congo central africa backbone (cab) project congo component
TRANSCRIPT
AFRICAN DEVELOPMENT BANK
CONGO
CENTRAL AFRICA BACKBONE (CAB) PROJECT
CONGO COMPONENT
OITC/ORCE DEPARTMENTS
May 2016
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TABLE OF CONTENTS
I. STRATEGIC THRUST AND RATIONALE………………………………………………………………………………..1
1.1 Project Linkages with Country Strategy and Objectives ........................................................................... 1 1.2 Rationale for Bank’s Intervention ............................................................................................................. 1 1.3 Donor Coordination .................................................................................................................................. 2
II. PROJECT DESCRIPTION .................................................................................................................. 3 2.1. Project Objectives and Components ......................................................................................................... 3 2.2. Technical Solutions Adopted and Alternatives Explored ......................................................................... 5 2.3. Project Type .............................................................................................................................................. 6 2.4. Estimated Project Cost and Financing Arrangements ............................................................................... 6 2.5. Project Area and Beneficiaries .................................................................................................................. 8 2.6. Participatory Approach for Project Identification, Design and Implementation, including Active Private
Sector Participation……………………………………………………………………………………….8
2.7. Bank Group Experience and Lessons Reflected in Project Design ........................................................... 9 2.8. Key Performance Indicators ................................................................................................................... 9
III. PROJECT FEASIBILITY .................................................................................................................. 10 3.1. Economic and Financial Performance ..................................................................................................... 10 3.2. Environmental and Social Impact ........................................................................................................... 11
IV. PROJECT IMPLEMENTATION ...................................................................................................... 12 4.1. Implementation Arrangements ................................................................................................................ 12 4.2. Procurement Arrangements ..................................................................................................................... 13 4.3. Financial Management and Disbursement Arrangements ....................................................................... 13 4.4. Monitoring .............................................................................................................................................. 14 4.5. Governance ............................................................................................................................................. 15 4.6. Sustainability ........................................................................................................................................... 16 4.7. Risk Management ................................................................................................................................... 16 4.8. Knowledge Building ............................................................................................................................... 17
V. LEGAL FRAMEWORK ..................................................................................................................... 17 5.1. Legal Instrument ..................................................................................................................................... 17 5.2. Conditions Associated with AfDB Intervention ..................................................................................... 17 5.2.1. Conditions Precedent to Loan Effectiveness ........................................................................................... 17 5.2.2. Conditions Precedent to First Disbursement of AfDB Loan ................................................................... 17 5.2.3. Other Conditions ..................................................................................................................................... 17 5.2.4. Undertakings ........................................................................................................................................... 17
VI. RECOMMENDATION .........................................................................................................................18
ANNEX I: DESCRIPTION OF INSTITUTIONAL SUPPORT AND CAPACITY BUILDING
ANNEX II: RATIONALE FOR THE LEVEL OF COUNTERPART CONTRIBUTION TO AFDB
FINANCING
ANNEX III: COMPARATIVE SOCIO-ECONOMIC INDICATORS
ANNEX IV: STATUS OF BANK PORTFOLIO IN CONGO AS AT 31 JANUARY 2016
ANNEX V: MAP OF THE OPTICAL FIBRE INFRASTRUCTURE PROJECT AREA (AFDB AND
WORLD BANK FINANCING)
LIST OF TABLES AND GRAPHS
Table 2.1 : Project Components ................................................................................................................... 5 Table 2.2 : Alternative Solutions Explored and Reasons for Rejection ....................................................... 6 Table 2.3 : Summary of Estimated Project Cost by Component .................................................................. 7 Table 2.4 : Summary of Estimated Project Cost by Expenditure Category ................................................ 7 Table 2.5 : Summary of Estimated Project Cost by Source of Financing ................................................... 7 Table 2.6 : Summary of Project Components by Source of Financing (EUR million) ................................ 7 Table 2.7 : Expenditure Schedule by Source of Financing (EUR million)…………………………………8 Table 3.1 : Economic and Financial Assessment…………………………………………………………. 10 Table 3.2 : Sensitivity Test…………………………………………………………….………………… 11
i
Currency Equivalents April 2016
EUR1 = CFAF 655.96
UA1 = EUR 1.27
Fiscal Year
1 January - 31 December
ACRONYMS AND ABBREVIATIONS
ACTIC Congolese Information and Communications Technology Agency
ADF African Development Fund
AfDB African Development Bank
ARPCE Posts and Electronic Communications Regulatory Authority
CAB Central Africa Backbone
CAR Central African Republic
CEAC Centre for Education and Community Action
CEMAC Central African Economic and Monetary Community
CFAF African Financial Community Franc
CSIRT Computer Security for Incident Response Team
DCC Digital Community Centre
DRC Democratic Republic of Congo
DUP Public Interest Statement
ECCAS Economic Community of Central African States
EIRR Economic Internal Rate of Return
ESMP Environmental and Social Management Plan
EU European Union
EWS Emergency Warning System
GDP Gross Domestic Product
GHG Greenhouse Gas
HDPE High-density Polyethylene
ICB International Competitive Bidding
ICT Information and Communications Technologies
IJSB Brazzaville Institute for Young Deaf People
INAC Congolese National Institute for the Blind
IsDB Islamic Development Bank
ITU International Telecommunication Union
JICA Japan International Cooperation Agency
KEXIM Korea Eximbank
LCB Local Competitive Bidding
LTS Long-Term Strategy
MAFDP Ministry of Land Tenure and State Property
ii
MEFPPPI Ministry of Economy, Finance, Planning, Public Investment and Integration
METPFE Ministry of Technical and Vocational Education, Skills Training and Employment
MPFIFD Ministry of Women’s Empowerment and Integration in Development
MPT Ministry of Posts and Telecommunications
MTE Ministry of Tourism and Environment
NEPAD New Partnership for Africa's Development
NIS National Institute of Statistics
NPV Net Present Value
OF Optical Fibre
PAP Project Affected Person
PCN Project Concept Note
PCU Project Coordination Unit
PIDA Programme for Infrastructure Development in Africa
PIS Postal Information System
PKI Public Key Infrastructure
PVC Polyvinyl Chloride
RC Republic of Congo
RISP Regional Integration Strategy Paper
SOPECO Congolese Posts and Savings Corporation
TFP Technical and Financial Partner
UMNG Marien Ngouabi University
WB World Bank
iii
PROJECT INFORMATION SHEET
Client Information
Borrower : REPUBLIC OF CONGO
Project Name : CENTRAL AFRICA BACKBONE (CAB) PROJECT –
CONGO COMPONENT
Project Location : SANGHA AND BRAZZAVILLE DIVISIONS
Executing Agency : MINISTRY OF POSTS AND TELECOMMUNICATIONS
(MPT)
CAB-CONGO PROJECT IMPLEMENTATION UNIT
(CAB-CONGO/PIU)
1. Financing Plan
Source of Financing Amount in
CFAF million Amount in
EUR million Amount in UA
million Instrument
AfDB 34 138 52.041 40.978 Project Loan
GOVERNMENT OF
CONGO 9 520 14.514 11.428 Public Investment Budget
TOTAL 43 658 66.555 52.406
2. Key AfDB Financial Information
Loan Currency : Euro (EUR)
Loan Interest Type : Floating (EURIBOR)
Interest Rate Margin : Base rate + Bank financing margin1 + 60 bp + maturity
premium2
Commitment Fee : Not applicable
Other Costs : Not applicable
Tenor : Six-monthly
Maturity : 20 years
Grace Period : 60 months
FNPV (baseline scenario) : EUR 143.42 million
FIRR (baseline scenario) : 18.88%
EIRR (baseline scenario) 29.12%
3. Timeframe - Milestones (expected)
Activities (Month/year)
Concept Note Approval November 2015
Project Approval May 2016
Effectiveness September 2016
Completion December 2020
Last Disbursement June 2021
Last Reimbursement of AfDB Loan December 2036
1 The financing margin corresponds to the cost of the Bank loan calculated twice a year. 2 Given that the weighted average maturity is < = 12.75, there is no maturity premium to be applied
iv
EXECUTIVE SUMMARY
1. Project Overview: Building on the objectives set for the Information and
Communications Technologies (ICT) sector by the Growth, Employment and Poverty
Reduction Strategy Paper (GEPRSP), the Government of Congo requested the Bank to finance
the national component of the Central Africa Backbone (CAB) project through the laying of
550 kilometres of optical fibre cables on the interconnection links with Cameroon and the CAR
and the establishment of a national data centre (Datacentre). The project also envisages the
implementation of a number of ICT applications and services (Emergency Warning System, e-
Post, etc.), and an institutional support concerning, among others, feasibility studies for the
preparation of the next phase of the project, support to the Posts and Electronic Communications
Regulatory Authority (ARPCE) and the Congolese Information and Communications
Technology Agency (ACTIC), support to the Congolese National Institute for the Blind
(INAC), the Brazzaville Institute for Young Deaf People (IJSB) and Marien Ngouabi
University (UMNG), and support for women’s empowerment, the promotion of vocational
training and the development of indigenous people. The Ministry of Posts and
Telecommunications (MPT) will be the project executing agency. The project will be
implemented over a four-year period. The total project cost is estimated at Units of Account
(UA) 52.406 million. The Bank will provide UA 40.978 million through the AfDB window and
the country’s counterpart contribution will be UA 11.428 million.
2. Needs Assessment: In addition to its regional focus, the project aims to complete the
missing links in the national optical fibre backbone. It will help to extend the national optical
fibre network coverage in this region and to Congo’s borders with Cameroon and the Central
African Republic (CAR). The links with neighbouring countries (especially Cameroon) will
offer them an alternative service for international traffic through submarine cables with landfall
points in Cameroon. Thus, the cost of international connectivity should be reduced by
introducing these new international outlets. The project also enables Congo to take advantage
of the extension of its national optical fibre backbone to modernize the postal sector by
introducing e-Posts in the Congolese Posts and Savings Corporation (SOPECO), hence the
inclusion of the project (for which all the required studies have already been carried out) in the
mid-term review of Congo’s Country Strategy Paper (CSP) for 2013-2017 as well as the Central
Africa Regional Integration Strategy Paper 2011- 2015 (whose implementation period is being
extended to 2017).
3. Bank’s Value Added: the Bank’s value added stems from the experience garnered
through exchanges with countries since the project was initiated in 2007. In fact, in coordination
with the World Bank, the Bank has provided substantial resources for the financing of studies
on the regional CAB project, while continuing exchanges with countries involved ever since.
The Bank’s intervention will also enable Congo to carry out these major infrastructure projects,
particularly its interconnections with neighbouring countries, in accordance with international
norms and standards, in order to avoid possible risks of defects that may seriously undermine
the economic benefits of the project and its reasonable financing costs.
4. Knowledge Building: the project will offer an opportunity to improve knowledge in
the area of national optical fibre infrastructure. Provision has been made to prepare the first
Broadband Infrastructure Development Master Plan. ARPCE could use this Plan, among others,
based on the results of the study on the profitability thresholds of optical fibre deployment, to
develop all appropriate tools for regulating the broadband infrastructure sector. Failure to
control illegal trenching could cause serious damage to costly road infrastructure.
v
RESULTS-BASED LOGICAL FRAMEWORK REPUBLIC OF CONGO
Country and Project Name: Congo: Central Africa Backbone (CAB) Project – Congo Component. Project Goal: Contribute to the diversification of the economy by fostering the emergence of a digital economy in Congo.
Results Chain Performance Indicators
Means of Verification Risks/Mitigation Measures Indicator (including CSI) Baseline Situation Target
Imp
act
Contribute to diversifying Congo’s economy, breaking the digital isolation
of rural areas coupled with regional
integration, and creating employment opportunities, especially for youths.
Percentage of ICT contribution to the country's GDP through sector tax reforms.
Number of interconnections with neighbouring countries.
4.4% (2014)
1 (2015)
10% (at least) in 2020
3 (2020)
Reports and statistics by the MPT, ARPCE, etc.
Project impact monitoring
and evaluation reports. Reports by the ITU and
ECCAS.
Ou
tco
mes
Outcome 1: Improved access of the
population, government services and businesses to quality
telecommunications/ICT services at
affordable prices.
Internet service penetration.
Price (USD/month) of a megabyte per second (Mbps) to Europe.
Number of people benefiting from online
government (informational and transactional) services.
Number of students benefiting from the
business incubator.
7% (2013)
1 076 (WACS/2014)
0 (2015)
0 (2015)
30% (2020)
358 (2020)
50 000 (2020)
5 000 (2020)
Reports and statistics by
the MPT, ARPCE, ACTIC, etc.
Reports by the METFPE,
MPFIFD, MAFDP, SOPECO, INCA, IJSB,
UMNG, etc.
Project impact
monitoring and
evaluation reports
prepared by CAB-Congo/PIU.
Reports by the ITU,
ECCAS and the World Bank (Doing Business).
Risks: (i) Non-compliance with
commitments regarding the laying of optical fibre cables; (ii) no impact on prices; (iii)
premature degradation of the optical fibre
due to lack of maintenance; (iv) lack of maintenance and upgradeability of the
various applications installed; and (v) social
tension arising from protests against the
result of the presidential election.
Mitigation measures: (i) Government's
commitment to implement the guidelines of the International Telecommunication Union
(ITU); (ii) technical assistance to ARPCE;
(iii) commitment by Congo Télécom and SOPECO to ensure the sustainability of the
infrastructure put in place; (iv) call for
inclusive dialogue by the opposition in order to ease the above-mentioned political and
social tension.
Outcome 2: Contribution to the social, economic and financial inclusion of the
population of the country's hinterland.
Number of beneficiaries of e-Post.
Number of people benefiting from solar
electric terminal systems.
Number of indigenous people benefiting from a community radio for awareness campaigns.
0 (2016)
0 (2016)
0 (2016)
5 000 (2020)
10 000 (2020)
90 000 (2020)
Outcome 3: Improved training and access to ICT in education.
Number of UMNG students with access to application tools (portal, services and an
online training medium, etc.).
Number of INAC and IJSB students with
access to ICT media in their training.
Number of women with access to training
programmes (ICT, entrepreneurship, etc.).
0 (2016)
0 (2016)
0 (2016)
30 000 students (2020)
350 (2020)
10 000 (2020)
Ou
tputs
Output 1: Optical fibre infrastructure
Optical fibre connections established Technical sites built
Length of optical fibre cable.
Number of technical sites along project links.
≈ 1800 km (2016)
0 (2016)
≈ 2 350 km (2020)
4 (2020)
CAB/Congo/PIU progress reports.
Control mission reports.
Project supervision reports.
Project completion
reports.
RISKS: (i) Delay in the release of counterpart contributions; (ii) slow pace and
lack of transparency in the procurement
process; (iii) escalation of the cost of works; and (iv) non-compliance with technical and
functional specifications in the context of
various project applications.
Mitigation measures: (i) Continuous
dialogue with the Ministry in charge of
Output 2: ICT applications and
services
ICT applications (Emergency Warning System, e-Post, and
standard e-Gov platform) installed.
Number of new ICT applications developed and put into operation
0 (2016)
3 (2020)
vi
Output 3: Institutional support and
capacity building
Optical fibre infrastructure network
development and preservation.
Conduct of feasibility studies to prepare the next phase of the project: (i) a CSIRT+ PKI
project; (ii) an integrated electronic system for
the identification of persons (SIGIEP); (iii) a mobile financial service development project;
(iv) implementation of the e-Gov; (v)
establishment of a National ICT School; and
(vi) establishment of a hybrid mail system.
Number of women’s centres, digital community centres and community radios
equipped.
Number of students in industrial sections of government technical high schools awarded
scholarships.
Number of community radios for indigenous people in the Sangha and Likoula Regions.
2016: lack of
strategic framework
for the development of the national optical
fibre backbone
2015: absence of bases for a large-
scale deployment of
ICT applications /services
0 (2016)
0 (2016)
0 (2016)
2020: strategic decision-
making documents
prepared (Master Plan and study on profitability
thresholds)
2019: feasibility studies on the delivery of
electronic administrative
services to the public and private sectors
11 (2020)
24 (by 2020), 2/3 of them
female students
1 (2020)
CAB-Congo/PCU
progress reports.
Control mission reports. Project supervision
reports.
METPFE monitoring and evaluation report.
UN Women reports.
Statistics by MPFIFD. Project completion
reports.
finance in the context of the preparation of
forward-looking finance acts throughout the
project period; (ii) strict monitoring of Bank procurement procedures; (iii) consideration
of physical contingencies in the project; and
(iv) CAB/Congo/PIU capacity building.
Output 4: Project Management
Support for CAB-Congo/PCU.
Monitoring and evaluation of
technical implementation and socio-economic and environmental
impacts.
Project accounting and financial audit.
Project technical audit.
Audit reports.
Reports on the monitoring and evaluation of various aspects of the project.
Technical audit report.
2016: No report.
2020: at least 4 audit
reports, at least 3 monitoring and evaluation
reports, and 1 technical
audit report prepared, etc.
CAB-Congo/PCU
progress reports.
Control mission reports.
Project supervision
reports.
Project completion reports.
Key
Acti
vit
ies
Components Resources
A. Optical Fibre Infrastructure
B. ICT Applications and Services
C. Institutional Support and Capacity Building
D. Project Management
Components EUR million
Optical Fibre Infrastructure (Component A) 42.036
ICT Applications and Services (Component B) 8.258
Institutional Support and Capacity Building
(Component C) 6.911
Project Management (Component D) 3185
Base Cost 60.39
Physical Contingencies 4.227
Price Escalation 1.938
Total Project Cost 66.555
vii
PROJECT IMPLEMENTATION SCHEDULE
1
REPORT AND RECOMMENDATION OF MANAGEMENT TO THE BOARD OF
DIRECTORS CONCERNING A PROPOSAL TO GRANT A EUR 52.041 MILLION ADB
LOAN TO THE REPUBLIC OF CONGO TO FINANCE THE CENTRAL AFRICA
BACKBONE (CAB) PROJECT – CONGO COMPONENT
I. STRATEGIC THRUST AND RATIONALE
1.1 Project Linkages with Country Strategy and Objectives
1.1.1. Congo potentially occupies a strategic position for ICT development in Central Africa as it
shares borders with three countries with submarine cable (SAT3, WACS and ACE) landfall points
and which could provide it with an alternative to the single submarine cable (WACS) to which it has
access so far. Yet, of all its neighbours, the country has only one under-river optical fibre link with
the Democratic Republic of Congo (DRC). Moreover, its own use of connectivity for data is still
limited. In addition to the low Internet penetration rate, with only 7% of the population enjoying
Internet access, broadband Internet access in rural areas is almost non-existent, apart from localities
along the main roads crossed by the optical fibre thus far.
1.1.2. Given the significant needs in terms of regional and national connectivity, and the catalytic
effect of ICT in all sectors of the country, it was agreed that the Bank’s intervention will follow the
multi-phased programme-based approach. The project is consistent with the Growth, Employment
and Poverty Reduction Strategy Paper (GEPRSP) which is a component of Congo’s National
Development Plan (NDP) 2012-2016. Given the cross-cutting nature of ICT, it is in line with the five
GEPRSP pillars, namely: (i) governance; (ii) economic transformation; (iii) economic and social
infrastructure development; (iv) social development; and (v) sustainable development. The recent
adoption (2014) of a new National Cyber Strategy is in line with the GEPRSP and seeks to provide
wide ICT access for the Congolese people. The main objective of this strategy is to increase the
provision of high-quality broadband electronic communication services at competitive prices, in line
with the Brazzaville Declaration (February 2014) issued by Central African Ministers in charge of
ICT. Lastly, it is in keeping with Pillar I of Congo’s 2013-2017 CSP and the Central Africa Regional
Integration Strategy Paper (RISP) 2011-2015 (whose implementation period is being extended to
2017). It also contains positive externalities that will strengthen sector governance (Pillar II of the
said CSP), particularly through the modernization of major State applications.
1.1.3. Beyond strictly infrastructural aspects, the project is intended to help Congo to develop a
genuine digital economy in order to ultimately create enough jobs by improving factors of production.
Thus, the implementation of the e-Post project for SOPECO will complement the optical fibre system
through the introduction of new electronic products and services. In addition, the establishment of the
National Data Centre will help to lay physical bases in terms of application storage and hosting space
for the development of an e-government service in Congo. This should be complemented by the
establishment of a technology park during the implementation of the next phase of the project in order
to establish an ICT cluster housing in one place all actors of the technology value chain, namely
innovative enterprises (start-ups in particular), training institutions, research laboratories, etc.
1.2 Rationale for Bank’s Intervention
1.2.1. The project is consistent with the Bank’s Ten-Year Strategy (2013-2022) particularly the
two pillars on infrastructure development and the promotion of regional integration as well as its ICT
Sector Strategy with respect to components on regional integration and the adoption of online
services. It also addresses the issue of green growth and inclusive development (especially gender
issues) through the following initiatives: (i) capacity building of various women’s centres and digital
community centres; (ii) provision of support to the Congolese National Institute for the Blind (INAC)
and the Brazzaville Institute for Young Deaf People (IJSB); (iii) the establishment of an Emergency
Warning System (EWS); (iv) implementation of women’s empowerment and local population
2
development activities; and (v) monitoring of project environmental and social impacts. All these
activities will be implemented in accordance with the requirements of the Bank’s Integrated
Safeguards System.
1.2.2. The Bank’s intervention in this project is justified by the fact that broadband connectivity is
a key component for the development, adoption and use of ICT in various economic activities with a
view to promoting socio-economic inclusion as well as social cohesion in the country. Based on
several studies carried out notably by the World Bank in 2010 in Africa, it is now proven that a 10%
increase in the number of Internet broadband connections will lead, among others, to a 1.3% boost in
economic growth. The ICT sector accounts for 6% of private employment in Congo and contributes
an estimated 4.4% (6% excluding oil) to gross domestic product (GDP). It could be even more
beneficial provided that the infrastructure and application prerequisites are in place since it already
makes up at least 50% of the tertiary sector.
1.2.3. It should be underscored that CAB-Congo Component is in line with the overall framework
of the CAB regional project, the Cameroonian component which had already been approved by the
Bank in July 2015. In addition, the establishment of optical fibre links by the CAB-Congo project is
in perfect synergy with the road projects financed by the Bank in Congo, among others, which has
systematically provided for the laying of ducts since 2008. All that is required is to procure the optical
fibre cables for the roads involved in the project, given that most of the costs will be borne by the
civil engineering component. This is the case with the Ketta-Djoum road under this project. These
links with neighbouring countries, particularly Cameroon, will induce competition between the
various additional underwater cables (ACE and SAT3) to which Congo will be connected and will,
in turn, lead to a sharp drop in international bandwidth prices.
1.2.4. The country is experimenting with a risky electoral process which may lead to the disruption
of political dialogue and social cohesion, causing social tension and the risk of falling back into
fragility. The context is indeed risky for the implementation of this project, but the risk related to its
“non-implementation” is higher insofar as the project could significantly help to limit the factors that
contribute to disrupting social cohesion. In fact, by increasing digital connectivity, the project will
contribute to enhancing trade, contacts and cohesion between communities, bringing government
services closer to the grassroots, offering virtual spaces for dialogue, increasing access to employment
opportunities, particularly for youths, promoting women’s empowerment, etc.
1.3 Donor Coordination
1.3.1. The Ministry of Economy, Finance, Budget and Public Investment and the Ministry of
Planning and Integration coordinate aid and cooperation with donors at the national level. Regarding
technical and financial partners (TFPs), the TFP Consultation Framework and Thematic Groups
(TGs), which focus on the five main pillars of the National Development Plan (NDP) 2012-2016
adopted in 2014, are a platform for dialogue and discussions on all key development issues in Congo.
The AfDB co-chairs the PTF Thematic Group on infrastructure and also participates actively in key
thematic groups such as governance, public finance management and statistics.
1.3.2. Regarding the ICT sector, in particular, there is a forum for constant dialogue between the
World Bank and the Bank, in consultation with the MPT. In addition to this operation, the Bank has
financed the CAB-Congo project through the review of the legal and regulatory framework as well
as the ongoing laying of optical fibre cables along the Pointe-Noire – Dolisie – Mbinda – Gabon
border road section (see map attached) and would like to continue to provide its support beyond end-
2016 (end of current financing). It is therefore ready to work closely with the Bank for its
3
implementation, particularly through a joint PCU/CAB-Congo, the sharing of documents and
information, joint meetings, as well as mutual monitoring of the progress of actions undertaken.
1.3.3. The Bank has acquired extensive experience through its exchanges with all the countries of
the sub-region since the CAB project was initiated in 2007. In coordination with the World Bank, the
Bank allocated substantial resources to finance studies on the initial regional CAB project. Thus, the
CAB-Cameroon project was approved by the Bank in July 2015 and the CAB-CAR project is seeking
additional financing from the European Union (EU). This operation will enable Congo to carry out
these major infrastructure projects, particularly its interconnections with neighbouring countries,
while complying with international norms and standards, in order to avoid possible risks of defects
that could seriously undermine the economic benefits of the project and its reasonable financing costs.
1.3.4. During the project identification, preparation and appraisal missions, the Bank team held
discussions with these key TFPs (WB, JICA and KEXIM). The discussions helped to harmonize
views concerning specific project components and the joint financing of the Project Coordination
Unit (PCU/CAB-Congo) with the World Bank. All these partners have acknowledged the importance
and relevance of the project, which is fully consistent with the operations of other partners. This
explains the interest shown by JICA and KEXIM in co-financing the next phase of the project.
II. PROJECT DESCRIPTION
2.1. Project Objectives and Components
2.1.1. The overall objective of this project is to contribute to diversifying the Congolese economy
by significantly increasing tax revenue and considerably reducing the cost of economic and social
transactions, breaking the digital isolation of rural areas as well as enhancing regional integration
through optical fibre infrastructure enabling access to neighbouring countries (Cameroon and CAR)
and creating employment opportunities, particularly for youths.
2.1.2. The construction of optical fibre infrastructure will contribute to reducing the cost of
accessing high-quality ICT services. It will also generate additional resources for Congo not only
through induced economic activities within the country itself, but also through taxes on the data
streams passing through the WACS international underwater cable with landing points at Matombi,
near Pointe-Noire. It could also contribute to enhancing social cohesion by improving digital
connectivity between various communities as well as between government services and users.
2.1.3. In terms of ICT infrastructure, the project seeks particularly to: (i) extend the national optical
fibre backbone to two major sections (interconnection with neighbouring countries, namely
Cameroon and CAR) for about 550 kilometres of fibre; and (ii) set up a National Data Centre. In
addition, it may also be necessary to: (i) set up a mini-data centre and a business incubator for Marien
Ngouabi University; and (ii) rehabilitate the library, computer rooms and the demutization room of
the Brazzaville Institute for Young Deaf People (IJSB) and the Congolese National Institute for the
Blind (INAC). The purpose of establishing the business incubator is to provide students with a
suitable environment for ICT-based entrepreneurship.
2.1.4. Concerning the legal and regulatory framework of the ICT sector, the Congolese
Government imposes no restriction on inter-urban links which include the two connections covered
by this project or on urban links. However, given the investment cost of optical fibre deployment,
particularly inter-urban links, private operators fall back on the existing optical fibre links established
mainly through the National Coverage Programme (PCN) financed with own funds and marketed by
Congo Télécom, besides their microwave links. The main obstacle to the use of these inter-urban
links and, hence, ICT development in the country, is related to excessive taxation by successive
finance acts (FH management and usage fee, optical fibre royalty, authorization for international
4
gateway access and annual fees, etc.). Thus, given the tax burden on the entire ICT sector value chain,
the conduct of the study on the ICT taxation model is relevant.
2.1.5. The project will support the regulation of the wholesale data market under the responsibility
of the ARPCE by fully enforcing the “open access” principle on each optical fibre link financed by
the Bank in order to ensure minimal competitive conditions on access costs, to the benefit of end
users in Congo. In this regard, a specific provision has been made concerning ARPCE, which involves
preparing an economic model for fixing the cost of access to national and international connectivity
through WACS, with a view to lifting barriers to entry into the optical fibre segment. All these
activities will be part and parcel of activities to extend ICT sector reforms funded by the World Bank
within the framework of the CAB project.
2.1.6. In addition, and through its “ICT Applications and Services” component, the project also
envisages the implementation of several ICT applications to support the diversification of the
Congolese economy. At present, access to financial services in Congo is quite low judging by the rate
of access to banking facilities which hardly exceeds 10%. The significant productivity gains that the
postal sector can derive from ICT applications should be kept in mind. Thus, an e-Post module will
be developed for SOPECO to strengthen financial inclusion and money transfer services for rural
populations through the networking of post offices nationwide.
2.1.7. The project will also support the efforts made by Congolese authorities to adopt a step-by-
step strategic approach to progressively lay the technical and institutional foundations for the
development of electronic government by establishing an e-Government platform. This will
contribute to enhancing the quality of life of citizens and improving the business climate in order to
promote the emergence of a dynamic job-creating private sector. To this should be added the
establishment of an Emergency Warning System (EWS) that will help to put at the disposal of the
competent national authorities a genuine data collection and processing system used to issue early
warnings about health and climatic risks (landslides, floods, etc.) to potentially vulnerable
populations.
2.1.8. The project will also support Marien Ngouabi University in developing infrastructure (mini-
data processing centre, application tools, multimedia centres, geomatics laboratory, etc.) which
sustains services and the management of teaching-, research- and institution administration-related
content. It also includes the establishment of a business incubator on the University website to enable
young entrepreneurs to take advantage of an environment that is conducive to the launching of their
activities concerning the development of ICT solutions. It will also provide targeted support for
vocational training by developing teaching media and awarding scholarships to promote the industrial
sector which is another outlet for Congo’s economic diversification.
2.1.9. The project also includes several feasibility studies relating, among others, to ICT
infrastructure and applications/services which will be considered under the next (second) CAB
project whose preparation should begin at end-2018 using a programme-based approach. Thus,
studies will be carried out on: (i) a comprehensive e-Government Strategy (analysis of the existing
situation, vision and action plan); (ii) a CSIRT+ PKI; (iii) an Integrated Electronic System for the
Identification of Persons (SIGIEP); and (v) the development of mobile financial services in Congo.
The project also envisages a component to build the capacity of key national stakeholders and provide
support to the Project Coordination Unit (PCU/CAB).
To achieve the above-mentioned objectives, project activities have been grouped into the four
components summarized in the table below.
5
Table 2.1
Project Components No. Component Name Description
A
ICT INFRASTRUCTURE
(EUR 42.036 million)
A.1 - Optical fibre infrastructure execution works;
A.2 - Monitoring and evaluation of impacts and control and supervision of optical fibre
works; A.3 - Establishment of a National Data Centre.
B
ICT APPLICATIONS AND
SERVICES
(EUR 8.258 million)
B.1 - Establishment of an Emergency Warning System (EWS); B.2 - Establishment of a standard e-Government platform;
B.3 - Establishment of an e-Post platform.
C INSTITUTIONAL
SUPPORT AND
CAPACITY BUILDING
(EUR 6.911 million)
C.1 - Studies;
C.2 - Technical assistance to the Post and Electronic Communications Regulatory Authority (ARPCE) and the Congolese Information and Communication Agency
(ACTIC);
C.3 - Support to the Congolese National Institute for the Blind (INAC) and the Brazzaville Institute for Young Deaf People (IJSB);
C.4 - Support to Marien Ngouabi University;
C.5 - Support for women’s empowerment and development of indigenous people; C.6 - Support for the promotion of vocational training.
D
PROJECT
MANAGEMENT
(EUR 3.185 million)
D.1 - Staff of the PCU/ CAB-Congo;
D.2 - Sundry expenses;
D.3 - Technical accounting and financial audits.
2.2. Technical Solutions Adopted and Alternatives Explored
2.2.1. This project involves the installation and commissioning of 550 kilometres of optical fibre
cables, also comprising active equipment as well as power and cooling systems. It comprises two
sections, namely Ouesso-Souanké-Ntam (Cameroonian border) and Ouesso-Pokola-Bomassa (CAR
border) located in Sangha Region. These sections are part of the critical links of the national optical
fibre backbone (with terminals to neighbouring countries) that Congo intends to rapidly extend to 3
600 kilometres of optical fibre by end-2017 within the framework of the 3rd phase of the National
Coverage Plan (PCN).
2.2.2. Currently, there are two main technical alternatives for the deployment of optical fibre:
satellite or microwave links. The use of satellite links suffers from the combined effect of high access
cost and service quality that is far below that offered by optical fibre, not to mention the capacity
limitations inherent in the technologies used (even the latest). Even with the development of new
satellite facilities (for instance O3b) using low orbit satellites, the cost difference is significant. In
fact, satellite remains a redundancy technology, allowing operators to compensate for the
unavailability (especially due to technical damage) of optical fibre, but at operating costs two to ten
times higher than the latter. In short, satellite is not a sustainable alternative compared to optical fibre.
2.2.3. Microwave links allow for the extension of broadband service coverage, particularly to
underserved areas. However, though useful for point-to-point traffic (connection of base stations and
collection networks), they cannot carry the huge amount of data expected to be transmitted through
an optical fibre backbone. The migration of mobile operators in Congo to 3G and even 4G in the near
future will lead to a significant increase in the level of Internet access and the bandwidth required. To
this end, optical fibre is the only option that meets all these requirements (particularly to serve as
support for the potential international traffic of neighbouring countries).
2.2.4. Furthermore, it should be noted that, based on technical studies conducted, the manual laying
of optical fibre cables (as opposed to the mechanical method) was selected for this project. In fact,
this option (despite its slightly higher cost compared with the mechanical method) induces beneficial
6
effects in terms of revenue generation for the population concerned and indirect support under the
project’s awareness component.
Table 2.2
Alternative Solutions Explored and Reasons for Rejection
Alternative Solution Brief Description Reason for Rejection
Mechanized laying of
optical fibre cables
Using slicers in digging ducts
along the two sections
identified in this project.
Quality risks related to the non-mastery of the
various reliefs concerned, reason for which this
method would not be easy to use. In addition,
manual laying generates income for labour from the
localities crossed, making the project favourable to
local residents.
Supply of dark fibre
(without active
equipment)
In this case, it means
supplying only optical fibre
cables without the
transmission equipment.
Solution chosen by Congo Télécom because it
would be operational from the first day of
commissioning of the installed links.
2.3 Project Type
2.3.1. The AfDB loan will help to finance most of the project with the exception of Components B
and C (ICT Applications and Services and Institutional Support and Capacity Building) which will
be financed with national counterpart contributions, excluding the component related to studies. The
investments to be financed are specifically defined. Therefore, the loan was considered appropriate
as an instrument for Bank intervention in the project. As comparison, World Bank interventions in
the ICT sector in Congo are funded through this type of operation (investment projects).
2.4 Estimated Project Cost and Financing Arrangements
2.4.1 The project cost net of taxes and customs duties amounts to EUR 66.555 million (UA 52.406
million). The provision for physical contingencies is 7% of the base cost. The provision for price
escalation is equal to 3% of the base cost plus physical contingencies. This cost was estimated on the
basis of feasibility studies carried out, discussions with other partners and similar contracts recently
implemented or being implemented by Congo Télécom.
2.4.2 The national counterpart contribution will be used to finance the “ICT Applications and
Services” component as well as part of the institutional support envisaged under the project in order
to establish a solid base for ICT development in Congo. In fact, the digital economy can only develop
with the advent of analogue supplements based on the strengthening of an appropriate legal,
regulatory and fiscal framework, enabling economic operators to take advantage of ICT, knowledge
building through the implementation of planned activities to popularize ICT for the benefit of the
general public, particularly vulnerable groups (women, visually impaired persons, hearing-impaired
persons, etc.) and, lastly, the improvement of digital governance that strengthens the accountability
of institutions to the Congolese people.
The summary of estimated project cost by component is presented in the table below:
7
Table 2.3
Summary of estimated project cost by component
Components EUR Million UA Million
F.E. L.C. Total F.E. L.C. Total
A. OPTICAL FIBRE INFRASTRUCTURE 33.629 8.407 42.036 26.479 6.620 33.099
B. ICT APPLICATIONS AND SERVICES 6.607 1.652 8.259 5.202 1.301 6.503
C. INSTITUTIONAL SUPPORT AND
CAPACITY BUILDING 5.529 1.382 6.911 4.353 1.088 5.442
D. PROJECT MANAGEMENT 2.548 637 3.185 2.006 502 2.508
BASE COST 48.312 12.078 60.390 38.041 9.510 47.551
Physical Contingencies (7%) 3.382 845 4.227 2.663 666 3.329
Price Escalation (3%) 1.551 388 1.939 1.221 305 1.526
TOTAL 53.244 13.311 66.555 41.925 10.481 52.406
The summary of estimated project cost by expenditure category is given in the table below:
Table 2.4
Summary of estimated project cost by expenditure category
Expenditure Categories EUR Million UA Million
F.E. L.C. Total F.E. L.C. Total
A. GOODS 2.982 745 3.727 2.348 587 2.935
B. WORKS 33.595 8.399 41.994 26.453 6.613 33.066
C. SERVICES 8.917 2.229 11.147 7.022 1.755 8.777
D. OPERATION 2.257 564 2.822 1.778 444 2.222
E. MISCELLANEOUS 560 140 700 441 110 551
BASE COST 48.312 12.078 60.390 38.041 9.510 47.551
Physical Contingencies (7%) 3.382 845 4.227 2.663 666 3.329
Price Escalation (3%) 1.551 388 1.939 1.221 305 1.526
TOTAL 53.244 13.311 66.555 41.925 10.481 52.406
2.4.3 The project will be financed by the Bank Group and the national counterpart in accordance
with the financing plan below. The Bank Group will provide an AfDB loan of UA 40.978 million,
representing 78.2% of the project cost. The provisions justifying this level of counterpart financing
under the Policy on Expenditure Eligible for Bank Group Financing are detailed in Appendix II.
Table 2.5
Summary of estimated project cost by source of financing
Sources of Financing EUR Million UA Million
Percentage F.E. L.C. Total F.E. L.C. Total
AfDB 41.633 10.408 52.042 32.782 8.196 40.978 78.2%
Government of Congo 11.611 2.903 -14 514 9.143 2.286 11.428 21.8%
TOTAL 53.244 13.311 66.555 41.925 10.481 52.406 100%
Table 2.6
Summary of project components by source of financing (EUR million)
Components AfDB Government of Congo Total
Component A: OF Infrastructure 46.328 0.000 46.328
Component B: ICT Applications and Services 0.000 9.102 9.102
Component C: Institutional Support and Capacity Building 2.204 5.412 7.616
Component D: Project Management 3.510 0.000 3.510
TOTAL 52.042 -14 514 66.555
8
2.4.4 The expenditure schedule (in UA million) by source of financing is shown in the table below: Table 2.7
Expenditure schedule by source of financing (UA million)
Source of Financing 15% 20% 35% 30% 100%
2017 2018 2019 2020 Total
AfDB 7.083 9.444 16.527 14.166 47.220
Government of Congo 1.975 2.634 4.609 3.951 13.169
BASE COST 9.058 12.078 21.136 18.117 60.390
Physical Contingencies (7%) 634 845 1.480 1.268 4.227
Price Escalation (3%) 291 388 678 582 1.939
TOTAL 9.983 13.311 23.294 19.967 66.555
2.5 Project Area and Beneficiaries
2.5.1 Project Area: This is a nationwide project with a regional focus. Five hundred and fifty
kilometres of optical fibre will be laid along the following roads: (i) Ouesso-Sembé-Souanké-Ntam
(Cameroonian border); and (ii) Ouesso-Pokola-Bomassa (CAR border). These two roads are located
in the Sangha Region. In addition to the local residents of these areas, the project will impact the
entire population of Congo and ultimately the population of the sub-region through the expected
reduction in the cost of ICT services following the integration of the telecommunications systems of
Central African countries. Moreover, the deployment of e-Post and the Emergency Warning System
(EWS) will help to improve the socio-economic inclusion of the rural population nationwide,
especially the population in the country’s interior, through access to money transfer services and
climate-related information in order to strengthen their resilience to natural hazards.
2.5.2 Direct Project Beneficiaries: the entire population of Congo and even the sub-region will
be the beneficiaries of the extended optical fibre project area. In fact, once the links are built to
connect neighbouring countries to the Congo optical fibre backbone, the population of Congo and
especially that of CAR stand to benefit. The entire Congolese population will benefit from ICT
applications and services through the use of the e-Government platform, the Emergency Warning
System and the e-Post module. In addition, at least 10 000 women are expected to be initiated in the
use of ICT tools each year. Lastly, graduate training scholarships could be awarded to 24 students
(2/3 of them female students) in the industrial sections of government technical high schools in order
to make the industrial sector more attractive. The country’s private operators (telephone companies,
banks, etc.) will also benefit from project achievements, as they would be able to easily extend their
services to all localities served by optical fibre facilities.
2.6 Participatory Approach for Project Identification, Design and Implementation, including
Active Private Sector Participation
2.6.1 The participatory approach was adopted during the preliminary studies, the environmental
and social assessment, and the preparation and appraisal missions. These consultations contributed to
better project design both in terms of component formulation and implementation arrangements.
2.6.2 During the identification, preparation and appraisal missions, all stakeholders were
consulted both in Government services (MPT, MTE, MPFIFD, etc.) and the private sector (MTN
Congo, Airtel Congo, Azur, etc.). Discussions with these entities were helpful, for example, in
defining the content of the technical assistance to be offered to ARPCE, under the “Institutional
Support and Capacity Building” component to ensure minimum conditions for the exercise of
competition in the sector by ultimately reducing the high tax burden, in particular.
2.6.3 As part of environmental and social assessment, public consultations were organized on the
Ouesso-Souanké-Ntam and Ouesso-Pokola-Bomassa road sections from 5 to 18 October 2013.
9
Community meetings were organized in each of the villages concerned by the optical fibre alignment.
The meeting were attended, in most cases, by village chiefs and notables. The people expressed their
main concerns and expectations, as well as their support for the project in a development perspective.
The minutes of these meetings were prepared and may be consulted at PCU-CAB.
2.6.4 Generally, MPT will prepare and implement a communication plan for the information,
education and social mobilization of local communities, and public and private operators in the sector
during the implementation phase.
2.7 Bank Group Experience and Lessons Reflected in Project Design
2.7.1 As of 31 January 2016, the Bank’s portfolio in Congo comprised 14 operations for a total
net commitment of UA 158.91 million, that is 9 national operations for a volume of financing of UA
53.43 million and 5 regional operations for a total amount of UA 105.39 million. It included 8 public
investment operations, 3 institutional support operations, and 3 studies whose sector breakdown
shows the predominance of the infrastructure sector which represents 85% of current commitments.
The portfolio’s cumulative disbursement rate is 40.36% with an average age of 4 years. The
evaluation of portfolio performance during the last review was, on the whole, deemed satisfactory
with a rating of 2.40.
2.7.2 The major constraints and problems encountered, especially in the implementation of
infrastructure projects, include: (i) the slow pace of procedures for the procurement of goods, works
and services; (ii) the delayed mobilization of national counterpart funding; and (iii) the financing of
compensation.
2.7.3 In view of the foregoing, the Bank will, during project implementation, capitalize on the
following measures already taken or planned: (i) use of the advance contracting (AC) method to
minimize procurement delays; and (ii) steps taken by MPT and MEFPPPI to ensure the inclusion of
national counterpart financing in the budgets of the various fiscal years throughout the project as from
2017.
2.7.4 Lastly, this operation draws on the lessons learned from the ongoing implementation of
Congo’s CSP (2013-2017). Hence, the ICT sector-related challenges in the country were anticipated
by taking into consideration the strengthening of the regulatory framework. It cannot be denied that
this project is highly inclusive by virtue of its diverse components.
2.8 Key Performance Indicators
2.8.1 The key performance indicators and expected project outputs are presented in the logical
framework along with timeframes. The core sector indicators (CSIs) on which the project will focus
are: (i) the percentage of ICT-related jobs in the private sector; (ii) the number of additional
international connections installed; (iii) the penetration of Internet services; (iv) the price of one Mbps
to Europe; (v) the number of people benefiting from online government (informational and
transactional) services; (vi) the number of students benefiting from the business incubator; (vii) the
number of beneficiaries of e-Post; (viii) the number of people benefiting from solar electric terminal
systems; (ix) the number of indigenous people benefiting from the community radio for awareness
campaigns; (x) the number of women with access to training programmes (ICT, entrepreneurship,
etc.); and (xi) institutional support and capacity building for the ICT sector.
2.8.2 ARPCE’s ICT observer will be responsible for data collection and analysis. He may be
supported by Congo’s National Institute of Statistics (NIS). In that case, NIS, which is familiar with
this type of exercise, may: (i) establish the baseline situation of these indicators at project start-up;
10
(ii) conduct an impact assessment at project completion; and (iii) continue the assessment after the
commissioning of the planned connections.
2.8.3 To ensure that all these operations are implemented on time, in addition to these outcome
indicators, implementation performance indicators have been established in line with the Bank’s
institutional performance indicators. They include: (i) the effectiveness timeframe; (ii) the timeframe
for fulfilling conditions precedent to first disbursement; (iii) the procurement timeframe; and (iv)
disbursement trends in relation to the expenditure schedule. These indicators will be monitored during
supervision missions and the day-to-day management of the project.
III. PROJECT FEASIBILITY
3.1. Economic and Financial Performance
A study of the financial and economic and rate of return was carried out for the following components:
(i) implementation of optical fibre infrastructure;
(ii) establishment of an Emergency Warning System (EWS);
(iii) establishment of online administrative services; and
(iv) establishment of an e-Post platform (postal information system, and development of
an electronic money transfer service and digital community centres).
The macro-economic assumptions are based on a 3% inflation rate and a stable CFAF/Euro exchange
rate. The interest rate on the AfDB loan is estimated at 1.17%. The financial discount rate is 2% and
the economic discount rate adopted is 10%.
Based on these assumptions, the main outcomes are listed below.
Table 3.1
Economic and financial assessment
FIRR, FNPV: 18.88%; EUR 143.42 million at 2%
EIRR, ENPV 28.63%; EUR 97 million at 10%
3.1.1 The economic lifespan of the project is 15 years. Based on the assumptions used, the FIRR
is 18.88 % and the EIRR 28.63%. The economic and financial analysis shows that the project is
economically and financially feasible.
Moreover, a project sensitivity test was conducted based on the following three parameters: (i) a 10%
increase in investment costs; (ii) 10% drop in income; and (iii) a combination of the two preceding
criteria. The outcomes of the sensitivity analysis shown in the table below (the details of which are
included in Technical Annex B.7) indicate slight variations which, in no way, affect the financial and
economic viability of the project.
11
Table 3.2
Sensitivity Test
Assumptions
FNPV
(EUR Million)
ENPV
(EUR Million)
FIRR (%)
EIRR (%)
Baseline scenario
143.42
97.340
18.8
28.63
A1:10% increase in investment costs
136.41
83.91
17.28
23.60
A2: 10% drop in income
122.07
82.99
17.11
26.48
A3: Scenarios 1 and 2
115.06
69.56
15.56
21.71
3.2. Environmental and Social Impact
3.2.1. Environmental aspect: the project has been placed under Environmental Category 2, in
accordance with the Bank’s Integrated Safeguards System requirements. The Environmental and
Social Impact Assessment and the Environmental and Social Management Plan (ESMP) were
prepared in July 2014 and validated by the Ministry of Tourism and Environment (MTE). They have
been issued an environmental acceptance certificate. Optical fibre cables will be deployed along roads
for which a Public Interest Statement (DUP) has been issued.
3.2.2. The project environment is regional (Sangha and Brazzaville) on account of the deployment
links selected and the equipment installation sites. The optical fibre cables and chambers will be laid
strictly following the right-of-way of the roads selected. The Ouesso-Ntam road already has ducts.
Development will therefore be the main activity. The Ouesso-Bomassa road will require trenching
and duct-laying civil engineering works prior to the deployment of optical fibre cables. This
equipment will be set up within existing entities and buildings, and the National Data Centre within
Kintélé University in Brazzaville.
3.2.3. The impacts expected to be generated by civil engineering works on the Ouesso-Pokola-
Bomassa road are: (i) risk of obstruction of access roads used by local residents due to lack of road
signs and trenches that are not covered to ease crossing; (ii) compensation by repairing 4 fence walls
at Pokola and Ouesso; (iii) obstruction of access roads by various deposits; and (iv) risk of road
accidents involving workers improperly positioned on the road. The deployment of optical fibre
cables by portage on the two roads will generate occasional but very short-lived sound nuisances
(compressor for compressed air). The expected impact on the natural and physical environment will
be poor management of wastes (small pieces of ducts and fibre, abandoned empty wire strands,
rejected cement mortar laitance, packaging, etc.).
3.2.4. These identified impacts will be offset for the most part by appropriate measures to enable
the project’s environmental integration. PCU/CAB will be responsible for monitoring the mitigation
measures recommended during project implementation through the Environmental and Social
Management Plan (ESMP). It will be backed by a Contracting Authority Assistance (CAA) mission.
The related budget is CFAF 260 million, that is about EUR 396 500.
3.2.5. The "ICT Applications and Services" component will not generate any adverse impacts on
the environment. It allows for the economy of movement and, as a result, reduces sound nuisances
and traffic accidents and greenhouse gas emissions. Hence, the positive impacts will be extensive, as
reflected, among other things, in: (i) the creation of direct jobs related to equipment operation and (ii)
the improved living conditions of local residents of project areas and across the country, thanks to
increased connectivity and access to information of all kinds.
3.2.6. Climate Change: the project will help to reduce the carbon footprint of the electricity sector
in Congo by providing solar panels producing 153 000 kWh per year for 5 women’s empowerment
12
centres, 5 digital community centres and the Sembé community radio. It will prevent the emission of
68.5 tonnes of CO2 per year. ICT services will also substantially reduce greenhouse gas emissions.
Indeed, the implementation of e-Post projects will lead to the substitution of transfers with data
transmissions, thus eliminating the movement of people estimated at 500 000 km/year. These avoided
movements therefore represent 92.5 tonnes of CO2 per year. Hence, a total emission of 161 tonnes
of CO2 will be avoided.
3.2.7. Social Impacts: the extended project impact area covers the entire population of Congo.
Moreover, the project’s positive externalities will benefit the entire population of Congo and the sub-
region. The main project positive impacts will be: (i) improved living conditions of rural residents
with the building of the capacity of women’s empowerment centres and CDCs in the project area; (ii)
the opening up of the project area; (iii) the creation of employment opportunities and improvement
of incomes; and (vi) improved functioning of community infrastructure. Contractor(s) will be
encouraged to recruit local labour for trenching, laying of ducts and optical fibre cables, etc. Improved
access to ICT will also help to reduce exclusion between the various communities within the
population and to strengthen social cohesion.
3.2.8. Involuntary Resettlement: there will be no resettlement under this project.
3.2.9. Gender and Women-specific Activities: Congo has a national gender policy and an Action
Plan for implementing the policy. The second strategic thrust of the Plan provides, among other
things, for improved access to information and communication technologies (ICT) which can
contribute to promoting women’s economic activities as well as improving their access to production
support services. To implement its national gender policy, the Government of Congo has a Ministry
of Women’s Empowerment and Integration in Development which comprises three general
directorates, namely: (i) the General Directorate of Women’s Empowerment (DGPF); the General
Directorate of the Centre for Research, Information and Documentation on Women; and (iii) the
General Directorate of Women’s Integration in Development (DGIFD). The Ministry also has
women’s empowerment centres (in Brazzaville, Kinkala, Djambala and Mayama) which are places
for reception, support, discussions and solidarity between all women. These women’s empowerment
centres are also forums for cultural activities, information and sensitization on women’s rights,
support and anonymous and free counselling on all issues relating to women’s day-to-day life.
3.2.10. The project provides for specific women’s empowerment support activities, namely (i)
procurement and installation of and training in digital equipment for the virtual library of the Centre
for Research, Information and Documentation on Women (CRIDF); (ii) procurement of computer
hardware (computers, multipurpose printers, inverters, etc.) for women’s empowerment centres; (iii)
support for the design and implementation of training programmes (ICT, entrepreneurship, etc.) in
women’s empowerment centres for 10 000 women by 2020; (iv) deployment of solar and computer
equipment for the five operational women’s empowerment centres; and (v) award of scholarships to
24 students (2/3 of them female students) in industrial sections of government technical high schools.
IV. PROJECT IMPLEMENTATION
4.1. Implementation Arrangements
4.1.1. The project executing agency is the Ministry of Posts and Telecommunications (MPT) acting
through the CAB-Congo Project Coordination Unit (PCU/CAB-Congo) set up in 2011 with Bank and
World Bank financing. This Unit currently comprises a Coordinator, an Environmental Officer, an
Administrative and Financial Officer (AFO), an Accountant, an Accounting Assistant, an Internal
Auditor, a Procurement Specialist (PS), an Administrative Assistant and a Monitoring and Evaluation
Specialist. It has a procedures manual which governs its operation. The Unit has the necessary
experience to conduct the sector’s operations. To implement this project, the PCU staff will be
13
reinforced with a technical expert (an ICT engineer) whose CV will be submitted to the Bank for non-
objection opinion. Staff performance will be evaluated regularly on a yearly basis.
4.1.2. Specifically, the Unit will be responsible for the technical monitoring of project
implementation. In this regard, it will: (i) ensure that the Government’s commitments are honoured;
(ii) conduct monitoring and evaluation; (iii) ensure compliance with the project implementation
schedule; (iv) prepare semi-annual and annual project progress reports; (v) prepare counterpart
budgets and ensure their timely availability; (vii) ensure project financial management (verification
of detailed accounts, transmission of direct payment requests to the Bank, etc.); (viii) ensure timely
submission of project accounting and financial audit reports; and (ix) prepare the Borrower’s
completion report for submission to the Bank.
4.2. Procurement Arrangements
4.2.1. All procurement of goods and works by international competitive bidding (ICB) and
consultancy services financed by the Bank will be in accordance with the Procurement Policy on
Bank Group-financed Operations dated October 2015, using appropriate Bank standard bidding
documents (SBDs). The procurement of goods and works by local competitive bidding (LCB) will
be conducted in accordance with the national procurement legislation, using the country’s standard
bidding documents, as well as with the provisions set forth in the financing agreement.
4.2.2. MPT, acting through UCP/CAB, will be responsible for managing project-related
procurement. UCP/CAB was set up in 2011 as part of the CAB project financed by the World Bank.
This project plans to recruit a Procurement Assistant to strengthen the procurement team in place.
4.2.3. A procurement plan (PP) was validated by the Bank during the appraisal mission and will
be regularly updated during the project implementation phase. The procurement arrangements are
detailed in Annex B.5.
4.2.4. The Government has expressed the wish to use advance procurement action (APA) to
accelerate contract award and thus ensure rapid project implementation. In that regard, the
Government is preparing to submit a request to the Bank for that purpose, which would enable it to
use the advance contracting arrangement for optical fibre infrastructure works, control and
monitoring. The Bank will examine the request and notify the Government of its decision.
4.2.5. Regarding procurement, despite a number of gaps related to the Bank's fiduciary
requirements, the procurement procedures for the local competitive bidding (NCB) process are
deemed largely compliant. In view of the findings of Bank assessment and Government's efforts,
plans have been made to propose the use of national procedures for local competitive bidding (NCB)
to the Government. A letter of agreement to be signed with the Government will identify weaknesses
which should be remedied. As usual, the specific measures for mitigating the governance-related risks
of this project include: (i) recruitment of an independent financial audit firm to ensure that funds are
used rationally and for their intended purposes; (ii) prior review and approval by the Bank of all
procurement activities for the project; and (iii) the use of direct payment disbursement method to
transfer project funds directly to contractors and service providers.
4.3. Financial Management and Disbursement Arrangements
4.3.1. The fiduciary risk for CAB project financial management is deemed moderate. The financial
management arrangements within the CAB Project Coordination Unit at the Ministry of Posts and
Telecommunications meet the Bank’s minimum requirements defined under the policy on the
"Financial Management of Projects Financed by the African Development Bank", February 2014
edition. The PCU, which was established in 2011, recently acquired experience from the
14
implementation of the first phase of the World Bank-funded CAB project. Pursuant to the donor
harmonization principle, this Unit was selected during this evaluation, the results of which will be
used to build its capacity to implement projects financed by donors and implemented by MPT. These
projects are expected to contribute to improving CAB project financial management through the
recommended measures in the financial management action plan presented in Annex B.6. These
measures will help to mitigate the fiduciary risk by reducing it to a lower level, if possible. Thus, by
reinforcing the financial management arrangements already in place, the implementation of these
measures will help to continue to provide, with reasonable assurance, reliable financial information
and to safeguard project assets, in accordance with Bank policy.
4.3.2. The Ministry of Posts and Telecommunications, acting through PCU placed under its
supervisory authority, will be the project executing agency. The PCU will be responsible for the
financial management of all project components, and will carry out all the controls required to ensure:
(i) proper, efficient and judicious use of project funds; (ii) the preparation of periodic, accurate,
reliable and timely financial reports; and (iii) the safeguard of project assets. This entity has proven
capacity and appropriate tools for CAB project financial management, and will be reinforced with
local technical assistance (individual consultant) responsible for project accounting, under the
supervision of an Administrative and Financial Officer. To ensure rapid project start and effective
implementation, the CAB project team will comprise the current PCU financial staff in compliance
with the decision establishing the PCU. The capacity of the team, which received financial
management and disbursement training during the quarterly portfolio review (conducted in June
2015), will be built during subsequent fiduciary clinic phases scheduled for 2016 in Congo.
4.3.3. Audit Arrangements: CAB projects financed with Loan resources will be audited annually
by an independent external audit firm recruited on a competitive basis and in accordance with the
Bank’s standard Terms of Reference (ToR). The PCU will be responsible for recruiting the external
auditor and will have to seek the Bank’s prior opinions. Audits will be conducted yearly throughout
the project, including the closing audit. The initial project audit could cover an 18-month financial
year from the date of loan effectiveness or the date of first disbursement. The external auditor will be
recruited by the PCU and audit costs will be borne by the project. The ToR of the external auditor
will be tailored to, and harmonized with, those of the World Bank to account for project specificities
and validated during the negotiation for the recruitment of an independent firm with experience in the
audit of Bank-financed projects. Audits will be conducted in accordance with ISA/ISSAI international
standards. The financial statements audited by the independent firm will be forwarded to the Bank
not later than six months following the end of the financial year concerned (see table for frequency).
4.3.4. Arrangements Relating to Disbursement Method: the disbursement of loan resources will
be in accordance with the Bank’s Disbursement Handbook, upon loan agreement effectiveness and
fulfilment of conditions precedent to first disbursement. Generally, three methods have been adopted
for fund disbursement at the Bank, namely: (i) the direct payment method; (ii) the working capital or
special account method; and (iii) the reimbursement method. The disbursement of counterpart
resources will be in accordance with national procedures which provide for the opening of an account
for external financing.
4.4. Monitoring
4.4.1. The Congo CAB Project Coordination Unit (PCU/CAB-Congo) will monitor the
implementation of the various project components. Joint supervision missions (donor and
Government) and inter-donor coordination meetings will also report on the performance of the project
in terms of project physical and financial outputs.
4.4.2. To strengthen the system in place, it was agreed with the Congolese authorities that a Project
15
Steering Committee (COPIL) placed under the supervisory authority of MPT will be set up to support
the Project Coordination Unit in setting the broad guidelines of the CAB project in the PCN, issuing
the necessary directives and recommendations to improve the project implementation strategy and
methods as well as approving the project documents and deliverables. The composition of this
committee will be modified to reflect the participation of all project stakeholders.
4.4.3. Concerning the assessment of the level of achievement of development objectives, a socio-
economic impact monitoring and evaluation mechanism will be established and implemented by
PCU/CAB. Project environmental and social impacts will be monitored directly by the PCU/CAB.
Regarding the implementation of the “ICT Applications and Services” component, a technical audit
of each planned project achievement will be conducted to ensure compliance with the initial
specifications, given that the implementation of the optical fibre infrastructure will be entrusted to a
separate manager who will supervise the scheduled works on behalf of the beneficiary.
Table 4.1
Project Monitoring and Supervision
Deadline Phase Process Feedback Loop
Q3 -2016 Project Launch Field Mission Progress Reports
Q4 – 2016 Project Review –
Procurement
Field/Supervision
Mission
Progress reports/Aide-
memoire
Q3&Q4-2017 OF Infrastructure Works
& National Data Centre
Field/Supervision
Mission
Progress reports /Aide-
memoire
Q1&Q2&Q3&Q6-2017-
2018-2019
OF Infrastructure Works
& National Data Centre
Field/Supervision
Mission
Progress reports /Aide-
memoire
Q3 -2020 Warranty Period & First
Year of Operations
Field Mission
Progress reports /Aide-
memoire
Project Completion
Report
4.5. Governance
4.5.1 The governance risks in the areas of procurement and financial management were analysed
during project appraisal. On the whole, the implementation of the public finance modernization plan
will mitigate these risks by enhancing public expenditure efficiency in the ICT sector. Moreover, the
Bank, jointly with the World Bank and the European Union, carried out a review of public expenditure
management and financial accountability in 2014, the recommendations of which will be the subject
of regular dialogue in order to strengthen public expenditure efficiency, notably in the ICT sector.
4.5.2 In the procurement process, especially as concerns international bid invitations, the
governance-related risk would be mitigated by the Bank’s strict enforcement of its relevant rules and
procedures, and the conduct of ex-ante reviews. The Bank's supervision missions and independent
technical and financial audits will ensure consistency between the specifications, actual services
provided and work performed, disbursements and the loan agreement.
4.5.3. In the ICT sectors, the market has been liberalized, particularly with the authorization of
mobile telephone operators to provide data services (Airtel and MTN launched their 3G licences in
2011 and 2013 respectively). This should help to support the use of wholesale market capabilities.
For its part, the Posts and Electronic Communications Regulatory Authority (ARPCE) guarantees
competition in the telecommunications market. It should, however, be mentioned that the difficulties
faced by operators are constraints on access to the broadband internet wholesale market owing to the
rates charged for national and international connectivity collocation, in addition to the appalling
taxation system applicable to the sector.
16
4.5.4 This explains why this operation includes the development of an economic model for costing
access to national and international connectivity. That will be beneficial to ARPCE since it will enable
the entity to sift through the catalogue of prices charged by the traditional operator and thus ensure
the implementation of the "open access" principle guaranteed by regulating the sector for all private
operators with licences. In addition, the project also includes a study on the assessment of the ICT
sector taxation model in order to carry out an exhaustive audit of all the taxes and royalties paid by
the operators and conduct a comparative study aimed at proposing concrete and viable alternatives to
the authorities for an accelerated ICT development in Congo.
4.6. Sustainability
4.6.1 The national optical fibre backbone maintenance management in Congo devolves on MPT
which delegates the function to the traditional operator, Congo Télécom, except for local urban loops
belonging to private operators. Congo Télécom will be responsible for programming and
implementing optical fibre maintenance on a force account basis. Indeed, within Congo Télécom,
there is a technical directorate responsible for network maintenance and servicing. It is in charge of
the maintenance of the national optical fibre network and has branches in Congo Télécom regional
representations. Maintenance is financed with Congo Télécom’s own resources. The PCN managed
by the General Directorate of Major Works also assists the traditional operator in installing some
segments.
4.6.2 However, the revenue generated by the project focus areas is largely sufficient to cover the
cost of equipment (fibre and assets) maintenance during the lifespan of the various components. The
same is true for e-Post business applications that will be procured by SOPECO under this project. As
part of its dialogue with the country, the Bank will ensure the actual availability of resources for the
maintenance and upgrade of the systems (physical and software) established.
4.7. Risk Management
4.7.1. Risks that may hinder the achievement of results include: (i) Congolese party’s non-
compliance with undertakings relating to the laying of optical fibre cables; (ii) failure to produce an
impact on prices; (iii) premature degradation of the optical fibre due to lack of maintenance; (iv) lack
of maintenance and upgrade of the various applications installed; and (v) social tension resulting from
the electoral process.
4.7.2. Mitigation Measures: (i) The Government's commitment to implement the guidelines of
the International Telecommunication Union (ITU); (ii) Bank support in the form of technical
assistance to enable the necessary reform of the ICT sector; (iii) commitment by Congo Télécom to
allocate a substantial portion of the resources generated by the new connections for the maintenance
of the road links and more generally the national backbone; and (iv) commitment by SOPECO, in
particular, to further invest in the extension of the reach of its existing e-post products and services
to ensure coverage of the entire country; and (v) the rest of the March 2016 presidential election
process bodes well for an end to political tension as the opposition, which rejected the results of the
election, has, nevertheless, called for inclusive dialogue.
4.7.3. Risks that may hinder the achievement of outputs are: (i) late release of counterpart
funds; (ii) the slow pace and lack of transparency in the procurement process; (iii) escalation of the
cost of works; and (iv) non-compliance with technical and functional specifications in the context of
the various applications envisaged in the project.
4.7.4. Mitigation Measures: (i) sustained dialogue with the Ministry in charge of finance as part
of the preparation of provisional appropriation acts throughout project implementation; (ii) expand
competition by taking advantage of the size of works contracts; (iii) take physical contingencies into
account in the project financing plan; (iv) strengthen the PCU by including a technical expert in
charge of project supervision, among other things.
17
4.8. Knowledge Building
4.8.1. The project will provide an opportunity to improve knowledge in the area of national ICT
infrastructure. To better derive lessons from this project, a monitoring and evaluation mechanism will
be set up by the Unit. Establishing key impact indicators prior to the project start-up and conducting
impact assessment at the end of the project will help to provide useful information on the project
outcomes and impacts. The lessons, experiences and knowledge that will thus be derived from
implementing this project will be managed from UCP/CAB and disseminated through annual reports
and the Bank's website. The knowledge will be very useful, among others, for implementing the next
CAB project.
V. LEGAL FRAMEWORK
5.1. Legal Instrument
The project will be financed through an AfDB loan granted to the Republic of Congo. A Loan
Agreement will be signed between the Republic of Congo and the African Development Bank.
5.2. Conditions Associated with AfDB Intervention
5.2.1. Conditions Precedent to Loan Effectiveness
Effectiveness of the Loan Agreement shall be subject to fulfilment by the Borrower, to the Bank’s
satisfaction, of the conditions set out in Section 12.01 of the General Conditions Applicable to Loan
Agreements and Bank Guarantee Agreements (sovereign entities).
5.2.2. Conditions Precedent to First Disbursement of AfDB Loan
In addition to the effectiveness of this Agreement, the first disbursement of AfDB loan resources shall
be subject to fulfilment by the Borrower, to the Bank’s satisfaction, of the following conditions:
(i) Provide the Bank with evidence of opening a special account in a bank acceptable to
the Bank intended exclusively to receive the counterpart funds for financing some
project-related activities;
(ii) Provide the Bank with evidence of opening a special account, in the name of the
Project, and in a bank acceptableto the Bank, to receive the loan resources.
5.2.3. Other Conditions
The Borrower shall, not later than 30 June of each year, also provide evidence of inclusion of the
amount of the Government’s project counterpart funding in the Appropriation Act of the following
fiscal year.
5.2.4. Undertakings
The Borrower undertakes, to the Bank’s satisfaction, to:
(i) Open discussions with the Bank on practical arrangements for the effective
implementation of "open access" to the optical fibre planned under the project within six
(6) months following the first disbursement of loan resources;
(ii) Implement the project and the ESMP, and ensure their implementation by its
contractors, in accordance with: (a) Bank rules and procedures; (b) national law; and
(c) the recommendations, provisions and procedures contained in the ESMP;
(iii) Provide the Bank with half-yearly reports on the implementation of the ESMP,
including, as appropriate, any weaknesses and corrective measures initiated or
envisaged.
18
VI. RECOMMENDATION
Management recommends that the Board of Directors approve the proposal to grant a EUR 52.041
million ADB loan to the Republic of Congo to finance the Central Africa Optical Fibre Backbone
Project (CAB) – Congo Component, under the conditions set forth in this report.
I
ANNEX I
DESCRIPTION OF INSTITUTIONAL SUPPORT AND CAPACITY BUILDING
This institutional support operation will focus on strengthening sector governance through support
for structural reform of the sector, notably the reinforcement of its legal and regulatory framework by
the Posts and Electronic Communications Regulatory Authority (ARPCE), building the capacity of
entities that provide assistance to vulnerable people (visually impaired, hearing-impaired persons,
etc.), as well as support for the operationalization of the Congolese Information and Communication
Technology Agency (ACTIC). Furthermore, it will entail providing targeted support for higher and
vocational education, women’s empowerment as well as the development of the indigenous
population. In addition to these measures, there are several studies aimed, among other things, at
preparing the next CAB project which is largely devoted to the development of the application layer
with a view to consolidating the foundations of the digital economy in Congo, and supporting
women’s empowerment. Institutional support will focus on the following four activities:
i- Studies: the objective of this project in Congo is twofold. It is intended to lay the
groundwork, in terms of infrastructure (optical fibre, in particular), for the launch of
the development of an ICT economy and industry in the country. Meanwhile, the
Congolese authorities wanted this initiative to include feasibility studies for a second
CAB project which aims to accelerate the leveraging of the growth and job-creation
sources underlying the ICT sector. Thus, based on the National Data Centre, the
bedrock for the development of e-government in the country and included in this
project, a study should be carried out on the establishment of a Citizen Electronic
Identification System which will enhance the reliability of the official and compulsory,
permanent and continuous registration of events (births, deaths, marriages and
divorces) relating to the status of individuals and their characteristics, from birth to
death, for administrative and legal purposes. This component also includes two major
studies on the establishment of a National ICT School in Congo and the development
of an exhaustive national e-government strategy. It also comprises a study on the
development of mobile financial services available in Congo, particularly to promote
financial inclusion in rural areas.
ii- Technical Assistance for ARPCE: the three studies envisaged in this component are
intended to support the development of the national optical fibre backbone by building
ARPCE’s capacity to contribute to achieving the project’s development objectives
(access to better quality ICT services at lower costs by private operators and, indirectly,
by users wherever they may be across the country). They concern the development of:
(i) an economic model for costing access to national and international connectivity;
(ii) a study on the regulation of the "open access" principle; and (iii) a business model
on the profitability thresholds of optical fibre (OF) deployment in the country.
iii- Support for INAC and IJSB: the project plans to support the Congolese National
Institute for the Blind by: (i) rehabilitating the library and the ICT room; (ii) providing
the library with appropriate furniture and documents; (iii) procuring computer
hardware (computers with appropriate keyboards and equipped with a voice synthesis
software, braille printer and stamping machine); (iv) training computer hardware
maintenance staff; and (v) procuring a vehicle (24-seater bus), with the clear
understanding that operating and maintenance costs will be charged to a budget head
of the Ministry of Education.
It will also support the Brazzaville Institute for Deaf Young People by: (i) rehabilitating the
library and the demutization room; (ii) providing the library with appropriate furniture
II
and documents (sign language); and (iii) procuring teaching material, computers,
photocopying machines, etc.
iv- Support for Higher and Vocational Education: the project intends to support ICT
development in Marien Ngouabi University (UMNG) by laying the foundations for a
consistent and efficient information system. This requires the following actions to be
undertaken: (i) the establishment of a data processing centre (Mini-Data Centre); (ii)
the development and establishment of application tools (internet portal, online
services, etc.) for administrative staff, students, lecturers, etc.; (iii) the establishment
of a geomatics laboratory (GIS); and (iv) the design of a University Computerization
Master Plan.
The 2008-2017 Ten-year Plan for Reviving and Developing Technical and Vocation Education in
Congo has made provision for improving access to ICT in schools and learning institutions. It is in
this connection that the project has provided for specific vocational training promotion support
activities, namely: (i) support for the development of teaching material in 10 specialties for the
Brazzaville Government Technical High School; (ii) procurement of computer hardware (computers,
multipurpose printers, inverter, etc.) for government technical high schools; and (iii) award of
scholarships to 24 students (2/3 of them female students) in technical high school industrial sections.
v- Support for Women’s Empowerment: the country has made significant progress
with respect to gender equality, at least from the commitments and legislation
standpoints. Congo has ratified all international conventions on women’s rights and
gender equality, notably the Convention on the Elimination of All Forms of
Discrimination Against Women (CEDAW). Article 8 of the country’s Constitution
guarantees equal rights and prohibits all forms of discrimination, including those based
on gender, and stipulates that women have the same rights as men by guaranteeing
women’s representation in all political, elective and administrative offices. Congo has
a national gender policy and an action plan for implementing the policy. In that
connection, the Government of Congo has a Ministry of Women’s Empowerment and
Integration in Development comprising three general directorates, namely: (i) the
General Directorate for Women’s Empowerment (DGPF); (ii) the General Directorate
of the Centre for Research, Information and Documentation on Women; and (iii) the
General Directorate of Women’s Integration in Development (DGIFD). The Ministry
also has women’s empowerment centres (in Brazzaville, Kinkala, Djambala and
Mayama) which are places for reception, support, discussions and solidarity between
all women. These empowerment centres are also forums for cultural activities,
information and sensitization on women’s rights, support and anonymous and free
counselling on all issues relating to women’s day-to-day life. Despite the progress
made, there is still need for much effort. In fact, the United Nations Development
Programme (UNDP) 2014 Human Development Report shows that the gender
inequality index dropped to 0.617 in 2014 against 0.610 in 2013. Regarding education,
there is equal enrolment of girls and boys in primary school, according to a UNESCO
report published in 2014. However, the gender parity index drops drastically from the
second cycle of secondary education, where it is only 37%. Women’s representation
in political, elective and administrative offices is still insufficient. The occupy only 10
out of 68 seats in the Senate (that is 14.7%), 10 out of 139 seats in the National
Assembly (that is 7.2%) and 4 out of 39 positions in Government (that is 10.2%).
There are also wide gender disparities regarding access to economic resources. Only
about 17% of businesses are managed by women. According to the Congolese
Household Survey conducted in 2011, the proportion of women wage earners in the
non-agricultural sector dropped from 48.48% in 2005 to 45.75% in 2011. In this sector,
III
women are mainly involved in trade in processed products (33.53 %) and, to a very
small extent, in administration (8.91%) and service provision (8.39%). Barely 6.8% of
women have their own bank account, compared with 11.3% for men. To reduce these
inequalities, the Government adopted a National Gender Policy in 2008. An action
plan was designed in 2009 and an observatory for recording and controlling violence
against women and children has been established. The major challenge is to implement
these instruments. The project intends to contribute to improving gender equality
through support for the promotion of women’s empowerment. This is in line with
Thrust 2 of the Gender Policy Implementation Action Plan, namely improving access
to ICT that can contribute to promoting women’s economic activities as well as
improving their access to production support services. Thus, the activities to be carried
out under this project are: (i) procurement and installation of, and training in digital
equipment for the virtual library of the Centre for Research, Information and
Documentation on Women (CRIDF); (ii) procurement of computer hardware
(computers, multipurpose printers, inverters, etc.) for women’s empowerment centres;
(iii) support for the design and implementation of training programmes (ICT,
entrepreneurship, etc.) for women’s empowerment centres; and (iv) deployment of
solar equipment in the 5 operational women’s empowerment centres.
vi- Support for the Development of Indigenous People
One of the local populations’ concerns is the promotion of the identity and traditional value of the
Baka indigenous people living along the Ouesso-Ntam road as the thrust through which the Baka
indigenous people can actively participate in sustainable natural resource management. To that end,
the Sembé Municipal Council plans to build a "Baka cultural village" for which the project includes
a proposal to allocate equipment to operationalize a community radio for Baka culture.
IV
ANNEX II
RATIONALE FOR THE LEVEL OF COUNTERPART CONTRIBUTION TO AfDB
FINANCING
In Congo, the project will be financed by the Bank Group and the national counterpart contribution.
The Bank Group’s contribution will be an AfDB loan of UA 40.978 million, representing a total of
78.2% of the project cost in the country. The national counterpart contribution is estimated at UA
11.428 million, representing 21.8% of the total project cost in Congo. This amount of counterpart
financing represents the current level of contribution affordable by the country.
The amount of Congo’s counterpart contribution to project financing is UA 11.428 million,
representing 21.8% of the total project cost. The level of the Government’s contribution is less than
the minimum rate of 50% of total project cost for AfDB member countries, as stipulated by Section
4.2.2 of the Policy on Expenditure Eligible for Bank Group Financing. Thus, in accordance with the
provisions of Section 4.2.2 of the above Policy (revised version of 19 March 2008), this annex
presents the analysis which justifies the request for a waiver of the amount of national counterpart
contribution, based on the following four criteria spelt out by the above Bank policy:
the country’s commitment to implement its overall development programme;
the financing allocated by the country to the sector targeted by Bank assistance;
the country’s fiscal situation and debt level;
the upper cost-sharing limit and guidelines laid down in the country financing
parameters.
Country’s Commitment to Implement its Overall Development Programme
By implementing its National Development Programme (PND) 2012-2016, the key objective of
which is to accelerate the industrialization of the economy so as to transform Congo into an emerging
country by 2025, the Government has shown a strong commitment to implement programmes that
contribute to diversified and inclusive growth, and poverty reduction. In line with PND’s priorities,
the authorities have made huge financial efforts to bridge the country’s wide social and infrastructure
gaps. Against this backdrop, an ambitious programme for average annual public investments of about
CFAF 1,500 billion has been implemented. These investments have stimulated economic growth
which reached 4.0% over the period 2013-2015, despite a difficult international economic
environment marked by a sharp drop in oil prices. They have also helped to reduce the infrastructure
gap, particularly by increasing installed electrical power seven-fold, providing the country with new
national and regional roads, and improving telecommunication infrastructure, notably through the
rehabilitation of telephone networks and the deployment of optical fibre. The authorities’
determination to implement their overall development programme also led to an increase in the share
of the budget allocated to social sectors from 18.3% in 2011 to 23.2% in 2015. The Government’s
financial effort has also resulted in a significant improvement in the country’s social indicators,
notably in the areas of health and education. Its commitment to implement its PND notwithstanding,
the Government is aware that the progress made in its implementation is moderate and that it must
step up its efforts, in particular concerning infrastructure, to achieve PND’s ambitious objectives.
V
Financing Allocated by the Country to the Sector Targeted by Bank Assistance
Aware of the crucial role played by ICT in the Congolese economy, the Government has significantly
increased the budget resources allocated to the sector over the past years in order to improve its
performance. Public financing allocated to the ICT sector increased by more than 70% between 2012
and 2015 to stand at slightly above CFAF 9 billion. The authorities’ efforts have helped to implement
the National Telecommunication Coverage Project (PCN) and establish the optical fibre backbone.
However, the needs are still enormous despite the remarkable efforts made by the Government. Public
resources allocated for telecommunication infrastructure are not enough to achieve PND’s lofty
growth objectives. The required level of investment is above the Government’s financial capacity,
especially within a context marked by falling oil prices. Increased assistance from TFPs is necessary
to back the efforts of the Government which remains strongly committed to ICT infrastructure
development as evidenced by the inclusion of substantial resources in the 2016 budget for its
financing, despite the difficult fiscal situation.
Country’s Fiscal Situation and Debt Level
The country’s fiscal situation has improved over the past years, but the drop in oil prices is a risk to
the maintenance of macro-economic stability. Budget performance over the period 2011-2013 was
also generally satisfactory, with an overall average budget balance which stood at 11% of GDP,
reflecting a significant increase in oil revenue over the period, despite a sharp rise in public
expenditure, particularly investment expenditure which tripled. However, owing to budget
dependence on oil, the sharp drop in oil prices led to a fall in public revenue of [9.4]% in 2014 and
43% in 2015. Reflecting the substantial decrease in public revenue, the 2014 State budget, for the
first time in ten years, showed an overall deficit estimated at 8.2% of GDP, which widened to 11.8%
in 2015. The country’s fiscal situation in 2016 is expected to be tense as a result of falling oil prices.
Concerning the country’s debt level, external debt has continued to increase since the attainment of
the completion point of the HIPC Initiative, when it represented 20% of GDP, to reach 32% in 2013,
36.5% in 2014 and 47% in 2015. Such increase is mainly explained by continued borrowing and the
deterioration of terms of trade resulting from the drop in oil prices and the depreciation of the CFA
franc. Reflecting these trends, the last debt sustainability analysis (DSA) carried out in 2015 by IMF
and World Bank staff shows that the risk of debt overhang has gone from low to moderate. Such
increase in the country’s risk of debt overhang is confirmed by the assessment conducted by the
Standard and Poor’s (S&P) Rating Services which reduced Congo’s long-term score from B+ to B,
while Fitch Ratings reduced the outlook associated with the country’s B+ score from Stable to
Negative. On these grounds, the DSA strongly recommends that the Government should adopt a
prudent debt policy to avoid jeopardizing debt sustainability.
Upper Cost-sharing Limit and Guidelines Laid Down in the Country’s Financing Parameters
For countries like Congo whose financing parameters (CFPs) are not available, the World Bank’s
Operational Guidelines specify that the share of the total costs financed by the Bank in the overall
lending programme is determined according to the country’s ranking and per capita income.
Specifically, these Guidelines determine the cost-sharing limits as follows: (i) 90% for IDA member
countries whose per capita income is less than USD 1,235; (ii) 75% for IBRD and Blend countries in
the same per capita income group; (iii) 60% for countries whose per capita income ranges from USD
1,236 to USD 4,465; and (iv) 50% for countries with a per capita income of more than USD 4,465.
These limits apply to the Bank’s overall lending programme in the country3 and not to individual
projects. For individual projects, a 10% minimum contribution is generally expected from the
Borrower. Lastly, in exceptional cases, the Guidelines offer the possibility of financing the entire
3 A three-year rolling lending programme which covers the two previous years and the current year.
VI
costs of projects with external resources. The above conditions are fulfilled in the specific case of
Congo whose per capita income is USD 2,660: (i) the Bank’s share in the overall lending programme
over the period 2014-2016 is 59.7%, compared with the 60% limit; and (ii) the national counterpart
contribution to the project concerned is 21.8%.
8. In conclusion, in light of the foregoing, and at the request of the Government, it is
proposed that the national counterpart contribution be set at 21.8% of total project cost, net of
taxes. The Congolese Government’s contribution will be used to finance the entire "ICT Applications
& Services" component as well as most of the institutional support operations provided for under the
project (except planned studies).
VII
ANNEX III
COMPARATIVE SOCIO-ECONOMIC INDICATORS
Year Congo Africa
Develo-
ping
Countries
Develo-
ped
Countries
Basic Indicators
Area ( '000 Km²) 2014 342 30 067 80 386 53 939Total Population (millions) 2014 4,6 1 136,9 6,0 1,3Urban Population (% of Total) 2014 64,9 39,9 47,6 78,7Population Density (per Km²) 2014 13,3 37,8 73,3 24,3GNI per Capita (US $) 2013 2 590 2 310 4 168 39 812Labor Force Participation - Total (%) 2014 70,7 66,1 67,7 72,3Labor Force Participation - Female (%) 2014 48,7 42,8 52,9 65,1Gender -Related Dev elopment Index Value 2007-2013 0,928 0,801 0,506 0,792Human Dev elop. Index (Rank among 187 countries) 2013 140 ... ... ...Popul. Liv ing Below $ 1.25 a Day (% of Population)2008-2013 32,8 39,6 17,0 ...
Demographic Indicators
Population Grow th Rate - Total (%) 2014 2,5 2,5 1,3 0,4Population Grow th Rate - Urban (%) 2014 3,1 3,4 2,5 0,7Population < 15 y ears (%) 2014 42,5 40,8 28,2 17,0Population >= 65 y ears (%) 2014 3,4 3,5 6,3 16,3Dependency Ratio (%) 2014 78,7 62,4 54,3 50,4Sex Ratio (per 100 female) 2014 100,0 100,4 107,7 105,4Female Population 15-49 y ears (% of total population) 2014 23,6 24,0 26,0 23,0Life Ex pectancy at Birth - Total (y ears) 2014 59,2 59,6 69,2 79,3Life Ex pectancy at Birth - Female (y ears) 2014 60,7 60,7 71,2 82,3Crude Birth Rate (per 1,000) 2014 37,1 34,4 20,9 11,4Crude Death Rate (per 1,000) 2014 10,0 10,2 7,7 9,2Infant Mortality Rate (per 1,000) 2013 35,6 56,7 36,8 5,1Child Mortality Rate (per 1,000) 2013 49,1 84,0 50,2 6,1Total Fertility Rate (per w oman) 2014 4,9 4,6 2,6 1,7Maternal Mortality Rate (per 100,000) 2013 410,0 411,5 230,0 17,0Women Using Contraception (%) 2014 46,9 34,9 62,0 ...
Health & Nutrition Indicators
Phy sicians (per 100,000 people) 2004-2012 9,5 46,9 118,1 308,0Nurses (per 100,000 people)* 2004-2012 82,4 133,4 202,9 857,4Births attended by Trained Health Personnel (%) 2009-2012 93,6 50,6 67,7 ...Access to Safe Water (% of Population) 2012 75,3 67,2 87,2 99,2Healthy life ex pectancy at birth (y ears) 2012 50,0 51,3 57 69Access to Sanitation (% of Population) 2012 14,6 38,8 56,9 96,2Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2013 2,5 3,7 1,2 ...Incidence of Tuberculosis (per 100,000) 2013 382,0 246,0 149,0 22,0Child Immunization Against Tuberculosis (%) 2013 92,0 84,3 90,0 ...Child Immunization Against Measles (%) 2013 65,0 76,0 82,7 93,9Underw eight Children (% of children under 5 y ears) 2005-2013 11,8 20,9 17,0 0,9Daily Calorie Supply per Capita 2011 2 195 2 618 2 335 3 503Public Ex penditure on Health (as % of GDP) 2013 3,2 2,7 3,1 7,3
Education Indicators
Gross Enrolment Ratio (%)
Primary School - Total 2011-2014 109,4 106,3 109,4 101,3 Primary School - Female 2011-2014 113,4 102,6 107,6 101,1 Secondary School - Total 2011-2014 53,7 54,3 69,0 100,2 Secondary School - Female 2011-2014 49,8 51,4 67,7 99,9Primary School Female Teaching Staff (% of Total) 2012-2014 53,5 45,1 58,1 81,6Adult literacy Rate - Total (%) 2006-2012 79,3 61,9 80,4 99,2Adult literacy Rate - Male (%) 2006-2012 86,4 70,2 85,9 99,3Adult literacy Rate - Female (%) 2006-2012 72,9 53,5 75,2 99,0Percentage of GDP Spent on Education 2009-2012 6,2 5,3 4,3 5,5
Environmental Indicators
Land Use (Arable Land as % of Total Land Area) 2012 1,6 8,8 11,8 9,2Agricultural Land (as % of land area) 2012 0,3 43,4 43,4 28,9Forest (As % of Land Area) 2012 65,6 22,1 28,3 34,9Per Capita CO2 Emissions (metric tons) 2012 1,5 1,1 3,0 11,6
Sources : AfDB Statistics Department Databases; World Bank: World Development Indicators; last update :
UNAIDS; UNSD; WHO, UNICEF, UNDP; Country Reports.
Note : n.a. : Not Applicable ; … : Data Not Available.
CongoCOMPARATIVE SOCIO-ECONOMIC INDICATORS
mai 2016
0
10
20
30
40
50
60
70
80
90
100
2000
2005
2008
2009
2010
2011
2012
2013
Infant Mortality Rate( Per 1000 )
Cong o Africa
0
500
1000
1500
2000
2500
3000
2000
2005
2007
2008
2009
2010
2011
2012
2013
GNI Per Capita US $
Cong o Africa
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
2000
2005
2008
2009
2010
2011
2012
2013
2014
Population Growth Rate (%)
Congo Africa
01020304050607080
2000
2005
2008
2009
2010
2011
2012
2013
2014
Life Expectancy at Birth (years)
Cong o Africa
VIII
ANNEX IV
STATUS OF BANK PORTFOLIO IN CONGO AS AT 31 JANUARY 2016
Sector Project Name Approval Date Signature Effectiveness Effec. For 1st Disb.
Apprv-1st Disb. (m)
Net Commitments
(UA m)
Amounts Disbursed
Disb. Ratio (%)*
Closing Date
Project Age
A. NATIONAL PROJECTS
Environment Multi Resource Forest Inventory to Prepare the Land Allocation Plan (CNIAF)
5-Dec.-11 17-Feb.-
12 17-Feb.-12 14-May-12 5 1.91 0.56 29.45 31-March-17 4.2
Sub-total Environment 5 1.91 0.56 29.45 4.2
Energy Rural Electrification Project 6-Dec-12 5-April.-13 22-Sept.-14 22-Sept.-14 22 10.00 0.20 2.03 31-Dec.-17 3.2
Sub-total Energy
22 10.0 0.2 2.0 3.2
Social
Skills and Human Resource Development Project (PDCRH)
18-Dec-14 14-Sept.-
15 Not Yet Not Yet
7.30 0.00 0.00
31-Dec.-20 1.1
Sub-total Social
7.3 0.0 0.0 1.1
Multisector
Business Climate and Economic Diversification Support Project (PACADEC)
14-Oct.-10 3-Feb.-11 3-Feb.-11 28-Oct.-11
13 3.44 0.8 23.62
30-Dec.-16
5.4
Development of National Skills 19-July-13 9-Sept.-13 9-Sept.-13 19-Sept.-14 14 1.00 0.14 14.48 30-June-16 2.6
Technical Assistance and Public Finance Capacity Building Project
24-July-13 9-Sept.-13 9-Sept.-13 19-Sept.-14 14 1.25 0.59 47.44 30-June-16 2.6
Investment Climate and Forestry Governance Support Project (PACIGOF)
1-July-15 23-Dec.-
15 Not Yet Not Yet
15.02 0.00 0.00 31-Dec.-20 0.6
Sub-total Multisector 14 20.7 1.5 7.5 2.8
Water and Sanitation Sanitation of Brazzaville and Pointe-Noire 16-Sept.-09
10-Nov.-09
10-March-10 10-March-
10 6 12.75 11.42 89.59 31-March-16
6.5
EAEPA Centres Second. and Operation FDSE 4-Jan.-13
21-May-13
21-May-13 22-Aug.-13 8 0.86 0.74 85.96
31-July-16 3.1
Sub-total Water and Sanitation 7 13.61 12.16 89.36 4.8
SUB-TOTAL NATIONAL PROJECTS 11.66 53.52 14.48 27.05% 3.2
B. MULTINATIONAL PROJECTS
Transport
Ndende-Dolisie Road and Libreville-Brazzaville Corridor Transport Facilitation Project
18-Dec.-13 19-Feb.-
14 22-Jun.-15 22-June-15 18 30.49 0.00 0.00 30-June-19
2.2
Study on the Kinshasa-Brazzaville Bridge 3-Dec.-08
13-May-09
13-May-09 15-March-
11 28 5.00 2.59 51.77 31-Dec.-16
7.3
IX
Sector Project Name Approval Date Signature Effectiveness Effec. For 1st Disb.
Apprv-1st Disb. (m)
Net Commitments
(UA m)
Amounts Disbursed
Disb. Ratio (%)*
Closing Date
Project Age
Cameroon/Congo: Ketta-Djoum Road (Phase I) 25-Sept.-09 11-Jan.-
10 11-Jan.-10 13-Feb.-12
29 61.90 46.05 74.39 30-Dec.-16
6.4
Study on Ouesso-Bangui-N'djamena Road and Navigability
1-Dec.-10 29-April-
11 29-April-11 29-April-11
5 8.00 1.02 12.79 30-Nov.-16
5.2
Ketta-Djoum Road and Yaounde-Brazzaville Corridor Transport Facilitation Project – Phase 2 21-Oct.-15
17-Dec.-15
Not Yet Not Yet
96.50 0.00 0.00
31-Dec.-20
0.3
Sub-total Transport 20 105.4 49.7 47.1 5.3
SUB-TOTAL MULTINATIONAL PROJECTS 20.03 105.39 49.66 47.12% 3,9
Total 14.70 158.91 64.14 40.36 3.9
X
ANNEX V
MAP OF THE OPTICAL FIBRE INFRASTRUCTURE PROJECT AREA (AFDB AND
WORLD BANK FINANCING)
This map has been provided by the staff of the African Development
Bank exclusively for the use of the readers which it is attached. The names used and the borders shown do not imply on the part of the ADB
Group and its members any judgment concerning the legal status of a
territory nor any approval or acceptance of these borders.
BM funding
ADB funding