1

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 62001-AFR

PROJECT APPRAISAL DOCUMENT

ON

A PROPOSED GRANT

IN THE AMOUNT OF SDR 14.2 MILLION

(US$23MILLION EQUIVALENT)

TO BURKINA FASO

AND

A PROPOSED GRANT

IN THE AMOUNT OF SDR 21 MILLION

(US$ 34 MILLION EQUIVALENT)

TO THE REPUBLIC OF GUINEA

AND

A PROPOSED GRANT

IN THE AMOUNT OF SDR 21.6 MILLION

(US$ 35 MILLION EQUIVALENT)

TO THE REPUBLIC OF THE GAMBIA

FOR THE

THE 2nd

SERIES OF PROJECTS UNDER THE FIRST PHASE OF THE US$ 300 MILLION WEST

AFRICA REGIONAL COMMUNICATIONS INFRASTRUCTURE PROGRAM (WARCIP APL

1B)

May 25, 2011

ICT Sector Unit

Africa Region

This document has a restricted distribution and may be used by recipients only in the

performance of their official duties. Its contents may not otherwise be disclosed without

World Bank authorization.

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2

CURRENCY EQUIVALENTS

(Exchange Rate Effective April 29, 2011)

Currency Unit = SDR

=

US$ 1 = SDR 0.616921

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS

$

ACE

United States dollar, all dollars are US dollars unless

otherwise indicated

Africa Coast to Europe

AICD

APL

Africa Infrastructure Country Diagnostic

Adaptable Program Loan

BP Bank Procedures

C&MA

CAS

CCL

Construction and Maintenance Agreement

Country Assistance Strategy

Cable Consortium for Liberia

EASSy

ECOWAS

EEZ

Eastern Africa Submarine Cable System

Economic Community of West African States

Exclusive Economic Zone

EIA Environmental Impact Assessment

ESMF Environmental and Social Management Framework

ESMP Environmental and Social Management Plan

FM

GAMTEL

GDP

GoBF

GoG

GoTG

GPT

GSM

Financial Management

Gambia Telecommunications Company

Gross Domestic Product

Government of Burkina Faso

Government of Guinea

Government of the Gambia

General Purpose Technology

Global System for Mobile Communication

ICT Information and Communication Technology

IDA International Development Association

IsDB

ISP

Islamic Development Bank

Internet Service Provider

ITES

ITU

Information Technology Enabled Services

International Telecommunication Union

IXP

LDC

M&E

Mbit/s

Internet Exchange Point

Least Developed Country

Monitoring and Evaluation

Megabit per second

OP Operational Policy

ORAF

PAD

Operational Risk Assessment Framework

Project Appraisal Document

3

PDO

PIU

Project Development Objective

Project Implementation Unit

PPA Project Preparation Advance

PPP Public Private Partnership

RIAS

RPF

Regional Integration Assistance Strategy

Resettlement Policy Framework

R-PRSP

SAT-

3/WASC

SOTELGUI

Regional Poverty Reduction Strategy Paper

South Atlantic 3/West Africa Submarine Cable

Society of Telecommunications of Guinea

SME

SPV

SSA

TA

Small and Medium Enterprise

Special Purpose Vehicle

Sub-Saharan Africa

Technical Assistance

WARCIP

WBG

West Africa Regional Communications Infrastructure

Program

World Bank Group

Vice President: Obiageli K. Ezekwesili

Regional Integration Director: Yusupha B. Crookes

Sector Director:

Acting Country Director for the Gambia:

Country Director for Guinea:

Country Director for Burkina:

Jose Luis Irigoyen

McDonald Benjamin

Ousmane Diagana

Madani M. Tall

Sector Manager:

Task Team Leaders for WARCIP 1B:

Task Team Leader for WARCIP-The Gambia

and Guinea:

Task Team Leader for WARCIP-Burkina Faso:

Philippe Dongier

Boutheina Guermazi and Mavis Ampah

Boutheina Guermazi

Mavis Ampah

4

Table of Contents

I. Strategic Context ................................................................................................................... 16 A. Regional Context ............................................................................................................ 16 B. Sectoral and Institutional Context .................................................................................. 17 C. Higher Level Objectives to which the Program Contributes ......................................... 20

II. Project Development Objectives........................................................................................... 21 A. PDO ................................................................................................................................ 21

i. Project Beneficiaries ................................................................................................... 21 ii. PDO Level Results Indicators for WARCIP 1B ........................................................ 22

III. Project Description............................................................................................................. 22

A. Project components..................................................................................................... 22 B. Project Financing ........................................................................................................ 23 i. Lending Instrument..................................................................................................... 23 ii. Indicative Program Costing Table .............................................................................. 25

C. Lessons Learned and Reflected in the Program Design ............................................ 25 IV. Implementation .................................................................................................................. 26

A. Institutional and Implementation Arrangements ........................................................ 26

B. Results Monitoring and Evaluation ............................................................................ 26 C. Sustainability .............................................................................................................. 26

V. Key Risks and Miigation ...................................................................................................... 27 VI. Appraisal Summary ........................................................................................................... 27

A. Economic and Financial Analysis: ............................................................................. 27

B. Technical: ................................................................................................................... 28 C. Financial Management: .............................................................................................. 28

D. Procurement: ............................................................................................................... 28

E. Environment and Social safeguards: ........................................................................... 28

F. Legal Conditions and Covenants: ............................................................................... 30

Annex 1: Results Framework and Monitoring.............................................................................. 34

5

BURKINA FASO TECHNICAL ANNEX I

WARCIP BURKINA FASO

GUINEA EMERGENCY PAPER ANNEX II

WARCIP THE GUINEA

THE GAMBIA TECHNICAL ANNEX III

WARCIP THE GAMBIA

6

THE 2nd SERIES OF PROJECTS UNDER THE WEST AFRICA REGIONAL

COMMUNICATIONS INFRASTRUCTURE PROGRAM (WARCIP APL 1B)

PROJECT APPRAISAL DOCUMENT

AFRICA ICT Sector Unit

Date: May 25, 2011

Regional Integration Director:

Yusupha B.Crookes

Sector Director: Jose Luis

Irigoyen

Acting Country Director for the

Gambia Benjamin McDonald

Country Director for Burkina:

Madani M. Tall

Country Director for Guinea:

Ousmane Diagana

Sector Manager: Philippe Dongier

Team Leader(s):

Boutheina Guermazi, Mavis

Ampah

Project ID: P122402

Lending Instrument: APL

Sector(s): Telecommunications (50%),

Information technology (50%)

Theme(s): Regional integration (40%),

Regulation and competition policy (40%),

Infrastructure services for private sector

development (20%)

EA Category: B (Partial Assessment)

Project Financing Data:

Proposed terms:

IDA Grants for The Gambia and Guinea and Burkina Faso

[ ] Loan [ ] Credit [ X ] Grant [ ] Guarantee [ ] Other:

Source Total Amount (US$M)

7

Total Project Cost:

of which

Guinea - IDA Grant:

Burkina Faso – IDA Grant:

The Gambia – IDA Grant:

Co-financing:

Borrower:

Total Bank Financing:

IBRD

IDA:

New

Recommitted

US$92.00 million

US$ 34 million

US$ 23 million

US$ 35 million

US$92.00 million

Borrower:

- Burkina Faso

- Republic of Guinea

- Republic of The Gambia

Ministry of Transport. Post and Digital Economy (Ministère des Transports, des Postes et de

l‟Economie Numérique -Burkina Faso)

Contact Person: Mr. Saidou Yanogo

Telephone No: 226 50 49 00 03

Email: ysaidou@yahoo.co.uk

Ministry of Posts, Telecommunications and New Information Technologies (Guinea)

Contact Person: Mr.Oye Guilavogui

Telephone No.: 224-60-23-75-00

Email: egecogui@yahoo.fr

Ministry of Information and Communications Infrastructure (The Gambia)

Contact Person: Min. Alhagi Cham

Telephone No: 220 4378000

Email: aacham@moici.gov.gm

8

Estimated Disbursements – APL 1-B (Bank FY/US$ m)

FY 2012 2013 2014 2015 2016 2017

Annual 37.75 12.75 26.75 11.75 3 0

Cumulative 37.75 50.5 77.25 89.00 92 0

Project Implementation Period: Start June 21, 2011.For Burkina Faso will be up

to Dec.31, 2016 and for Guinea and The Gambia to March 31, 2016

Expected effectiveness date: September 30, 2011.

Expected closing date for Guinea and The Gambia: March 31, 2016 and for

Burkina Faso: December 31, 2016

Does the project depart from the CAS in content or

other significant respects?

○ Yes X No

If yes, please explain:

Does the project require any exceptions from Bank

policies?

Have these been approved/endorsed (as appropriate

by Bank management?

Is approval for any policy exception sought from the

Board?

○ Yes X No

○ Yes ○ No

○ Yes X No

If yes, please explain:

Does the project meet the Regional criteria for

readiness for implementation?

X Yes ○ No

If no, please explain:

9

Project Development Objective:

WARCIP Program seeks to increase the geographical reach of broadband networks and reduce

the costs of communications services in West Africa. Under WARCIP APL1B, the objectives

of the Projects, thus, are to increase the geographical reach of broadband networks and to

reduce costs of communications services in the territories of The Gambia, Guinea and Burkina

Faso.

Project description: The program will be structured around three components:

1. Component 1- Supporting connectivity

The connectivity component will focus on (i) support to provide access to The Gambia and

Guinea to international submarine cable connectivity via coastal landing stations, and (ii)

support to Burkina Faso to have access to submarine capacity through virtual landing point(s).

This component will also focus on facilitating regional connectivity.

2. Component 2- Creating an enabling environment for connectivity. This component will create an enabling environment for connectivity and applications, improve

institutional strengthening to remove existing bottlenecks for private sector participation.

3. Component 3- Project implementation. This component will give support to countries to implement the program through the setting up

and strengthening of project implementation units, communications, resettlement

implementation and costs where relevant, and Monitoring and Evaluation.

Safeguard policies triggered?

Environmental Assessment (OP/BP 4.01)

Natural Habitats (OP/BP 4.04)

Forests (OP/BP 4.36)

Pest Management (OP 4.09)

Physical Cultural Resources (OP/BP 4.11)

Indigenous Peoples (OP/BP 4.10)

Involuntary Resettlement (OP/BP 4.12)

Safety of Dams (OP/BP 4.37)

Projects on International Waters (OP/BP 7.50)

Projects in Disputed Areas (OP/BP 7.60)

X Yes ○ No

X Yes ○ No

○ Yes X No

○ Yes X No

X Yes ○ No

○ Yes X No

X Yes ○ No

○ Yes X No

○Yes X No

○ Yes X No

10

Conditions and Legal Covenants:

Financing

Agreement

Reference

Description of Condition/Covenant Date Due

Article 5 (01)

Section IV B (b) of

Schedule 2

Conditions and Legal Covenants for The Gambia

Effectiveness Conditions for The Gambia

(a) The execution and delivery, on behalf of the Recipient, of the Construction

and Maintenance Agreement, in form and substance satisfactory to the

Association, and containing no prohibition of divestiture of the Recipient‟s

shareholding, has been duly authorized or ratified by all necessary

governmental or corporate action.

(b)The SPV has been duly created, registered and made operational in the

territory of the Recipient, including through the appointment of its director

general and the adoption of its shareholders‟ agreement and its by-laws, in

form and substance satisfactory to the Association.

(c) With GAMTEL‟s (Gambia Telecommunications Company Limited)

acquiescence, the ACE Consortium has transferred to the SPV all the rights

and obligations of GAMTEL in the Construction and Maintenance Agreement

and has fully substituted GAMTEL with the SPV as the member of the ACE

Consortium.

(d) The Contractual Arrangement, in form and substance satisfactory to the

Association, has been entered into between the Recipient and the SPV.

(e) The Recipient shall have established the PIU under terms of reference and

with staff in numbers and with qualifications satisfactory to the Association.

As part of such staffing, there shall be in place for the PIU: (i) the project

coordinator; and (ii) a financial management specialist and a procurement

specialist, all of them under terms of reference and with qualifications and

experience satisfactory to the Association.

(f) The Recipient shall have adopted the Project Implementation Manual in

form and substance satisfactory to the Association

Disbursement Conditions for The Gambia

Set up a computerized financial and accounting system for the Project for

disbursements for components 1.b, 2 and 3

Before

disbursement of

components 1b, 2

and 3

11

Financing

Agreement

Reference

Description of Condition/Covenant Date Due

Section I.D.I. of

Schedule 2

Section II. C. 4 of

Schedule 2

Legal Covenants for The Gambia

1.The Gambia shall take all action necessary on its behalf: (i) to carry out the

Resettlement and Rehabilitation Plan (“RRP”) with due diligence and

efficiency and at all times provide the funds necessary therefore; (ii) to

adequately monitor and evaluate the carrying out of the activities provided in

the RRP in the carrying out of the Project and in the contracts to be concluded

for the construction of the landing station there under; and (iii) to maintain the

Association suitably informed of the progress in the implementation of the

RRP.

2. The Gambia shall take all measures necessary to carry out the

Environmental and Social Management Plan with due diligence and efficiency,

ensuring that adequate information on the implementation of the mitigation

measures to be implemented to minimize any potential negative impact under

the Project is suitably included in the Project Reports to be prepared pursuant

to the provisions of Section II.A.1 of Schedule 2 of the Financing Agreement

(FA).

3. The Gambia shall: (i) not later than three (3) months after the Effective

Date, initially recruit a consultant to perform a quarterly review of the internal

control system for the Project; and (ii) not later than four (4) months after the

Effective Date, recruit an external auditor for the PIU, both on the basis of

terms of reference and with qualifications and experience satisfactory to the

Association.

Not later than 3

months after the

effective date

Not later than 4

months after the

effective date

12

Article 5 (01)

Conditions and Legal covenants for Guinea

Effectiveness Conditions for Guinea

(a) GUILAB (La Guinéenne pour la Large Bande) has been fully established

and operational, in form and substance satisfactory to the Association, in the

territory of the Recipient, including through the appointment of its Director

General and the adoption of its shareholders‟ agreement and its by-laws.

(b)With Sotelgui‟s (Société des Télécommunications de Guinée) acquiescence,

the ACE Consortium has transferred to GUILAB all the rights and obligations

of Sotelgui in the Construction and Maintenance Agreement and has fully

substituted Sotelgui with GUILAB as the member of the ACE Consortium.

(c)The Contractual Arrangement, in form and substance satisfactory to the

Association, has been entered into between the Recipient and GUILAB.

(d)The Recipient shall have established the PIU under terms of reference and

with staff in number and with qualifications satisfactory to the Association. As

part of such staffing, there shall be in place for the PIU: (i) the Project

coordinator; and (ii) a financial management specialist and a procurement

specialist, all of them under terms of reference and with qualifications and

experience satisfactory to the Association.

(e)The Recipient shall have adopted the Project Implementation Manual in

form and substance satisfactory to the Association.

13

Financing

Agreement

Reference

Description of Condition/Covenant Date Due

Section IV B (b) of

Schedule 2

Section II.A.1 of

Schedule 2

Section II. C. 4 of

Schedule 2

Disbursement Conditions for Guinea

Set up a financial and accounting computerized system for the Project for

disbursements for components 1.b, 2 and 3

Legal Covenants for Guinea

Guinea shall:

(a) not later than one hundred twenty (120) days after the Effective Date,

prepare, consult upon and disclose the Environmental and Social Impact

Assessment (“ESIA”), the Environmental and Social Management Plan

(“ESMP”), and/or the Resettlement Action Plan (“RAP”), as the case may be,

as approved by the Association;

(b)ensure that the construction of the landing station related to component 1.a

of the Project does not commence until and unless: (i) the Association shall

have approved the ESIA, ESMP, and/or the RAP, as the case may be, and the

same documents have been consulted upon and disclosed as approved by the

Association; and (ii) it shall have verified, through its own staff, outside

experts, or existing environmental/social institutions, that the activities under

component 1.1 of the Project meet the environmental and social requirements

of appropriate national and local authorities and that they are consistent with

the Association‟s applicable environmental and social assessment and

safeguard policies and comply with the environmental and social review

procedures set forth in the Project Implementation Manual;

(c) take all measures required on its behalf to carry out, or to ensure that

GUILAB carry out, the ESIA, ESMP, and/or the RAP, as the case may be, in

accordance with the provisions of the ESSAF; and

(d) ensure that the relevant mitigation and monitoring provisions of the ESIA,

ESMP, and/or RAP, as the case may be, are appropriately implemented.

Guinea shall, not later than four (4) months after the Effective Date, recruit an

external auditor for the PIU on the basis of terms of reference and with

qualifications and experience satisfactory to the Association.

By disbursement of

components 1.b, 2

and 3

Not later than one

hundred twenty

(120) days after the

Effective Date

Not later than 4

months after the

Effective Date

14

Article 5 (01)

Section IV B of

schedule 2

Conditions and Legal Covenants for Burkina Faso

Effectiveness Conditions for Burkina Faso

The Recipient shall have adopted the Project Implementation Manual in form

and substance satisfactory to the Association.

Disbursement Conditions for Burkina Faso:

No withdrawal shall be made for component 1.a, until and unless:

(i) (A) the Selected Operator has been duly created, registered and made

operational in the territory of the Recipient, including through the appointment

of its manager and the adoption of its shareholders‟ agreement and its by-laws,

in form and substance satisfactory to the Association; and (B) there shall be

furnished to the Association an opinion satisfactory to the Association of

counsel acceptable to the Association showing that the Selected Operator has

been duly created, registered and made operational in the territory of the

Recipient and is legally authorized to operate in accordance with the laws of the

Recipient;

(ii) (A) the Contractual Arrangement, in form and substance satisfactory to the

Association, has been entered into between the Recipient and the Selected

Operator; and (B) there shall be furnished to the Association an opinion

satisfactory to the Association of counsel acceptable to the Association showing

that the Contractual Arrangement has been duly authorized or ratified on behalf

of the Recipient and the Selected Operator, and executed and delivered on their

behalf, and is legally binding upon the Recipient and the Selected Operator in

accordance with its terms; and

(iii) the Capacity Purchase Contract, in form and substance satisfactory to the

Association, has been entered into between the Selected Operator and the

operator selected for the delivery of the bandwidth to be supplied under

component 1.a of the Project.

Before the

construction on the

VLP and the

development of

fiber link

15

Section I D of

schedule 2

Legal Covenants for Burkina Faso

Burkina Faso shall:

(a) ensure that neither the construction of the Virtual Landing Point under

component 1.b of the Project nor the development of the fiber link from the city

of Ouagadougou to the city of Paga under component 1.c of the Project

commence until and unless: (i) the Association shall have approved the

Environmental and Social Impact Assessment (“ESIA”), the Environmental and

Social Management Plan (“ESMP”), and/or the Resettlement Action Plan

(“RAP”), as the case may be, and the same documents have been consulted

upon and disclosed as approved by the Association; and (ii) it shall have

verified, through its own staff, outside experts, or existing environmental/social

institutions, that the activities under components 1.b and 1.c of the Project meet

the environmental and social requirements of appropriate national and local

authorities and that they are consistent with the Association‟s applicable

environmental and social assessment and safeguard policies and comply with

the environmental and social review procedures set forth in the Project

Implementation Manual;

(b)take all measures required on its behalf to carry out, or to ensure that the

Selected Operator carry out, the ESIA, ESMP, and/or the RAP, as the case may

be, in accordance with the provisions of the ESMF and the RPF; and

(c)ensure that the relevant mitigation and monitoring provisions of the ESIA,

ESMP, and/or RAP, as the case may be, are appropriately implemented and that

adequate information on how any potential negative impact under Parts 1.b and

1.c of the Project has been minimized is suitably included in the Project Reports

to be prepared pursuant to the provisions of Section II.A.1 of Schedule 2 of the

FA.

Burkina Faso shall, not later than three (3) months after the Effective Date: (A)

employ the existing external auditor of the PIU on the basis of terms of

reference satisfactory to the Association; and (B) redeploy to the PIU one of the

accountants employed by the Recipient under the Association-financed West

and Central Africa Air Transport Safety and Security Project (Credit No. 4163-

BUR).

(d) In order to ensure the Project continues to receive priority attention and the

required support and oversight from the Recipient, the Recipient, through the

MTPEN shall, establish and thereafter maintain throughout Project completion,

a Steering Committee with the mission to provide strategic guidance to the

MTPEN and to ensure effective coordination across various of the Recipient‟s

concerned ministries, departments and agencies and relevant representatives

from the private sector. The Steering Committee shall be chaired by the

MTPEN‟s Secretary General and its composition shall include selected public

and private officials acceptable to the Association.

Not later than 3

months after

effective date

Not later than six

(6) months after

the Effective Date,

16

I. Strategic Context

A. Regional Context

1. The ECOWAS region has seen steady economic growth since 2000. Rising raw material

prices, increased macroeconomic stability and a substantial increase in development

assistance resulted in robust economic growth for the 15 countries of the Economic

Community of West African States (ECOWAS)1 in the years preceding the financial crisis of

2008 and the global economic downturn that followed. It is estimated that real Gross

Domestic Product (GDP) growth rate of 4.7% in 2008, which slowed to 4.4 % in as a result

of the global economic downturn.2 In line with the region, The Gambia, Guinea and Burkina

Faso experienced sustained positive economic growth (GDP) in the run up to 2008; between

3- 6 %.

2. The Gambia, Guinea and Burkina Faso gained independence in 1965, 1958, and 1960,

respectively. Guinea and Burkina Faso have suffered from post-independence political

instability, with periods of military rule. In spite of political challenges Burkina Faso and

Guinea conducted successful democratic elections in 2010, which saw the election of

President Blaise Compaoré in Burkina Faso, and President Alpha Conde in Guinea. More

recently in early 2011 Burkina Faso has experienced a growing political discontent which is

threatening to paralyze economic and social activities in the country. The Gambia will hold a

presidential election in 2011. Despite sustained economic growth up to 2008, vast economic,

political and social challenges remain in all three countries, all listed as Least Developed

Countries (LDCs) ranked at 151 (The Gambia), 156 (Guinea), and 161 (Burkina), out of 169

countries on the UN Human Development Index3. In 2009 GNI per capita in the Gambia and

Guinea was, US$ 430 and US$ 407, respectively, compared to Burkina Faso at US$ 517.

The population of these countries totals approximately 28 million.

3. The governments of West Africa aim to deepen integration of their economies to

improve economic growth in the region. In 2007, the ECOWAS and the West Africa

Economic and Monetary Union finalized a joint regional poverty reduction strategy (R-

PRSP) for West Africa, the first of the kind in Sub-Saharan Africa. Recognizing that the

region is not on track to achieve the Millennium Development Goals (MDGs), the regional

PRSP emphasizes the need for enhanced cooperation among West African countries and

deeper regional integration to help them accelerate growth, reduce poverty, and improve

performance on the MDGs. It proposes four strategic directions for regional intervention: (i)

improve governance, prevent and manage conflicts, and facilitate the free movement of

people across the sub-region; (ii) integrate markets to increase competitiveness and

economic growth; (iii) develop and interconnect infrastructures; and (iv) build up human

resources. The integration and opening up of the regional market should lead to improved

competitiveness for the service sectors. The agricultural and industrial sectors should also

gain through greater access to more efficient and less expensive basic services (transport,

telecoms, banking and insurance).

1 Benin, Burkina Faso, Cape Verde, Cote d‟Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra

Leone, and Togo. Mauritania left ECOWAS in 2002 to favor its membership in the Arab Maghreb Union (AMU). The official French

name for ECOWAS is Communauté Economique des États de l'Afrique de l'Ouest (CEDEAO). 2 2010 Interim Report of the ECOWAS Commission. 3 United National Human Development Index: http://hdr.undp.org/en/statistics/

17

B. Sectoral and Institutional Context

(i) Status of Access to Information and Communication Technology (ICT)

Services in The Gambia, Guinea and Burkina Faso

4. Considerable developments in the ICT sector have resulted in improved

communications access in The Gambia, Guinea and Burkina Faso. A wave of reforms in

the ECOWAS region during the last few years, particularly on policy and regulatory

improvements at the national level, increased competition, and increased harmonization at

the regional level, has resulted in improved access in the sub-region. Burkina Faso, The

Gambia and Guinea embraced policies of significant liberalization in 1998, 2001, and 2004

respectively. The three countries are committed to further reforms in their sector and to open

access principles in communications infrastructure.

5. Reforms have resulted in increased investment and an exponential increase in mobile

services. Reforms implemented over the last decade have unleashed competitive forces and

fostered an unprecedented increase in investment in the telecommunications and ICT sectors,

which has supported private sector participation in the mobile phone markets in particular. In

The Gambia mobile penetration has risen dramatically from 16% in 2005 to 95% by the end

of September 2010- one of the highest levels in sub-Saharan Africa. In Guinea and Burkina

Faso, significant progress has also been made with mobile penetration levels rising from 2%

and 5.5% in 2005 to 35%, and 37.2 %, respectively in 2010. This compares to the sub-

Saharan Africa average of 32.6 % in 2008.

6. The impressive developments, however, mask the challenge that The Gambia, Guinea

and Burkina Faso face in providing access to modern ICT for their populations.

Despite the opening up of the telecommunication sectors and impressive mobile penetration

growth, internet penetration levels remains marginal in these three countries. This is often a

product of poor fixed infrastructure. In 2010 barely 1% of inhabitants in The Gambia,

Guinea and Burkina Faso were internet users (0.7, 0.9, and 1.1 %, respectively) compared to

an average of 8.71% in Sub-Saharan Africa, and nearly 27% globally4. Broadband

penetration5 in these three countries is also below the sub-Saharan average, at between 0.07

and 0.09 %, compared to the continent‟s 0.11%. Prices of ICT services in the ECOWAS

region generally are also very high. An ICT Price Basket6 in The Gambia, Guinea and

Burkina Faso rank them at 147th

, 142nd

, and 155th

out of 161 countries in the world,

respectively7 (See Technical Annexes and Emergency Paper for further details on pricing in

each country).

(ii) Status of Enabling Environment

7. Despite progress, ICT sector liberalization remains largely incomplete in The Gambia,

Guinea and Burkina Faso. A number of market segments still run under monopoly regimes

in a number of ECOWAS countries, including The Gambia, Guinea and Burkina Faso.

Monopoly policy structures related to international broadband fiber optic gateways

especially continue to constrain the development of broadband in Burkina Faso and The

4International Telecommunications Union ( ITU) Database (2010). 5 Defined as being at least 256 kbit/s, in one or both, directions. 6 The ITU ICT Price Basket score is a composite score that considers the cost of a Fixed telephone line (monthly subscription and 30 calls),

Mobile telephone line (25 outgoing calls and 30 SMS messages) and Fixed broadband internet (Monthly subscription to an entry level

package and 1Gb a month). 7 ITU, Measuring the Information Society (2010).

18

Gambia. In all three countries, the incumbent suppliers also often have monopolies on

fixed-voice services, resulting in low penetration of fixed networks and sub-optimal

development of the internet sector. Monopolization of the international gateway in The

Gambia and Burkina Faso has also promoted high prices and has suppressed the demand for

international traffic. In The Gambia, Guinea and Burkina Faso the average outgoing

international traffic (2009) is low at 14.6, 0.9 and 6.5 international minutes, respectively, per

person (compared to 49 minutes per person in Cape Verde and 22 per person in Senegal )8.

In general, the goal of creating a fully integrated telecom market in these three West Africa

countries remains to be achieved.

8. Capacity building is needed to improve the technical efficiency of National Regulatory

Authorities. In a fast changing ICT environment the National Regulatory Authorities in The

Gambia, Guinea and Burkina Faso need technical support and human and financial resources

to ensure they are able to ensure fair competition and manage next generation reforms

including spectrum management, licensing renewal, broadband services regulation and

number portability.

(iii) Status of Infrastructure Development

9. The Gambia, Guinea and Burkina Faso currently experience low levels of access to

international internet bandwidth. In The Gambia, Guinea and Burkina Faso international

bandwidth stands at around 155, 150 and 800 Mbit/s, respectively (2010 figures) 9

. This

situation accounts for the relatively small number of internet users in these countries, the

high cost of capacity, and the limited access to international bandwidth. These three

countries can be compared to Nigeria, Senegal and Ghana who have multiple domestic

connections to international fiber cables and access 15,765 Mbit/s, 6487 Mbit/s and 3,400

Mbit/s respectively and have relatively higher number of internet users.10

10. The Gambia and Guinea, as smaller coastal states are often seen as unattractive

investment opportunities and consequently bypassed by private submarine cable

consortia. The Gambia and Guinea are among a handful of countries in the ECOWAS

region which are not connected domestically to the global network of broadband optical

fiber infrastructure. Small states in the region are often by-passed by submarine cable

consortia, because their markets are not attractive enough. With small domestic markets The

Gambia and Guinea have had to rely on satellite connectivity and fiber connection through

neighboring countries. The result has been an unreliable service and high prices. Over-

dependence on satellite technologies has led to costs of between US$4,000-

5,000/Mbit/s/month, compared to countries directly connected to submarine cables which

can access capacity at much lower prices - approximately US$500/Mbit/s/month in East

Africa and US$200 in the US). Absence of competitive access to capacity via submarine

cables is a critical constraint limiting opportunities for growth and development, and ability

to trade competitively with the rest of the world. High connectivity prices translate into some

of the highest prices in the world for international calls and Internet costs - even compared to

other countries in the region and limit the potential of these countries to create jobs, expand

production of goods and services.

8 Telegeography International Traffic Database, 2009. 9 Figures provided by National Regulatory Authorities: Guinea- ARPT, The Gambia- PURA and ARCE Burkina Faso-

Mike Jensen Feasibility Study. 10

Telegeography (2010) Global Bandwidth Research Service.

19

11. Burkina Faso, suffers from its landlocked geographical position, but has the potential

to be an important link in a regional connectivity network. As a landlocked country,

Burkina Faso will always depend on the cooperation of its neighbors for international access,

often at high risk and uncompetitive prices currently about US$4,500 for 1Mbit/s. The

country, however, also benefits from its advantageous geographic position in the center of

West Africa, and could provide a key route for a number of the large telecom groups in the

region. With six neighboring countries (Mali, Niger, Benin, Ghana, Togo, Cote d‟Ivoire)

there could be an opportunity for such regional players to complete their international

connections and regional rings.

(iv) Relevance of WARCIP APL 1-B

12. The West Africa Regional Communications Infrastructure Program (WARCIP), seeks

to provide a comprehensive solution to address connectivity gaps in the ECOWAS

Region. Approved on January 20, 2011, the US$300 million WARCIP program seeks to

increase the geographical reach of broadband networks in West Africa and reduce the cost of

communications in the region. WARCIP focuses on international and regional connectivity

to enable the creation of a fully integrated network which will eventually link all countries‟

networks in the region and provide affordable high speed connectivity within countries.

11. For the coastal countries, including The Gambia and Guinea, connection to the new

Africa Coast to Europe (ACE) fiber cable represents a unique opportunity for

international connectivity. For most of the coastal countries without established access to

international submarine cable connectivity, such as The Gambia and Guinea the ACE cable

represents a unique opportunity for countries to gain international bandwidth access.

WARCIP activities will include providing support to ensure that these countries participate

in the new submarine cable systems being planned in the region. For some of these

countries, this may be the only opportunity to be connected to submarine fiber.

12. For The Gambia and Guinea due diligence analysis confirmed that ACE is the most

economic option for these countries. Additional due diligence on financial, economic,

legal, fiduciary, and safeguard aspects of the submarine cable opportunity was conducted to

confirm that ACE represents the best and most economic option for The Gambia and Guinea

to secure international connectivity. ACE is the only cable in planning that presents the

advantage of providing these countries with dedicated landing stations and independent

access to international capacity. Other fiber cable systems in the region such as MainOne

and SAT-3/West Africa Submarine Cable (SAT-3/WASC) also did not propose landing

stations in The Gambia and Guinea. The team‟s assessment is that the ACE consortium is

being structured in a manner consistent with international good practices in the industry, and

is led by major industry players.

13. For Burkina Faso an overland route to a new or existing fiber-cable system is found to

be the most long-term cost effective option. Due diligence on financial, economic, legal,

fiduciary conducted indicates that cross-border fiber optic connections would be the most

viable strategy to meet Burkina Faso's international bandwidth requirements. Aside from low

bandwidth costs, the high quality of fiber bandwidth compared to satellite and other options,

is also a factor which has to be taken into account in the comparisons.

14. The World Bank has already approved Project Preparation Advances (PPAs) for The

Gambia, Guinea and for Burkina Faso to advance project preparations. The focus of

20

the PPAs is to provide legal and financial support to advance project preparation regarding

the governance, ownership through Special Purpose Vehicles (SPV) companies, the

operation of the landing station (The Gambia and Guinea) and Virtual Landing Point (VLP

in Burkina Faso). The PPAs are also used to help put in place enabling environment for open

access and help the three countries to put in place implementation arrangements for the

project. In Burkina Faso the PPA is also used to clarify the business and ownership models

as well as support for the tendering process for both the supply of bandwidth. In the case of

Guinea, the PPA also covered initial payment for ACE for US$3.5 million.

C. Higher Level Objectives to which the Program Contributes

15. Addressing connectivity gaps in The Gambia, Guinea and Burkina Faso could

accelerate the realization of an integrated regional ICT market. The Africa

Infrastructure Country Diagnostic (AICD)11

report highlights the importance of regional

integration, in particular for the smaller countries in the region. Integrating and sharing

physical infrastructure could allow countries to gain scale economies, harness regional

public goods and enable deeper economic growth. A regional approach to addressing the

combined effects of the three level connectivity gaps could reduce the cost for each of the

countries involved, and result in positive effects on prices and capacity, increased

availability of end-to-end high-capacity bandwidth at competitive rates and hence broadband

provisioning within the region.

16. An integrated ICT market would stimulate economic growth and enhance trade. The

region‟s prosperity depends on how well it is integrated into the global economy.

Information and Communication Technologies (ICT), particularly high-speed Internet, is

playing an increasingly central role in this - enhancing trade, facilitating cross-border

payments, increasing productivity and improving the quality of public service delivery – all

key components of economic growth and poverty reduction. A number of ECOWAS

countries are at the initial stages of positioning themselves as preferred destinations for IT

and IT Enabled Services (ITES) in the region.

17. Deployment of broadband networks will stimulate investment and economic growth. The contribution of broadband networks to economic growth is much more pronounced than

that of narrowband networks. Additional studies have confirmed that for every 10

percentage-point increase in high-speed internet connections, there is an increase in

economic growth of 1.3 percentage points.12

New businesses in the ICT and IT enabled

services sectors are supported by improved access to high-speed internet. More generally,

the remarkable contribution of ICT to economic growth has been demonstrated in many

studies. For example, a recent cross-country analysis found that the growth effect of ICT can

be significantly stronger in developing countries than in developed countries13

.

18. WARCIP leverages private sector investment. In most countries in Africa, the private

sector is quite active in the sector. In order not to crowd out private investment, the program

will focus on putting in place Public Private Partnerships (PPP) frameworks, where relevant,

to leverage private sector investment. Where private investment cannot be guaranteed

upfront, the program provides guidance and resources to affect a clear exit strategy and

transfer of public assets to private sector.

11

AICD - ECOWAS‟s Infrastructure: A Regional Perspective, July 2010 12

Word Bank - Information and Communications for Development 2009: Extending Reach and Increasing

Impact. 13

Word Bank - Information and Communications for Development 2009: Extending Reach and Increasing

Impact.

21

19. WARCIP APL1B is fully in line with the March 21, 2010 Regional Integration

Assistance Strategy (RIAS) Update Partnering for Africa’s Regional Integration, and

the West Africa Implementation Action Plan (2010). The RIAS seeks to create economies

of scale, facilitate intra-regional trade and exports and connect landlocked countries to

regional and global trade routes by reducing barriers to movement of goods and services

between countries and improve the regional business environment. WARCIP is featured as a

flagship project in the RIAS Update.

20. The Program is fully in line with the new World Bank Africa Strategy Africa’s Future

and the World Bank’s Support to It (2011). By facilitating cheaper access to internet and

supporting the development of national and regional communications infrastructure,

WARCIP APL1-B will promote sustainable employment (pillar 1 Competitiveness &

employment ) and will create a critical building block for ICT applications (Foundation

Governance & Public sector capacity). The program also focuses on partnerships by

leveraging private sector investment in the ACE submarine cable.

21. WARCIP APL 1B is fully in line with strategic priorities at the country level- For The

Gambia, the Project is aligned with the 2008-2011 Joint Assistance Strategy (JAS) which

focuses on two pillars: i) strengthening economic management and public service delivery

and (ii) enhancing productive capacity and accelerating growth and competitiveness. As with

the JAS, WARCIP APL-B will support the development of an infrastructure platform to help

accelerate growth. For Guinea, the Project is aligned with the Interim Strategy Note (ISN)

discussed in April 2011. The ISN focuses on (a) fostering sustainable and equitable growth,

(b) improving access and quality of basic social services, and (c) strengthening governance

and institutional and human capacity. For Burkina Faso, the Project is aligned with the

2010-2012 CAS which seeks to assist the country to deepen economic transformation and

identify new drivers of growth. The Project would support CAS objectives through better

access and use of ICT to improve delivery of public services, lower the cost of doing

business, new investments in the ICT sector and improved access to markets.

II. Project Development Objectives

A. PDO

22. The development objective of WARCIP is to increase the geographical reach of

broadband networks and reduce costs of communications services in West Africa. For

APL1B, the Project‟s development objectives are to contribute to increasing the

geographical reach of broadband networks and to reducing the costs of communications

services in each of the territories of The Gambia, Guinea and Burkina Faso.

i. Project Beneficiaries

23. WARCIP APL1-B will benefit the entire population of The Gambia, Guinea and

Burkina Faso All over Africa, businesses, governments, teachers, doctors, farmers, and

fishermen, are using ICTs to communicate, share information, improve productivity and

service delivery, find better prices, improve access to markets, and increase their bargaining

power. The situation is the same in The Gambia, Guinea and Burkina Faso. The proposed

Project will therefore benefit the entire population of these countries including

telecommunications operators, telecommunications users, universities, schools, hospitals,

banks, corporate users, and ministries and departments. For the purpose of M&E, Direct

Project Beneficiaries will be defined in a more restrictive way (see country technical annexes

for details).

22

ii. PDO Level Results Indicators for WARCIP APL1B

Table 1: PDO level results indicators for APL1B.

Project Development

Objective

Outcome Indicators At closing of the project

To increase the

geographical reach of

broadband networks and

reduce costs of

communications services

in Burkina Faso, Guinea

and The Gambia .

Volume of international traffic (Kbit/s per person)

Access to telephone services (%)

Access to internet services (%)

Average monthly price of wholesale international E1

capacity link from capital city to Europe

Number of direct project beneficiaries, of which female

See the relevant sections of the

Technical Annexes for The

Gambia and Burkina Faso and the

Emergency Paper for Guinea

III. Project Description

A. Project Components

Component 1- Supporting Connectivity (US$68.25 million)

(a) International Connectivity

24. International connectivity component focuses on connecting countries to submarine

fiber-optic cable. The international connectivity component will focus on (i) support to

provide access to those countries without established access to international submarine cable

connectivity and (ii) supporting countries with limited/ indirect access to have alternative

access to improve terms of access to capacity and lower cost. Project funds will secure

participation for The Gambia and Guinea in the ACE submarine cable and will allow

Burkina Faso to issue a competitive tender to purchase high capacity bandwidth from

neighboring coastal countries via an overland connection to a new or existing fiber cable

system. In The Gambia and Guinea these funds will allow for the construction of a domestic

landing station, and in Burkina Faso for a Virtual Landing Point (VLP) ((see Burkina Faso

and The Gambia Technical Annexes and Guinea Emergency Paper for details).

(b) Regional/national Connectivity

25. For WARCIP APL1B, the regional connectivity component will focus on rolling-out of

the terrestrial broadband backbone fiber networks, and cross-border connectivity. This

component is expected to be complemented by proceeds of divestiture of Government shares

in the local Special Purpose Vehicles (SPVs) companies to be created specifically for the

purpose of owning and operating the landing stations/VLP according to a proposed PPP

approach. In the case of Burkina, additional infrastructure (72 pair fiber link) will be built

between Ouagadougou and the closest border point (Paga, Ghana). This missing link would

provide redundancy, security and wider access to low cost capacity.

26. In all three countries, it is expected that IDA resources will be complemented by other

Development Partners for the national connectivity and enabling environment agenda,

including the Islamic Development Bank (The Gambia and Guinea), United States

Trade and Development Agency (Burkina Faso). The Bank projects in the three countries

have no dependency on the other Development Partners „projects but are designed to enable

seamless interconnection and interoperability with other network links that may be built in

the future (see Technical Annexes and Emergency Paper for further details).

23

Component 2- Creating an Enabling Environment for Connectivity (US$ 17.73

million).

27. Support to optimize the governance, ownership and financing issues related to the

operation of the landing station/VLP and provision of networks and services emanating

from the acquired international bandwidth. This component will focus on the transaction

design and operating model for ownership and management of international, regional and

national infrastructure using PPP frameworks and related open access principles to create an

enabling environment for improved connectivity14

. The PPP framework would focus on

principles of open and non-discriminatory access while maximizing the role of the private

sector.

28. Creating a policy and regulatory environment to allow competition. In addition to

transaction design, this component will focus on addressing policy and regulatory

bottlenecks to maximize the benefits of the proposed connectivity agenda. In the three

countries, detailed studies will be launched to support the three governments to put in place a

regime for open access to the landing stations and to the international capacity. Additional

support to improve policy and regulatory environment is also included in the projects

depending on the specific needs of each country (See Technical Annexes and Emergency

Paper for details)

29. Institutional capacity strengthening for the regulators and relevant Ministries in the

three countries. Significant institutional strengthening support is needed to ensure that the

PPP agreements and principles are implemented effectively. The support will be different

from country to country depending on the maturity of regulatory institution and the specific

needs.

Component 3- Project Implementation. (US$4.465 million)

30. Capacity strengthening to ensure effective implementation. This activity will provide

support needed to strengthen the capacity of the governments to implement the connectivity

project. In The Gambia and Guinea new Project Implementation Units (PIU) will be

established. In Burkina Faso the project will be implemented by an existing PIU. The core

PIUs consist, on a case by case, of a project coordinator, procurement specialist, financial

management specialist, M&E specialist, safeguards specialist, accountant and an office

assistant. Technical specialists may also be hired if required for implementation of the

project. The component will also cover office equipment, incremental operating costs, audits

and communications. The component will also cover environmental and social studies, their

implementation and/or the monitoring of their implementation.

31. A Contingency of US$1.555 is included to accommodate any escalation in project costs.

B. Program Financing

i. Lending Instrument

32. Lending will be done via a Horizontal Adaptable Program Loan (APL) The rationale for

using an APL instrument is to ensure a phased and modular support which will facilitate the

inclusion of countries according to their level of readiness and completion of the readiness

14

Open access is broadly defined as an equal opportunity for operators to have unfettered access to given infrastructure or

services under similar terms and conditions.

24

triggers. The APL phased approach would allow long-term and sustainable development of

ICT infrastructure and services in the region, with a focus on building effective public-

private partnerships, leveraging private capital, developing institutions, building capacity,

and deepening sector reforms over time. The scope, scale and timing of inclusion would

depend on the commitment to the sector reforms, and through this, the ability of the

countries to attract private capital on their own to develop national and cross-border

infrastructure.

Country readiness

33. WARCIP APL1B will deal with The Gambia, Guinea and Burkina Faso and each

country has satisfied the triggers set out in the WARCIP PAD. These triggers include (i)

government commitment to liberalization and open access principles, (ii) existence of PPP

framework (or willingness to formulate one as part of preparatory activities), and (iii)

government commitment to increased sector competition as evidenced by pro-competitive

policy and regulatory frameworks. For the Gambia and Guinea inclusion is also prompted

by the urgent request by the two countries to meet tight deadlines for participation in the

ACE cable.

34. Burkina Faso was supposed to be included in follow up phases dealing with landlocked

countries as originally contemplated in the WARCIP PAD approved in January 2011. The Government of Burkina Faso however requested to be included in an earlier phase of

WARCIP. The World Bank responded favorably as Burkina represents particular challenges

for international connectivity and could serve as model for other landlocked countries. In

addition, the Government of Burkina Faso (GoBF) has made impressive efforts to liberalize

the sector and break the monopoly of the incumbent operator, developed a licensing regime

that ensures non-discriminatory access to infrastructure, and has ongoing efforts to develop

PPP frameworks and structures, including for managing the yet to be developed national

backbone

35. Guinea was originally included to join this phase. Earlier requests from the Government

could not be honored because of the suspension of lending due to the de facto Government.

As the situation normalized and arrears cleared, Guinea was re-introduced in this phase and

its operation is being prepared under emergency procedures. Guinea operation will benefit

from accelerated, consolidated and simplified procedures under streamlined procurement and

safeguards requirements (See Emergency paper for details).

36. Other countries originally planned to join WARCIP APL 1B (Togo and Guinea Bissau)

could not join this phase because IDA resources were not available. Togo and Guinea

Bissau will join follow up phases when resources are available and when the countries have

met the readiness triggers.

37. Total proposed budget for WARCIP APL1B is US$ 92 million. For these three countries

a horizontal APL is adopted with most issues related to creating the enabling environment

treated under the PPA approved for each country.

25

ii. Indicative Program Costing Table15

Table 2: Indicative Program Cost Table The Gambia Guinea Burkina Faso Total

Improving connectivity 25.75 25.2 17.3 68.25

Enabling environment 7.25 6.8 3.68 17.73

Implementation support 1.705 1.5 1.26 4.465

Contingency 0.295 0.5 0.760 1.555

Total 35 34 23 92

C. Lessons Learned and Reflected in the Program Design

38. The World Bank has experience in coordinating ICT infrastructure projects. The

Bank has developed a good experience in coordinating and financing similar ICT projects

in the World in general, and Africa in particular. In the East and Southern Africa, the

World Bank has approved a US$ 424 million Regional Communications Infrastructure

Program (RCIP) covering about 25 countries which includes a component for Virtual

Landing Points for landlocked Malawi. The Malawi model was adapted for use in Burkina

Faso. The World Bank Group also recently approved a US$ 215 million Central Africa

Backbone Program which will leverage existing fiber and provide improved connectivity

to the region. These experiences are being leveraged in the preparation of WARCIP.

39. APL 1-B is benefitting from lessons of APL 1-A covering Liberia and Sierra Leone. WARCIP APL 1-A focused on Liberia and Sierra Leone. As with APL-1-B the focus of

the program was to increase access to international bandwidth capacity through connection

to international fiber cable systems, - neither country had access previously. The program

supported the establishment of domestic landing station in these countries and two new

SPVs - the Cable Consortium for Liberia (CCL), and Sierra Leone Cable Limited

(SALCAB)- who signed as signatories to the ACE cable. In Liberia private sector

involvement included a US$5 million investment in ACE, through the CCL, by two of the

private operators (Cellcom and Lonestar). In Sierra Leone SALCAB is wholly government

owned, with at least 50% divestiture expected before the ACE cable goes live in 2012.

Important lessons learnt from the project include: a) importance of upfront legal and

regulatory due diligence and establishment of PPP frameworks, b) early engagement of

private sector, and c) buy in from key stakeholders (public, private and regulatory

institutions) regarding the common understanding of open access. These lessons have

guided APL 1B.

40. The project builds on general lessons learned in the ICT sector. Key lessons learned

and applied to the project design are: (a) project development objectives should be

realistic, focused and achievable in the country, sector and implementing agency context;

(b) project components should support country priorities and have broad ownership among

stakeholders; (c) project design should be flexible to adapt to a rapidly changing

environment; (d) implementation support should be included in Project activities with a

focus on retaining staff to ensure continuity and an accumulation of capacity within the

implementing agency; and (e) activities should aim to yield quick returns, build basic

15

Note: the total cost of each phase depends on a number of factors including cable routing, backhaul costs etc.

26

building blocks to support transition from emergency recovery to medium to long term

reconstruction and development, and be sustainable over the long term.(f) There is a need

for limited catalytic public funding for infrastructure to improve access to ICT

infrastructure development, in particular in infrastructure market segments that fail to

attract private investment. PPP structures will be established in all of the three countries.

VI. Implementation

A. Institutional and Implementation Arrangements

41. Implementation will be done via Project Implementation Units (PIUs). Implementation

arrangements have been designed for each country. New PIUs will be established in The

Gambia and Guinea. In Burkina Faso the Project will be implemented by an existing PIU.

In Burkina Faso a Steering Committee will be established to offer policy advice and assist

the PIU to achieve the PDO. In The Gambia and Guinea the PIUs will be assisted by a

project team called focal points forum, composed of representatives from relevant

Ministries, the national regulator and private sector. The PIUs will consist of a project

coordinator, procurement specialist, financial management specialist, M&E specialists and

accountants as required. Technical specialists may also be hired if required for

implementation of the project. Detailed implementation arrangements are included in

Technical annexes and Emergency Paper for each country operation.

B. Results Monitoring and Evaluation

42. PIUs will monitor and evaluate national projects. The PIUs in each country will bear the

primary responsibility for project monitoring and evaluation (M&E), and, as such, will

establish standard formats and guidelines for data collection and reporting, and will organize

training sessions for project stakeholders in their use. Monitoring and evaluation of the

project will be embedded in its various components to ensure results.

43. The views of direct beneficiaries will be brought into the monitoring and evaluation

process. Comprehensive M&E reporting will be needed to monitor the results and

performance of the project. It will involve mainly the direct beneficiaries of project

activities, but will be extended to other beneficiaries such as telecommunications operators

and private ICT firms, which ultimately are the main beneficiaries of the project‟s outcomes.

The PIUs will review and validate the reports on performance indicators and recommend

corrective action if necessary.

C. Sustainability

44. The sustainability of the project benefits will depend on government commitment to

ICT and their ability to create and maintain enabling environments. The sustainability

of project benefits will depend on a number of factors, including the commitment of policy

makers to putting ICT reform at the forefront of the development agenda; the ability to

create effective competition in the telecommunications industry in order to keep prices low;

and the ability to establish the PPP framework for connectivity. Commitment of both

national governments and regional organizations has been very strong for WARCIP.

27

45. Improved access and lower prices will be sustained. Improved service coverage and

quality at more competitive prices for international connectivity and for data services will be

sustained as it will create opportunities for advanced applications, using more bandwidth and

creating more traffic.

46. Local capacity will be strengthened through training and technical assistance. The

program will make significant investments in capacity-building efforts through training and

technical assistance to build technical expertise, social capital, and knowledge. With the

focus on building sustainable capacity in key institutions such as regulators and Ministries,

the benefits of the project are expected to last far beyond program completion. As such

capacity will support the creation of ICT policy and regulatory know-how to guide sector

growth and applications in the future.

V. Key Risks and Mitigation

47. The overall risk rating for WARCIP APL 1B at preparation and implementation is MI. The

main project risks concern (i) interest and level of participation of the private sector in

financing and managing the landing station in Guinea and in the Gambia as the VLP in

Burkina under PPP arrangements, (ii) possible delays in implementation of reforms as well

as overall capacity to implement the projects. Detailed description of risks is included in the

ORAF as well as in the country annexes.

VI. Appraisal Summary

A. Economic and Financial Analysis

48. Connecting to Submarine Cables will result in financial savings for beneficiaries. - Connecting to ACE will see The Gambia investment breakeven between 2019

and 2020, depending on the wholesale price adopted, with an NPV to 2025 of US

$26.3 million. The IRR is 28.8% assuming an average bandwidth sale price of

US $100/Mbit/s/month, and an IRR of 19.9%, assuming US $50/Mbit/s/month.

- Connecting to ACE will see Guinea investment breakeven between 2014 and

2015 with an NPV to 2025 of US $24.8 million. The IRR is 22.4% assuming an

average bandwidth sale price of US $100/Mbit/s/month, and an IRR of 14.3%,

assuming US $50/Mbit/s/month.

- Overland fiber connection for Burkina Faso will see the country investment

breakeven between 2016 and 2018, with an NPV for the first 10 years (to 2022)

of US $8.38million. The IRR is 28% assuming an average bandwidth sale price

of US $100/Mbit/s/month, and an IRR of 41% assuming a US $20/Mbit/s/month

for capacity on the link to the Burkina border. (See Technical Annexes and

Emergency Paper for further details).

49. Benefits from targeted countries will spill over to neighboring countries. The benefits

projected to accrue in the targeted countries (i.e. increased access to quality and affordable

ICT services) spill over country boundaries as: (i) higher volumes increase the viability of

the regional communications infrastructure network, decrease cost of access and increase

trade between African countries, and (ii) cross-border initiatives provide countries with the

incentives to develop missing infrastructure to increase ICT access. Indeed, the

implementation of the WARCIP will have a transformational impact on regional

28

connectivity which will impact regional trade and overall economic integration of the

participating ECOWAS countries.

B. Technical

50. WARCIP recognizes that infrastructure and policy environment bottlenecks need to be

addressed to ensure better communications access. The technical design of the project

reflects lessons learned in the sector and international best practices. For most developing

countries, a major obstacle to the uptake of ICT remains the lack of adequate access to ICT

infrastructure. A lack of investment in ICT infrastructure and access networks, coupled with

inefficient provision of services, are the most important factors undermining the

development of networked economies. The main lesson derived is that success is mainly

market driven. Creating a predictable legal and policy environment is key to improving

investor confidence and restoring trust in the ICT sector. A key focus of the project is to

create PPP frameworks as well as robust governance structures, in particular, for

international connectivity. The project will establish an enabling institutional and regulatory

environment to help attract and sustain private investment in the telecommunications sector.

C. Financial Management

51. The assessment of the project‟s financial management arrangements being implemented by

the PIUs as documented in the separate technical annexes for the Gambia and Burkina Faso

and in the Emergency Paper for Guinea indicates a number of mitigation measures are

needed to ensure that the systems are very robust.

D. Procurement

52. For The Gambia and Guinea component 1 (a) under the international connectivity

component, IDA procurement guidelines will not apply. For other components of the

project, and for the entire Burkina Faso Project, Procurements will be carried out in

accordance with World Bank guidelines. IDA funding for the international connectivity

does not go towards a procurable item which is subject to compliance with World Bank

procurement Guidelines. The payment is for membership fees (paid in different installments)

against a set of rights including use of a certain amount of capacity at preferred rates and a

share of ownership of an indivisible cable infrastructure asset. For other components, and for

the entire Burkina Faso project, procurement will be carried out under “Procurement of

Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants

by World Bank Borrowers” dated January 2011, “Consultants under IBRD Loans and IDA

Credits and Grants” dated January 2011 and the “Guidelines on Preventing and Combating

Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated

October 15, 2006 and revised in January 2011, and the provisions stipulated in the Financing

Agreement for each project.

E. Environment and Social Safeguards

53. For The Gambia and Guinea the connection to the ACE cable is not expected to have

significant environmental impact. The cable is not expected to have any perceptible effect

on the quality of the coastal waters of the Atlantic Ocean or on marine species or habitat: as

the cable gets closer to the shores in water depths shallower than 1,500m, the cable‟s

29

diameter may increase to about 40-50 mm due to the need to add protective wire armoring.

The small environmental disturbances caused by laying connecting cable from the shore in

Guinea to a deep sea submarine fiber optic cable are not expected to have any perceptible

effect on the quality of the coastal waters of the Atlantic Ocean or on marine species or

habitat. For the cable and associated equipment onshore, there may be some temporary, low

to moderate environmental and social impacts including localized impacts to near shore

marine life and local fishermen access.

54. The Gambia has prepared and disclosed an Environmental and Social Impact

Assessment (ESIA) and an Environmental and Social Management Plan (ESMP) and a

Resettlement and Rehabilitation Plan (RRP) The plans are consistent with national laws,

any applicable treaty concerning international waters, and developed for the lateral cables

and any associated equipment that will be laid from the junction with the main cable through

territorial waters and onto the national shores, and also for the fiber on transmission lines, as

required. The reports clearly show that the cable system is not expected to have a large

environmental nor social impact.16

55. In Guinea given the emergency nature of the project and in accordance with OP/BP

8.00 (Rapid Response to Crises and Emergencies), an Environmental and Social

Screening and Assessment Framework (ESSAF) has been prepared and disclosed and

will be followed by an ESIA, ESMP and/or Resettlement Action Plan (RAP) not later

than one hundred twenty (120) days after effectiveness. A preliminary safeguard

assessment has been undertaken which concludes that the environmental and social impacts

are minimal.

56. For Burkina Faso, the overland Connection to fiber cable system is not expected to

have a large environmental and social impact. The terrestrial connectivity is expected to

follow the major roads already in place between Ouagadougou and neighboring countries.

As the precise route and civil works are still to be determined, an Environmental and Social

Management Framework (ESMF) has been prepared, consulted upon and disclosed both in

country and at Infoshop on May 13, 2011. The environmental impact of laying the additional

fiber optic cable along these routes will be very minimal. In addition to OP/BP 4.01

(Environmental Assessment) the Project triggers OP/BP 4.04 (Natural Resources) as the

cable is being laid along a road that goes through a national park and other areas, and OP/BP

4.11 (Cultural Heritage), as there is a possibility that the cable may be laid in areas where

cultural assets exist. The ESMF addresses both impacts and includes proposed mitigation

measures. An Environmental and Social Impact Assessement and/or Environmental and

Social Management Plan will be prepared as and when necessary during project

implementation. It should be noted that the project connection at the border with Ghana will

not lead to dispute or social conflicts because the borders between the two countries have

been clearly delineated and materialized.

57. In all countries there may be some temporary and/or permanent displacement of

Project-Affected Peoples (PAPs) as a result of the cable connectivity activities. The

cable is expected to follow Rights of Way for existing roads and/or transmission lines and

involuntary resettlement is expected to be minimal. Temporary displacement in urban areas

may involve larger numbers of PAPs. Resettlement issues are included in the ESSAF for

16

Disclosure of the ESIA, ESMP and RRP was on May 13, 2011 both in country and at Infoshop.

30

Guinea. A Resettlement and Rehabilitation Plan, equivalent to an Abbreviated RAP, has

been prepared, consulted upon and disclosed in The Gambia. For Burkina Faso, a

Resettlement Policy Framework (RPF) has been prepared, consulted upon, and disclosed

before appraisal. A Resettlement Action Plan (RAP) will be prepared as and when necessary

during implementation. (See Technical Annexes and Emergency paper for more details on

Environmental and Safeguards).

58. WARCIP APL 1B is expected to have positive social benefits. The main social impacts of

the project are the increased possibility of better access to ICT services for the population

and improved government service delivery. The project will (i) enable ICT to become a

driver for sustainable economic growth; (ii) enable the Government to use ICT to provide

decentralized services; (iii) improve access and quality of ICT services for the population,

businesses, and the Government; (iv) reduce isolation and enhance economic activities in

rural areas; and (v) create additional opportunities for women entrepreneurs to own ICT-

related Small and Medium Enterprises (SMEs).

F. Legal conditions and Covenants

i. Legal Conditions and Covenants for The Gambia

Effectiveness Conditions for The Gambia

(a) The execution and delivery, on behalf of the Recipient, of the Construction and

Maintenance Agreement, in form and substance satisfactory to the Association,

and containing no prohibition of divestiture of the Recipient‟s shareholding, has

been duly authorized or ratified by all necessary governmental or corporate

action.

(b) The SPV has been duly created, registered and made operational in the territory

of the Recipient, including through the appointment of its director general and the

adoption of its shareholders‟ agreement and its by-laws, in form and substance

satisfactory to the Association.

(c) With GAMTEL‟s acquiescence, the ACE Consortium has transferred to the SPV

all the rights and obligations of GAMTEL in the Construction and Maintenance

Agreement and has fully substituted GAMTEL with the SPV as the member of

the ACE Consortium.

(d) The Contractual Arrangement, in form and substance satisfactory to the

Association, has been entered into between the Recipient and the SPV.

(e) The Recipient shall have established the PIU under terms of reference and with

staff in numbers and with qualifications satisfactory to the Association. As part

of such staffing, there shall be in place for the PIU: (i) the project coordinator;

and (ii) a financial management specialist and a procurement specialist, all of

them under terms of reference and with qualifications and experience satisfactory

to the Association.

(f) The Recipient shall have adopted the Project Implementation Manual in form and

substance satisfactory to the Association.

Disbursement Conditions for The Gambia

Set up a computerized financial and accounting system for the Project for disbursements for

components 1.b, 2 and 3

31

Legal Covenants for The Gambia

(a).The Gambia shall take all action necessary on its behalf: (i) to carry out the

Resettlement and Rehabilitation Plan (“RRP”) with due diligence and efficiency and

at all times provide the funds necessary therefore; (ii) to adequately monitor and

evaluate the carrying out of the activities provided in the RRP in the carrying out of

the Project and in the contracts to be concluded for the construction of the landing

station there under; and (iii) to maintain the Association suitably informed of the

progress in the implementation of the RRP.

(b).The Gambia shall take all measures necessary to carry out the Environmental and

Social Management Plan with due diligence and efficiency, ensuring that adequate

information on the implementation of the mitigation measures to be implemented to

minimize any potential negative impact under the Project is suitably included in the

Project Reports to be prepared pursuant to the provisions of Section II.A.1 of the

Financing Agreement.

(c).The Gambia shall: (i) not later than three (3) months after the Effective Date,

initially recruit a consultant to perform a quarterly review of the internal control

system for the Project; and (ii) not later than four (4) months after the Effective Date,

recruit an external auditor for the PIU, both on the basis of terms of reference and

with qualifications and experience satisfactory to the Association.

ii. Legal Conditions and Covenants for Guinea

Effectiveness Conditions for Guinea

(a) GUILAB has been fully established and operational, in form and substance

satisfactory to the Association, in the territory of the Recipient, including through the

appointment of its Director General and the adoption of its shareholders‟ agreement

and its by-laws.

(b) With Sotelgui‟s acquiescence, the ACE Consortium has transferred to GUILAB

all the rights and obligations of Sotelgui in the Construction and Maintenance

Agreement and has fully substituted Sotelgui with GUILAB as the member of the

ACE Consortium.

(c) The Contractual Arrangement, in form and substance satisfactory to the

Association, has been entered into between the Recipient and GUILAB.

(d) The Recipient shall have established the PIU under terms of reference and with

staff in number and with qualifications satisfactory to the Association. As part of

such staffing, there shall be in place for the PIU: (i) the Project coordinator; and (ii) a

financial management specialist and a procurement specialist, all of them under terms

of reference and with qualifications and experience satisfactory to the Association.

(e) The Recipient shall have adopted the Project Implementation Manual in form and

substance satisfactory to the Association.

Disbursement Conditions for Guinea

Set up a financial and accounting computerized system for the Project for disbursements for

components 1.b, 2 and 3

32

Legal Covenants for Guinea

Guinea shall:

(a) not later than one hundred twenty (120) days after the Effective Date, prepare,

consult upon and disclose the Environmental and Social Impact Assessment

(“ESIA”), the Environmental and Social Management Plan (“ESMP”), and/or the

Resettlement Action Plan (“RAP”), as the case may be, as approved by the

Association;

(b) ensure that the construction of the landing station related to component 1.1 of the

Project does not commence until and unless: (i) the Association shall have approved

the ESIA, ESMP, and/or the RAP, as the case may be, and the same documents have

been consulted upon and disclosed as approved by the Association; and (ii) it shall

have verified, through its own staff, outside experts, or existing environmental/social

institutions, that the activities under component 1.a of the Project meet the

environmental and social requirements of appropriate national and local authorities

and that they are consistent with the Association‟s applicable environmental and

social assessment and safeguard policies and comply with the environmental and

social review procedures set forth in the Project Implementation Manual;

(c) take all measures required on its behalf to carry out, or to ensure that GUILAB

carry out, the ESIA, ESMP, and/or the RAP, as the case may be, in accordance with

the provisions of the ESSAF; and

(d) ensure that the relevant mitigation and monitoring provisions of the ESIA, ESMP,

and/or RAP, as the case may be, are appropriately implemented.

(e) Guinea shall, not later than four (4) months after the Effective Date, recruit an

external auditor for the PIU on the basis of terms of reference and with qualifications

and experience satisfactory to the Association.

iii. Legal Conditions and Covenants for Burkina Faso

Effectiveness Conditions for Burkina Faso

The Recipient shall have adopted the Project Implementation Manual in form and substance

satisfactory to the Association.

Disbursement Conditions for Burkina Faso:

No withdrawal shall be made for component 1.1.1, until and unless:

(A) i the Selected Operator has been duly created, registered and made operational in

the territory of the Recipient, including through the appointment of its manager and

the adoption of its shareholders‟ agreement and its by-laws, in form and substance

satisfactory to the Association; and (B) there shall be furnished to the Association an

opinion satisfactory to the Association of counsel acceptable to the Association

showing that the Selected Operator has been duly created, registered and made

operational in the territory of the Recipient and is legally authorized to operate in

accordance with the laws of the Recipient;

(A) ii the Contractual Arrangement, in form and substance satisfactory to the

Association, has been entered into between the Recipient and the Selected Operator;

and (B) there shall be furnished to the Association an opinion satisfactory to the

Association of counsel acceptable to the Association showing that the Contractual

Arrangement has been duly authorized or ratified on behalf of the Recipient and the

33

Selected Operator, and executed and delivered on their behalf, and is legally binding

upon the Recipient and the Selected Operator in accordance with its terms; and

(B) the Capacity Purchase Contract, in form and substance satisfactory to the

Association, has been entered into between the Selected Operator and the operator

selected for the delivery of the bandwidth to be supplied under component 1.1.1 of

the Project.

Legal Covenants for Burkina Faso

Burkina Faso shall:

(a) ensure that neither the construction of the Virtual Landing Point under component

1.1.2 of the Project nor the development of the fiber link from the city of

Ouagadougou to the city of Paga under component 1.2.1 of the Project commence

until and unless: (i) the Association shall have approved the Environmental and

Social Impact Assessment (“ESIA”), the Environmental and Social Management

Plan (“ESMP”), and/or the Resettlement Action Plan (“RAP”), as the case may be,

and the same documents have been consulted upon and disclosed as approved by the

Association; and (ii) it shall have verified, through its own staff, outside experts, or

existing environmental/social institutions, that the activities under components 1.1.2

and 1.2.1 of the Project meet the environmental and social requirements of

appropriate national and local authorities and that they are consistent with the

Association‟s applicable environmental and social assessment and safeguard policies

and comply with the environmental and social review procedures set forth in the

Project Implementation Manual;

(b) take all measures required on its behalf to carry out, or to ensure that the Selected

Operator carry out, the ESIA, ESMP, and/or the RAP, as the case may be, in

accordance with the provisions of the ESMF and the RPF; and

(c) ensure that the relevant mitigation and monitoring provisions of the ESIA, ESMP,

and/or RAP, as the case may be, are appropriately implemented and that adequate

information on how any potential negative impact under Parts 1.1.2 and 1.2.1 of the

Project has been minimized is suitably included in the Project Reports to be prepared

pursuant to the provisions of Section II.A.1 of the Financing Agreement.

(d) Burkina Faso shall, not later than three (3) months after the Effective Date: (A)

employ the existing external auditor of the PIU on the basis of terms of reference

satisfactory to the Association; and (B) redeploy to the PIU one of the accountants

employed by the Recipient under the Association-financed West and Central Africa

Air Transport Safety and Security Project (Credit No. 4163-BUR).

34

Annex 1: Operational Risk Assessment Framework (ORAF)

THE GAMBIA, GUINEA, AND BURKINA FASO

WARCIP 1B

Project Development Objective(s)

To increase the geographical reach of broadband networks and reduce costs of communications services in the Gambia, Guinea and Burkina Faso

PDO Level Results

Indicators: Volume of international traffic (Kbit/s per person)

Access to telephone services (%)

Access to internet services (%)

Average monthly price of wholesale international E1 capacity link from capital city to Europe

Number of direct project beneficiaries, of which female

35

Risk Category Risk Rating Risk Description Proposed Mitigation Measures

Stakeholder

MI

Inadequate interest from private sector to

finance PPP for submarine, virtual

landing and terrestrial connectivity

Potential "veto" by existing private

licensees and government operators over

different aspects of the program.

Difficulties in changing ACE CMA

signatories and handing over rights and

responsibilities of national operators to the

new SPVs. For Guinea and Gambia

Delays in agreeing to PPP model or

models to manage all aspects of the

International Connectivity

PPA to make PPP structures attractive for

private investment. Private sector already

signaled significant interest under

transparent conditions and support from WB.

Detailed due diligence will identify

incentives for existing operators to willingly

participate in the proposed infrastructure.

Ongoing discussions with ACE and initial

TAs will support a framework for the change

of signatories.

Transaction Advisory Team consisting of

legal and financial advisers will be in place

to support development of business model

and rules of engagement. .

Implementing

Agency Risks

(including FM &

PR Risks)

MI Complex PPPs schemes and the VLP will

require significant capacity building

during implementation due to inadequate

technical capacities of the respective

implementing agencies.

In the cases of The Gambia and Guinea,

the Financial Management staff is not yet

in place and there is not an FM manual

and an accounting software

Built in TA to create and sustain capacity.

Technical advisors will supplement internal

government technical capacity. In the case of

Burkina, an experienced Implementation

Unit exists to support implementation.

A new stand-alone Project Implementation

Unit will have the overall FM responsibility

on the project in The Gambia and Guinea.

36

Risk Category Risk Rating Risk Description Proposed Mitigation Measures

Project Risks

Design

MI Non conformance with cross-effectiveness

conditions and cross-suspension remedies

for regional cooperation

ACE penalties due to delays in missing

payment milestones

Insufficient demand for services making

project commercially unviable

For Burkina: Potential monopoly risks

for the VLP and transmission

infrastructure.

Program structured so that if there is default

in any one country, this would only reduce

the scope but not affect the implementation

of the separate activities of the other two.

Concessional financing arranged to cover

shortfalls for the ACE payment milestones.

Early traffic assessment results confirm

commercial viability.

The project is not relatively complex. The

components are dedicated to well-specified

structures which will designate a focal point.

For Burkina: An envisaged carrier neutral

VLP and open access infrastructure policy

will prevent any monopoly.

37

Risk Category Risk Rating Risk Description Proposed Mitigation Measures

Social &

Environmental

ML Possible negative environmental and social

impacts for laying the cable and Landing

Station/VLP.

The institutional responsibilities for

preparing the various safeguards

instruments would lie with the various

ministries whose capacity for safeguards is

constrained.

For Guinea, an Environmental and Social

Screening and Assessment Framework

(ESSAF) has been prepared and included as

an annex to the PAD. It will be followed by

Environmental and Social Impact

Assessments (ESIAs) and/or Environmental

and Social Management Plans (ESMPs)

and/or a Resettlement Action Plan (RAP)

that will be developed during project

implementation. For The Gambia an ESMP

and a RRP were prepared and disclosed

before appraisal. Studies confirmed that the

environmental and social impacts of the

project are minimal, but some 27 households

will be affected during laying the cable and

will be compensated. For Burkina, an

Environmental and Social Management

Framework (ESMF) and a Resettlement

Policy Framework (RPF) for the regional

connectivity component have been prepared

and disclosed before appraisal and indicate

minimal environmental and social impact.

Once the final sites of VLP and transmission

infrastructure are chosen and the specific

civil works identified, ESIAs, ESMPs and/or

RAPs or ARAPs, as appropriate, will also be

prepared. Finally, as a PPP, relevant

technical clauses will be part of the private

entities bidding or binding documents to

ensure the execution of the agreed

safeguards and implementation of the

recommendations.

Capacity strengthening is included in the

project as part of implementation support

component.

38

Risk Category Risk Rating Risk Description Proposed Mitigation Measures

4.1 Program &

Donor

MI Delays of funding of backbone

infrastructure

Failure of IsDB parallel funding to

materialize would prevent Guinea and The

Gambia from getting the full benefits of

international connectivity nationally but

would have no effect on the attainment of the

international connectivity component.

For The Gambia has already secured funding

from IsDB. The Project will support the TA

component to ensure that backbone

infrastructure will be managed under open

access. In the case of Guinea, discussion is

quite advanced with IsDB for the backbone.

4.2 Delivery

Quality

ML PIUs and concerned Ministries have weak monitoring and evaluation capacities. Operators may be unwilling to disclose key financial and performance information.

Training and TA will be integral to the monitoring and evaluation system which is designed with incentives to advance; not curtail operators’ competitiveness.

4.3 Other (max

2)

Overall Risk Rating at

Preparation

Overall Risk Rating During

Implementation Comments

MI

MI

Major issues and risks will be dealt with by effectiveness through targeted activities financed by the PPA. The MI rating for implementation is mainly due to the risky country and institutional contexts, outside the project scope.

39