen institutional capacities (a) to reduce Albania's vulnerability to natural and man-made hazards; and (b) to limit human, economic, and financial losses due to these disasters. Revised Project Development Objectives (as approved by original approving authority) The PDO was not changed.

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(a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 :

(Revised Jan 2012) Newly produced hydrometeorological products meet WMO standards (Original) Weather forecasting tools fully integrated with daily operational capacities and needs.

Value quantitative or Qualitative)

No assessment has been made.

0.5 million annual (demonstrated economic benefit of public forecasts)

Hydromet data and alerts (flood and forest fire risk indexes) are disseminated to risk managers and data posted on IGEWE website.

Histroric hydromet data have been digitalized and available on the IGEWE website.

Date achieved 02/23/2009 02/28/2012 06/30/2013 06/30/2013

Comments (incl. % achievement)

Target mostly met. Historic hydrolomet data have been digitized and available on IGEWE website. 3-day and 7-day bulletins are published. Real-time data from majority of newly installed monitoring stations are flowing to the database after some delays.

Indicator 2 : (Revised Jan 2012) Revisions to Building Code, bringing them to EU standards (Eurocode 8) are ready for legal adoption. (original) New building codes developed.


Outdated building codes.

Develop codes and training in new building codes provided to first group of 100 engineers.

National plan of revisions developed and approved by MOPWTT

National plan of revisions of building code has been developed and approved by the ministry.

Date achieved 02/23/2009 02/28/2012 06/30/2013 06/30/2013 Comments (incl. % achievement)

Target has been met. Key sections of Eurocode 8 are ready for legal adoption.

Indicator 3 :

(Revised Jan 2012) Catastrophic risk insurance is available to businesses, households and government (original) SEE Catastrophic Risk Insurance SEE-CRIF is established and policies sold to businesses and households.


No catastrophe insurance. 10% penetration rate

CAT insurance infrastructure and regulatory framework in place.

CAT insurance infrastructure and regulatory framework in place.

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approval documents)

Formally Revised Target Values




Target met. The CRIF has been established. Comprehensive earthquake/flood insurance packages have been developed. The insurance is now available as of the end of March 2014.

(b) Intermediate Outcome Indicator(s)



approval documents)

Formally Revised

Target Values



Indicator 1 : Component 1 - Emergency response equipment provided to the response units

Value (quantitative or Qualitative)

None

Emergency response equipment delivered to first responders

All equipment were procured and delivered to the respecitve units.

Date achieved 02/23/2009 02/28/2012 06/30/2013 Comments (incl. % achievement)

Target has been met.

Indicator 2 : Component 1 - Disaster risk action plan and the prioritized investment program formulated


No strategy or investment plan

Strategy and investment program developed

Draft strategy and investment program have been developed.


Target partially met. Draft strategy and investment program will be reviewed and finalized by the new government.

Indicator 3 : Component 2 - Increased availability of weather alerts (for floods and wild fires), real time data and historical data to multiple users


Users do not receive tailored weather products

Fire, weather and flood forecasts distributed to users and historical data digitized

Fire, weather and flood forecasts is distributed to users and historical data digitized


Target partially met. Historic data has been digitized and available. Real-time data still to be transferred to the database.

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approval documents)

Formally Revised

Target Values



Indicator 4 : Component 2 - (New Jan 2012) Institutional capacity of hydromet service strengthened through training


Limited access to international practices and knowledge

Training to hydromet services staff provided

Training to hydromet staff on forcasting was provided.


Target has been met. Training provided to all relevant staff.

Indicator 5 : Component 2 - (New Jan 2012) Hydromet monitoring network modernized


Antiquated manual monitoring network

New monitoring stations installed and the old ones refurbished.

40 new monitoring stations installed and the old ones refurbished.


Target has been met. Data transfer from these stations has been delayed but expected to be operational shortly.

Indicator 6 : Component 3 - EU-compatible building codes, including seismic compliance developed


Outdated building codes

Revisions to building codes developed to comply with Eurocode 8

Eurocode 8 has been developed.


Target has been met. Key sections of Eurocode 8, which deals with seismic compliance, was developed.

Indicator 7 : Component 3 - (Revised Jan 2012) Training for engineers program developed (original) Training for engineers program implemented.


None 200 engineers trained in new code.

Training materials developed.

Training materials were developed and training was delivered in 12 prefectures. More than 200 practitioners were trained.

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approval documents)

Formally Revised

Target Values




Target has been met.

Indicator 8 :

Component 4 - (Rev Jan 2012) All systems (products, distribution system, infrastructure, regulatory framework and public awareness mechanism) ready for launch of catastrophe insurance (Original) Cat insurance policies available to homeowner and SMEs.


No catastrophe insurance

10% of homeowners and SMEs hold cat insurance policies.

Albania becomes a member of SEEC CRIF; catastrophe products developed; regulations and website ready to support catastrophe insurance.

Albania has become a member of SEEC CRIF; catastrophe products have been developed; regulations and website are ready to support catastrophe insurance.


Target has been met. Insurance products are now available as of end of March 2014.

G. Ratings of Project Performance in ISRs

No. Date ISR Archived DO IP Actual

Disbursements (USD millions)

1 06/24/2009 Moderately Unsatisfactory Moderately

Unsatisfactory 0.00

2 03/23/2010 Unsatisfactory Unsatisfactory 0.00

3 11/24/2010 Unsatisfactory Moderately Unsatisfactory 2.42

4 04/30/2011 Moderately Unsatisfactory Moderately

Unsatisfactory 2.42

5 06/22/2011 Moderately Satisfactory Moderately Satisfactory 2.96 6 12/23/2011 Moderately Satisfactory Moderately Satisfactory 3.06

7 06/30/2012 Moderately Satisfactory Moderately Unsatisfactory 4.15

8 11/13/2012 Moderately Satisfactory Moderately Satisfactory 5.36 9 06/25/2013 Moderately Satisfactory Moderately Satisfactory 8.16

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H. Restructuring (if any)

Restructuring Date(s)

Board Approved

PDO Change

ISR Ratings at Restructuring

Amount Disbursed at

Restructuring in USD millions

Reason for Restructuring & Key Changes Made DO IP

01/31/2012 MS MS 3.43

The first restructuring made the following amendments: (i) reallocation between the disbursement categories of the IDA credit and IBRD loan proceeds; (ii) extension of the credit and loan closing dates by 12 months; and, (iii) revisions to the project results and monitoring framework.

11/19/2012 MS MS 5.36

The second restructuring extended the closing date from February 28, 2013 to June 30, 2013.

I. Disbursement Profile

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1. Project Context, Development Objectives and Design

1.1 Context at Appraisal Country context. Albania is vulnerable to a number of man-made and natural disaster risks such as earthquakes, floods and drought. Compounded with the lack of catastrophe insurance, these risks could have devastating effects on Albania’s population, its economy and growth prospects. In fact, the floods in Albania in 2002 recorded economic damage of US$17.5 million. The maximum potential probable losses in Albania from a disaster with a 250-year mean return period (MRP) are estimated at US$2.3 billion for earthquakes and US$1.3 billion for floods. Albania has one of the highest seismicity ratings in Europe. Considering that buildings in Albania were not built to acceptable construction standards, the impacts of earthquakes on the built environment was of major concern. Weather forecasting is intrinsically difficult, as precipitation is naturally highly variable and Albania’s topography enables floods to develop rapidly. The Albanian economy is sensitive to weather conditions, given the importance of agriculture, hydropower, fisheries, and tourism. Despite the serious risks, Albania’s organizational and technical capacities to respond effectively to emergencies were extremely low prior to the project, and the country was not equipped for management of natural disaster risks. Albania’s weather, climate and hydrological services agency (IGEWE) and its products did not meet international standards such as those set by the WMO, and could not contribute to the regional observation data network and forecast models. The IGEWE was lacking the basic monitoring network; the observation data was collected manually, in hard copies which were periodically faxed to the central office; the forecast based on these inputs lacked credibility and accuracy, and the weather alerts were not transmitted to the end-users. The historical observation data, critical to engineering designs and climate and risk assessments, was stored in fragile hard copies and was not accessible when it needs to be. The emergency response authorities lacked adequate technical capacity to respond to disasters, such as frequent floods and wild fires. The responders lacked basic equipment, relying on external assistance from neighboring countries and dilapidated equipment, still in stock from early 1990s. There was no central operational center to coordinate response to disasters that would be linked through modern ITC technologies with any other institutions. Moreover, building codes were outdated and not conforming to the European safety standards. Taking into account high vulnerability of Albania to seismic risks, the Eurocode 8 on structural safety was of particular importance and needed to be urgently updated taking into account very dynamic construction development in the urban centers. The catastrophe insurance market operators have been selling policies which in fact could not be paid out in case a major disaster due to the low accumulated capital and lack of re-insurance. The insurance regulatory framework was not conducive to introduction and development of sustainable catastrophe risk insurance market. In this context, the Albania Disaster Risk Mitigation and Adaptation Project (AL-DRMAP) was developed as part of a regional disaster risk mitigation and adaptation program for South Eastern European (SEE) countries.

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Government strategy. Under communist rule, Albania’s military was responsible for emergency management, focusing mostly on response rather than mitigation or prevention activities. Since the end of the communist regime, Albania has made great strides towards developing an emergency management system. In 1999, to coordinate assistance during the Kosovo refugee crisis, an Emergency Management Group (EMG) was established under the Office of the Prime Minister. After the refugee crisis, the Government dissolved the EMG and passed a series of Laws and Decrees to establish a new emergency management system. In 2001, the Government of Albania passed Law No. 8756, “Civil Emergency Services,” which identifies Government-wide emergency management roles and responsibilities. In 2002 and 2003, the Council of Ministers further clarified Albania’s emergency management system by passing Decision 532, “Liabilities and Tasks of the Civil Emergency Planning and Response Department”, Decision 655, “Establishment and Functioning of the National System Structure on Civil Emergency Planning and Response” and Decision 664, “Criteria and Procedures of Proclamation on the Civil Emergency Situation.” In 2004, with assistance from UNDP/DFID, the Albanian Government developed a National Civil Emergency Plan (NCEP). The plan outlines various phases of disasters, from identifying hazards to activating the National Civil Emergency Service System. The NCEP was approved by the Council of Ministers and given legal status. However, Albania did not have a comprehensive and country-wide disaster risk management strategy, which the project was to help develop. Rationale for Bank involvement. The World Bank has long been engaged in assisting countries to recover from catastrophes and to reduce vulnerability to hazards, primarily natural hazards. From 1984 to 2006, for example, the Bank financed 528 projects that addressed natural disasters, comprising more than US$26 billion in lending. Traditionally, reconstruction assistance has been provided in the aftermath of disasters. However, in recent years, the Bank has shifted its focus toward support for disaster preparedness and mitigation, and catastrophe risk financing. Over time, the Bank has developed specialized expertise and knowledge in the area of hazard risk management. Some key policy tools and knowledge products have been developed by the Bank in partnership with other organizations, including post-disaster damage and needs assessment, hazard and vulnerability assessment, and risk-transfer instruments, among others. Increasingly, in response to requests from client countries, the Bank has shifted its focus to supporting disaster risk mitigation operations. The Bank has prepared a regional South Eastern Europe Disaster Risk Mitigation and Adaptation Program (SEE-DRMAP) framework, of which the Albania Disaster Risk Mitigation and Adaptation project (AL-DRMAP) is the first project. In the Europe and Central Asia (ECA) region, there has been an increased recognition of the importance of the proactive measures for disaster preparedness and risk management. The Bank has supported several programs in disaster risk reduction; the regional SEE-DRMAP together with “vertical” operations, such as the AL-DRMAP, will advance the region’s disaster risk management and adaptation agenda based on the experience gained in ECA and other regions. As part of the regional SEE-DRMAP, this project was designed as the first phase of Adaptable Program Lending (APL), to ensure that Albania was accompanied and supported regionally in its disaster risk mitigation and adaptation work. Higher level objectives to which the project contributes. There is a body of evidence which suggests that disasters have a particularly severe impact on the poor. Natural and man-made disasters are major source of risk to the poor people who tend to live in the disaster-prone areas and are not able to cope with the effects of such hazards. Recurrent disasters erode their already minimal assets and livelihoods. The importance of hazard mitigation was underscored by inclusion in Section IV of the Millennium Development Goals (MDG) Declaration of a goal “to intensify our collective efforts to reduce the number and effects of natural and man-made

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disasters.” In this context, by supporting hazard risk management efforts the project intended to contribute to the objective of poverty alleviation and protection of the most vulnerable groups of societies. Disasters have negative macroeconomic impacts as measured by the cost of damages as a percentage of GDP. This share is much higher in developing countries than in the developed ones. Since disasters pose a threat to economic growth, the project was to contribute to the economic development of Albania by supporting measures that would limit and decrease potential financial, fiscal, economic, and human losses due to disasters. The Country Partnership Strategy (CPS) of Albania for the period of FY11-14 highlights the importance of addressing natural disasters to achieve the country’s development goals. As such, the CPS recognized the reduction of vulnerability to climate change and increasing disaster preparedness as one of the strategy’s three key objectives. The CPS also supports Albania’s integration in the SEE region and the EU. The participation of Albania in the regional SEE-DRMAP through the project was to enhance this integration further. The Bank’s worldwide experience in risk management indicates that there is a direct consequential link between disasters and poverty; the occurrence of disasters hampers achievement of the MDGs. Since disasters may set the country back from its development path and constitute a significant risk to its economic growth, improvements in disaster risk reduction efforts are of key importance to Albania.

1.2 Original Project Development Objectives (PDO) and Key Indicators The AL-DRMAP was the initial project of the broader regional SEE-DRMAP framework. The objective of the AL-DRMAP was to strengthen institutional capacities: (a) to reduce Albania's vulnerability to natural and man-made hazards; and (b) to limit human, economic, and financial losses due to these disasters. The AL-DRMAP, designed as APL, comprised two phases. The first phase was to focus on consolidating and upgrading Albania’s capacity to plan for, mitigate and respond to disasters. This phase was to provide financing for mostly soft measures consisting of activities and investments that will build Government capacity to effectively respond to natural and man-made disasters. The second phase was to be triggered by achievement of the first phase activities, specifically the development and approval of a comprehensive countrywide disaster risk reduction and adaptation strategy which was to define priority actions and an investment program to be implemented in the second phase. It should be noted that this PDO was designed for a longer timeframe including the two phases of the APL, and the first phase AL-DRMAP operation was to contribute to PDO achievement by strengthening the institutional capacities that would help decrease the vulnerability to disasters and limit financial losses by transferring catastrophe risk to the international (re)insurance markets. The achievement of the project objective was originally to be measured by the following PDO indicators:

A Disaster Risk Mitigation Strategy and prioritized Investment Program agreed by Government;

User-assessed value of weather forecasts and disaster alerts (target: US$0.5 million annually);

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New building code developed in accordance with European standards; and, SEE Catastrophic Risk Insurance Facility is established and policies sold to businesses

and households (target: 10% penetration rate).

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification The PDO was not revised during the Project. The Key Indicators were revised at the first project restructuring in January 2012 as shown below. In addition, the quantitative targets to measure the original indicators (such as the user-assessed value of weather forecast and the insurance penetration rate) were dropped altogether as these were regarded as unrealistic.

Original Revised due to Restructuring PDO Level Indicators

A Disaster Risk Mitigation Strategy and prioritized Investment Program agreed by Government

Dropped as PDO indicator, but intermediate indicator has the following: Strategy and Investment Program developed

User-assessed value of weather forecasts and disaster alerts

Revised Newly produced hydrometeorological products meet WMO standards

New building codes brought to EU standards disseminated

Revised Revisions to Building Code bringing them to EU standards (Eurocode 8) are ready for legal adoption

SEE Catastrophic Risk Insurance Facility is established and policies sold to businesses and households

Revised Catastrophic risk insurance is available to businesses, households and government

1.4 Main Beneficiaries The main beneficiaries of the Project are the general public and businesses that are located in disaster-prone areas and are vulnerable to the negative impacts of various types of hazards in Albania. Officials at target institutions are also beneficiaries as they were to get trained and their capacity developed. These institutions include: General Directorate of Civil Emergencies (GDCE) at the Ministry of Interior (MOI), Institute of Geosciences, Energy, Water and Environment (IGEWE) in the Ministry of Education and Science (MOES), the Ministry of Public Works and Transport (MOPWT), and the Ministry of Finance (MOF).

1.5 Original Components The Project was composed of the five components described below to achieve the project objective. It should be noted that this was a blended project which was supported by both an IDA credit and an IBRD loan. The credit financed the main project for disaster preparedness and risk mitigation, and the loan financed the CRIF-related activities under the component 4. The IDA-financed components focused on mitigating catastrophic risk while the IBRD-financed component was to cover those risks that could not be mitigated.

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Component 1: Disaster Risk Management and Preparedness. The component objective was to support capacity building for emergency response mechanism through provision of necessary equipment, and strengthening disaster risk mitigation planning. Specific activities included in the original component are as follows:

Strengthening disaster risk mitigation planning and emergency management o Review and update the emergency response legislative framework o Develop national disaster risk management strategy and investment program o Prepare and implement a public awareness and education program

Enhancement of emergency response capacity o Procure emergency response equipment o Strengthen existing emergency operations center o Prepare feasibility studies for establishment of an emergency communications

system o Develop emergency response procedures o Prepare and implement exercises and training for first responders

Component 2: Strengthening of Hydro-meteorological Services. The component objective was that disaster risk managers (including households, farmers, and forest managers) receive more-timely, more-accurate hydro-meteorological forecasts and services and consequently undertake more-beneficial preparatory measures to limit weather risks. Specific activities included in the original component are as follows:

Increasing accessibility of data Upgrading the monitoring network Developing capacity to prepare forecast products tailored to disaster management

Component 3: Development of Building Codes. The component objective was to reduce hazard risks through development of improved building codes and mechanisms for introduction of improved standards. Specific activities included in the original component are as follows:

Building Code Development. Licensing of Engineers Training of Engineers

Component 4: Catastrophe Insurance. The main objective of the component was to make catastrophe insurance available to Albanian households and SMEs through the establishment of the SEE Catastrophic Risk Insurance Facility, of which Albania will be a shareholder and member. Specific activities included in the original component are as follows:

Securing Albania’s membership in the SEE Catastrophic Risk Insurance Facility by paying membership contribution

Establishing the presence of the Facility in the Albanian insurance market Establishing an interactive consumer education website on disaster risk and disaster risk

insurance

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Component 5: Project Management. The component was to finance some of the project management costs, such as the procurement and financial management consultants, the monitoring and evaluation activities, communication expenses, reporting and audits.

1.6 Revised Components Revision of Components. Some of the planned activities were revised/ dropped from the original components. The table below shows the summary of changes made to the components. The details of the outputs by component are described in Annex 2 of this report.

Original Revised Component 1

-

Added Procurement of fifty boats with motors for the first responder teams in order to cope with the heavy floods in Shkodra Region in December 2010

Review and update the emergency response legislative framework

Revised The emergency response legislative framework will be reviewed as part of drafting the strategy and investment plan

Prepare and implement a public awareness and education program

Dropped

Develop emergency response procedures Dropped Prepare and implement exercises and training for first responders

Dropped

Component 3 Licensing of Engineers Dropped Additional study to respond to flood events during the Project. As part of the response to the major flood events which occurred in January and December 2010 during the project period, the World Bank agreed to conduct a study through Global Facility for Disaster Reduction and Recovery (GFDRR) funding in order to assist the Government of Albania to prepare a comprehensive flood risk assessment and management plan for the Lower Drini-Buna Basin, including options for flood risk mitigation measures. The Study includes the details of the proposed works to be undertaken in the medium term (within a five-year period). This includes drawings at preliminary design level, together with cost estimates and maps showing the calculated extents and depths of residual flooding throughout the Study Area with the implementation of these works. In addition to the proposed works for the medium term, the Flood Risk Management Plan for the study area, as set out in the study report, includes recommendations for non-structural and longer term measures to reduce the risk and impact of flooding in the Basin. Terms of reference have been prepared for additional studies required in respect of such measures.

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7 Other significant changes The Project underwent two restructurings. First restructuring (January 2012). The first restructuring made the following amendments: (i) reallocation between the disbursement categories of the IDA credit and IBRD loan proceeds; (ii) extension of the credit and loan closing dates by 12 months; and (iii) revisions to the project results and monitoring framework. However, this restructuring did not entail revisions to the PDO, total project costs, safeguards category, or the financing percentage. The amendments aimed at improving the results framework by bringing more consistency and realism, reflecting the proposed loan and credit closing date extension and reallocation, and the implementation status at that time. With regard to the reallocations within the IBRD loan, these were necessitated by the exchange rate fluctuations of US$ vis-a-vis Euro (the currency of the loan), which resulted in a lower than agreed equity contribution to the Catastrophe Risk Insurance Facility (US$1.779 million instead of US$2 million). Therefore, the Government of Albania requested Euro 185,000 to be reallocated from Consulting Services to the Membership Contribution under the project. Most activities for this operation were at various stages of procurement or had been contracted. However, the completion of all initiated activities was anticipated to go beyond the original closing date of February 28, 2012. Therefore, a 12-momth extension was sought and approved. Second restructuring (November 2012). The second restructuring extended the closing date from February 28, 2013 to June 30, 2013. Even though the Project showed good progress in spite of the initial delays, the completion of a number of critical activities (such as the installation of the hydromet network, delivery of last tranches of the emergency response equipment, development of the insurance products, development of a national disaster risk management strategy and investment plan, etc.) fell on or just about the previous closing date of February 28, 2013. Therefore, it was necessary to extend the closing date once again. Extension of ICR deadline. In December 2013, an extension of the ICR deadline from December 31, 2013 to April 30, 2014 was sought and approved. The extension was justified due to the fact that the factors beyond the project's control are somewhat delaying the achievement and assessment of full project results. These factors include: (i) the general election in June 2013 and subsequent change in government in September 2013, which delayed a handing-over of some of the assets created under the project and putting in place the operational arrangements for them; and (ii) delays in operationalization of the regional re-insurance company (Europe Re) under the Southeastern Europe Catastrophic Risk Insurance Facility (SEE-CRIF).

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry Background analysis. Lessons learned from previous sector projects were adequately reflected in the project design, including: (i) focusing on ex-ante disaster risk reduction measures considering the importance of risk reduction acknowledged by the international community;(ii) adopting comprehensive and strategic approach to disaster risk management through integrated multi-hazard disaster risk reduction; (iii) adopting a programmatic regional approach rather than individual country approaches for effectiveness; (iv) considering the importance of dissemination

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of high-quality forecasts; and (v) considering the importance of operation and maintenance of hydromet investments. Based on these lessons learned, the project design adopted a multi-hazard approach with focus on disaster risk reduction. The project design was also to enable Albania to participate in the global exchange of data and information through WMO. Funding arrangement. As noted, the AL-DRMAP was designed as a part of the regional SEE-DRMAP. This project was supposed to be the first of a two-phase Adaptable Program Loan (APL) for Albania. The APL instrument was determined to be the appropriate lending instrument during the project preparation phase, since it allows for phased accessibility of funds for the investments increasing country preparedness for and resilience to hazards and disasters. The first phase was to establish a coordinated and consistent policy framework and strengthened institutional capacity for second phase investments in equipment and infrastructure, and the capacity to respond. This phasing of projects with trigger requirements to lead to the second phase through the APL was considered necessary to ensure that the relevant institutions of the Government of Albania have the necessary strategy, and institutional arrangement and capacity are in place for further investments for disaster mitigation measures. Risk assessment. The overall project risk was considered Moderate at appraisal, with three key risks identified. These risks included: (i) weak institutional capacity and governance; (ii) limited cooperation and coordination among government agencies; and (iii) lack of regional participation in SEE-CRIF. While these risks were rightly identified, it appears that the Bank underestimated the second and third risks, which were main causes of the delays in project implementation. Effectiveness Delays. The effectiveness deadline was extended four times, and the Credit and the Loan finally became effective in June and November 2009, respectively. The delays were caused by the borrower’s inability to meet the effectiveness conditions such as: (i) establishment of a project management team (PMT) at GDCE and implementation teams at three other agencies; (ii) establishment of project steering committee; (iii) establishment of a DRM strategy working group; and (iv) establishment of SEE-CRIF as a legal entity (this last one was an effectiveness condition for the Loan). Particularly, recruitment of a procurement specialist critical to make the PMU functional took a very long time and this procurement was finalized only in March 2010 (21 months after the Board approval). Quality at Entry. There are mainly two aspects related to Quality at Entry, which are: (i) project design; and (ii) project readiness. The project design was appropriate as it rightly focused on building institutional capacities as a prerequisite to proceed to an investment operation in this field. The project design covered several different fronts such as disaster preparedness, hydro-meteorological services, building codes and risk transfer, which made it mandatory to involve multiple agencies and caused some complexity. However, these were the essential and critical elements of disaster risk management in Albania, and this design was deemed necessary. On contrary, project readiness was inappropriate. In addition to the lack of institutional arrangements critical to implementing the project (mentioned above in the section of Effectiveness Delays), neither the TORs for key technical assistance/studies nor technical specifications for emergency equipment/automated hydro-meteorological monitoring stations were prepared during project preparation. The need for a Project Operational Manual was only raised after the project became effective

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2.2 Implementation Inception of the Project. The project experienced significant delays in the initial years of implementation due mainly to the lack of effective institutional arrangements and low readiness described above. The only notable disbursement under the project for the first 2.5 years after Board approval was the payment for the membership contribution to the SEE-CRIF out of the Loan element of the project. As a result, the project was in a problem status for most of the first three years with unsatisfactory or moderately unsatisfactory ratings for both PDO and IP. Both PDO and IP were upgraded to moderately satisfactory in June 2011 (only eight months before the original closing date) as project key activities started to move. Mid-Term Review. The mid-term review was conducted in December 2010, two months after the original schedule. Given the significant delays in implementation, not many project activities were underway when the mid-term review took place. Therefore, the mid-term review focused on identification of the necessary reallocation of project funds between categories, which included: (i) an increase in membership fee for SEE-CRIF necessitated by the fluctuation in currency exchange rate; and (ii) an increase in Goods category to procure more emergency equipment to respond to the serious floods in Shkodra Region. The mid-term review also led to some minor adjustments to the project activities such as: (i) allocation of more funds from IT/database establishment to the extension of the hydro-met monitoring network under the component 2; and (ii) dropping of licensing engineers under the component 3. The mid-term review also facilitated revisions to project’s results framework. Restructuring. While the mid-term review in December 2010 identified the necessary reallocation of project funds, the formal project restructuring (the first restructuring) was approved only in January 2012. This delay was mainly caused by the lack of government’s action to send a formal letter to the Bank to request this reallocation. While the restructuring was approved by the Bank and formally communicated to the government in January 2012, the modifications in the project were not confirmed by countersignature of the government for a long time. The ambiguity of the effectiveness of the modifications, and particularly, in the reallocation of the Loan and Credit proceeds, caused a stalemate in payments and signing of new contracts, further delaying implementation at the very late stage of the project. As a result, IP was downgraded to moderately unsatisfactory rating in June 2012 while PDO was kept as moderately satisfactory. The countersignature by the government was finally provided in September 2012 (IP was upgraded to moderately satisfactory at this point), by which time it was apparent that some project activities could not be completed by the new closing date (February 28, 2013) extended by the first restructuring. Subsequently, the second restructuring was necessary to extend the closing date for another six months till June 30, 2013. SEE-CRIF. There were also delays in establishing the regional SEE-CRIF and operationalizing the re-insurance company (Europe Re). However, this was beyond the control of the Albanian Government or any implementing agencies of the project. The Europe Re is now licensed under the Swiss law and has become operational as of the end of March, 2014. Partnerships. Overall, after a few years of intense efforts from the Government and Bank side, along with other donors and international institutions, the modest project resources substantially improved Albania's institutional capacities to deal with disaster risks. This was possible due to the excellent collaboration with the Italian Civil Protection, which tailored the Technical Assistance financed by the Government of Italy to supplement the Bank-funded project, particularly in relation to the Components 1 and 2. The project was also developed and implemented in close collaboration with the UNISDR and WMO. During the supervision phase, joint missions with

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Italian Civil Protection and WMO were carried out along with closely consulted implementation support provided to the beneficiary institutions.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization Design. The overall responsibility for project monitoring and evaluation was vested with the PMT at the MOI, supported by the implementation teams in the IGEWE, MOF, and MOPWT based on the institutional arrangement of the Project. The original design of the project’s M&E included the public surveys of households, farmers, and forest fire managers to assess the availability of disseminated information and emergency warning and the value of such new information to the users. Implementation. Project reporting substantially improved towards the final years of project implementation. PMT/M&E specialist prepared and sent to the Bank the Progress Reports on a regular basis during this period. Besides the usual reporting on the progress of implementation of activities per component, the last two project reports provided detailed information on the achievement of the project objective based on outcome and intermediate indicators outlined in the project results framework. A comprehensive Implementation Completion Report was also provided, with thorough analysis of project performance and useful lessons learnt. Utilization. Given that project implementation was delayed substantially and most project activities took place in the last two years, there was little utilization of results of project’s M&E which focused mainly on monitoring progress and outputs of project activities, rather than outcomes/impacts. The original results framework contained some measurable indicators with yearly targets, such as: (i) user-assessed value of weather forecasts; (ii) percentage of people aware of availability of seven-day forecasts; and (iii) penetration rate of the catastrophic risk insurance. But it was not possible to monitor these indicators due mainly to the implementation delays, and these indicators were eventually dropped, let alone the public surveys mentioned above. It is still a good idea for each agency to monitor some of these original indicators in the future once the project benefits are fully realized.

2.4 Safeguard and Fiduciary Compliance Safeguard policies. The Project’s compliance with the Bank’s safeguards policies were reviewed at appraisal to ensure that all potential issues had been taken into account in the Project’s design. In sum, the Project did not trigger the Bank safeguard policies. However, as a matter of due diligence, it was decided that the disaster risk mitigation strategy to be developed under the project would identify whether future displacement/resettlement would be likely to be called for, and if so, should indicate the actions needed to carry this out in compliance with the requirements of OP 4.12. Environmental category rating. The Project was a technical assistance project and as such, under OP 4.01, was determined to be environmental assessment category “C.” If the project were to advance to the APL second-phase, which would involve civil works, the PMT implementation teams in consultation with the World Bank project team would define and prepare the appropriate safeguard due diligence requirements, in compliance with World Bank safeguard policies. Procurement. The procurement performance of the Project was moderately satisfactory. The procurement capacity in the PMT was sufficient. However, delays were encountered with the selection of the consultants for various activities. These delays, according to the PMT, were attributed mainly to the appointment of members of Evaluation Committee from different

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ministries. The procurement documents are archived to the MOI’s central archive following the rules of this institution. The filing was made in a satisfactory way, although there is room for a better segregation of contracts’ files indicating the beginning and completion of each procurement procedure and preparation of an index for each folder. A post review was conducted jointly with financial management staff and its results were recorded in a post-review report. Financial management. The project disbursement and financial management arrangements were adequate including project accounting and reporting arrangements, internal control procedures, planning and budgeting, and audit. Therefore, the financial management arrangements are considered as “satisfactory”. The Government also ensured a smooth closure of the project with appropriate staffing arrangements during the grace period, financial management related manual and electronic documentation handover and archive, final audit period arrangements, etc.

2.5 Post-completion Operation/Next Phase Finalization of the Disaster Risk Management Strategy and Investment Plan. The project was supposed to finance a Technical Assistance to develop a National Disaster Risk Management Strategy and Investment Plan. The original idea was that the Phase 2 of the APL would finance implementation of the Strategy and Investment Plan. In fact, this was a dated covenant, which was to be achieved by January 31, 2010. However, delays in preparation of TORs and the subsequent procurement process led to the very late start of the consultancy (only in late 2012). As a result, a draft strategy and investment plan were drafted but not finalized before the twice-extended closing date of June 30, 2013. This activity needs to be finalized by the newly-formed government, as the document will not only provide the strategic framework for disaster risk management for the five upcoming years, but more importantly will help prioritize actions to address major disaster risks in the country. This includes consideration of available government resources, its capacity for operations and maintenance, as well as future resources to be mobilized. The draft version of the strategy exists, which will need to be reviewed, revised, finalized and adopted by the new government. The Bank is willing to support this strategy formulation further if the government is interested. As the Strategy and Investment Plan have not been finalized, it is uncertain at this point whether there will be the Phase 2 operation of the APL as originally planned. Operations and maintenance of hydro-meteorological observing stations. The project financed modernization of 40 automated hydro-meteorological monitoring stations across the country. Project completion coincided with the general election in June 2013 in Albania. The election and subsequent change in the government have delayed a handing-over of these monitoring stations and particularly, operational arrangements for them were not in place immediately. A new head of IGEWE was appointed by the new government only in November 2013. All hydro-meteorological data was supposed to be transmitted by General Packet Radio Service (GPRS) which requires fast speed internet or bandwidth to transmit the data from station locations to the internet where it is saved in a data base. Monthly costs of the required high internet bandwidth are estimated to be about Euro 1,000 for collecting and processing the data from 40 hydro-meteorological observing stations. The new government approved the operational budget of IGEWE in early April 2014, and it has been reported that the real-time data from the majority of these stations are now flowing as of the middle of April 2014. Real time data from the 6 satellite stations is currently being transmitted directly to EUMETSAT in Germany and the data is forwarded onto the WMO GTS. The contractor needs to establish

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functionality for the GTS message switching software at IGEWE and train the staff how to operate and maintain the downlink and communications software. This will allow IGEWE to receive the 6 synoptic stations continuously via the downlink at IGEWE and re-transmit to WMO by way of the GTS. There are some problems with equipment malfunctioning (for about 8 stations out of 40), which need to be fixed. Also a lack of proper sensor data calibration needs to be done by the vendor in cooperation with IGEWE. In late March 2014, the Bank and IGEWE agreed on an Action Plan to fix these problems and to put in place all operational arrangements including staff training in the operations and maintenance of the hardware and software. IGEWE website and data platform. The IGEWE website is running, and 3-day and 7-day bulletins are published. Ten years of historical meteorological data and 20 years of historical hydrological data were digitized under the project. According to WMO, the real time data collected by this project needs to be merged with the digitized data to meet the CDMS WMO standard. As of the end of March 2014, both the real time data and the archived historical hydrometeorological data are stored in standard SQL DBMS format. This meets the WMO standards and is being merged into a singular and remotely accessible (password protected) database. IGEWE needs to maintain the website and database from now on. Legal adoption of building codes. Key sections of the Eurocode 8 (earthquake resistance) were prepared, including national parameters, under the project for adopting European standards of building designs. A national plan for revisions of building codes has been developed. The code was widely disseminated and training was provided for local engineers and architects. The code, when made effective, will be applied to all new buildings and this represents a major step forward. The Ministry of Public Works also translated with its own resources the Eurocode 0 (basis of structural design), 1 (actions on structures), 2 (design of concrete), and 3 (design of steel) into Albanian language. The next steps required for the legal adoption of Eurocode 8 are to update other Eurocodes which are referred to in Eurocode 8 and to coordinate with national and EC institutions for their formal adoption. CRIF. Albania is a founding member and part owner of the Europe Re, a reinsurance company created under the SEE-CRIF and now licensed and operational in Switzerland. About half of the existing private insurance companies in Albania have already registered with the Europe Re. In the meantime, the Bank together with Europa Re will help the technical staff of the Ministry of Finance to understand better the consequences of different disaster scenarios and explore further disaster risk financing instruments available to the Ministry that can complement the residential earthquake insurance scheme developed under the SEE-CRIF program. The Ministry will also review the education and communication materials prepared by the Europa Re for the public awareness and education campaign for catastrophe risk and catastrophe insurance products in the country.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation The Project’s overall objective, that is “to strengthen institutional capacities to reduce Albania’s vulnerability to natural and man-made hazards and to limit human, economic, and financial losses,

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due to disasters,” was considered highly relevant to the situation of Albania and remains so at completion. The devastating flood in Albania which happened during project implementation in 2010 also showed the importance of effective hazard risk management of the country. The overall objective continued to provide the logical links to the relevant policy, sectoral project context and constitutes the broad development impact, to which the project was designed to contribute in national and sectoral level. The project design focused on capacity building of various agencies responsible for DRM, with modest funding, as a prerequisite for bigger investment operations, which is regarded as the right approach.

3.2 Achievement of Project Development Objectives By the middle of April 2014, the Project mostly achieved the development objective to strengthen institutional capacities to reduce Albania’s vulnerability to natural and man-made hazards and to limit human, economic, and financial losses, due to disasters. According to the revised results framework, PDO was to be achieved mainly through newly produced hydro-meteorological products, revisions to building code to EU standards and ready for legal adoption, and making catastrophic risk insurance available to business, households and government. While project implementation was significantly delayed and further follow-up by the Government of Albania is required for some operational aspects as described below, the Project was able to meet most of the targets of the PDO Level Results Indicators by the time this ICR is being prepared. Details on achievements of the PDO indicators (revised ones after the first project restructuring) are described below. PDO Level Results Indicator: Newly produced hydrometeorological products meet WMO

standards. Baseline: Severe weather products and warnings tailored to users are not available Target: Hydromet data and alerts (flood and forest fire risk indexes) are disseminated to risk

managers and data posted on IGEWE website Current Status: The digitalization of Hydrometeorological data has been completed. 20 years of

hydrological data and 10 years (2001-2011) of meteorological data have been digitized. The data was undergone quality analysis and has been published on the IGEWE website for user access. 40 hydrometeorological observing stations have been installed, and the real-time data from the majority of these stations are now flowing. 3-day and 7- day bulletins are published and posted on the website for user access. Forest Fires Warning Bulletin during the summer and a Meteorological Warning Bulletin during the wet seasons are issued.

In addition to the achievements described above, IGEWE also needs to ensure that the operational Action Plan, on which the Bank and IGEWE agreed, will be fully implemented to sustain the project benefits. This includes, among other things, maintenance of the website and database, staff training, calibrations of monitoring stations, and fixing of some malfunctioning equipment. PDO Level Results Indicator: Revisions to Building Code, bringing them to EU standards

(Eurocode 8) are ready for legal adoption. Baseline: Outdated building codes Target: National plan of Revisions developed and approved by MOPWT Current Status: National plan of revisions of building code has been developed. A special decree

has been issued by MOPWT to integrate Eurocode 8, 0-3 into national legislation based on the national plan. Key sections of the Eurocode 8 for earthquake resistance were prepared with project funds and Eurocodes 0, 1, 2, and 3 were translated with MOPWT budget.

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PDO Level Results Indicator: Catastrophic risk insurance is available to businesses, households

and government. Baseline: No catastrophic insurance Target: CAT insurance infrastructure and regulatory framework in place Current Status: The CRIF has been established and catastrophic insurance infrastructure and

regulatory framework are in place. More than half of the existing private insurance companies in Albania have already registered with the Europe Re. A regional arrangement, especially operationalization of the Europe Re (the reinsurance company under SEE-CRIF), has also been completed as of the end of March 2014. Comprehensive earthquake and flood insurance packages have been fully developed with view to provide homeowners and SME’s with high credit quality coverage. An innovative underwriting platform and consumer education website on disaster risk and disaster risk insurance have been developed and is made available to the government and the public.

In addition to the achievements of PDO level indicators described above, other project outputs have contributed to or are expected to contribute to strengthening of institutional capacities (therefore, PDO achievements). Such outputs include: (i) procuring emergency equipment such as earth-moving vehicles, multi-purpose fire trucks, and motor-boats for flood response teams; (ii) equipping the national emergency operations center with the IT hardware and office furniture; (iii) various training activities; (iv) feasibility studies for emergency communication system; and (v) draft national disaster risk management strategy.

3.3 Efficiency Economic analysis to calculate current Economic Rate of Return (ERR) based on the actual ex-post project data was conducted using three different methodologies: (i) benchmarking analysis; (ii) sectoral analysis; and (iii) required benefits analysis (detailed explanation of these methodologies is in Annex 3). The analysis assumes that the annual operation and maintenance cost is 10 percent of the investment cost, and that the project lifetime is 20 years after the completion of the project. The result of the ex-post ERR calculation is in the table below.

Method Annual Estimated Benefits ERR NPV

Benchmarking 4.32 - 42.19 US$ million 34 – 120 percent 14.63 - 196.63 US$ million

Sectoral analysis 2.13 - 4.75 US$ million 20 – 37 percent 4.12 - 16.72 US$ million

Required benefits 1.40 US$ million 12 percent 0

The ERR results, both from benchmarking methodology and sectoral analysis, suggest that the Project is economically feasible. The lowest ERR estimate from the benchmarking methodology is 34 percent and the lowest ERR estimate from the sectoral analysis is 20 percent, both of which are well above the 12 percent threshold. Therefore, the efficiency is rated substantial.

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Financial analysis was not conducted, as this is not a revenue-generating project. Further details of the economic analysis are described in Annex 3.

3.4 Justification of Overall Outcome Rating Rating: Moderately Satisfactory The overall outcome rating is moderately satisfactory, combining relevance, PDO achievement, and efficiency described above. Relevance remains high, PDO has been mostly achieved despite some delays in implementation and putting in place operational arrangements, and efficiency is substantial.

3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development Natural disasters disproportionately affect the poor and the vulnerable including women and children. While the project was not particularly targeting the vulnerable groups of the society, strengthening the government capacity in disaster preparedness and response can benefit the society as a whole. This is what this project was intended for. The project’s original design included development of school curricula teaching students on disaster risks and actions required in emergencies. Experience from other countries shows that educating children on this subject greatly contributes to overall public understanding on what actions to take before, during and after an emergency and saves more lives than just children’s. It is regrettable that this activity was dropped at the end due to the lack of timing, but should be included in the future operation. (b) Institutional Change/Strengthening The lack of operational capacity (inadequate staffing and budget) for weather-related services at IGEWE, as a research-oriented institute under the Ministry of Education, was identified as a major risk at appraisal. This issue was raised from time to time by the Bank team during project implementation. While the project did not intend any explicit institutional reform, WMO visited Albania in July 2010 to assess and recommend options for reforming IGEWE or establishing a new institutional structure for more effective hydrometeorological services. These options are: (i) significantly strengthening IGEWE and create an organizational structure focusing more on operations of hydrometeorological services; (ii) create a new government agency responsible for hydrometeorological services under a line ministry such as the Ministry of Environment; and (iii) create a multi-agency model where IGEWE provides technical support in hydrology, meteorology and climatology by doing research in these fields. The government may wish to consider these options in determining a longer-term institutional arrangement for Albania’s hydrometeorological services. After the general election in June 2013 and subsequent change in government, MOPWT was reorganized and a department responsible for building codes has been shifted from MOPWT to the newly-created Ministry of Urban Development and Tourism. Now the new ministry is responsible for any follow-up actions such as formal adoption of the new building codes for seismic resistance to make the codes enforceable. (c) Other Unintended Outcomes and Impacts (positive or negative) Not applicable.

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3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops No beneficiary survey was conducted. But according to the Project Appraisal Document, at least two surveys (at mid-term and project closing) were supposed to be conducted to measure use-assessed value of weather forecasts and disaster alerts. The original results framework included, as an outcome indicator, the user-assessed value of these improved weather services under the Component 2 with a target of US$0.5 million annually. But implementation of the Component 2 did not really start before the mid-term review, and this indicator was dropped at the first project restructuring in January 2012. A stakeholder workshop was planned at project closure to discuss implementation experiences and lessons learned. However, this did not take place due to the fact that project closure coincided with the general election and subsequent change in government. It is expected that a workshop will be held sometime later in 2014 in coordination with the new government and key stakeholders to disseminate the lessons learned and also to discuss the draft national disaster risk management strategy.

4. Assessment of Risk to Development Outcome Rating: Substantial The main risks to development outcome are related to institutional and operational aspects of various project entities and activities. Most project activities would need serious follow-up actions in order to sustain the project benefits on a long-term basis and to really achieve development outcomes. These are already highlighted in the section 2.5 above, but one critical example worth repeating here is the need to secure adequate staffing and operational budget on a continuous basis for IGEWE. The World Bank is now working with the new government, but because the follow up actions are not yet fully completed, the risk is deemed substantial.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Moderately unsatisfactory The Bank performance in ensuring quality at entry is moderately unsatisfactory. While the Bank ensured that the project design was generally sound, project readiness was totally lacking. The project design, while complicated, was regarded as necessary to adopt a multi-hazard approach crucial for Albania exposed to various types of hazards. Consequently, the project had to involve multiple implementing agencies, such as the MOI, MOPWT, IGEWE, etc. However, implementation arrangements at these agencies were not established before Board approval, and this contributed to the serious delays in effectiveness and implementation in initial years. In addition, critical project preparation activities were not completed before appraisal, including development of TORs for key TA/studies and preparation of technical specifications for emergency equipment and hydro-meteorological monitoring stations. In fact, most of these preparatory activities started only after the project became effective. In sum, the project was not ready for implementation when it was approved. (b) Quality of Supervision Rating: Satisfactory

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The Bank performance for supervision is moderately satisfactory. The Bank team conducted regular supervision missions with relevant technical specialists and reported important issues candidly. The mid-term review and two project restructurings ensured that most project activities were completed at the end although the closing date had to be extended twice (a total of 16 months). The Bank team also worked with the new government to help operationalize the assets created under the project, especially for the hydrometeorological monitoring stations. (c) Justification of Rating for Overall Bank Performance Rating: Moderately satisfactory Combining the moderately unsatisfactory rating in ensuring quality at entry and the satisfactory rating in supervision, the overall Bank performance is rated as moderately satisfactory.

5.2 Borrower Performance (a) Government Performance Rating: Moderately satisfactory Despite the various delays in taking required actions during project implementation, the Government performance is rated as moderately satisfactory given its strong commitment to completing the project activities. The new government has started to work with the Bank to ensure that some of the necessary operational arrangements will be in place. (b) Implementing Agency or Agencies Performance Rating: Moderately satisfactory There were four main implementing agencies. These included PMT at GDCE of MOI, which played a leading role in project implementation, and three other implementation teams at IEWE, MOPWTT, and MOF. While they suffered from implementation delays and coordination difficulties on many occasions throughout project implementation, they managed to complete most project activities at the end. For that, their performance is rated moderately satisfactory. (c) Justification of Rating for Overall Borrower Performance Rating: Moderately satisfactory Combining the moderately satisfactory rating of Government performance and the moderately satisfactory rating of implementing agencies’ performance, the overall Borrower performance is rated as moderately satisfactory.

6. Lessons Learned Project Readiness. Project preparation was not sufficient at the time it was approved in June 2008, which led to implementation delays in initial years. Establishing Project Management Team (PMT) at the GDCE was one of the effectiveness conditions, but it took MOI about one year since project approval to establish the team. Moreover, none of the TOR for key studies and consultancy services was developed before project approval, including: (i) the National DRM Strategy and Investment Plan; (ii) feasibility study for establishing an emergency communication system; and (iii) development of school curricula for disaster risk and preparedness. In addition, none of the technical specifications were prepared for main procurement items, before project approval, including emergency equipment such as fire trucks under the Component 1 and the hydrometeorological monitoring stations under the Component 2. Some of these activities

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planned for the first years of implementation should have been completed by appraisal to ensure project readiness at the time of project approval. Coordination of multiple agencies. While the project was relatively small in size with a focus on technical assistance, project design was complex with four independent components, each of which was implemented by a different agency. Procurement of all items was to be handled by PMT of the lead implementing agency, at GDCE, by coordinating on technical details with other implementing agencies. The required coordination proved to be too difficult at many times, contributing to procurement delays and dropping of some activities. While the project design involving multiple agencies was necessary to deal with multi-hazards, a more effective coordination mechanism should have been carefully thought through at project preparation and managed throughout project implementation. Early attention to operational phases. While the project completed most of its activities after the two closing date extensions, there was some serious delays regarding post-completion operational aspects and follow-on activities (please see more details in the section 2.5 above), which was partly attributed to the change in government. Given the initial delays in implementation, most of the project activities took place in the last two years and were completed just before the final closing date. Because of this, the Bank was unable to effectively supervise the post-completion operational aspects. The Government and the Bank should have paid more serious and early attention to the operational phases of various project activities to ensure effective operational arrangements once the project is completed. Start small. The project was designed as the first phase of the bigger APL, focusing on capacity building aspects of various DRM-related institutions with modest funding, paving the way for major investments for the second phase at a later stage. This proved to be a less risky approach as major investments will take place only if the required capacity and other necessary arrangements are in place. Regional approach to disaster risk management. The key lesson of the insurance component of the Albania DRMAP is that with a rather small investment in the regional insurance program, the government managed to create the framework for reducing its fiscal risk exposure to natural disasters and at the same time secured access to affordable and innovative catastrophe insurance products for the Albanian homeowners and SMEs. Despite a relatively long gestation period, the SEE-CRIF is an example of how a regional approach to disaster risk management can benefit all participating countries by enabling them to reach better quality outcomes at a much reduced cost per country. Hence, in the future the Bank should continue to encourage countries to pool their resources in DRM related operations.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies The Borrower provided its comments on the draft ICR in late December 2013. An unofficially-translated version of their comments is attached as part of the Annex 7. (b) Cofinanciers Not applicable.

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(c) Other partners and stakeholders Not applicable.

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Annex 1. Project Costs and Financing (a) Project Cost by Component

Components

Appraisal Estimate

(Euro millions)

Actual/Latest Estimate*

(Euro millions)

Percentage of Appraisal

Component 1: Disaster Risk Management and Preparedness 2.90 4.04 139%

Component 2: Strengthening of Hydro-meteorological Services 1.24 0.90 73%

Component 3: Development of Building Codes 0.22 0.17 77% Component 4: Catastrophe Insurance 1.60 1.73 108% Component 5: Project Management 0.12 0.25 208% Flood Study for Drini Buna River - 0.46 -

Total Baseline Cost 6.06 7.54 124% Physical Contingencies 0.20 - Price Contingencies 0.27 -

Total Project Costs 6.52 7.54 116% Project Preparation Fund - - - Front-end fee 0.02 0.02 100%

Total Financing Required 6.54 7.56 116% *Based on borrower’s ICR

(b) Financing

Source of Funds

Type of Cofinancing

Appraisal Estimate

(Euro millions)

Actual/Latest Estimate*

(Euro millions)

Percentage of Appraisal

Borrower 0.67 1.09 163% IDA 3.94 4.05 103% IBRD 1.94 1.95 101% GFDRR - 0.46 -

Total 6.54 7.56 116% *Based on borrower’s ICR

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Annex 2. Outputs by Component Below is a list of outputs by component with some explanatory notes on links to project outcomes, complementing the description in the main text. Component 1: Disaster Risk Management and Preparedness. The component objective is to support capacity building for emergency response mechanism through provision of necessary equipment, and strengthening disaster risk mitigation planning.

Appraisal cost: Euro 2.90 million (US$4.53 million) Restructured cost: Euro 2.90 million Actual cost: Euro 4.04 million

Component outputs are as follows:

Outputs Status/Results Review and update the emergency response legislative framework

(Revised) The emergency response legislative framework will be

reviewed as part of drafting the strategy and investment plan

Develop national disaster risk management strategy and investment program

The Disaster Risk Management Strategy and Investment Plan have been drafted.

Prepare and implement a public awareness and education program

(Dropped)

Procure emergency response equipment

Emergency response equipment were procured, including 3 earthmoving vehicles for mobility of GDCE assessment teams in case of emergencies or disasters, equipment for search and rescue teams, and 4 multi-purpose fire trucks

(Added) 50 boats with motors for the first responder teams to cope

with heavy floods in Northern Albania, Strengthen existing emergency operations center

The National Operation Centre was strengthened through supplying IT hardware equipment and office furniture

Prepare feasibility studies for establishment of 112 system and emergency communications system

The Feasibility Study for Establishment of an Integrated Emergency Call System 112 was completed and GDCE is looking for financial support from different donors to enable the establishment of a modern 112 emergency communication system in accordance with European standards.

Develop emergency response procedures

(Dropped)

Prepare and implement exercises and training for first responders

(Dropped)

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Component 2: Strengthening of Hydro-meteorological Services. The component objective is to support disaster risk reduction through provision of accurate hydro-meteorological forecasts and services tailored to the needs of disaster risk managers in weather-sensitive sectors.



Outputs Status Increasing Accessibility of Data

Accessibility of data was increased through the digitization of hydro-meteorological data has been completed. 20 years of hydrological data and 10 years (2001-2011) of meteorological data have been digitized. Real time data from the newly-installed observing stations are being transferred to IGEWE database.

Upgrading the Monitoring Network

40 new automated monitoring stations installed and the old ones refurbished.

Installation of a satellite downlink system. Global Telecommunication System for meteorological

work station. Developing Capacity to Prepare Forecast Products Tailored to Disaster Management

DEWETRA software for integration and display of geographical data, hydro-meteorological data and forecast products.

A distributed hydrologic flood forecasting model for the Drin-Buna basin.

A fire-risk monitoring and assessment model for the whole territory of Albania.

Daily basic weather forecast fields from LAMI and ECMWF models.

Design and development of an IGEWE website for the users.

Forecasting Center with forest fire prediction model (RISICO) and flood forecasting model (PROOFS) for forecasting and warning.

Training on forecasting was provided to all relevant hydrologists and meteorologists for two weeks.

Component 3: Development of Building Codes. The component objective is to reduce risks from seismic activities through development of improved building codes and mechanisms for introduction of improved standards.


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Component outputs are as follows: Outputs Status

Building Code Development National plan of revisions of building code has been developed. A special decree has been issued by MOPWT to integrate Eurocode 8, 0-3 into national legislation based on the national plan. Key sections of the Eurocode 8 for earthquake resistance were prepared with project funds and Eurocodes 0, 1, 2, and 3 were translated with MOPWT budget.

Training materials, including the National Determined Parameters specific for Albania on Eurocode 8 were developed and disseminated in all 12 prefectures in Albania.

Licensing of Engineers (Dropped) Training of Engineers Training materials were developed and training was

delivered to over 200 engineers in 12 prefectures. Component 4: Catastrophe Insurance. The component objective is to provide access to private catastrophe risk insurance to households and small and medium enterprises.


Component outputs are as follows: Outputs Status

Securing Albania’s membership in the SEE Catastrophic Risk Insurance Facility

(Revised due to restructuring) Albania’s membership in SEEC CRIF was secured.

Operationalization of Europe Re (the reinsurance company under SEE-CRIF) has now been completed as of the end of March 2014.

Establishing the presence of the Facility in the Albanian insurance market

Comprehensive earthquake and flood insurance packages have been fully developed with view to provide homeowners and SME’s with high credit quality coverage. The draft law on insurance has been prepared and submitted by the Financial Supervisory Agency to the Council of Ministers to initiate the approval process.

Three main modules of an Interactive Consumer Awareness and Education Website to support catastrophe insurance have been developed. The three models are: earthquake and flood risk assessment tool for homeowners, real time risk monitoring and awareness module, and a crowd-sourcing module for real time hazard feeding from various sources.

Establishing an interactive consumer education website on disaster risk and disaster risk insurance

The consumer education website on disaster risk and disaster risk insurance has been developed and is made available to the government and the public.

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Component 5: Project Management. The component will finance some project management costs, such as procurement and financial management consultants, monitoring and evaluation activities, incremental operating costs of managing the project and project reporting and audits.



The Project Management Team coordinated the implementation of activities, procurement, financial management, as well as monitoring and evaluation of project implementation and results.

Additional study to respond to flooding events during the Project. As part of the response to the major flood events which occurred in January and December 2010 during the Project period, the World Bank agreed to fund the “Post-Disaster Comprehensive Flood Risk Assessment & Management Study” in order to assist the Government of Albania to prepare a comprehensive flood risk assessment and management plan for the Lower Drini-Buna Basin, including options for flood risk mitigation measures. The Study includes the details of the proposed works to be undertaken in the Medium Term (as defined by the ToR to be within a five year period). This includes drawings at preliminary design level, together with cost estimates and maps showing the calculated extents and depths of residual flooding throughout the Study Area with the implementation of these works. In addition to the proposals for Medium Term Works, the Flood Risk Management Plan for the Study Area, as set out in this report, includes recommendations for Non-Structural and Longer Term measures to reduce the risk and impact of flooding to the Study Area. Terms of ref