1

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 61646-CG

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED CREDIT

IN THE AMOUNT OF SDR 9.4 MILLION

(US$ 15 MILLION EQUIVALENT)

TO THE

REPUBLIC OF CONGO

FOR THE

CENTRAL AFRICAN BACKBONE PROJECT

IN SUPPORT OF THE THIRD PHASE OF THE CENTRAL AFRICAN BACKBONE PROGRAM – APL3

May 4, 2011

ICT Sector Unit Africa Region

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

2

CURRENCY EQUIVALENTS

(Exchange Rate Effective April 2011)

Currency Unit = XAF XAF 500 = US$1

US$ 0.002 = XAF 1

FISCAL YEAR January 1 – December 31

ABBREVIATIONS AND ACRONYMS

ACNIC Assemblée Congolaise de Nommage Internet en Coopération Congolese Assembly for Internet Names and Cooperation

AfDB African Development Bank APL Adaptable Program Loan ARPCE Agence de Régulation des Postes et des Communications

Electronique Post and Electronic Communications Regulatory Agency

AU African Union CAS Country Assistance Strategy CEMAC Communauté Economique et Monétaire des Etats de l’Afrique

Centrale Economic and Monetary Community of Central Africa

CFAA Country Financial Accountability Assessment CITCG Central African Backbone Program APL3 – Republic of Congo

Project (Communication Infrastructure and Technology Congo Project)

CPIPP Country Procurement Issues Paper DGE Direction Générale de l’Environnement

Directorate of Environment DGGT Direction Générale des Grands Travaux

Directorate of Civil Engineering Work EMP Environment Management Plan ESMF Environmental and Social Management Framework FBS Fixed Budget Selection FCFA Franc CFA

CFA franc FMM Financial Management Manual FMS Financial Management Specialist FMU Financial Management Unit GDP Gross Domestic Product GoC Government of the Republic of Congo

3

ICB International Competitive Bidding ICT Information and Communication Technology IDA International Development Association IFC International Finance Corporation IFMIS Integrated Financial Management Information System IFR Interim Financial Report IPDP Indigenous People Development Plan IPPF Infrastructure Project Preparation Facility ISR Implementation Status and Results Report MPTNTC Ministère des Postes, des Télécommunications et des Nouvelles

Technologies de la Communication (MPTNTC) Ministry of Posts and Telecommunications in Charge of ICT

M&E Monitoring and Evaluation NCP National Coverage Project

Projet de Couverture Nationale (PCN) NEA National Environmental Agency (NEA), ONPT Office National des Postes et Télécommunications PPA Project Preparation Advance PCU PPP

Project Coordination Unit Public Private Partnership

PSTN Public Switched Telephone Network RAP Resettlement Action Plan RoC Republic of Congo SOTELCO Société des Télécommunications du Congo (National Telecom

Operator) SPV Special Purpose Vehicle WACS West Africa Cable System WLL Wireless Local Loop WiMAX Worldwide Interoperability for Microwave Access

Vice President: Obiageli Katryn Ezekwesili Regional Integration Director: Yusupha B. Crookes

Sector Director Jose Luis Irigoyen Country Director for CAB APL3/CITCG Marie Françoise Marie-Nelly

Sector Manager Philippe Dongier Task Team Leader for the CAB Program

and for CAB3/CITCG :

Jérôme Bezzina Co-Task Team Leader for CAB3/CITCG Marc Jean Yves Lixi

4

Table of Contents I.  Strategic Context ................................................................................................................... 10 

A.  Country Context ............................................................................................................. 10 

B.  Sectoral and Institutional Context .................................................................................. 10 

C.  Higher Level Objectives to which the Project Contributes ............................................ 14 

II.  Project Development Objectives........................................................................................... 16 

A.  PDO ................................................................................................................................ 16 

1.  Project Beneficiaries ................................................................................................... 16 

2.  PDO Level Results Indicators .................................................................................... 16 

III.  Project Description ............................................................................................................. 17 

A.  Project components..................................................................................................... 17 

B.  Project Financing ........................................................................................................ 18 

1.  Lending Instrument ..................................................................................................... 18 

2.  IDA allocations will follow country considerations ................................................... 18 

3.  Project Financing Table .............................................................................................. 18 

C.  Lessons Learned and Reflected in the Project Design ............................................... 20 

IV.  Implementation .................................................................................................................. 21 

A.  Institutional and Implementation Arrangements ........................................................ 21 

B.  Results Monitoring and Evaluation ............................................................................ 21 

C.  Sustainability .............................................................................................................. 21 

V.  Key Risks .............................................................................................................................. 22 

VI.  Appraisal Summary ........................................................................................................... 22 

A.  Economic and Financial Analysis .............................................................................. 22 

B.  Technical .................................................................................................................... 23 

C.  Financial Management ............................................................................................... 24 

D.  Procurement ................................................................................................................ 25 

E.  Social and Environment.............................................................................................. 25 

Annex 1: Results Framework and Monitoring.............................................................................. 27 

Annex 2: Detailed Project Description ........................................................................................ 29 

Annex 3: Implementation Arrangements ..................................................................................... 39 

Annex 4: Operational Risk Assessment Framework (ORAF) ...................................................... 65 

Annex 5: Implementation Support Plan ........................................................................................ 67 

Annex 6: Team Composition ........................................................................................................ 69 

Annex 7: Economic and Financial Analysis ................................................................................. 70 

Annex 8: CAB Program Background and Vision ......................................................................... 75 

5

6

PAD DATA SHEET

AFRICA

CENTRAL AFRICAN BACKBONE PROGRAM - APL3 - REPUBLIC OF CONGO PROJECT

PROJECT APPRAISAL DOCUMENT

AFRICA

TWICT

Date: May 4, 2011 Country Director: Yusupha B. Crookes Sector Director: Jose Luis Irigoyen Sector Manager: Philippe Dongier Team Leader(s):Jerome Bezzina and Marc Lixi Project ID:P122398 Lending Instrument: Adaptable Program Loan

Sector(s): Telecommunications (60%);General information and communications sector (20%);General industry and trade sector (20%) Theme(s): Regional integration (50%);Infrastructure services for private sector development (40%);Regulation and competition policy (10%) EA Category: B – Partial Assessment

Project Financing Data: Proposed terms:

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

Source Total Amount (US$M) Total Project Cost:

Cofinancing: Borrower:

Total Bank Financing:

IBRD

IDA:

New

Recommitted

30.00 15.00

15.00

Borrower: Republic of Congo

Responsible Agency: Ministry of Posts and Telecommunications in Charge of ICT

Contact Person: William Fidèle EBONZA Telephone No.: (242) 912 89 89 Fax No.: Email: ebondzafw2002@yahoo.fr

7

Estimated Disbursements (Bank FY/US$ m)

FY 2011 2012 2013 2014 2015 2016 2017

Annual 0.25 0.75 2.50 3.50 4.00 4.00 0.00

Cumulative 0.25 1.00 3.50 7.00 11.00 15.00 15.00

Project Implementation Period: Start May 24, 2011 – End June 30, 2016 Expected effectiveness date: September 12, 2011 Expected closing date: December 31, 2016

Does the project depart from the CAS in content or other significant respects?

○ Yes X No

If yes, please explain:

Does the project require any exceptions from Bank policies? Have these been approved/endorsed (as appropriate by Bank management? Is approval for any policy exception sought from the Board?

○ Yes X No ○ Yes ○ No ○ Yes X No

If yes, please explain:

Does the project meet the Regional criteria for readiness for implementation?

X Yes ○ No

If no, please explain:

Project Development objective: The development objective of the proposed project is consistent with the PDO for the CAB Program: to contribute to increase geographical reach and usage of regional broadband network services and reduce their prices, in the Republic of Congo.

8

Project description: The main project components will consist of (i) Enabling environment at the regional and national levels. This component will include Technical Assistance to strengthen the regulatory framework and capacity of key stakeholders to provide policy and regulatory capacity building, Technical Assistance to promote Open Access Regime & PPP, Technical Assistance to design a strategic plan for Congo Telecom, and Technical Assistance to design Management Policy for ".cg" Domain Name; (ii) Connectivity. This component will include CAB-related environmental and resettlements consultancies, the financing of three interregional links to neighboring countries, the financing of the establishment of Internet Exchange Points (IXP) to minimize rerouting of domestic Internet traffic via international routes, (iii) Promotion of ICT sector. This component will build ICT skills and create new business opportunities for local ICT firms, and (iv) Project Management.

Safeguard policies triggered? Environmental Assessment (OP/BP 4.01) Natural Habitats (OP/BP 4.04) Forests (OP/BP 4.36) Pest Management (OP 4.09) Physical Cultural Resources (OP/BP 4.11) Indigenous Peoples (OP/BP 4.10) Involuntary Resettlement (OP/BP 4.12) Safety of Dams (OP/BP 4.37) Projects on International Waterways (OP/BP 7.50) Projects in Disputed Areas (OP/BP 7.60)

X Yes ○ No X Yes ○ No ○ Yes X No ○ Yes X No X Yes ○ No X Yes ○ No X Yes ○ No ○ Yes X No ○ Yes X No ○ Yes X No

Conditions and Legal Covenants:

Financing Agreement Reference

Description of Condition/Covenant Date Due

Loan/credit effectiveness: Preparation and adoption of the Procedures

Manual and the Project Implementation Plan satisfactory to IDA

Payment of the first tranche of the government contribution

9

Covenants applicable to project implementation: Acquisition and installation of a multisite

accounting software

Recruitment of an external auditing firm

Recruitment of internal auditor at PCU

Contribution of counterpart funds

No later than 3

months after effectiveness

No later than 3 months after effectiveness

No later than 3 months after effectiveness

No later than 8 months after effectiveness and every six months thereafter

Disbursement Conditions for Component 2: A memorandum of understanding has been

signed between the PCU, the DGE (Direction Générale de l’Environnement) within the Ministry of the Recipient in charge of environment and the Directorates affected by the Project, clarifying the respective roles of these various institutions in the monitoring of the safeguards compliance of the Project activities and defining the attributions, modalities, cost of intervention and reporting schedules of DGE.

An environmental and social safeguards specialist has been recruited within the PCU.

Other FM standard covenants IFRs (Interim Financial Reports) will be

prepared on a quarterly basis and, submitted to the Bank

Annual detailed work program and budget will be prepared by the Recipient and furnished to IDA each year by end of December

The overall FM system will be maintained operational during the project's entire life contribution

No later than 45

days after each quarter

10

I. Strategic Context

A. Country Context 1. The Republic of Congo (RoC) has experienced remarkable growth and progress towards economic reform over the past decade. With considerable resources, (oil, forests, arable land, minerals), a small yet highly urbanized population (70% of 4.3 million) and access to a deep-sea port at Pointe-Noire, this Central African nation has the opportunity to leverage its strategic advantages to build a robust economy and attain a higher standard of living for its people. RoC has made significant progress towards economic stabilization and “first generation” structural reforms since the end of civil strife in 2000. Over the past decade, GDP growth has stabilized, GNI per capita has increased significantly, and inflation has remained broadly under control. Thanks to a near-doubling of GDP at constant prices from 2002 (US$735 million) to 2008 (US$1,425 million), RoC has surpassed the threshold for lower middle income countries. Such potential notwithstanding, the burden of history has left its mark on RoC: extensive state intervention in the economy during the 1970s and 1980s severely hampered economic growth, while recurrent conflicts in the 1990s ravaged the country’s infrastructure and public institutions. Still today, the country struggles with economic diversification, as RoC’s economy remains relatively dependant on oil. A decrease in oil production caused by an oil platform accident in 2007 caused GDP to contract by 1.6% in real terms, illustrating the vulnerability of the economy to changes in oil production and prices. Although oil production recovered strongly in 2008, this was partially offset by the global financial crisis in the second part of the year. RoC has recorded strong growth in 2009 and is expected to have realized even stronger growth in 2010. Real GDP is projected to have expanded by 9.1 percent in 2010 compared to 5.6 percent and 7.5 percent in 2008 and 2009, respectively, due to continued high growth in the oil-sector (14.7 percent in 2010 versus 16.2 percent in 2009) as well as an acceleration of the growth rate of the non-oil sector (6.5 percent in 2010 versus 3.9 percent in 2009). The recent growth is largely driven by a strong increase in oil output, thanks to new concessions coming on stream. Oil production is expected to have peaked in 2010, followed by a gradual decline in subsequent years as oil wells get depleted. Although oil currently dominates Congo’s economy, there is considerable strategic interest in stimulating the development of other sectors as part of a long-term economic diversification effort. Stimulating key sectors such as information and communication technology (ICT), power, transport and water would make a significant contribution to growth, while improving the investment climate in the RoC.

B. Sectoral and Institutional Context 2. Fixed lines and Congo telecom. As of June 30, 2010, there were 9,827 main fixed lines users in RoC, with fixed teledensity at 0.25 percent (source: ARPCE). The quality of the fixed line network has rapidly deteriorated, becoming a binding constraint to expanding and improving Internet services. Fixed line incumbent Congo Telecom, formerly known as Société des Télécommunications du Congo (SOTELCO), was formed as a state-run, limited liability company in March 2003 and given ownership of the fixed telephone network (PSTN – Public Switched Telephone Service) previously operated by the Office National des Postes et Telecommunications (ONPT – Post and Telecommunications National Office).

11

3. Mobile Telephony. Increased competition in the mobile market in recent years has led to relatively widespread mobile coverage in the country. In the fourth quarter of 2010, the penetration rate was more than 85 percent.

Figure 1 - Market penetration in the Republic of Congo (% of population) (source: Wireless Intelligence 2011)

As of end 2009, mobile telephone penetration in RoC was higher than the Africa region as a whole (69 percent as compared with 48 percent).

Figure 2 - Regional Market penetration Q4 2009 (% of population)

(source: Wireless Intelligence 2010)

While mobile phone users with multiple SIM cards somewhat inflate subscriptions rates, increasing competition in the mobile market has accelerated the industry’s extensive coverage and growth. Mobile operators have continued to take advantage of the poor availability and high cost of fixed line services to establish significant subscriber bases. Wireless penetration surpassed fixed line teledensity in 1999 and the operators have since developed comparatively extensive and reliable networks. Services are widely available in the cities of Brazzaville, Pointe-Noire, Dolisie, Nkayi, Kinkala, Mouyondzi, Gamboma and Ouesso. Coverage to areas

47.8

13.7

21.7

42.8

54.7 56.961.7

69.4

Africa DRC Chad Cameroon Kenya Angola Ghana Congo

12

outside of major population centers is improving, although it remains lower than in urban centers. As of end 2010, the four key mobile operators are: Zain (Bharti Airtel – 1.598 million users), MTN Congo (1.666 million users), Warid Telecom (0.500 million users), and Azur (0.120 million users). 4. Internet and data. Poor availability, high costs and slow speeds for installation of fixed line services have obstructed the market for internet access in RoC. At the end of 2009, there were only 15,000 internet subscribers in the country, the bulk of which connected via GPRS (General Packet Radio Service) networks (source ARPCE). ADSL (Asymmetric Digital Subscriber Line) connections in May 2010 totaled just 121, of which only eleven had access to downlink speeds of 512kbps, the highest rate recorded at the time. The number of broadband subscribers was estimated to reach 130 in September 2010 (source Telegeography), and RoC’s eGovernment Readiness Index has fallen over time (from 0.2855 in 2005 to 0.2737 in 2008)1. Operators themselves offer limited services: the incumbent operator appears to have re-entered the internet sector recently, offering IPTV (Internet Protocol TV) and VoIP (Voice over Internet Protocol) services in addition to its ADSL-based broadband connections (although speeds are limited to 256kbps for residential users). Other operators have alternative sources of internet access: Mobile operator Airtel Congo has WLL networks or dial-up via mobile handsets in Brazzaville and Point-Noire; MTN Congo uses GPRS-based mobile internet services; and fixed line operator Alink Telecom offers data, internet and VoIP services via its WLL and satellite network. The ICT Development Index (IDI) ranked the Republic of Congo 132nd out of 159 in the world and 15th out of 37 in Africa. 5. Bandwidth, Backbone and Infrastructure Project. Most of the telecommunications network, including the national microwave transmission backbone, was destroyed during the war. All but one telephone exchange at Pointe-Noire were damaged. Since then, Congo Telecom has undertaken a limited infrastructure rehabilitation program. Most of the backbone is using wireless connections through 32 Mbps Microwave links. 6. Competition, Policy, regulation and strategy overview. After the 1997 law abolishing ONPT monopoly, the GoC initiated an era of liberalization and succeeded in attracting private mobile telecommunications operators. The three main existing operators (Zain Bharti Airtel, MTN Congo and Warid) entered the market between 1997 and 2007. A fourth operator entered the market in 2010. The progression of the Herfindahl-Hirschman Index (HHI Index) 2 during the last decade reflects the market structure’s dynamism.

1 RoC’s eGovernment Readiness Index was benchmarked to an average Central Africa eGovernment Readiness of 0.2530 (average eGovernment Readiness for the World: 0.4514). 2 The Herfindahl-Hirschman Index or HHI, is a measure of the size of firms in relation to the industry and an indicator of the amount of competition among them. It can range from 0 to 1.0, moving from a huge number of very small firms to a single monopolistic producer. Increase in the HHI generally indicates a decrease in competition and an increase of market power, whereas decrease indicates the opposite.

13

Figure 3 - Evolution of HHI between 2000 and 2010 (source: Wireless Intelligence 2010)

7. The October 29, 2004 – Decree No. 466 restored monopoly powers on the international gateway and gave WLL market exclusivity to Congo Telecom, jeopardizing telecom sector performance. In 2009, the triggers for the completion point under the HIPC Initiative included repealing the Decree and establishing an independent telecommunications regulatory authority (the 2004 466 Decree was repealed and an independent regulator was established). By August 28, 2009, both Chambers of the Parliament had adopted the complete Postal and Telecom legal and regulatory framework, including, most recently: Decree No.2010-554 (May 2010), requiring mobile operators to register all subscribers as of January 2011 as part of global anti-terror and crime initiatives; Decision No.305 (September 2010), instating a nine digit numbering system; and in July 2010, mobile termination rates fell from F CFA 75 (US$0.15) to F CFA 50 among all operators.

8. ICT Sector as a diversification opportunity. In 2008 – 2009, the GoC designed and adopted a new Policy and Strategic Vision for the ICT sector (Cyberstrategy), a road map ushering Congo to the next stage of ICT connectivity, with the goal of becoming a regional ICT hub. The Cyberstrategy also promotes the ICT sector as an opportunity for non-oil diversification and an engine of job creation. The GoC reviewed infrastructure projects, legal and regulatory frameworks, and e-government initiatives, identifying infrastructure gaps, investments needs and developmental objectives aligned with sector development. The Cyberstrategy contains four pillars: (1) Infrastructure and Universal Access, (2) Legal and Institutional Framework, (3) Human Resources, Promotion of ICT and Innovation, and (4) ICT Products and Services. The GoC has developed an action plan to implement this strategy, and of twenty seven (27) projects, seventeen (17) are within the ICT sector, ten (10) are related to Postal Services. To date, the action plan’s implementation has made little progress. Three noteworthy actions thus far include the creation of a Post and Electronic Communications Regulatory Agency (Agence de Régulation des Postes et des Communications Electronique - ARPCE in 2009), and the initiation of two major, DGGT-supervised infrastructure projects.

0.38

0.51 0.51

0.50

0.51 0.54

0.59

0.64

0.45

0.400.37

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

14

9. Under the Cyberstrategy, the GoC has undertaken two national infrastructure projects (under the supervision of the DGGT) which may catalyze the country’s transition into a regional hub for ICT: the West Africa Cable System (WACS) and the National Coverage Project – NCP (Projet de Couverture Nationale - PCN). WACS is a submarine communications cable linking South Africa with the United Kingdom along the west coast of Africa. The cable landed in Pointe Noire and will connect RoC to the global submarine cable network. The design capacity of WACS is at least 3.84 Tbps. The GoC will be financing the NCP (transmission capacity network between the landing station in Pointe Noire, Brazzaville and Ouesso). As can be seen from the map below, the NCP and the WACS connectivity are key building blocks to help position Congo as a traffic hub in between Gabon, Cameroon, CAR (Central African Republic) and DRC (Democratic Republic of Congo).

Figure 4 - National Coverage Project – NCP (Projet de Couverture Nationale - PCN) Source: Congo telecom

C. Higher Level Objectives to which the Project Contributes 10. Contribution to the MDGs. The proposed Program will contribute towards realization of the Millennium Development Goals (Targets 1 and 2) by supporting economic growth; and Target 183, by making available the benefits of new technologies, especially information and communications.

3 Target 1. Halve, between 1990 and 2015, the proportion of people whose income is less than $1 a day Target 2. Halve, between 1990 and 2015, the proportion of people who suffer from hunger

15

11. Supporting Cyberstrategy implementation. The proposed CAB Republic of Congo (CITCG) project has been designed to support the implementation of the government’s Cyberstrategy. CITCG project would support five (5) of the seventeen ICT related Projects (labeled P1 to P17 of the Cyberstrategy): P1 – Implementation of a broadband national network, P3 – Development of ICT legal framework, P5 – Capacity development of ARPCE, P12 – Creation of IT MSMEs incubators and, P14 – Creation of Technopole. 12. Consistency with the Country Partnership Strategy (CPS). The World Bank’s Country Partnership Strategy (FY10 – FY12) is to contribute to PRSP implementation through seven specific outcomes: (i) more effective management of oil revenues and public expenditure; (ii) enhanced agricultural productivity and marketing; (iii) better tools for improved forestry management; (iv) a foundation for MSME growth; (v) improved infrastructure service delivery; (vi) a foundation for increasing Congo’s market share in regional transit services; and (vii) improved basic services. The proposed project will contribute to the CPS outcomes by financing a regional telecommunications infrastructure to enhance RoC’s transit role in the region (outcome (vi)), and extend the usage/reduce prices of broadband network services (outcome (v)). Farmer communities will be able to leverage access to higher speed data services at a lower cost to acquire price information and advisory services through mobile phones (outcome (ii)). The project’s component 3 aims to build ICT skills and extend economic opportunities in the local ICT industry (outcome (iv)). 13. Contribution to RIAS and alignment with World Bank Strategy for Africa. The proposed project supports the objective of CEMAC and ECCAS (Economic Community of Central African States) of creating an integrated and competitive economic space in Central Africa. In particular it contributes to the implementation of the third pillar of the 2010-2015 CEMAC Regional Economic Program related to physical interconnectivity of its member countries. The project also contributes to the implementation of both the Africa Strategy and the updated continent-wide RIAS that were recently discussed by the Board. RIAS places significant emphasis on the need for improved regional physical connectivity (electricity, surface and air transport and ICT infrastructure) as critical foundation for effective regional integration and the competitiveness of African economies. 14. Regionalization and CAB Program. The CITCG project is consistent with the GoC’s goals of improving regional integration and increasingly positioning the country as a service hub for neighboring countries and the region. Improved communications capacity, better information access, and affordable international communications will help the RoC regain its historical position as a thoroughfare, albeit now through ICT infrastructure and services, connecting the Point-Noire – Brazzaville corridor within Congo and neighboring countries eligible to participate in the CAB Program (Gabon, DRC, CAR, and Cameroon). Conversely linking these 4 countries through Congo will provide traffic from all 4 countries with additional route to submarine cable connectivity, thereby leading to additional price and quality pressure on the regional high speed Internet traffic across the region.

Target 18. In cooperation with the private sector, make available the benefits of new technologies, especially information and communications technologies

16

15. Reinforcement of regional CAB program. CAB APL1 (Cameroon, Chad, and Central African Republic) is currently at a critical stage: governments of participating countries have negotiated at the regional level to ensure seamless connectivity in Central Africa. In this context, landlocked countries (Chad, CAR) are dependent on Cameroon for access to international gateways. By financing additional international connections between Congo, Chad and CAR, this project (i) would mitigate the risk of potential bottlenecks in Cameroon, causing international communications failure; (ii) reinforce the integrity of the regional networks by creating loops (redundancy) in the sub region; and (iii) reinforce Congo’s position as a regional hub for international communications in Central Africa.

II. Project Development Objectives

A. PDO 16. The development objective of the proposed project is consistent with the PDO for the CAB Program: to contribute to increase geographical reach and usage of regional broadband network services and reduce their prices, in the RoC.

1. Project Beneficiaries 17. Direct beneficiaries of the project include people who may be connected to the internet or more generally to communications networks. Indirect beneficiaries potentially include all of the country’s population, since increased communications capabilities at affordable rates for some of the population will eventually have externalities for all.

2. PDO Level Results Indicators 18. Achievement of the development objective will be assessed through 4 outcome indicators. Key monitoring indicators are summarized in the Table 1 (see Table 1, Project Funding on page 18).

Project Development Objective (PDO)

Outcome Indicators for CAB3 Congo [same indicators as for CAB Program]

By the closing date

To contribute to increase geographical reach and usage of regional broadband network services and reduce their prices, in the RoC

International Communications (Internet, Telecoms, and Data) bandwidth per person

Internet subscribers per 100 inhabitants Average monthly price of international capacity

link (E1 or 2Mbts) from the capital city to Europe Number of direct project beneficiaries (% female)

500 bits/s/person

15 $800 800,000 (50%)

19. For the purpose of the project performance assessment, and in particular the PDO indicator “Number of Direct Project Beneficiaries (of which percentage of female)”, a direct project beneficiary is defined as an Internet subscriber (a person, a business – ISP), or a mobile subscriber with Internet access.

17

III. Project Description

20. Four components have been identified to support the implementation of five high priority projects from the Government’s Cyberstrategy : Component 1 – Enabling environment at the regional and national levels supporting the development of ICT legal framework (project P34) – and capacity development of ARPCE (project P5); Component 2 – Connectivity supporting the implementation of a broadband national network (project P1); Component 3 – Promotion of ICT sector supporting the creation of IT MSMEs incubators (project P12) and IT parks (project P14); Component 4 – Project Management..

A. Project components 21. The Project will be executed over a five-year period with total financing of US$30 million, including US$15 million contribution from the government. Annex 2 provides a detailed breakdown of financing between IDA and the Government. The main Project components will consist of: Component 1 - Enabling environment at the regional and national levels (Total cost US$7.1 million: IDA US$3.55 million; RoC US$3.55 million) – This component will include the following activities : (i) Technical Assistance to strengthen the regulatory framework and capacity of key stakeholders (i.e. Ministry of Posts and Telecommunications in charge of ICT and the Regulatory Authority ARPCE) to provide policy and regulatory capacity building (regulatory tools, frequency management equipment, cost models, M&E capacity); (ii) Technical Assistance to promote Open Access Regime & PPP5. This activity will be launched prior to Project effectiveness to ensure its completion prior to the international tender process for PPP (see component 2); (iii) Technical Assistance to design a strategic plan for Congo Telecom, and (iv) Technical Assistance to design Management Policy for ".cg" Domain Name. Component 2 – Connectivity (Total cost $18 million: IDA US$9 million; RoC US$9 million) – This component will include the following activities: (i) CAB-related environmental and resettlements consultancies, (ii) financing three interregional links to neighbouring countries (including fiber-optic cables, terminal equipment, switches), guaranteeing the establishment of an open access network (open to all operators), leveraging private sector investment and ensuring interconnectivity among neighbouring countries: Gabon (link Dolisie – Mbinda), Cameroon (Link Oyo – Ouesso), and DRC (Link Brazzaville – Kinshasa); (iii) financing the establishment of Internet Exchange Points (IXP) to minimize rerouting of domestic Internet traffic via international routes. Component 3 – Promotion of ICT sector (Total cost $2 million: IDA US$1 million; RoC US$1 million) – This component will build ICT skills and create new business opportunities for local ICT firms, consisting of three main activities: (i) Technical Assistance for the review, improvement and development of information laws, "cyber" legal framework (cyber-security, cybercrimes, privacy, promotion of ICT sector, etc); (ii) Promotion of ICT start-up firms through a business incubator approach; and (iii) Financing a study for the design

4 The various P’s (P3, P5, P1, P12, and P14) are in reference to the Government’s Cyberstrategy labeled projects. 5 A Public Private Partnership (PPP) refers to the financing, governance, ownership and operation of an enterprise by one or more private sector entities together with one or more public sector entities

18

and development of an interoperable platform for mobile and electronic applications development (e.g. m-banking…). Component 4 – Project Management (Total cost $2 million: IDA US$1 million; RoC US$1 million) – This component will consist of support to finance management-related issues at the Project level, such as human resources support with management, procurement, financial management, M&E, internal and external audit, and communications expertise, operating expenses and equipment.

B. Project Financing

22. The Bank received a letter, dated January 12, 2011, in which GoC committed to funding 50% of total project cost (US$15 million), securing client ownership and commitment at project preparation. The disbursement arrangement for this project will be similar to that of the PEEDU (Projet d’Electrification, d’eau et de Développement Urbain – Water, Electricity and Urban Development Project): government financing will be treated as a form of counterpart funding, with each activity co-financed following the World Bank fiduciary procedures (see Annex 3).

1. Lending Instrument 23. The instrument is an Adaptable Program Loan. CITCG is the third phase of the Horizontal APL for the CAB Program. The third phase is fully consistent with the CAB Program objectives.

2. IDA allocations will follow country considerations

Table 1: Project Funding (US$ million) Regional IDA National IDA GOC Total

10 5 15.0 30.06

3. Project Financing Table 24. Total project financing requirements are estimated at US$30 million. Detailed information on costs is provided in Table 2. Each activity will be co-funded by IDA and Government funds and implemented using Bank procedures.

6 The total cost of the 4 components is US$29.1 million. The total amount of the project is $30 million including $0.9 million for contingencies.

19

Table 2. Project Costs by Component and Use of Financing

Component Amount US$

Technical Assistance to strengthen regulatory framework and capacity of key stakeholders 3,000,000Technical Assistance to promote Open Access Regime & PPP 3,300,000Technical Assistance to design a strategic plan for Congo Telecom and propose options for business valuation 600,000Technical Assistance to design Management Policy for ".cg" Domain Name. 200,000

TOTAL Component 1 7,100,000

CAB-related environmental and resettlements consultancies 500,000Finance the infrastructure for the establishment of the regional network CAB including fiber-optic cables, terminal equipments and switches between Dolisie and Mbinda

5,000,000

Finance the infrastructure for the establishment of the regional network CAB including fiber-optic cables, terminal equipments and switches between Oyo and Ouesso

9,500,000

Finance the infrastructure for the establishment of interconnection between Brazzaville and Kinshasa 2,500,000Supporting the establishment of a national and regional Internet eXchange Point (IXPs) 500,000

TOTAL Component 2 18,000,000

Technical Assistance for the review, improvement and development of information laws, "cyber" legal and institutional framework (cyber-security, cybercrimes, privacy, promotion of ICT sector, support to ICT agency, etc).

600,000

Promote ICT start-up firms through a business incubator approach that will provide a critical mass of small ICT businesses with affordable and reliable access to the Internet, office space, training, business support services, and business incubation.

1,100,000

Financing a study for the design and development of a interoperable platform for m and e applications development (e.g. mbanking…).

300,000

TOTAL Component 3 2,000,000

Staff 1,000,000PCU operating costs 700,000Communication and monitoring and evaluation 300,000

TOTAL Component 4 2,000,000

Contingencies 900,000

Total Total IDA and Government contribution without Private sector contribution 30,000,000

Component 1 - Enabling Environment

Component 2 - Connectivity

Component 3 - Promotion of ICT sector

Component 4 - Project Management Unit

20

C. Lessons Learned and Reflected in the Project Design

25. The project incorporates lessons learned from the existing policy dialogue in Congo and draws from experiences of World Bank-financed Telecom/ICT projects and programs in the region.

26. Building on the World Bank’s policy dialogue in the ICT sector in Congo. Since 2008, the World Bank and the GoC have engaged in policy dialogue on the ICT sector, informing the project design by granting a view into the intricacies of the country and sector’s political economy. The project accommodates all the sector stakeholders (MPTNTC, DGGT, ARPCE, Congo Telecom, private operators and Ministry of Planning), aligns substantially with the Cyberstrategy, and builds on country institutions for Project beneficiaries. On legal and institutional reforms, the project accounts for past achievement in the sector, focusing on the remaining bottlenecks identified by stakeholders.

27. Open Access and Public Private Partnerships (PPP). Successful commercialization of capacity - maximizing benefits with a reasonable rate of return - requires smart investments, appropriate management skills, and incentive structures. Emerging international best practice (Kenya, Tanzania, Rwanda and Uganda and Colt Group in Europe) indicates the best management structures for high capacity broadband backbone networks are on an "open" basis and under PPPs. Integrating the private sector brings access to private capital, reduced public sector operational risk, faster project deliveries, project management skills, entrepreneurship and innovation. The CITCG project finances technical assistance to design and implement a PPP structure which will manage, operate and commercialize link capacity. The "open access" PPP structure assures non-discriminatory treatment of all entities, fosters transparency, facilitates market entry, and promotes reasonable tariffs, maximizing the project’s developmental contribution (see paragraph 46). 28. Co-financing with Government. CITCG’s 50/50 between IDA and GoC establishes mutual commitment and involvement from the financing parties. The PEEDU (Projet d’Electrification, d’eau et de Développement Urbain) successfully implemented a similar co-financing arrangement, 80% of which was GoC-financed (US$ 100 million out of US$125 million). In RoC, with fewer government funding constraints but low capacity, the Government is using this co-financing arrangement to assure efficient use of public resources, mainly through the use of World Bank procurement and disbursement procedures.

29. A client-initiated Steering Committee. The World Bank experience using ad-hoc Steering Committee approach to monitor project implementation has not always been successful. Such Steering Committees are often created to guide and govern, however, involve senior decision-makers and therefore do not engage in operational oversight of project implementation. As an alternative (discussed below), CITCG will use the GoC-created PPP/Capacity Committee (Ministerial Decision N°0003/MPTNTC/CAB7) as the project Steering Committee to initiate and monitor the PPP process for the backbone management. By using this Commission as the Project

7 Decision N°0003/MPTNTC/CAB of March 2 2011 creating a PPP/Capacity Committee monitor the PPP process for the backbone management

21

Steering Committee, CITCG broadens GoC ownership of project implementation and stakeholder buy-in, as the committee comprises all project stakeholders.

IV. Implementation

A. Institutional and Implementation Arrangements 30. As discussed above, a Steering Committee was created on March 3, 2011 (Decision N°0003/MPTNTC/CAB). This Steering Committee, chaired by the Minister of Posts and Telecommunications in Charge of ICT (MPTNTC), will be responsible for project implementation oversight. For each activity concerned, the Steering Committee, through the Project Coordination Unit (PCU), will consult with and delegate to the relevant agencies and ministries. During Appraisal, the Bank team and GoC confirmed the Steering Committee responsibilities on strategic directions and guidance during implementation. The Steering Committee will also have fiduciary and governance oversight functions. 31. The PCU will be responsible for project coordination and implementation, including all fiduciary tasks such as Procurement, Financial Management, M&E, Communications and Environmental Support. Staff will be complemented and incentives will be put in place as needed to handle additional workload generated by CITCG.

B. Results Monitoring and Evaluation 32. ARPCE will be responsible for data collection. The PCU will put together relevant data and produce a quarterly M&E report reviewed by the Steering Committee and submitted to the Bank. The list of selected indicators (see Annex 1) contains core sector indicators and other indicators that are usually collected by the regulator from the sector operators. The indicator related to Project Beneficiaries will be collected from different project stakeholders (operators, Internet Service Providers – ISPs, service retailers) through either short surveys or performance reports.

C. Sustainability 33. The project will be implemented through PPP establishing low cost connectivity. The implementation of PPP mechanisms and expected private sector participation will stimulate sector development in the country and promote competition. A reliable supply of low-cost, wholesale, international connectivity will boost investments and competition in downstream market segments, benefits which will last beyond the project, increasing the sustainability of the project outcome. 34. The GoC’s commitment and ownership will ensure medium term sustainability of the project outcomes and impact during the transition process to PPP structures, enabling private stakeholders to complement the public sector’s current mandate.

22

V. Key Risks 35. CAB is an ambitious program with significant risks and benefits at the regional and country level. Some project risks arise in other regional programs, underscoring the importance of a coordinated approach. Potential risks are summarized in the Operational Risk Assessment Framework (see Annex IV). The overall project risk at preparation is rated Medium-driven by Likelihood (ML) and the overall risk at implementation is rated Medium-driven by Impact (MI). Risks identified are manageable and mitigation measures are in place. Should additional risks arise during the implementation phase of the project, additional mitigation measures will be considered as part of project supervision, 36. A minor risk to project outcome has been identified. The risk is related to the completion of the NCP: while NCP-financed infrastructure would eventually need to be interconnected with project infrastructure, the CITCG will finance three network segments that could operate and become economically viable without the NCP: the Kinshasa-Brazzaville segment (because of the enormous user/customer potential in Kinshasa), the Oyo-Ouesso segment, (because Oyo serves as a hub for all mobile operators and Ouesso is at the border with Cameroon, the largest market in the sub-region), and the Dolisie – Mbinda segment, (because (i) Dolisie is close to Pointe-Noire and likely to be the first city NCP-connected, and (ii) Mbinda is on the border with Gabon, near Franceville, an important economic city in Gabon). Moreover the Government has reassured the Bank Team that the civil works for NCP were ongoing and would be completed by June 2012. 37. A major risk is related to the PPP scheme. Given the country and sector risks, foreign private operators may be reluctant to invest in Congo, in particular on the three network links mentioned above. In order to mitigate this risk, the project will benefit from the Government-created PPP Commission to help review risks and solve issues which may surface during project implementation. The project also finances an international expert recruited under the PPA (Project Preparation Advance) to support the Commission on PPP technical aspects. Moreover, early in implementation, the project will finance the development of laws and tools for regulators to support greater law enforcement capacity, reassuring potential investors. Finally, the project will finance a comprehensive study including PPP options and technical infrastructure appraisal, as well as a performance based fee for the Investment Bank carrying out the transaction.

VI. Appraisal Summary

A. Economic and Financial Analysis 38. The Leontief analysis shows that investment in Broadband infrastructure has a significant impact on employment and economic growth in the Republic of Congo. The final demand of 1 billion FCFA (U.S. $ 1,895,849) for the Post and Telecommunication industry will cause a total impact of 1.29 billion FCFA (U.S. $2,448,768) in new production in the economy. Moreover, this amount increases to 1.69 billion FCFA (U.S. $3,197,383) in the model keeping households endogenous, with a 31% increase when household consumption is considered a sector of the economy. Both high final demand induced output effect and high household influence indicate that the Post and Telecommunication industry is a labor-intensive sector capable of playing a key

23

role in the Congolese economy, particularly in storing foreign exchange reserves to finance the transfer of technology and in providing downstream support for possible extensions of production industries. 39. From a financial perspective, the financial situation for the CIT CG Project was assessed taking into consideration two options: Option 1 CIT CG if NCP materializes, Option 2 if NCP does not materialize. For each scenario, two financial aggregates were calculated to assess the CAB CIT CG Project: (1) Internal Rate of Return (IRR) i.e, the discount rate for which the total present value of future cash flows equals the cost of the investment (in other words, the interest rate that produces a zero Net Present Value) and (2) the Net Present Value (NPV), i.e. the sum of each cash inflow/outflow discounted back to its present value (PV). The calculated Net Present Value (NPV) for CAB CIT CG Project was estimated to be US$16.4 million if NCP materializes, and US$10.5 million if NCP does not materialize. The calculated Internal Rate of Return (IRR) for CAB CIT CG Project was estimated to be 21 percent if NCP materializes, and 17 percent if NCP does not materialize. 40. From a microeconomic perspective, the opportunity cost calculated to measure economies from the cost of providing bandwidth relying on satellite connection as opposed to CAB Network until 2024 was estimated to be US$22.5 million if NCP materializes, and US$18.7 million if NCP does not materialize.

B. Technical 41. RoC having only one “exit point” on the submarine cables (WACS landing station of Matombi), it is necessary that terrestrial infrastructure connects to one or more countries with international connectivity. It is therefore necessary to interconnect other cables through DRC, Cameroon, and Gabon (see Annex 2 for details on technical options proposed by the project). 42. Ensuring regional connectivity. As per the Connectivity component, the team considers the establishment of a PPP to accelerate the roll-out of backbone links to three neighboring countries. This would in turn include the installation of fiber-optic cables, terminal equipment and switches to connect Gabon (link between Dolisie and Mbinda), Cameroon (link between Oyo and Ouesso) and DRC (link between Brazzaville and Kinshasa). 43. Technical solutions. The cable between Dolisie – Mbinda will be dedicated to the transportation of international traffic and would therefore not contain any intermediary interconnection points. Due to its sub regional nature, this segment is on the list of the CEMAC telecom Projects. The connection between Oyo and Ouesso will use microwave links (it will become a redundancy solution when the NCP deploys fiber optic over the power transmission line starting 2015, after the completion of the Liouesso Dam). Solar panels will power poles and active equipment. This way, the project protects the environment by avoiding the duplication of infrastructure, and features the “open access” management of the link. The 10 km Brazzaville – Kinshasa segment will use microwave links to duplicate the existing fiber optic cable laid under the Congo River. See Annex 2 for details.

24

44. Managing the new infrastructure through PPP. The potential PPP options will take into consideration the GoC objectives as expressed by MPTNTC, the newly-formed PPP Commission, and the sector’s legal and regulatory framework. This Commission will have only advisory role. The GoC has indicated its intention to treat the fiber optic electronic communications cable of the NCP as a “national asset” to achieve economic and social objectives in line with the “Objectives” of the national Cyberstrategy. It also intends to use the facility to enhance national security. Consequently whatever the PPP option will be, the Government will play a significant role in the future partnership.

45. The investment bank would consider two options for carrying out the PPP transaction for CITCG-financed infrastructure: (i) A Joint venture (SPV – Special Purpose Vehicle) between the Government (owner of the infrastructure) and private investors to develop a full network (carrier’s carrier), (ii) Contract with Private Operator on a Build Operate and Transfer (BOT) model to develop and market fiber (full network). For security and sovereignty reasons, the Government is willing to keep ownership of the CITCG infrastructure. However, private participation in CITCG management, maintenance and commercialization through a concession would be the best way of ensuring that investment, operation, and maintenance decisions are made on a sound commercial basis. Moreover, a PPP management arrangement for the CITCG would appeal to potential private investors bidding on the above-mentioned PPP transaction. The percentage of ownership of the infrastructure by the SPV will be determined based on the level of private sector investment. See Annex 2 sub-component 1.2.

C. Financial Management 46. Initial FM assessment has been performed for the initial PPA. Part of the PPA funding is used to strengthen FM capacity of implementation units in the country. 47. Financial management risk: The financial management risk, a combination of inherent and control risk, is essentially fiduciary: the risk of Bank fund misuse. To mitigate this risk, which is Medium Impact (M-I), a robust financial management arrangement system is proposed in Annex 3. To ensure this system continues to operate well during the project’s life, two on-site supervision missions a year will be carried out, in addition to on-desk reviews of IFRs, annual work program and budget, and audit reports. Timely advice and hands-on support will be provided to the PCU team as needed. The project will comply with the Bank disclosure policy of audit reports (e.g. make publicly available, promptly after receipt of all final financial audit reports (including qualified audit reports) and place the information provided on the official website within one month of the report being accepted as final by the team. Two (2) bank accounts will be opened and maintained by PCU in a commercial bank on terms and conditions acceptable to IDA as follow: (i) a Designated Account in CFAF to receive IDA advances, and to pay for project expenditures eligible for IDA financing; (ii) a Project Counterpart Funds Account in CFAF to receive counterpart deposits and replenishments, and to record payments eligible for RoC resources. Given the high risk environment, the report-based disbursement may not be applicable by default. Thus the transaction-based disbursement will be used at the project effectiveness.

25

D. Procurement

Procurement for the proposed project will be carried out in accordance with the World Bank’s “Guidelines: Procurement of Goods, Works, and Non-consulting services under IBRD Loans and IDA Credits & Grants by World Bank Borrowers” dated January 2011; and “Guidelines: Selection and Employment of Consultants under IBRD Loans & IDA Credits & Grants by World Bank Borrowers” dated January 2011, and the provisions stipulated in the Legal Agreement. All works, goods, non consultancy services and consultancy services to be procured under this project would be carried out using the Bank’s Standard Bidding Documents (SBDs) or Standard Request for Proposals, respectively for all ICB (International Competitive Bidding) for goods, non consultancy services and works, and recruitment of consultants. The Government revised its national procurement system, with a new public procurement code in place since September 2009. While waiting for the Bank to give its no objection on use of the national bidding documents and for National Competitive Bidding (NCB), the Borrower would use the World Bank’s SBD for ICB for goods, non consultancy services and works, and the World Bank’s Standard Request for Proposals for recruitment of consultants. The Anti-Corruption guidelines that will apply to the project are: “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006 and revised in January 2011.

48. The MPTNTC PCU will handle project procurement activities, responsible for the administration, coordination, and monitoring of the Project, as well as compliance with procurement procedures. The PCU includes a coordinator, a financial management specialist, a procurement specialist, and an accountant (all recruited on a competitive basis in January 2011 under the PPA) and an internal auditor (to be recruited within 3 months following effectiveness).

49. The overall project risk for procurement is substantial. This is the MPTNTC’s first Bank funded operation. The PCU with procurement responsibility, already established and staffed, is a completely new entity, unfamiliar with procurement processes. Although procurement risk is rated substantial, the mitigation measures and monitoring designated in the action plan (including tasks, responsible party, and time-frame) is expected to reduce this risk to moderate.

E. Social and Environment 50. The Central African Backbone - APL3 - CITCG is a Category B project. That is, the environmental and social impacts of the project, for the most part, are expected to be minimal, site-specific and manageable to an accepted level. There are five Bank Safeguard policies triggered under the project. These include: Environmental Assessment (OP 4.01); Natural Habitats (OP 4.04), Indigenous Peoples Policy (OP 4.10); Physical Cultural Resources (OP 4.11) and Involuntary Resettlement (OP 4.12).

26

51. In line with the triggering of the five operational policies cited above and because of the lack of site-specific information about the environmental and social characteristics of future investments, the Project prepared three safeguards instruments: an Environmental and Social Management Framework (ESMF), a Resettlement Plan Framework (RPF), and an Indigenous Peoples Planning Framework (IPPF). The details will be provided during the feasibility studies, at which stage the project will prepare Environmental and Social Management Plans (ESMPs), Resettlement Action Plans (RAPs) and Indigenous Peoples Plans (IPPs) as and when necessary. 52. Like the ESMF, the RPF also outlines the principles and procedures for resettlement and/or compensation of subproject-affected people, and establishes standards for identifying, assessing and mitigating negative impacts of program supported activities. The ESMF, the RPF and the IPPF for this operation have been prepared according to Bank and national safeguard policies, following a consultation framework, involving relevant stakeholder groups, both public and private, as well as in civil society and local communities, consistent with the approach adopted at project inception. Prior to disclosure in-country and at Bank InfoShop, stakeholder workshops have been organized, involving relevant project stakeholder groups. 53. The supervision of safeguards implementation for the project will be done as part of the overall project implementation, by PCU in conjunction with DGE.

27

Annex 1: Results Framework and Monitoring

AFRICA: Central African Backbone Program - APL3 Communications Infrastructure and Technology - Congo Project (CITCG)

Results Framework

Project Development Objective (PDO): To contribute to increase geographical reach and usage of regional broadband network services and reduce their prices in Congo

PDO Level Results Indicators*

Cor

e Unit of Measure

Baseline Cumulative Target Values**

Frequency Data Source/ Methodology

Responsibility for Data

Collection YR 1 YR 2 YR3 YR 4 YR5 Volume of international traffic - International internet bandwidth

Bits per second person

51 [2009]

75 100 200 300 500 Yearly ARPCE/ITU ARPCE

Volume of national traffic using 1 proxies: Access to internet services

(number of subscribers per 100 people)

%

6.1 [2010]

6.2

7.0

10.0

12.0

15.0 Yearly ARPCE/ITU ARPCE

Average price of international communications using the proxy: average monthly price of wholesale international E1 capacity link from capital city to Europe

US$/ month/2Mb

ps

US$3,200 [2010]

3,200

2,500

1,500

1,000

800

Yearly ARPCE/ITU ARPCE

Number of direct project beneficiaries (of which women %)

Number (%)

50,000 ($0%)

[2010]

50,000 (40%)

75,000 (40%)

150,000 (45%)

300,000 (50%)

800,000 (50%)

Yearly PIU PIU

28

INTERMEDIATE RESULTS

Intermediate Result (Component One): Enabling Environment - Sound environment conducive to investment and competition

Price of mobile call and internet access

Average cost of mobile call [three minutes, local, peak]

Retail price of internet services (per 256 kbit/s per Month, in US$)

US$/3min US$/month

0.5

300

0.5 $280

0.4 $200

0.3 $150

0.2 $100

0.1 $80

Yearly

Yearly

ARPCE/ITU

ARPCE/ITU

ARPCE

ARPCE

Geographic reach of mobile services: Coverage of mobile network (percentage of population covered)

%

> 89% [2009]

90%

90%

92%

93%

95%

Yearly ARPCE/ITU ARPCE

Intermediate Result (Component Two): Connectivity - Increased access to ICT services

Unfettered access for all operators to regional infrastructure: Number of operators and service providers buying capacity from the Regional infrastructure deployed

Number

0

0

1

2

4

5 Yearly ARPCE/ITU ARPCE

Increased access to ICT services: Number of localities with broadband Internet access (128Kbps)

Number

4

4

5

7

8

10

Yearly ARPCE/ITU ARPCE

29

Annex 2: Detailed Project Description

AFRICA: Central African Backbone Program- APL3 Communications Infrastructure and Technology - Congo Project (CITCG)

1. Components and subcomponents of CITCG. This section provides a description of the components and subcomponents for the CAB Republic of Congo project (CITCG). 2. The major deliverable will be the implementation of an effective connectivity and increased competition and regulatory oversight. This will be achieved through:

a. Providing TA strengthening regulatory framework and capacity of key stakeholders to promote further sector liberalization and resolve market efficiency gaps;

b. Leveraging private investment on the basis of Public Private Partnership (PPP) arrangements in the coordinated deployment of regional and national backbones, with a focus on financing international links while avoiding development of redundant infrastructure; and

c. Promoting ICT sector while supporting ICT skills to create new business opportunities for local ICT firms.

3. Component 1 - Enabling environment at the regional and national levels (Total cost US$7.1 million: IDA US$3.55 million; RoC US$3.55 million) – This component will include the following activities : (i) In order to strengthen regulatory framework and capacity of key stakeholders (i.e. Ministry of Posts and Telecommunications in charge of ICT and the Regulatory Authority ARPCE) Technical Assistance to provide policy and regulatory capacity building (regulatory tools, frequency management equipment, cost models, M&E capacity); (ii) Technical Assistance to promote Open Access Regime & PPP; (iii) Technical Assistance to design a strategic plan for Congo Telecom and propose options for business valuation, and (iv) Technical Assistance to design and Implementation of Management Policy for ".cg" Domain Name. This component will include the following activities:

Subcomponent 1.1 – Strengthen regulatory framework and capacity of key stakeholders to provide policy and regulatory capacity building to promote further sector reform so as to maximize benefits from access to capacity, strengthen PPP framework to provide a sound basis for the connectivity component. This subcomponent will support the functioning of the Ministry (MPTNTC) and regulatory body (ARPCE) to ensure that the GoC’s objectives are being met. This subcomponent will include in particular the following activities: (i) TA to develop the institutional and operational capacities of ARPCE (ii) TA to finalize and establish the regulatory and legal regime for Broadband (Wholesale); (iii) TA to develop regulatory tools for broadband market (market analysis, network mapping, cost models, Quality of Service – QoS and Key performance Indicators – KPI); (iv) TA for strategic development of ARPCE (Training, applications, equipments).

30

Subcomponent 1.2 – Promote an Open Access and Wholesale pricing regime. This activity will consist of (i) Recruitment of international expert/adviser for the capacity/steering committee, (ii) Legal, Technical and Regulatory Technical Assistance to design options to promote PPP schemes in the Telecom ICT sector (fiscal study, SME enabling environment…), (iii) Legal, Technical and Regulatory Technical Assistance to design and establish a Special Purpose Vehicle (SPV) to manage and operate the access to the infrastructure financed by the CAB project.

PPP structure – The CAB CITCG project will finance backbone links to ensure interconnection with neighboring countries (linking the country to the overall regional Central Africa Backbone network) and better connectivity between cities and to the country's submarine cable landings (without including any works related to submarine network connection). The financing of these links will complement the existing infrastructure investment by GoC under NCP (Projet de Couverture Nationale). The focus will be the deployment of international backbone links including fiber-optic cables or microwave links, terminal equipments, switches, to guarantee the establishment of an open access network (open to all operators) on the basis of PPPs, leveraging private sector investment (equipments and installation).

Within the context of this project a Public Private Partnership (PPP) can be defined as an agreement between government and private entities for the purpose of delivering a project or service (building, operating and commercializing capacity on the fiber optic network) by sharing the risks and rewards of the venture. The PPP model helps in bridging gaps in quality, speed, and efficiency in the provision of services by the public sector. The extent of participation from the private sector may range from small scale sharing of risk to near complete ownership and management of the project.

PPP options would take into consideration the objectives of the GoC as expressed by MPTNTC, the newly-formed PPP Commission and the legal and regulatory framework (December 2010 Decree), and the outcomes of the high level PPP workshop organized in Brazzaville on March 31, 2011. The GoC has indicated its intention to treat the fiber optic electronic communications cable of the NCP as a “national asset” to achieve economic and social objectives in line with the “Objectives” of the national Cyberstrategy. It also intends using the facility to enhance national security. In this regard, any partnership should provide for an adequate role for the Government and/or its nominee.

The CITCG network will be built in parallel and independent of the NCP. The Government agreed on using PPP schemes for the financing and management of the CITCG infrastructure. Lessons learnt from this experience will eventually help the Government identify the best PPP options for future management of NCP.

Regarding the infrastructure financed by CITCG, and as part of the TA activity (iii) mentioned above, several options would be considered by the Investment bank carrying out the PPP transaction: for instance, (i) A Joint venture (SPV) between the Government

31

(owner of the infrastructure) and private investors to develop a full network (carrier’s carrier), (ii) Contract with Private Operator on a Build Operate and Transfer (BOT) model to develop and market fiber (full network). In both cases, according to local laws, the wholesale operator cannot enter the retail market. Regarding the CITCG network, the Government is willing to keep the ownership of the infrastructure for security and sovereignty reasons. Private participation in a management, maintenance and commercialization through a concession of the network would be the best way of ensuring that investment, operation and maintenance decisions are made on a sound commercial basis. The percentage of ownership of the infrastructure by the SPV will be determined based on the level of private sector investment.

As part of the TA activity (ii) mentioned above, the regulatory implications of the various PPP models will be studied at the earliest stage of Project implementation (launch of the studies prior to project effectiveness) to ensure that appropriate environment exists to support private investment. For example the operation of the infrastructure may imply Significant Market Power (SMP) for the structure managing it (independently of the model chosen). It will therefore need to be closely regulated. The operator should not be allowed to operate directly a parallel retail business that could unfairly compete with the other players in the market. However, if the operator has a pre-existing interest in retail business, there must be strict separation of the wholesale operation from any retail business. In addition, wholesale prices of capacity, as well as other important terms and conditions of the commercialization of the infrastructure, such as technical parameters, service level agreements (SLA), key performance indicators (KPI) etc., may all need to be regulated.

Box 1

A potential Congolese PPP Approach

The Congolese PPP approach could be a hybrid model that is a cross between the typical SPV (private ownership) model and a concession contract. Based on a fundamental GoC guiding principle that establishes the state maintain ownership over its strategic assets, it was deemed necessary to include a concession aspect in the design of the PPP. In this form a concession including a license to provide wholesale backbone services could be granted via a public tender to an SPV in which the GoC may also be a participating shareholder (via an appropriate government entity). The SPV would be created and capitalized at the minimum legally required amounts by the GoC. In addition to specifying the minimum build-out of links, QOS, technical and interoperability standards, and service license terms and conditions, the concession document would indicate that the GoC is willing to provide an additional capital contribution (“the top up”) up to a fixed ceiling amount (e.g. US $17.5 million) . In addition to a technical prequalification process, the concession/license would be awarded to the investor group that requires the lowest capital contribution from the GoC (i.e lowest subsidy).

The following graph depicts this PPP approach.

32

Subcomponent 1.3 – Design a strategic plan for Congo Telecom and propose options for business valuation. This activity will finance a technical assistance to help incumbent operator review and refine existing product and service portfolios. This would in turn provide Congo Telecom with strategic planning options to improve performance and to propose turnaround initiatives.

Subcomponent 1.4 – Design and Implementation of Management Policy for ".cg" Domain Name. This sub-component's main objective to generalize the ". cg" domain name and its use in RoC and abroad with the specific objectives: to achieve 200,000 names registered in the ".cg" by the year 2015, to create direct jobs for qualified (Engineers and / or technicians) in this area and, to attract foreign investors in the sector. RoC envisages a re-delegation of the current registrar of ".cg", and has entered in a negotiation process with ICANN (Internet Corporation for Assigned Names and Numbers). Moreover the ACNIC constituting assembly will be held by the end of 2011. Consistent with existing agreements, this sub-component will design a management policy for ".cg" domain name, through the provision of (i) technical assistance to conduct a diagnostic summary of the current status of the use of ". cg”; to describe the process of public participation in policy development and to develop management policy for the “.cg” domain taking into account the tools, means and outcomes; (ii) technical assistance to design a national implementation policy and a media communication plan around the ".cg" domain at the national and international level.

 Note: “top­up capital” represents Component 2 disbursement and could be up to US $17.5 million  

SPVWholesaleConcession

Pre ‐capitalization• GoC 100%

Tender 1 ‐Maximum GoC “top –up capital” 

Investor Group 1Investor Group  2

Investor Group  N

PPPWholesaleConcession

Post‐capitalization• Investor Group ≤ 100%• GoC ≤ US $17.5 million“top‐up capital”

Tender 2‐Network Build

33

Compoment Total Component Category Total activityCompoment 1: Enabling Environment IDA Counterpart 7,100,000

2,800,000 services 1,400,000 1,400,0000 Works 0 0

200,000 Goods 100,000 100,000500,000 services 250,000 250,000

0 Works 0 00 Goods 0 0

800,000 services 400,000 400,0000 Works 0 00 Goods 0 0

1,000,000 services 500,000 500,0000 Works 0 00 Goods 0 0

500,000 services 250,000 250,000Works 0 0

200,000 Goods 100,000 100,000

3,300,000 services 1,650,000 1,650,0000 Works 0 00 Goods 0 0

300,000 services 150,000 150,0000 Works 0 00 Goods 0 0

1,000,000 services 500,000 500,0000 Works 0 00 Goods 0 0

2,000,000 services 1,000,000 1,000,0000 Works 0 00 Goods 0 0

600,000 services 300,000 300,0000 Works 0 00 Goods 0 0

50,000 services 25,000 25,0000 Works 0 0

150,000 Goods 75,000 75,000

Legal, Technical and Regulatory Technical Assistance to design options to and establish a Special Purpose Vehicle (SPV) to manage and operate the access to the

infrastructure financed by the CAB project2,000,000.00

Development of regulatory tools for broadband market (market analysis, network mapping, cost models, QoS and KPI)

Funding (US$)

Technical Assistance to strengthen regulatory framework and capacity of key stakeholders

Recruitement of international expert/adviser for the capacity/steering committee 300,000.00

Legal, Technical and Regulatory Technical Assistance to design options to promote PPP schemes in the Telecom ICT sector (fiscal study, SME enabling environment…)

1,000,000.00

700,000.00Technical assistance for strategic development of ARPCE (Training, applications,

equipments)

Technical Assistance to promote Open Access Regime & PPP 3,300,000.00

Technical Assistance to design a strategic plan for Congo Telecom and propose options for business valuation

600,000.00

Technical Assistance and equipment to design Management Policy for ".cg" Domain Name

200,000.00

3,000,000.00

Development of institutional and operational capacities of ARPCE 500,000.00

Finalization and establishment of the regulatory and legal regime for Broadband (Wholesale)

800,000.00

1,000,000.00

34

4. Component 2 – Connectivity (Total cost US$18 million: IDA US$9 million; RoC US$9 million) – This component will include the following activities: (i) CAB-related environmental and resettlements consultancies, (ii) the financing of fiber-optic cables, terminal equipments, and switches to set up, through PPP Arrangements with private sector participation, three interregional links to the neighbouring countries of Gabon (through the link Dolisie – Mbinda), Cameroon (through the link Oyo – Ouesso), and DRC (through the link Brazzaville – Kinshasa); and; (iii) the financing of the establishment of national and regional Internet Exchange Points (IXP) so as to minimize rerouting of domestic Internet traffic via international routes.

Subcomponent 2.1 – Address environment, social and resettlement aspects. The activities to be undertaken in this project are unlikely to have significant environmental, social or resettlement impact. However, as outlined in the ESMF and RPF prepared by the GoC for the CAB program, the project will finance an Environmental Management plan and a Resettlement Management Plan for the deployment of the regional backhaul. This subcomponent will include the following activities: (i) TA to conduct environmental and resettlements studies; (ii) Resettlements / compensation funds.

Subcomponent 2.2 – Deployment of a network of international links with neighboring countries. This component will finance the fiber-optic cables, terminal equipments, and switches to set up, through PPP Arrangements with private sector participation, three interregional links to the neighbouring countries of Gabon (through the link Dolisie – Mbinda), Cameroon (through the link Oyo – Ouesso), and DRC (through the link Brazzaville – Kinshasa); Dolisie – Mbinda link: this segment is 338 km long and will consist of a 12 pair fiber optic cable. The link will be comprised of (i) 2 (two) repeaters and powered by solar solutions, (ii) 2 (two) SDH (Synchronous Digital Hierarchy) terminal stations located in Dolisie and Mbinda. The acquisition and installation cost of the cable is estimated at US$2.4 million. The SDH and terminal stations cost is estimated at US$1.6 million. The cost of the 2 (two) repeaters and their respective solar powered stations is estimated around US$1 million. Oyo - Ouesso link: this segment is 420 km long and will consist of 6 (six) microwave links. Each link will be comprised of 1 (one) repeater powered by solar solutions and 1 (one) SDH terminal station. The acquisition and installation cost of the six poles is estimated to be US$3 million. The SDH and terminal stations cost is estimated to US$3 million. The cost of the 6 (six) repeaters and their respective solar powered stations is estimated around US$3 million. The technical and management options identified for this segment are based on the successful experiences carried out in Nigeria and Iran. In these two countries, the Government created an SPV with private operators to ensure infrastructure sharing through collocation of poles and hence reduce the number of poles installed. However, to ensure a minimum bandwidth of 2 Gb/s, the poles cannot be distant of more than 80 km. The component costing includes the installation of 6 poles between Oyo and Ouesso.

35

Brazzaville - Kinshasa link: this segment is 10 km long and will consist of 2 (two) microwave links. Each link will be comprised of 1 (one) repeater powered by solar solutions and 1 (one) SDH terminal station. The acquisition and installation cost of the two poles is estimated to be US$0.3 million. The SDH and terminal stations cost is estimated to US$1.7 million.

Subcomponent 2.3 – Supporting the establishment of a national and regional Internet eXchange Point (IXPs). IXPs allow Internet traffic to be channeled in a more efficient way: for example, the establishment of a national IXP allows internal traffic to the Republic of Congo to be routed without the need to go through the US or Europe. The IXP would be run by an association of operators or a private venture. It would make sense for the IXP to be operated together through the same entity as the backbone. The project will finance the study and equipment needed for the establishment of such national IXP and Regional IXP (to reroute all regional traffic).

Compoment Total Component Category Total activityCompoment 2: Connectivity IDA Counterpart 18,000,000

500,000 services 250,000 250,0000 Works 0 0

0 Goods 0 0

0 services 0 0

17,000,000 Works 8,500,000 8,500,0000 Goods 0 00 services 0 0

5,000,000 Works 2,500,000 2,500,000

0 Goods 0 0

0services

0 0

9,500,000Works

4,750,000 4,750,000

0Goods

0 0

0 services 0 0

2,500,000 Works 1,250,000 1,250,000

0 Goods 0 0

100,000services

50,000 50,000

100,000Works

50,000 50,000

300,000Goods

150,000 150,000

17,500,000.00

Infrastructure for the establishment of the regional network CAB including fiber optics cables, terminal équipement and switches between Dolisie and Mbinda

5,000,000.00

Funding (US$)

Infrastructure for the establishment of the regional network CAB including fiber optics cables, terminal équipement and switches between Oyo and Ouesso

9,500,000.00

Infrastructure for the establishment of the regional network CAB including fiber optics cables, terminal équipement and switches between Brazza and Kinshasa

2,500,000.00

Supporting the establishment of the national and regional Internet eXchange Point (IXPs)

500,000.00

CAB related envvironmental and resttlements consutancies 500,000.00

Infrastructure

36

5. Component 3 – Promotion of ICT sector (Total cost US$2 million: IDA US$1 million; RoC US$1 million) – This component will support ICT skills and create new business opportunities for local ICT firms. The project will support the following three main activities: (i) Technical Assistance for the review, improvement and development of information laws (information security, promotion of ICT sector); (ii) Promotion of ICT start-up firms through a business incubator approach; and (iii) finance a study for the design and development of an interoperable platform for m and e applications development (e.g. mbanking…)..

Subcomponent 3.1 – Technical Assistance for the review, improvement and development of information laws, "cyber" legal and institutional framework (cyber-security, cybercrimes, privacy, promotion of ICT sector, support to national entities in charge of ICT, etc). This subcomponent through technical and capacity-building support will improve the ICT legal and institutional framework, will support national entities in charge of ICT, and develop legal enabling environment for the promotion of ICT.

Subcomponent 3.2 – Promoting ICT start-up firms. This subcomponent through technical and capacity-building support would eventually promote greater awareness of ICT and e-applications in the business community, in particular among small and medium enterprises (SMEs). Through a business incubator approach this sub component is aimed at providing a critical mass of small ICT businesses with affordable and reliable access to the Internet, office space, training, business support services, and business incubation in a single facility.

Subcomponent 3.3 – Financing a study for the design and development of an interoperable platform for m and e applications development (e.g. mbanking…). A comprehensive study would be conducted to prognose Congo’s market potential for mobile and e-application. Based on the study’s overall evaluation of the key constraints to development of the industry, the project will prioritize the design and development of interoperable platform for m and e applications development.

37

Compoment Total Component Categories Total activityCompoment 3: Promotion of ICT sector IDA Counterpart 2,000,000

1,300,000 services 650,000 650,000

300,000 Works 150,000 150,000400,000 Goods 200,000 200,000

600,000 services 300,000 300,000

0 Works 0 0

0

Goods

0 0

400,000services

200,000 200,000

300,000Works

150,000 150,000

400,000Goods

200,000 200,000

300,000 services 150,000 150,000

0 Works 0 0

0 Goods 0 0

Financing a study for the design and development of a interoperable platform for m and e applications development (e.g. mbanking…).

300,000.00

Funding (US$)

Promotion of ICT Sector 2,000,000.00

Technical Assistance for the review, improvement and development of information laws, "cyber" legal and institutional framework (cyber-security, cybercrimes, privacy, promotion of ICT sector, support to ICT agency, etc).

600,000.00

Promotion of ICT start-up firms through a business incubator approach

1,100,000.00

38

6. Component 4 – Project Management (Total cost US$2 million: IDA US$1 million; RoC US$1 million) – This component will consist of support to finance management related issues at the Project level, such as human resources support with management, procurement, financial management, M&E, internal and external audit, and communications expertise, operating expenses and equipments.

Compoment Total Component Categories Total activityCompoment 4: Project Management IDA Counterpart 2,000,000

1,500,000 services 750,000 750,000400,000 Works 200,000 200,000100,000 Goods 50,000 50,000

1,000,000 services 500,000 500,000

0 Works 0 0

0 Goods 0 0

200,000services

100,000 100,000

400,000Operating Costs

200,000 200,000

100,000Goods

50,000 50,000

300,000 services 150,000 150,000

0 Works 0 0

0 Goods 0 0

Communication, Monitoring and evaluation

300,000.00

Funding (US$)

Project Management 2,000,000.00

Staff 1,000,000.00

PCU operating cost 700,000.00

39

Annex 3: Implementation Arrangements

AFRICA: Central African Backbone Program - APL3 Communications Infrastructure and Technology - Congo Project (CITCG)

1. Project institutional and implementation arrangements

i. Project administration mechanisms

1. MPTNTC will be responsible for the overall coordination, implementation, and supervision of the project. For each activity concerned, MPTNTC, through the PCU, will consult with and delegate to the relevant agencies and ministries.

2. The implementation arrangements involve three organizational levels: (i) the Project Steering Committee (Comité de Pilotage) will be responsible for the overall coordination and supervision of the project, would have the fiduciary and governance oversight and would provide advice regarding cross-sectoral issues; (ii) the PCU will be responsible for project implementation, coordination of activities and fiduciary management; and (iii) ARPCE will be asked to participate actively by contributing their expertise and knowledge in preparing TORs, evaluations, participation in selection committees, etc.

3. For each activity concerned, the Steering Committee, through the Project Coordination Unit (PCU), will consult with and delegate to the relevant agencies and ministries. The GoC defined, under Ministerial Decision Nº003/MPTNTC/CAB of March 3, 2011, the responsibilities of the project Steering Committee to be in charge of overall operative guidance and direction during implementation. The Steering Committee would have the fiduciary and governance oversight.

4. The figure below identifies these agencies and ministries, as well as other entities not concerned with the carrying out of the project.

Figure 7: CITCG Implementation Arrangements

CITCG

Steering Committee Chair MPTNTC

Chair – MINEPAT or MPTNTC

(ARPCE, Min. of Infra, Congo Telecom, DGGT,

Mobile Operators…)

MPTNTC

PCU

Project Coordination Unit (PCU)

Project manager

Procurement Specialist Financial Management Specialist

CITCG

Technical Input

ARPCE

Support Support

Provide technical Inputs

Advice/ Direction/ Oversight

ARPCE MPTNTC Congo

Telecom CAB SPV DGGT

Entities in charge of

ICT

Operators

DNT Dir. New

technologies

40

5. The PCU: Day-to-day project implementation, coordination of activities and fiduciary management of the project will be done by the PCU anchored in the MPTNTC and financed through the project. The PCU, in close collaboration with the technical team from MPTNTC, will be responsible for: (i) oversight of all technical, social, and environmental matters relating to Project implementation; (ii) planning of Project activities and preparation of Project annual work programs; (iii) monitoring and evaluation of Project activities including quality assurance; (iv) financial management, procurement, and audits under the Project; and (v) monitoring of implementation of the National ICT Policy. The PCU will also provide TA support to the Ministry by monitoring progress towards the GoC strategy on ICT. The PCU shall be staffed with qualified and experienced personnel in adequate numbers, including, inter alia, a Project coordinator, a technical expert on backbone issues, a financial management specialist, a monitoring and evaluation specialist, an accountant, a procurement specialist, an environmental and social specialist, and an internal auditor, all with qualifications, experience, and terms of reference satisfactory to the Association.

6. The CITCG Steering Committee (Comité de Pilotage CITCG). The project Steering Committee chaired by the Minister of Posts and Telecommunications in Charge of ICT (MPTNTC). The Steering Committee shall be responsible for reviewing and adoption of the proposed Annual Work Plans and Budgets for the Project prepared by the PCU, overseeing overall performance of the Project, including on fiduciary activities, and providing policy guidance; and identifying necessary Project adjustments based on monitoring and evaluation results.. For each activity concerned, the Steering Committee, through the Project Coordination Unit (PCU), will consult with, and delegate to the relevant agencies and ministries. The Steering Committee will also provide advice on coordination of cross-sectoral interventions, realignment of project implementation activities and consistency of activities with the National ICT policy. The meetings of the Steering Committee will be held quarterly or more often if so required.

7. ARPCE will provide technical input. While all procurement and fiduciary activities will be centralized and carried out by PCU, ARPCE will be asked to participate actively by contributing their expertise and knowledge in preparing TORs, evaluations, participation in selection committees, also providing relevant M&E data to the PCU (as per Annex 1), etc.

8. Project Implementation Plan: A detailed Project Implementation Plan (Plan d’Exécution du Projet) will define the diverse roles, responsibilities, and individual work programs of each participating agency or entity, and will also include the timetable that shall be respected to ensure the success of the project. Technical implementation of project activities shall be delegated to the participating agencies and ministries.

9. World Bank supervision. The Bank will conduct a minimum of two supervision missions a year during project implementation, including an annual progress review. A midterm review will be conducted, which will encompass: (i) a thorough review of the execution of the project and the achievement of project objectives to date; and (ii) agreement between the Bank and the Borrower on recommended measures to ensure efficient execution of the project and successful achievement of project objectives in the period after the review, all in accordance with agreed performance indicators. The Borrower will provide the Bank a project completion report not later than four months after the closing date and inputs to the Implementation Completion and Results Report to be prepared by the Bank. The Bank will support public dissemination of project information, including supervision reports on the project’s performance.

41

ii. Financial Management, Disbursements and Procurement

10. The financial management (FM) arrangements for the project have been designed with consideration for the country’s post-conflict situation while taking into account the OP/BP 10.02 which describes the overall FM Bank policies and procedures. The assessment of the FM capacity of the Ministère des Postes, des Télécommunications et des Nouvelles Technologies de la Communication (MPTNTC) revealed some weaknesses and risks mainly in the field of staffing arrangements and capacity, accounting systems and fiduciary risks. The overall risk rating is deemed medium risk driven by impact (MI). Due to the weaknesses and the fiduciary risks associated to the project, the country system will not be used as default. The financial management team will be headed by a qualified, experienced FM specialist (already recruited), supported by one accountant (already recruited). A financial management procedures manual is being prepared and will be adopted by effectiveness as well as the setting-up of a computerized accounting system no later than 3 months after effectiveness.

11. Interim Financial Reports (IFR) will be prepared every quarter in a format and content agreed with IDA and submitted to the Bank no later than 45 days after the end of the quarter.

12. Upon Credit effectiveness, transaction-based disbursements will be used. Thereafter, the option to disburse against submission of IFR will be considered subject to the quality and timeliness of IFR submitted to the Bank and the overall financial management arrangement as assessed in due course. The other options of disbursing the funds will also be available. Two (2) bank accounts will be opened and maintained by PCU in a commercial bank on terms and conditions acceptable to IDA as follow: (i) a Designated Account (DA) in CFAF to receive IDA advances, and to pay for project expenditures eligible for IDA financing; (ii) a Project Counterpart Funds Account in CFAF to receive counterpart deposits and replenishments, and to record payments eligible for RoC resources. An initial advance up to the ceiling of the DA and equivalent to three months expenditures forecast will be released by IDA at the request of the PCU upon effectiveness. Subsequent advances will be made against submission of Statements of Expenditures or records reporting on the use of initial/previous advance as specified in the DL (disbursement letter). Payments to beneficiaries, services providers and suppliers will be made as specified in the respective contracts and MOUs.

13. The “Cour des Comptes”, the Supreme Audit Institution having been assessed as weak, a qualified, experienced, and independent external auditor will be recruited on approved terms of reference no later than 3 months after effectiveness. The Cour des Comptes may participate in the selection process of the external auditor. The external audit will be carried out according to either International Standards on Auditing (ISAs) or Auditing Standards (ASs) and will cover all aspects of project activities implemented and will include verification of expenditures eligibility and physical inspection of goods and services acquired. The audit period will be on annual basis and the reports submitted to IDA and the Cour des Comptes no later than six months after the end of each fiscal year.

14. The project will be supervised on a risk-based approach. Based on the current FM risk, the project will be supervised at least twice a year. FM supervision will focus on the status of financial management system to assess whether the system continues to operate well and provide support as needed.

42

Country issues

15. The RoC is gradually emerging from a decade of political instability, conflict, and mismanagement. The country has recently reached the HIPC completion points. The country’s institutions and economy are weak. Structural reforms have been launched in the areas of economic governance, public expenditure management, and transparency. The current Transparency and Governance Capacity Building Project financed by the World Bank is helping the country strengthen capacity in public administration and tackle corruption and mismanagement. The integrated fiduciary assessments (Country Financial Accountability Assessment, PEFA, Country Procurement Assessment Report, and Public Expenditure and Financial Accountability) conducted in 2006 and 2007 reports outlined significant public finance management weaknesses—mainly in budgeting preparation and control, accounting, reporting, internal and external controls, and human resources.

16. Although there is cause for cautious optimism (significant improvements have been made in public finance management and oil revenue management through the IDA project on transparency and governance support as well as other donor-financed projects), it will take a long time for these reforms to yield substantial improvement in the management of public funds. Given the fragility of the fiduciary environment, the Government has requested to use a ring-fenced approach to implement this project, similar to the other Bank-financed Projects in the country.

Overall conclusion of the Financial Management Assessment of the MPTNTC

17. The findings of CFAA and PEFA exercises as well as the FM capacity assessment conducted during the project preparation revealed some capacity deficiencies in financial management and procurement within the MPTNTC. These weaknesses include (i) insufficiently qualified staff in financial management at all levels of the sector, (ii) staff’s weak familiarity with IDA and other donor-financed project procedures for reporting, disbursement arrangements, and auditing; (iii) lack of an accounting system acceptable to IDA and of computerized and modern accounting tools. Due to the limited FM capacity at the financial division of the MPTNTC, it was agreed during the project preparation to set up the FM team within the PCU established at the MPTNTC to manage the fiduciary and technical aspects of the project. Therefore, the only financial management system acceptable to IDA is the one described below.

Risk assessment and mitigation

18. The following table summarizes the significant risks with the corresponding mitigating measures.

43

Risk3 Risk Rating

Risk Mitigating Measures Incorporated into Project Design

Conditions for Effectiveness (Y/N)

Residual Risk

Inherent risk MI MI Country level According to questions 13 and 16 of the CPIA, Congo is a high risk country from the fiduciary perspective. The CFAA, PER and the PEFA reports outlined PFM weaknesses at central and decentralized government levels as well as sector ministries level in term of governance and public funds management;

H None. Beyond the control of the project. The government is committed to a reform program that includes the strengthening of the PFM, An ongoing IDA-financed PFM Reform project is being implemented but is unlikely to yield results quickly enough to impact the proposed project. Use of IDA FM procedures is required for this project.

N H

Entity level The assessment of the key ministries during the CFAA, PEFA and particularly the FM assessment of the Ministry of Posts and Telecommunications during the preparation of this project revealed internal control weaknesses and weak fiduciary environment

MI On RoC request, a ring-fenced PCU will be set up within the MPTNTC to manage the project. Relying on a dedicated FM team at the PCU and use of IDA FM system requirements is critical for the mitigation of fiduciary risk of this project and the adoption of a FM procedures manual by effectiveness will mitigate internal control weaknesses.

Y ML

Project level: Funds may not be used for the intended purposes; Delays in the reporting system and auditing due to the weak capacity of the fiduciary team are expected.

MI The PCU will strengthen ex-ante and ex-post control of funds allocated to implementing entities. The scope of audit will include review of expenditures incurred at decentralized level. FM staff will be recruited on ToRs acceptable to IDA and training and hands on advice to staff during project implementation.

N MI

Control Risk MI MI Budgeting: (i) Weak capacity at the implementing entities to prepare and submit accurate work program and budget; (ii) weak budgetary execution and control

MI Annual work plan and budget required each year and approved by the steering committee. The project Financial Procedures Manual will define the arrangements for budgeting, budgetary control and the requirements for budgeting revisions. Annual work plan and budget required. IFR will provide information on budgetary control and analysis of variances between actual and

N MI

44

Risk3 Risk Rating

Risk Mitigating Measures Incorporated into Project Design

Conditions for Effectiveness (Y/N)

Residual Risk

budget. Accounting: Poor policies and procedures, lack of qualified accountant staff. A computerized accounting system is yet to be put in place; delay in keeping reliable and auditable accounting records.

MI (i) The project will adopt the OHADA accounting system. Accounting procedures will be documented in the procedures manual (ii) The FM functions will be carried out by qualified consultants (individuals) FM staff recruited on competitive basis; A computerized accounting system will be set up and will be maintained by the FM team

N MI

Internal Control: Internal control system may be weak due to weak FM capacity of IA; Insufficient safeguards and controls may result in misuse of funds and impact the implementation of the project.

MI (i) Adoption of a FM Procedures Manual and training on the use of the manual by the consultant recruited for this purpose. No later than three months after Project effectiveness, an internal auditor will be recruited to ensure that the project’s fiduciary and operational procedures and regulations are adhered to by the PCU and any entity managing the project funds

Y (FM manual) N (internal auditor)

ML

Funds Flow: (i) Risk of misused of funds; and (ii) delays in disbursements of funds to IA and beneficiaries; (iii) delays in the release of government contributions

MI (i) Payment requests will be approved by the FM Manager prior to disbursement of funds to contractors or consultants (ii) The ToRs of the External Auditors include regular field visits (physical verification of goods, services acquired). (iii) A ceiling for expenditures that can be handled by IA will be set up in the FM procedures manual; (iv) FM staff capacity will be strengthened prior and during project implementation period. (v) The RoC to release US$ 1 million as initial deposit before effectiveness and subsequent tranches according to a disbursement schedule agreed upon during negotiations and confirmed in the Financing Agreement

N MI

Financial Reporting Inaccurate and delay in submission of IFR at central level

ML (i) A computerized accounting system will be used. (ii) IFR and financial statements

N ML

45

Risk3 Risk Rating

Risk Mitigating Measures Incorporated into Project Design

Conditions for Effectiveness (Y/N)

Residual Risk

due to delays from IAs

formats have been agreed on at project negotiations. (iii) A FM specialist will support the FM team of the PCU to prepare a consolidated IFR

Auditing: No auditing arrangement in place; the national audit capacity is weak and not reliable. Delay in submission of audit report.

MI (i) The project’s institutional arrangements allow for the appointment of adequate external auditors and the ToRs will include physical verification and specific report on finding of physical controls of goods, and services acquired or delivered. (ii) Annual auditing arrangements will be carried out during the project implementation period in accordance with ISA (International Standards on Auditing).

N MI

Governance and Accountability Possibility of circumventing the internal control system with colluding practices as bribes, abuse of administrative positions, mis-procurement etc, is a critical issue.

MI (i) The TOR of the external auditor will comprise a specific chapter on corruption auditing (ii) FM procedures manual approved before project effectiveness ; (iii) Robust FM arrangements (qualified individual FM staff recruited under ToRs acceptable to IDA, quarterly IFR including budget execution and monitoring; (iv) Measures to improve transparency such as providing information on the project status to the public, and to encourage participation of civil society and other stakeholder are built into the project design.

N MI

OVERALL FM RISK MI MI The overall residual risk rating is deemed Medium driven by Impact.

19. Strengths: No specific strength has been identified except the FM action derived from this FM capacity assessment.

20. Weaknesses and Action Plan: In contrast, the main weaknesses for the FM arrangements of this project include shortage of qualified accountants, poor FM system, delay in reporting and disbursement.

46

Financial Management Action Plan

21. The Financial Management Action Plan described below has been developed to mitigate the overall financial management risks.

Issue Remedial action recommended Responsible

body/person Completion date

FM Effectiveness Conditions

Information system accounting software

(i) Acquisition and installation of a multi-projects accounting software for the project and training of the users

PCU and the software providers.

Three months after effectiveness

Financial covenants (1)

Administrative Accounting, and Financial Manual

Preparation and adoption of the FM Procedures Manual

PCU Effectiveness Yes

Internal auditing Appointment of the internal auditor completed and contract signed

PCU Underway (Three months after Effectiveness)

Financial covenants (1)

External auditing

Appointment of the external auditor completed and contract signed

Ministry of Posts and Telecommunications /Cour des Comptes/PCU

Three months after effectiveness

Financial covenants (1)

(1): The actions required no later than 3 months after effectiveness are part of the Financing Agreement

22. Implementing entity: A Project Coordination Unit PCU will be the Bank’s main counterpart and focal point. It will oversee the entire project management including management of the funds and will primarily be responsible for: (i) overseeing implementation; (ii) handling financial and administrative management; (iii) collaborating and coordinating with other relevant entities involved in the project for the successful implementation of the project; and (iv) liaison with the Bank and other donors. The FM team of the project comprised of a Financial Management Specialist and an Accountant at the PCU. The two consultants are already on board and are working on the FM aspects of the PPA. The FM staff has been selected on a competitive basis, the civil servant already working for the Ministry of Posts and Telecommunications in charge of ICT or other entities or ministries. The FM Specialist will oversee the project overall FM aspects.

23. Budgeting: Annual work plans and budgets will be consolidated into a single document by the FM team of the project, which will be submitted to the Inter-Ministerial Steering Committee for approval, and thereafter to IDA for approval no later than December 31 of the year proceeding the year the work plan should be implemented. The PCU will monitor its execution with the accounting software in accordance with the budgeting procedures specified in the manual of procedures and report on variances along with the quarterly interim financial

47

report. The budgeting system needs to forecast for each fiscal year the origin and use of funds under the project. Only budgeted expenditures would be committed and incurred so as to ensure the resources are used within the agreed upon allocations and for the intended purposes.

24. Accounting policies and procedures: The RoC is a member of the Organisation pour l’Harmonisation en Afrique du Droit des Affaires (OHADA – Organization for the Harmonization of Business Law in Africa), hence adheres to its accounting standards, (Syscohada), in line with the international accounting standards. Hence Syscohada accounting standards will apply to this project. An integrated financial and accounting system will be put in place and used by the PCU. The Project code and chart of accounts will be developed to meet the specific needs of the project and documented in the Manual of Procedures.

25. The accounting systems and policies and financial procedures used by the project will be documented in the project’s Administrative, Accounting, and Financial Manual, which will be used by the project staff as a reference manual; by IDA to assess the acceptability of the project accounting, reporting, and control systems; and by the auditors to assess the project’s accounting systems and controls and to design specific project audit procedures. For the project to deliver on its objectives, a computerized financial management system will be developed based on multi-projects accounting software to be acquired by the PCU. The system should integrate budgeting, financial and cost accounting systems to facilitate monitoring, evaluation and reporting.

26. Internal control and auditing: Internal controls comprising the whole systems of control, financial or otherwise, established by management are being put in place in order to (a) carry out project activities in an orderly and efficient manner, (b) ensure adherence to policies and procedures, and (c) safeguard project assets and secure as far as possible the completeness and accuracy of the financial and other records. A manual of procedures documenting the internal controls will be developed (the consultant is being recruited and the manual is due by effectiveness) with a specific focus on the following: (i) Segregation of duties, (ii) Physical control of assets, (iii) Authorization and approval, (iv) Clear channels of command, (v) Arithmetic and accounting accuracy, (vi) Integrity and performance of staff at all levels, (vii) Supervision. An internal auditor (individual consultant) is being recruited on a competitive basis (due 3 months after project effectiveness) to ensure that the project’s fiduciary and operational procedures and regulations are adhered to by the PCU and any entity managing the project funds. The internal auditor will report directly to the Steering Committee and the Coordinator of the PCU. Besides, the PCU will coordinate with the “Inspection Générale des Finances” – IGF (General Inspection of Finances) – to include this project in their annual audit program for review at least once a year focusing on major infrastructure activities. The IGF audit report shall be communicated to the PCU and the World Bank supervision missions. A single FM procedures manual will be developed and used by the WB.

27. Financial Reporting: The PCU will record and report on project transactions and submit to the World Bank Interim Financial Monitoring Reports (IFRs) no later than 45 days after the end of each calendar quarter. At a minimum, the financial reports must include the following tables with appropriate comments; (i) Sources and Uses of Funds; (ii) Uses of Funds by Project Activity/Component and (iii) Special account activity statement and (iv) Note to the IFR. At the end of each fiscal year, the project will issue the Project Financial Statements (PFS) comprising: (i) a balance sheet; (ii) a statement of sources and uses of funds; (iii) accounting policies and procedures; and (iv) notes related to significant accounting policies and accounting

48

standards adopted by management and underlying the preparation of financial statements. These PFS will be subject to annual external audits as described below.

28. External audit: Due to the weak capacity of the SAI, (Cours des Comptes) an external qualified audit firm will be recruited under Terms of References and procedures acceptable to IDA. This firm will audit the financial statements of the project annually. The PCU with participation of the “Cours des Comptes” will prepare the terms of reference for the audit and they will be agreed on. The scope of the audit will cover the activities performed by the PCU and other IA at central and decentralized levels. The audit reports comprising the audited financial statements, a single audit opinion and a management letter will be submitted to IDA no later than 6 months within the end of each fiscal year. These audits will be carried out in accordance with the International Standards on Auditing (ISA). The report will also include specific controls such as compliance with procurement procedures and financial reporting requirements and consistency between financial statements and management reports and field visits (e.g. physical verification). The audit report will thus refer to any incidence of non-compliance and ineligible expenditures identified during the audit mission. The tentative due dates of the audit report will be as follows:

Fiscal Year Scope and Period covered Due date 2011 PPF and PFS : Jan to – Dec.2011 June 30, 2012 2012 PFS: January to December 2012 June 30, 2013 2013 PFS: January to December 2013 June 30, 2014 2014 PFS: January to December 2014 June 30, 2015 2015 PFS: January to December 2015 June 30, 2016 2016 PFS: Closing audit December 30,

2016 (estimate) The project will comply with the Bank disclosure policy of audit reports (e.g. make publicly available, promptly after receipt of all final financial audit reports (including qualified audit reports) and place the information provided on the official website within one month of the report being accepted as final by the Bank team. Disbursement arrangements and flow of funds

29. Flow of funds- designated account. The overall project funding will consist of IDA US$ 15 million credit and US$15 million counterpart funds provided by RoC. These funds will finance all components and will be managed through two (2) bank accounts to be opened and maintained by PCU in a commercial bank acceptable to IDA as follow: (i) a Designated Account in CFAF to receive IDA advances, and to pay for project expenditures eligible for IDA financing; (ii) a Project Counterpart Funds Account in CFAF to receive counterpart deposits and replenishments, and to record payments eligible for RoC resources. Interest income received on the designated account will be deposited into the project account. The ceiling of the Designated Account will be set at CFAF 350 million. Additional advances to the Designated Account will be made on a monthly basis against withdrawal applications supported by Statements of Expenditures or records and other documents as specified in the Disbursement Letter.

49

The flow of funds is summarized as follow:

Source of Funds Financiers Project Bank Accounts (Commercial bank)

30. Advances will be made when the conditions for credit effectiveness are met. All bank accounts will be reconciled with bank statements by the PCU accountant and cleared by the Financial Management Specialist on a monthly basis. Detailed banking arrangements, including control procedures over all bank transactions (e.g. checks, signatories, transfers, etc.) are documented in the Manual of Procedures currently being drafted.

31. Disbursement Methods. Given the high risk environment, the report-based disbursement may not be applicable by default. Thus the transaction-based disbursement will be used at the project effectiveness. Once the PCU demonstrates its ability to submit reliable quarterly IFR the project may shift to the report-based disbursement in the second year of implementation if it sustains a satisfactory FM rating. Other disbursement methods such as reimbursement, direct payment and special commitment are applicable. The minimum value for Direct Payment and Special Commitment will be twenty percent of the designated account ceiling.

32. Counterpart funding. The government is committed to supporting the project with US$15 million. Yet the risk of delay in releasing counterpart funds in a timely manner (e.g. P106851: Health project and P095251: Agricultural project are currently facing some delays in releasing of the government contributions) may jeopardize the implementation of the annual work program. To mitigate this risk, 6 percent of government contributions estimated at US$1 million will be required as a condition of effectiveness. Subsequent replenishments will be done by RoC on the basis of the disbursement schedule agreed upon during negotiations and included as a covenant in the financing agreement. The table below provides the government’s counterpart funds disbursement schedule.

IDA GoC Budget

Designated Account CFAF

Project Counterpart Funds Account in CFAF

50

Amount (in CFA) Date

CFA 500,000,000 Effectiveness Date

CFA 500,000,000 by no later than 8 months after the Effective Date

CFA 500,000,000 by no later than 14 months after the Effective Date

CFA 1,000,000,000 by no later than 20 months after the Effective Date

CFA 1,500,000,000 by no later than 26 months after the Effective Date

CFA 1,000,000,000 by no later than 32 months after the Effective Date

CFA 1,000,000,000 by no later than 38 months after the Effective Date

CFA 500,000,000 by no later than 44 months after the Effective Date

CFA 500,000,000 by no later than 50 months after the Effective Date

CFA 500,000,000 by no later than 56 months after the Effective Date

33. Taxes: Funds will be disbursed in accordance with project categories of expenditures (component), as shown in the Financing Agreement. Financing of each category of expenditure will be authorized at 50 percent for each item, with the Government’s counterpart financing 50 percent for each item (inclusive of taxes as per the current Country Financing Parameters approved for the Republic of Congo). The disbursement table for this Credit is as follows:

Percentage of Expenditures to

(inclusive of Taxes)

(1) Goods, non-consulting services, and consultants’ services for Component 1 of the Project

2,500,000 50%

(2) Goods, works, non-consulting services for Component 2 of the Project (excluding Consultants’ services for environmental studies)

9,200,000 50%

(3) Consultants’ services for environmental studies of component 2

300,000 50%

(5) Goods, works, Operating Costs, non-consulting services, and consultants’ services for Component 4 of the Project

1,000,000 50%

(6) Refund of Preparation Advance 1,000,000 Amount payable pursuant to Section 2.07 of the General Conditions

TOTAL AMOUNT 15,000,000.00

50%

Category Amount of the Credit Allocated

(expressed in USD)

(4) Goods, non-consulting services, and consultants’ services for Component 3 of the Project

1,000,000

51

34. Financial covenants: financial covenants are the standard ones as described in the legal documents and are comprised of maintaining a financial management system for the project in accordance with sound accounting practices, and having the project’s financial statements audited annually.

35. Governance and Accountability: the risk of fraud and corruption within project activities is high given the country context, inherent risks of activities. However, the proposed fiduciary arrangements will help mitigate such risks. Nonetheless, the following measures are envisaged to further mitigate the risk of fraud and corruption; mainly the PCU to implement an Anti-corruption Action Plan under the oversight of the Government Anti-corruption Watchdog – “Observatoire Pour la Lutte Contre la Corruption”. The project will be carried out in accordance with the provisions of the “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants” dated October 15, 2006 and revised in January 2011.

36. Conclusion and Supervision Plan. According to the overall risk rating which is Medium Impact (MI), supervisions will be conducted over the project’s lifetime. The project will be supervised on a risk-based approach. Supervision will focus on the status of financial management system to verify whether the system continues to operate well throughout the project’s lifetime and to ensure that expenditures incurred by the project remain eligible for IDA funding. It will comprise inter alia, the review of audit reports and IFRs, advice to task team on all FM issues. Based on the current risk assessment which is M-I (e.g. at least twice during the first FY and may be adjusted when the need arises). The ISR will include a FM rating of the project. An implementation support mission will be carried before effectiveness to ensure the project readiness. To the extent possible, mixed on-site supervision missions will be undertaken with procurement monitoring and evaluation and disbursement colleagues.

List of conditionality Following are the FM effectiveness conditions: Preparation and adoption of the FM Procedures Manual Payment of the first tranche of the government contribution

iii. Procurement

General

Applicable guidelines. Procurement for the proposed project will be carried out in accordance with the World Bank’s “Guidelines: Procurement of Goods, Works, and Non-consulting services under IBRD Loans and IDA Credits & Grants by World Bank Borrowers” dated January 2011; and “Guidelines: Selection and Employment of Consultants under IBRD Loans & IDA Credits & Grants by World Bank Borrowers” dated January 2011, and the provisions stipulated in the Legal Agreement. For each contract to be financed by the Credit, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame are agreed between the Recipient and the Bank in the Procurement Plan. The prior review and procurement method thresholds indicated below are intended for the initial procurement plan. The procurement plan would be updated at least

52

annually or as required to reflect the actual project implementation needs and improvement in institutional capacity.

37. Procurement documents. All works, goods, non consultancy services and consultancy services to be procured under this project would be carried out using the Bank’s Standard Bidding Documents (SBDs) or Standard Request for Proposals, respectively for all ICB for goods, non consultancy services and works, and recruitment of consultants. As the Government has already revised its national procurement system and the new public procurement code has been implemented since September 2009 and while waiting for the Bank to give its no objection on the use of the national bidding documents, for National Competition Bidding (NCB), the Borrower would use the World Bank’s SBD for ICB for goods, non consultancy services and works, and the World Bank’s Standard Request for Proposals for recruitment of consultants.

National procurement system and ongoing reforms

38. The main recommendations of the 2006 Country Procurement Issue Paper (CPIP) were to (i) prepare and approve a public procurement code, (ii) carry out a survey of the existing capacity on procurement, (iii) make a needed assessment of the institutional and human capacity requirements for public procurement in the country, (iv) prepare an action plan for the procurement reform and (v) implement the new procurement code. All these recommendations have been implemented.

39. The Government has adopted a new Procurement Code signed by the President of the Republic on May 20, 2009. The new code has been already implemented since September 2009.

Advertising procedure.

40. General Procurement Notice (GPN), Specific Procurement Notices (SPN), Request for Expression of Interest, and results of the evaluation and contracts award should be published in accordance with advertising provisions in the following guidelines: “Guidelines: Procurement of Goods, Works, and Non-consulting services under IBRD Loans and IDA Credits & Grants by World Bank Borrowers” dated January 2011; and “Guidelines: Selection and Employment of Consultants under IBRD Loans & IDA Credits & Grants by World Bank Borrowers” dated January 2011.

Procurement methods

41. Procurement of works. The civil works envisaged under the Project is mainly related to connectivity component. Procurement will be done under ICB or NCB using the Bank’s Standard Bidding Documents for all ICB and National SBD agreed with or satisfactory to the Bank. Small simple works may be procured by requesting at least three written quotations from qualified contractors.

42. Procurement of Goods and Non consultancy services. Goods procured under this project will include: Computer equipment; office furniture; and accounting software. Non consultancy services procured under this project will include workshops and training in the region and abroad. Procurement will be done under ICB or NCB using the Bank’s Standard Bidding Documents for all ICB and National SBD agreed with or satisfactory to the Bank. Small value goods may be procured under shopping procedures.

53

43. Direct contracting may be used where necessary if agreed in the procurement plan in accordance with the provisions of paragraph 3.7 to 3.8 of the Procurement Guidelines

44. Selection of Consultants. Consultancy services would include various advisory services, feasibility studies, and environmental and social impact study. The selection method will be Quality and Cost Based Selection (QCBS) method whenever possible. Contracts for specialized assignments estimated to cost less than USD 100,000 equivalent may be contracted through Consultant Qualification (CQ). The following additional methods may be used where appropriate: Quality Based Selection (QBS); Selection under a Fixed Budget (FB); and Least-Cost Selection (LCS).

45. Single Source Selection (SSS) may be employed with prior approval of the Bank and will be in accordance with paragraphs 3.8 to 3.11 of the Consultant Guidelines.

46. All services of individual consultants (IC) will be procured under contracts in accordance with the provisions of paragraphs 5.1 to 5.6 of the Consultant Guidelines.

47. Short lists of consultants for services estimated to cost less than the equivalent of USD 100,000 per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. However, if foreign firms express interest, they will not be excluded from consideration.

48. Training, workshops, seminars, and conferences. Training activities will comprise workshops and training in the region and abroad, based on individual needs as well as group requirements; on-the-job training, and hiring consultants for developing training materials and conducting training. All training and workshop activities will be carried out on the basis of approved annual programs that will identify the general framework of training activities for the year, including: (a) the training envisaged; (b) the personnel to be trained; (c) the selection methods of institutions or individual conducting such training; (d) the institutions conducting the training, if already selected; (e) the duration of the of the proposed training; and (f) the cost estimate of the training. Attendance at relevant project workshops and seminars will be treated as training and will need advance Bank’s no objection.

49. Operating costs. The operating costs would include reasonable expenditures for office supplies, vehicle operation and maintenance, communication and insurance costs, banking charges, rental expenses, and office equipment maintenance, utilities, document duplication/printing, consumables, travel cost and per diem for Project staff for travel linked to the implementation of the Project, and salaries of contractual staff for the Project, but excluding the salaries of officials of the Recipient’s civil service. Operating costs financed by the project will be procured using the administrative procedures described in the Manual of Procedures that would be reviewed and found acceptable to the Association.

Procurement Implementation arrangement

50. The Project Coordination Unit (PCU) within the MPTNTC will be responsible for overall fiduciary responsibility of the project activities in order to mitigate the procurement risk. The PCU will carry out the following activities with the assistance of the procurement expert: (i) overall coordination and quality control/assurance of all draft procurement documents (bidding documents, RFP, Evaluation reports, TORs etc.) prepared; (ii) preparation and updating of the procurement plan; (iii) seek and obtain approval of IDA on all procurement documents, if necessary; and (iv) supervise the execution of project activities.

54

51. In addition to his daily responsibilities, the recruited procurement expert will provide the following services: (i) develop and strengthen the MPNTC staff capacity on procurement; (ii) reinforce and guarantee the integrity and internal review of the procurement process; (iii) oversee and advise on procurement related issues; (iv) ensure the quality of procurement activities; and (v) draft no objection requests for all procurement decisions subject to prior review for the Project Coordinator.

Assessment of the PCU’s capacity to implement procurement

52. An assessment of the PCU’s capacity to implement procurement activities for the project was carried out by the Bank procurement specialist in June 2010. The assessment reviewed the PCU’s internal arrangements for handling procurement, the organizational structure for implementing the project, and the capacity of staff responsible for procurement activities under the proposed project. The assessment also reviewed the interaction between the project staff responsible for procurement and the MPTNTC within the framework of the new procurement code.

Assessment of risks and mitigation measures

53. The risk factors for procurement performance include the country context and the low procurement capacity of the MPTNTC. This Ministry will be in charge of project implementation. In terms of the country context, the CPIP and the experience of other IDA funded projects indicate that procurement on the projects is likely to involve the following risks:

A weak governance environment, weakness in accountability arrangements and an overall lack of transparency in conducting procurement processes creates significant risks of corruption, collusion and fraud;

The administrative system as it operates in practice creates opportunities of informal interference in the procurement process by senior officials-creating opportunities for waste, mismanagement, nepotism, corruption, collusion and fraud; and

Government officials likely to be involved in project procurement through tender committees and the national control system ensuring that the rules are respected and able to handle complaints from bidders may not be familiar with procurement procedures.

The overall project risk for procurement is substantial.

Measures to mitigate the risks

54. The following strategy has been developed to mitigate procurement risks identified:

To mitigate the risks of collusion, fraud, corruption, waste and mismanagement, implementation arrangements will be geared towards achieve a high level of transparency in project implementation;

To mitigate risks to the low level of capacity both at the PCU and the MPTNTC, all proposed procurement decisions at a given threshold will be subject to mandatory review by a contract committee composed of members proposed by the steering committee but any staff involved in evaluation and contract award processes should be excluded;

In case there is a publicly accessible project website at the country or Ministry level, it will provide all relevant information to facilitate transparency and integrity of implementation, including the following: Project Appraisal Document; Financing

55

agreement; advertisements; terms of reference for all activities; contract awards; a procedure handling complaints satisfactory to the World Bank; and complaints received and actions taken;

All consulting contracts costing above USD 200,000, ICB and NCB contracts for Goods and Works will be published in the United Nations Development Business (UNDB) and DgMarket, in accordance with World Bank Guidelines;

The government project team will apply a ‘one-strike’ policy to all contractors and consultants – any case of complicity in corruption, collusion, nepotism, and/or fraud will lead to dismissal, disqualification from all further project activities and prosecution;

A project launch workshop will be conducted for the MPNTC, staff and relevant staff of all other entities involved in project implementation; and

For all procurement, the Manual of Procedures includes procurement methods to be used in the project along with their step by step explanation as well as the standard and sample documents to be used for each method.

55. The MPTNTC, in close relation with the Project Coordination Unit, will create a data base of suppliers of the required goods, construction contractors and consultants (firms and individuals). The database will also include information on current prices applied on the field.

Implementation readiness

56. The following actions were initiated or carried out during project preparation:

A detailed Procurement Plan for the first 18 months of the project has been prepared and finalized during negotiations;

The General Procurement Notice (GPN) prepared on appraisal time, has been be finalized during the negotiations and will be advertised locally, online in the United Nations Development Business (UNDB) and the DgMarket after Board approval; and

The selection of consultants for various studies to be financed by the project has been initiated and is expected to be completed by the project effectiveness.

Fraud, coercion, and corruption

57. The Staff of the PCU, as well as bidders, consultants, suppliers, and contractors, shall observe the highest standard of ethics during the procurement and execution of contracts financed under the project in accordance with paragraph 1.16 and 1.17 of the Procurement Guidelines and paragraphs 1.23 and 1.24 of the Consultants Guidelines.

Frequency of Procurement Supervision

58. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the implementing agency has recommended (i) supervision missions every six months to visit the field, and (ii) at least one annual post procurement review. Missions in the first 18 months shall include a Bank Procurement Specialist or a specialized Consultant.

56

Procurement Plan

59. The Borrower developed a draft procurement plan for project implementation, which provides the basis for the procurement methods. This plan was agreed between the Borrower and the PCU Team during negotiations. It will be available in the project’s database and on the Bank’s external website. The Procurement Plan will be updated in agreement with the Bank on an annual basis or as required to reflect the project implementation needs and improvements in institutional capacity.

57

Thresholds for Procurement Methods and Prior Review Expenditure Category

Contract Value Threshold (US$) Procurement Method Contracts Subject to Prior Review (US$)

1. Works ≥3,000,000 < 3,000,000 - ≥100,000 <100,000 No threshold

ICB NCB quotations Direct contracting

All First two contracts None All

2. Goods and Services (other than Consultants’ Services)

≥500,000 < 500,000 - ≥ 50,000 < 50,000 No threshold

ICB NCB Shopping Direct contracting

All First two contracts None All

3. Consultants’ Services Firms Individuals

≥100,000 <100,000 No threshold No threshold ≥50,000 <50,000

QCBS CQ SSS SSS

All First two contracts All All All Subject to post review

Details of the Procurement Arrangements Involving International Competition

1. Goods (a) List of contract packages to be procured following NCB and ICB:

1 2 3 4 5 6 7 8 9

Ref.

No. Description of Assignment

Estimated Cost (US$)

Selection Method

Pre qualification

(yes/no)

Domestic preference

(yes/no)

Review by Bank (Prior

/Post)

Expected Bids

Opening Date

Comments

Component 1: Enabling Environment

Technical Assistance to design and Implementation of Management Policy for ".cg" Domain Name 150 000 NCB no no Prior

December 2011

According to the above table requirement

2

Technical assistance for strategic development of ARPCE (applications, equipments) 100 000 NCB No No Post

November 2011

Component 4: Project Management

3 Office equipment 100 000 NCB no No Prior August 2011

According to the above table requirement

Total 350 000

Component 2: Connectivity

1

Supporting the establishment of the national and regional Internet eXchange Point (IXPs) 300 000 ICB yes No Prior

March 2012

Component 3: Promotion of ICT sector

2

Promotion of ICT start-up firms through a business incubator approach (equipment) 400 000 ICB no No Prior

August 2011

Total 700 000

58

2. Works

ICB contracts for goods costing the equivalent of US$ 500,000 or more per contract and for works costing the equivalent of US$ 3,000,000 or more per contract and all direct contracting will be subject to prior review by the Bank.

1 2 3 4 5 6 7 8 9

Ref. No.

Description of Assignment Estimated Cost (US$)

Selection Method

Pre qualification

(yes/no)

Domestic preference

(yes/no)

Review by Bank (Prior

/Post)

Expected Bids

Opening Date

Comments

Component 2: Connectivity

Infrastructure for the establishment of the regional network CAB including fiber optic cables, terminal équipement and switches between Dolisie and Mbinda 5 000 000 ICB No No Prior

December 2012

Infrastructure for the establishment of the regional network CAB including fiber optic cables, terminal equipments and switches between Oyo and Ouesso 10 000 000 ICB No No Prior

December 2012

Infrastructure for the establishment of the regional network CAB including fiber optic cables, terminal equipments and switches between Brazza and Kinshasa 2 500 000 ICB No No Prior

December 2012

Supporting the establishment of the national and regional Internet eXchange Point (IXPs) 100 000 NCB No No Prior

December 2011

Total 17 600 000

59

3. Consulting Services

(a) List of consulting assignments with short-list of international firms.

1 2 3 4 5 6 7

Ref. No. Description of Assignment Estimated Cost (US$)

Selection Method

Review by Bank (Prior/Post)

Expected Proposals Submission Date Comments

Component 1: Enabling Environment

1 Development of institutional and operational capacities of ARPCE 500 000 QCBS Prior November 2011

2 Finalization and establishment of the regulatory and legal regime for Broadband (Wholesale) 600 000 QCBS Prior September 2011

3 Development of regulatory tools for broadband market (market analysis, network mapping, cost models, QoS and KPI) 800 000 QCBS Prior June 2012

4 Technical assistance for strategic development of ARPCE 500 000 QCBS Prior May 2012

5 Legal, Technical and Regulatory Technical Assistance to design options to promote PPP schemes in the Telecom ICT sector (fiscal study, SME enabling environment…) 1 000 000 QCBS Prior March 2012

6

Legal, Technical and Regulatory Technical Assistance to design options to and establish a Special Purpose Vehicle (SPV) to manage and operate the access to the infrastructure financed by the CAB project 2 000 000 QCBS Prior February 2012

7 Technical Assistance to design a strategic plan for Congo Telecom and propose options for business valuation 600 000 QCBS Prior September 2012

Component 2: Connectivity

8 CAB related environmental and resettlements consultancies

150 000 QCBS Prior

September 2011

9 Supporting the establishment of the national and regional Internet eXchange Point (IXPs) 100 000 QCBS Prior October 2011

Component 3: Promotion of ICT sector

10

Technical Assistance for the review, improvement and development of information laws (information security, promotion of ICT sector…) 400 000 QCBS Prior January 2012

11 Promotion of ICT statup firms through a business incubator approach 400 000 QCBS Prior January 2012

12 Study for the creation of technopole (IT parks) 500 000 QCBS Prior December 2012 Total 7 550 000

60

(b) List of consulting assignments for individual consultants.

1 2 3 4 5 6 7

Ref. No. Description of Assignment Estimated Cost (US$)

Selection Method

Review by Bank (Prior/Post)

Expected Proposals Submission Date Comments

Component 1: Enabling Environment

1

Recruitment of international expert/adviser for the capacity/steering committee 150 000 IC Prior November 2011

Component 4: Project Management

10 PCU staffing 500 000 IC Prior September 2011 11 Communication, promotion 100 000 IC Prior January 2012

12 Monitoring and Evaluation 200 000 IC Prior February 2012

Total 950 000

(c) Consultancy services costing the equivalent of US$ 100,000 or more per contract and single source selection of consultants (firms or individuals) regardless the contracts cost estimate will be subject to prior review by the Bank.

(d) Short lists composed entirely of national consultants: Short lists of consultants for services costing less than US$ 100,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.

4. Non Consulting Services Training: US$700 000

iv. Environmental and Social

1. Safeguard policies triggered and Project Categorization

60. From an environmental and social safeguard standpoint, the Central African Backbone - APL3 - Republic of Congo (CAB CITCG) is a Category B project. That is, the environmental and social impacts of the project, for the most part, are expected to be minimal, site-specific and manageable to an accepted level. There are five Bank Safeguard policies triggered under the project. These include: Environmental Assessment (OP 4.01); Natural Habitats (OP 4.04), Indigenous People Policy (OP 4.10); Physical Cultural Resources (OP 4.11) and Involuntary Resettlement (OP 4.12).

61

61. Despite the benefits expected to accrue to the local and sub-regional populations and operators, in terms of establishing an open access network to ensure the interconnection with neighboring countries, promoting greater awareness of ICT and e-applications in the business community and providing a critical mass of small ICT businesses with affordable and reliable access to the Internet, implementation of an effective connectivity system sometimes result in adverse impacts on the bio-physical, socioeconomic and cultural environments, if proper mitigation measures are not in place. These impacts, particularly in this sub-region may include: soil erosion and land degradation, loss of biodiversity through land clearing and deforestation, sedimentation of waterways as a result of lack of rehabilitation measure designed to restore soil structures (i.e tree planting, vegetation cover), disturbance of indigenous people settlements and/or livelihood, land acquisition and/or loss of livelihood and economic activities on the part of project-affected people, and impacts on cultural and historical resources.

2. Safeguard Instruments Prepared

62. In line with the triggering of the five operational policies cited above and because of the lack of site-specific information about the environmental and social characteristics of future investments, the Project prepared three safeguards instruments, namely an Environmental and Social Management Framework (ESMF), a Resettlement Plan Framework (RPF) and an Indigenous People Planning Framework (IPPF). The details will be provided during the feasibility studies, at which stage the project will prepare detailed environmental and social studies.

63. The ESMF and RPF set out standard methods and procedures, specifying how sub-projects, whose locations are unknown at this stage, will systematically address environmental and social issues at all stages. These include: sub-project screening, categorization, sitting, design, implementation, operational, and maintenance. At the core of this approach are: (i) the systematic screening of all sub-projects; (ii) procedures for applying the environmental checklist or for conducting ESIAs/ESMPs and RAPs – whichever or combination of which is deemed applicable – for all identified sub-projects, (iii) institutional arrangements for mitigating, preventing, and managing the identified impacts; (iv) typical environmental management planning process for addressing negative externalities in the course of project implementation; (v) a system for monitoring the implementation of mitigation measures; (vi) Environmental and social environmental clauses to be inserted in the bidding documents; and (viii) recommended capacity building measures for environmental planning and monitoring of project activities. Guidelines and provisions for properly discussing and addressing impacts related to Natural Habitats and physical cultural resources in sub-project specific ESIAs/EMPs have been amply outlined in the ESMF.

64. Like the ESMF, the RPF also outlines the principles and procedures for resettlement and/or compensation of subproject-affected people, and establishes standards for identifying, assessing and mitigating negative impacts of program supported activities. In addition, the RPF will guide the preparation and implementation of resettlement action plans (RAPs) for each individual sub project that triggers the involuntary resettlement policy. Specific ESIAs and RAPs will be prepared for relevant activities before project implementation along with Environmental Management Plans (EMPs). To adequately address the project impacts on indigenous people, the project is set out to prepare an Indigenous People Development Plan

62

(IPDP). An IPPF has been prepared to ensure that the project will respect the rights, interests, dignity and culture of the pygmies’ population as well as to ensure that they will benefit from the project. The IPPF gives a view on the types of the programs, (i) the potential positive and adverse effects of such programs, (ii) a framework for consultation with the Pygmies, (iii) institutional arrangements for screening the project-supported activities, evaluating their effects on Pygmies. All three safeguard documents were reviewed and cleared by the Bank before appraisal and relevant provisions of the three safeguard documents will be included in the Project Manual of Procedures.

3. Public Consultation, Involvement and Disclosure

65. The ESMF, the RPF and the IPPF for this operation have been prepared according to Bank and national safeguard policies, following a consultation framework, involving relevant stakeholder groups, both public and private, as well as in civil society and local communities, consistent with the approach adopted at project inception. This participatory approach will also be carried on in the context of the preparation of each sub-project specific ESIA/EMP or RAP, as well as throughout implementation, maintenance, supervision and evaluation of the project. Prior to disclosure in-country and at Bank InfoShop (April 5 and 7, 2011), stakeholder workshops have been organized, involving relevant project stakeholder groups. This approach is designed to foster ownership and seeking input from these stakeholders in order to improve quality and soundness of the instruments. Recommendations from both the Bank and stakeholders' workshop have been reflected in the final safeguard reports, prior to disclosure. The same approach will be applied to each sub-project specific ESIA/EMP or RAP and for the IPDP.

4. Safeguard Monitoring Mechanisms

66. Successful implementation of project safeguard requirements and performance measurement requires regular monitoring and evaluation of activities to comply with national and Bank safeguard policies. This will also help ensure that implementation of project safeguard measures are systematically carried out all throughout the life of the project. To do so, the following verifiable indicators need to be measured, as part of the project global monitoring plan, because environmental and social management in this operation is, for the most part, are governed by safeguard frameworks:

Number or % of sub-projects screened on environmental and social safeguard grounds; Number or % of subprojects needing specific ESIAS and/or RAPs; Number or % of activities in favor of Indigenous People; Number or % of ESIAs conducted with budgeted Environment Management Plans

(EMPs) and/or Resettlement Action Plans (RAPs); Contractor bidding documents with specific environmental and social clauses Number of EMPs and/or RAPs implemented according to schedule in relation to the

whole; Number/ Frequency of annual Safeguard supervision and project reviews undertaken; Number training programs carried out for safeguard capacity strengthening; and Number of institutions/organizations or stakeholder groups trained in accordance with

specified measures identified in the instruments.

63

67. Though the Borrower is familiar with World Bank safeguards policies, having implemented many Bank-funded operations, capacity for environmental monitoring and enforcement remain weak. To ensure good safeguard performance and compliance with national and Bank policies, the ESMF, the RPF and IPPF include further provisions for capacity strengthening at all levels for the successful implementation of the project safeguard measures, in compliance with national and Bank safeguard policies. Specific attention is taken to strengthen, the Project Coordination Unit (PCU), the implementation agency, in particular, which has no proven records in these areas.

68. Key entities involved in the environmental function of the project include: the PCU who will be assisted by experts to prepare detailed technical studies (i.e., feasibility studies, subproject-specific environmental and social safeguard instruments), Resident engineers, whose team will include expertise in environmental and social monitoring and reporting to ensure contractors implement proposed measures; (iii) the national environmental agency (DGE), who will carry out external monitoring the implementation of project safeguard and ensure compliance with national and Bank policies. DGE will be assisted by the Directorates of Forestry, Hydraulics, and other institutions for technical backstopping in carrying out their mandate. DGE will also review and comments on subprojects specific safeguard instruments and ensure they are disclosed in time. A “protocol d’accord” (MOU) sanctioning this close partnership between DGE, assisted with other relevant technical divisions/directorates shall be issued and ratified by the project steering committees and Ministry of Environment. The attributions, modalities and cost of intervention, reporting schedules of DGE should be clearly outlined in the protocol.

5. Arrangements for Safeguards Supervision

69. The supervision of safeguards implementation for the project will be done as part of the overall project implementation, by PCU in conjunction with DGE. World Bank supervision teams will also include the environmental and social safeguards specialists on the team. To ensure effective Bank supervision, the project Environmental and Social team will prepare and update detailed reports on the implementation of the safeguards instruments prepared under the ESMF, RPF and IPPF, as well as subprojects’ specific ESMPs, IPP and/or RAP, whichever is applicable, before Bank supervision missions. Appropriate budget for project supervision will be included in the project financial evaluation.

v. Monitoring & Evaluation

70. The PCU will monitor and evaluate all project indicators, plus additional ones as they see fit. They will bear the primary responsibility for project monitoring and evaluation (M&E), and, as such, will establish standard formats and guidelines for data collection and reporting, and will organize training sessions for project stakeholders in their use.

71. An M&E system will be set up within the PCU to keep track of and evaluate implementation progress of the proposed IDA project within the broader context of the institutional framework for the telecommunications sector. Although increased geographical reach and reduction of prices at the country level remains the hallmark of success of an enabling environment, the project’s M&E system will seek first to measure results that are closely associated with project activities. Hence, the first order of indicators that the M&E system will look at shall include lower order indicators related to quality, quantity, and time (see Annex 1).

64

Ultimately, improvement of laws and decrees by the project activities (component 1) will have positive ripple effects on the whole sector and on service delivery.

72. The PCU will designate a person responsible for M&E, based on the capacity assessment of the PCU staff right after effectiveness. More specifically, the person responsible for M&E will liaise with all the project’s stakeholders (through designated focal points) to gather relevant information and data regularly.

73. The views of direct beneficiaries will be brought into the monitoring and evaluation process. Comprehensive M&E reporting will be needed to monitor the results and performance of the project. It will involve mainly the direct beneficiaries of project activities, but will be extended to other beneficiaries such as telecommunications operators and private ICT firms, which ultimately are the main beneficiaries of the project’s outcomes. The PCU will review and validate the reports on performance indicators and recommend corrective action if necessary.

65

Annex 4: Operational Risk Assessment Framework (ORAF)

AFRICA: Central African Backbone Program - APL3 Communications Infrastructure and Technology - Congo Project (CITCG)

Project Development Objective(s) 

 The development objective of the proposed project is to contribute to increase geographical reach and usage of regional broadband network services and reduce their prices in the Recipient’s territory. 

  PDO Level Results Indicators: 

International Communications (Internet, Telecoms, and Data) bandwidth per personInternet subscribers per 100 inhabitantsaverage monthly price of wholesale international E1 capacity link from capital city to EuropeNumber of direct project beneficiaries (of which women %)

  

Risk Category Risk Rating 

Risk Description  

Proposed Mitigation Measure Project Stakeholder Risks   ML  Program main stakeholders may not 

always have the same immediate interests as the program or the other countries participating in the CAB Program. 

PPP scheme will be designed to ensure private sector participation in the management and commercialization of the infrastructure financed by the Project.  Private sector already signaled significant interest under transparent conditions. Moreover, the Investment bank to be recruited to carry out the transaction would partly be funded with success fee.  First activities implemented by the project will focus on improving the regulator capacity to effectively enforce Open Access (non discrimination in price, quality, and enforcement of mandatory access).  Detailed due diligence has been undertaken during preparation to inform all stakeholders of the potential benefits that will result from a successful implementation of the project. 

Implementing Agency Risks (including FM & PR Risks) 

MI  The implementing capacity of the involved agencies is not strong but their lack of experience is offset by their solid technical knowledge of the sector. 

TA will be provided throughout the project implementation.

Project Risks       

4.1 Design  

ML  There are risks associated with (i) the negotiations the PPP arrangements, and (ii) private sector investors failing to contribute their share of the investment. 

The PPP commission established by the Government and comprising representatives of all the sector stakeholders has been put in place during Project preparation and will also act as Project Steering Committee.  

66

  Meetings and participatory process with the private operators have reduced their apprehension. The investment bank to be recruited at the beginning of implementation will partly be compensated by a success fee. The Government officially committed to following the PPP principles for the CITCG infrastructure in the letter dated April 11, 2011  

4.2 Social & Environmental 

 

ML  Potentially negative social and environmental impact of proposed activities 

The Bank’s environmental and social safeguards policies require that the recipient prepare an Environmental and Social Management Framework (ESMF), a Resettlement Policy Framework (RPF) and an Indigenous People Planning Framework (IPPF) for the cables and any associated equipment (including fiber‐optic cables, terminal equipments, switches,) that will link neighboring countries: Gabon (link Dolisiee – Mbinda), Cameroon  (Link Oyo – Ouesso), and DRC (Link Brazzaville – Kinshasa. These safeguards documents have been prepared, disclosed and consulted on before appraisal. Once the specific sites are known, Environmental and Social Management Plans (ESMPs), Resettlement Action Plans (RAPs) and and an Indigenous Peoples Plan (IPP) for the lateral cable and equipment will be prepared as part of project implementation but before the civil works begin.  

4.3 Program & Donor  

ML  There is a risk related to the timely availability of government’s counterpart funding. 

The financial management arrangements of this project are based on the WB‐funded PEEDU model. The project secured about 6% of the total counterpart funding amount upfront by adding the first tranche in the current FY government’s budget and agreed on an overall binding disbursement schedule during negotiations.  

4.4 Delivery Quality  

ML  Key data collections and sharing, particularly from operators, may be difficult as the market is highly competitive. 

Training and TA will be made available for monitoring and evaluation. The system will be designed in such a way as not to affect the operators competitively 

Overall Risk Rating at Preparation

Overall Risk Rating During Implementation

Comments

MI MI

Major issues and risks will be dealt within the first year of implementation through targeted activities. The MI rating for implementation is mainly due to the risky country and institutional contexts, outside the project scope, as well as the risks related to the PPP transaction.

67

Annex 5: Implementation Support Plan

AFRICA: Central African Backbone Program - APL3 Communications Infrastructure and Technology - Congo Project (CITCG)

1. The strategy for Implementation Support (IS) has been developed based on the nature of the program and its risk profile. It will aim at making implementation support to the client more flexible and efficient, and will focus on implementation of the risk mitigation measures defined in the ORAF.

Procurement. Implementation support includes: (a) hiring a procurement specialist for the

PCUs; (b) providing procurement training to relevant staff in entities involved in implementation, as necessary; (b) reviewing procurement documents and providing timely feedback to the procurement specialist; and (c) providing detailed guidance on the Bank’s Procurement Guidelines to the procurement specialist; and (d) monitoring procurement progress against the detailed Procurement Plan.

Financial management. Supervision will review the individual project’s financial

management system, including but not limited to, accounting, reporting and internal controls. Supervision will also cover sub- projects on a random sample basis (See Paragraph 9 in Annex 3).

Environmental and Social Safeguards. The Bank team will supervise the implementation

of the agreed Plans and provide guidance to PCUs and relevant entities. Other Issues. Sector level risks will be addressed through policy dialogue with the

governments’ Ministries and Regulatory Authorities.

2. The Bank team members will be based either in Washington DC, or in the Africa Region, and will be available to provide timely, efficient and effective implementation support to the client. Formal supervision and field visits will be carried out semi-annually initially, with possibility for annual visits in later years of the project. Detailed inputs from the Bank team are outlined below:

Technical & Legal inputs. Technical and legal telecommunications and regulatory related

inputs are required to review bid documents to ensure fair competition through proper technical specifications and fair assessment of the technical aspects of bids. ICT Policy Specialists will provide technical support and conduct supervision visits whenever needed. Legal support will be provided as necessary.

Fiduciary requirements and inputs. Training will be provided before the commencement

of project implementation as needed. The Bank teams will also help identify capacity building needs to strengthen its financial management capacity and to improve procurement management efficiency. Both the financial management and the procurement specialists will be based in the region to provide timely support. Formal supervision of financial

68

management will be carried out semi-annually or annually, while procurement supervision will be carried out on a timely basis as required by the client.

Safeguards. Inputs from an environment specialist and a social specialist may be required,

though the project’s social and environmental impacts have been clearly identified and client capacities are generally adequate (DGE).

Operation. The co-TTLs will also provide day to day supervision of all operational aspects,

as well as coordination with the clients and among Bank team members. If needed, a consultant may be used to support this role.

The main focus of implementation support is summarized below.

Time Focus Skills Needed Resource Estimate

First twelve months

Creation/Strengthening of PCU Transaction/Legal Advisory Work

Procurement, FM, Program Coordinators Experienced Transaction and Legal Teams

12-48 months

Creation of the SPV Diverstiture of Shares in SPV Application of Divestiture Proceeds

Transaction/Legal Teams

Other

Skills Mix Required

Skills Needed Number of Staff Weeks Number of Trips Comments Task team leaders 8 SWs annually Fields trips as

required. DC or Country office based

Procurement 2 SWs annually Fields trips as required.

Country office based

Social specialist 0.5 SWs annually Fields trips as required.

Country office based

Environment specialist 0.5 SWs annually Fields trips as required.

Country office based

Financial management specialist

2 SWs annually Fields trips as required.

Country office based

Legal support 1 SW Fields trips as required

DC based

69

Annex 6: Team Composition

AFRICA: Central African Backbone Program - APL3 Communications Infrastructure and Technology - Congo Project(CITCG)

World Bank staff and consultants who worked on the project:

Name Title Unit

Jerome Bezzina Regulatory Economist ICT Sector Unit Marc Lixi Sr. Operations Officer ICT Sector Unit Doyle Gallegos Lead ICT Policy Specialist ICT Sector Unit Aissatou Diallo Finance Officer CTRFC Philippe Mahele Liwoke Senior Procurement Specialist AFTPC Clement Tukeba Lessa Kimpuni Procurement Specialist AFTPC Gaspy Gedeon Muanda Financial Management Specialist AFTFM Diego Garrido Martin Monitoring and Evaluation

Specialist AFTDE

Alexandra Bezeredi Regional environmental and Safeguards Advisor

AFTOS

Nathalie S. Munzberg Sr. Counsel LEGAF David Satola Sr. Counsel LEGPS Deo Ndikumana Sr. Operations Officer ACFRI Amadou Konare Sr. Environment Specialist AFTEN Lucienne M’Baipor Sr. Social Development Specialist AFTCS Michele Ralisoa Noro Senior Program Assistant ICT Sector Unit Shabani Ely Katembo Consultant ICT Sector Unit Josyane E. Carmen Costa Team Assistant AFMCG

70

Annex 7: Economic and Financial Analysis

AFRICA: Central African Backbone Program - APL3 Communications Infrastructure and Technology - Congo Project (CITCG)

1. Intersectoral Input-Output Analysis. Prior to presenting the theoretical framework of this analysis, let us provide a brief discussion of the structure and concept of input-output (IO) analysis. The IO models are designed to examine the inter-relationships among the productive sectors of an economy. Wassily Leontief is a pioneer of input-output analysis and in 1973 he was awarded the Nobel Prize in economics. The model uses the table of the input-output table (IOT) or matrix, which establishes the interdependencies between the production sectors, linking inputs to products (outputs). The matrix exhibits the flow of goods and services among industries. An IO system uses a linear Leontief production function. This production function presumes proportionality between inputs and outputs of an industry with no economies of scale. This is characterized by the insensitivity of the proportion of inputs used in the production process in respect to the level of production. The use of the IO analysis is to demonstrate how industries are linked together through supplying inputs for the output of the economy. Furthermore, the techniques can also be used to assess the relative significance of a sector in terms of its impact on output, incomes, and employment by distinguishing the direct effect occurring within the sector and that spreading to other sectors that it is known as indirect effect.

2. Application of the model in the context of the Congo. In order to determine the job effects of national and international trade flows of the Congolese sector, we apply an input-output approach. The International Monetary Fund (IMF) provided an input-output matrix for 44 sectors of the Congolese economy for the year 2005. By putting this panoply of economic information together we will build the core element of our analysis as following equations:

a) x = (I-A)-1f = Lf

In this equation, A = matrix of input coefficients for intermediate products (Matrix of technical coefficients), I is the identity matrix, (I - A) is Leontief matrix, (I - A)-1 is the inversed Leontief matrix or the total requirement matrix. It reveals, for a certain final demand, the various necessary productions. It thus reflects the direct and indirect requirements for intermediates. x is the vector of production and f is the final demand. If the Final Demand for the telecommunication sector were to increase next year, how much of output from the two sectors would be necessary in order to meet this new demand. These will be necessary outputs – the “direct effects” – as the product were used in production and all output was directly available for final demand. We will denote the new demand as:

b) fnew =

12………

and the New Final demand (3) xnew =

12………

Assuming that technology does not change, the needed total output caused by fnew will be found in equation (1):

71

c) xnew = L fnew

3. The multiplier effect on aggregate value added (GDP) for an additional demand (in million FCFA) and the impact of household consumption. As this analysis seeks to understand the Congolese economy and the dynamics of its growth, household consumption cannot be manipulated in isolation but must be considered with respect to its interaction with other sectors of the economy. The Leontief analysis is the general equilibrium system capable of establishing interindustry links. Hence, the analysis disaggregates consumption not only as an industry, but also other sectors of the economy and then analyzes all economic and industrial activities. With more than 40 industries in the national economy, the multiplier value added gives us rich information about the real potential of each industry in the economy of the Republic of Congo.

4. By averaging the multipliers of all sectors, the output multiplier of the postal and telecommunications equal 1.69. This is the total value of production in all sectors of the economy that is necessary in order to satisfy a dollar’s worth of final demand for postal and telecommunications’ sector.

Table 1: Comparisons of output multipliers under different assumptions

5. The Leontief analysis shows that investment in Broadband infrastructure has a significant impact on employment and economic growth in the Republic of Congo. The final demand of 1 billion FCFA (U.S. $ 1,895,849) for the Post and Telecommunication industry will cause a total impact of 1.29 billion FCFA (U.S. $ 2,448,768) in the new production of the economy. Moreover, this amount increases to 1.69 million FCFA (U.S. $ 3,197,383) in the model with household endogenous. This is a 31% percent increase when we consider household consumption as a sector of the economy. With both high final demand induced output effect and high household influence, these results indicate that the Post and Telecommunication industry is a labor-intensive sector capable to play a key role in the economy in the Republic of Congo, particularly in helping to save foreign exchange to finance the transfer of technology and providing downstream support for the possible extension of the production industries.

Post & Telecom,s 1.69

Othersindustries, 1.63

72

Table 2: Comparison of total income in U.S. $ per sector of the economy

Final demand of billion FCFA (US$1895849), Rank Industry HH

exogenous HH

endogenous % increase Revenu

e as % GDP

1 Petroleum refinery and transformation

3548718 3915806 10% 0.0010

2 Woodwork, manufacture of wooden art

3244166 3748717 16% 0.0010

3 Manufacturing of cereal based food

3123450 3627908 16% 0.0009

4 Manufacture of sugar tea, coffee and chocolate

3076801 4457015 45% 0.0011

5 Manufacture of tobacco products

3067146 3867825 26% 0.0010

6 Manufacture of machinery and other equipment

2505114 5371158 114% 0.0014

7 Education 2111829 3980852 89% 0.0010 8 Electricity and water 2555219 4082634 60% 0.0010 9 Posts and Telecommunications 2448768 3197383 31% 0.0008 10 Government Activities 2417983 3664201 52% 0.0009

6. Vertical spillovers effects. The basic concept behind these classifications is to measure the linkages of the economy: the backward and forward linkage or vertical spillover effect. The techniques of Rasmussen (1956), Hirschman (1958) are used in this analysis. As part of the input-output analysis, production of a sector of the economy has two effects on other sectors of the economy.

The formula for backward linkage is:

a) Amontj = ∑      ∑

= .    

= .   

where bij B, the multiplier matrix of the backward linkages.

The forward linkage:

b) Avalj =    ∑

= .    

= .   

ij , multiplier matrix of the forward linkages.

73

7. The method used in this analysis suggests presents the linkage effect in a standard table. The linkage multipliers are devised by their average following the condition in table 4:

Table 3: Terms of the partition repercussions in the economy

Condition Key Sectors Amontj > 1 et Avalj > 1

Sectors with strong forward linkage Avalj > 1 mais Amontj < 1

Sectors with strong backward linkage Amontj > 1 mais Avalj < 1

Low key sectors Amontj < 1 et Avalj < 1

8. The result reveals that the Post and Telecommunication industry has a strong forward linkage. Hence, it is most connected therefore a leading sector in the economy. This result indicates a strong interconnection of the Post and Telecommunication industry with all other downstream sectors to which it sells its outputs. Increase in GoC spending on output of this industry will have a tremendous impact on the rest of the economy, and adopting ICT in all the other sectors will boost the economic growth.

Table 4: Standardized Backward and Forward ripple effect

Aval >1 Aval ≤1 Amont >1 - Agriculture

- Breeding and hunting - Education - Fishing - Fabrication de boissons - Financial Activities - Public Administration - Repair - Leather industry - Other food industry - Manufacture of textile - Construction of transportation means

- real estate - Extractives industries - Local collectivities activities - Commerce - Extraction of hydrocarbons - Industrial agriculture and of export - Sylvicul. exploit. forest. and annex activities - Services rendered to the companies - fabric of mineral products not metalliq - Post and telecoms - Editing and peper industry

Amont ≤1 - Health - Meat and fish industry - Manufacture of greasy substance - Manufacture of furniture - Manufacture of sugar, tea, coffee - manufacture of tabacco - Hotels, bars restaurants

- metallu. foundry, - Manufacture of chemicals - Production and distribution of electricity - Construction - Wood - Oil Raff and transformat

9. From a financial perspective, the financial situation for the CIT CG Project was assessed taking into consideration two options: Option 1 CIT CG if NCP materializes, Option 2 if NCP does not materialize. For each scenario, two financial aggregates were calculated to assess the CAB CIT CG Project: (1) Internal Rate of Return (IRR) i.e, the discount rate for which the total present value of future cash flows equals the cost of the investment (in other words, the interest rate, that is that produces a zero Net Present Value) and (2) the Net Present Value (NPV), i.e. the sum of each cash inflow/outflow discounted back to its present value (PV).

74

10. The table below summarizes the income statement for the CAB CIT CG Project in the case NCP materializes and NCP does not materialize.

11. The calculated Net Present Value (NPV) for CAB CIT CG Project was estimated to be to be US$16.4 million if NCP materializes, and US$10.5 million if NCP does not materialize. The calculated Internal Rate of Return (IRR) for CAB CIT CG Project was estimated to be 21 percent if NCP materializes, and 17 percent if NCP does not materialize.

12. The opportunity cost was calculated to measure the global economies from the cost of providing bandwidth relying on lowest regional Satellite connection as compared to the cost of providing bandwidth relying on CAB connection. As suggested in the table below under the assumption of an average annual decrease of 15 percent for satellite connection, the actual opportunity cost is estimated at US$22.5 million if NCP materializes, and US$18.7 million if NCP does not materialize.

NPVs/IRRs - CAB CIT CG (M$) n n+2 n+4 n+6 n+8 n+10NPV if NCP materializes 16.43

NPV if NCP does not materializes 10.50Cash Flow if NCP materializes -17.00 1.31 2.15 3.13 4.45 6.05 8.11

Cash Flow if NCP does not materializes -17.00 0.67 1.41 2.61 4.48 7.59 12.47IRR if NCP materializes 21%

IRR if NCP does not materializes 17%

Opportunity Cost - CAB CIT CG (M$) n n+2 n+4 n+6 n+8 n+10NPV of opportunity cost if NCP materializes $22.54

NPV of opportunity cost NCP does not materializes $18.72Opportunity cost if NCP materializes 2.83 3.41 3.87 4.09 3.74 1.77

Opportunity Cost if NCP does not materializes 2.35 2.83 3.22 3.40 3.11 1.47

75

Annex 8: CAB Program Background and Vision

AFRICA: Central African Backbone Program - APL3 Communications Infrastructure and Technology - Congo Project (CITCG)

1. The Central African Backbone Program (CAB) is a World Bank Group regional instrument aimed at catalyzing private sector investment to improve connectivity in Central Africa. The World Bank CAB Program is designed to provide broadband connectivity in Central Africa to all capital cities, main secondary cities and establishing redundancy linkages which is estimated at a cost of about $700m. Broadband access and international and national traffic in the region and countries targeted are expected to increase, while bandwidth costs and broadband access prices for end-users are expected to decline rapidly. By the end of the program, all capitals and major cities in Central Africa should be linked to the global Information and Communications network through competitively priced high-bandwidth connectivity. Traffic in the region is expected to increase by at least 36% CAGR8, and bandwidth price projected to start at around US$300/Mbit in 2010 at retail level and rapidly decline thereafter. This in turn should lead to lower prices for telephone services and better access to the Internet, which will significantly improve foreign and local private investment opportunities in the region, decrease the cost of doing business and increase the prospects for job creation and wealth generation while enabling countries to reap the benefits of ICT as a platform to deliver services to their citizens and support natural hazards and emergency management systems.

2. The proposed amount of IDA and IBRD contribution for the CAB Program is $215m over a ten-year period. The CAB Program is aiming at leveraging additional $97.8m from the private sector. Other financing will be contributed and leveraged through other institutions (e.g. AfDB and others).

3. The CAB program is structured as both a horizontal and vertical APL. It will include CAP APL1 A and B (vertical APL) as well as further horizontal phases CAB APL2, 3 and other subsequent phases. This project is CAB APL3. As a background, the first phase of this program (CAB Phase 1) included CAR, Cameroon and Chad. This first phase was split into two parts (i.e. as a vertical APL). The first part, CAB APL1A9, for a total amount of US$26.2m, was approved by the Board of the World Bank on September 24, 2009 and became effective in mid-2010. CAB APL1A focused on technical assistance to the legal and regulatory frameworks for the telecommunications sector. CAB APL1B is the second part of this vertical APL and includes CAR and Chad. This part is focused on investment in international communications infrastructure through a PPP. Cameroon already has this infrastructure which exists along the Chad-Cameroon oil pipeline and they recently approved a project to expand the national fiber-optic network within the country. Cameroon has not requested financing for international infrastructure links but continues to be a full member of the CEMAC connectivity program. ). The expected Board date approval for CAB APL1B is June, 2011.

8 Compound annual growth rate 9 The Cameroun Communications Infrastructure and Technology Project (CITCM), the Central African Republic Communications Infrastructure and Technology Project (CITCAR) and the Chad Communications Infrastructure Project Communications Infrastructure and Technology Project (CITCD)..

76

4. The subsequent horizontal APL phases of the CAB are being prepared based on individual countries’ requests. CAB APL2 was initially being prepared following the requests of the Governments of the Republic of Congo, and São Tomé e Príncipe (STP) for a possible combined US$25 million IDA support. Given the pace of project preparation and the nature of the investment in STP, it was decided to delink the two operations and to only have STP in CAB2 and the Republic of Congo in CAB3. Subsequent phases of CAB would likely cover Gabon, Equatorial Guinea and the Republic Democratic of Congo, and for a possible US$80+ million IDA support. Other phases may follow, as it is expected that other countries will accelerate their dialogue to use IDA funds as the implementation of the first Phase operations progress. Up to eleven (11) Central African countries may join: Cameroon, CAR, Chad, Congo, DRC, Equatorial Guinea, Gabon, Nigeria, Niger, Sao Tome and Principe and Sudan.

5. Role of the World Bank Group. The World Bank is well placed to contribute in the context of a multiple development partners' effort: the WBG has been involved in the CAB program since 2005. The Declaration of the CEMAC heads of state adopted in May 2007 called explicitly for WBG financial support for the implementation of the CAB program. The overall program has been formulated with other key stakeholders and DFIs (the AfDB joined the initiative in 2007 and is providing parallel financing for the CAB Program; the African Union (AU) is also playing an important role in facilitating inter-governmental cooperation and policy harmonization, in conjunction with the CEMAC, moreover, the Islamic Development Bank and Japan International Cooperation Agency expressed their interest to participate in the Project. It should however be noted that this project has been structured so as to achieve its project development objective outcomes regardless of other donor financing materializing.

6. The CAB Program fits well with WBG's Regional Integration Assistance Strategy for Africa (RIAS), particularly within the framework of the Africa Action Plan. CAB APL 1-B is fully in line with World Bank Regional Integration Assistance Strategy for Sub-Saharan Africa (RIAS) (2008) and the West Africa Implementation Action Plan (2010) which seeks to create economies of scale, facilitate intra-regional trade and exports and connect landlocked countries to regional and global trade routes by reducing barriers to movement of goods and services between countries and improve the regional business environment.. The project supports the objective of CEMAC and Economic Community of Central African States (ECCAS) of creating an integrated and competitive economic space in Central Africa. In particular it contributes to the implementation of the third pillar of the 2010-2015 CEMAC Regional Economic Program related to physical interconnectivity of its member countries.

7. Project development objectives for CAB. The overarching development objective of the CAB Program is to contribute to increase geographical reach and usage of regional broadband network services and reduce their prices.

8. The program will seek to achieve the objective by focusing on investments linked to fostering open and cost-effective access to communications infrastructure. The main development outcomes will include: (i) support opening up the telecommunications market to competition, improving policies and regulatory framework, (ii) support the development of infrastructure with a secondary impact on the market through reducing the cost of broadband services and making them more accessible, (iii) improve efficiency of transaction processed through electronic e-government services and improved user perception of services through electronic application. Result indicators will be defined accordingly and in order to comply

77

and be consistent with ICT Core Sector Indicators and Definition as defined under the Bank’s project coding system as of December 2009.

9. Menu of Options. To maximize flexibility, client-responsiveness in a multi-country environment and the specific national situation of each country (in terms of existing infrastructure or policy environment), CAB has been designed as a menu of options which individual Governments choose from in order to package their CAB operation. The individual projects under the program will therefore include a customizable set of activities which have been grouped under four broad headings or components, described in more detail below.

10. Regionality for the purpose of using the Regional IDA envelope. Following discussions with Financial Resource Management, all of the options eligible for CAB financing have been deemed regional in nature for the purpose of qualifying for the use of the Regional IDA envelope – with the exception of eGovernment Applications (if applicable), which have to be funded solely from the individual country national IDA allocation.

11. Guiding principles. The following principles will guide the design of each component of the proposed project: (i) utilizing a programmatic approach with detailed phasing of activities; (ii) incorporating a results-based Monitoring and Evaluation framework; (iii) leveraging Public Private Partnerships; and (iv) leveraging participatory approaches and harmonization with development partners.

12. Based on the above considerations, the each proposed operation would cover the following four components.

13. Component 1 - Enabling environment at the regional and national levels – This component will include the following activities : (i) Modernize and harmonize legal and regulatory framework the Information Communication Technology (ICT) sector and the Information Society; (ii) Strengthen capacity of public key stakeholders (i.e. Ministry and independent regulatory agency); (iii) Promote a pro-competitive environment (i.e. develop regulatory tools, liberalize the telecom sector, support introduction of new service providers, restructure and privatize public incumbent operators, PPP promotion) to maximize benefit from the regional backbone; (iv) Strengthen M&E capacity.

14. Component 2 – Connectivity – This component will include the following activities: (i) Finance the national infrastructure for the CAB including fiber-optic cables (with a potential contribution for a submarine cable), terminal equipments, switches, to guarantee the establishment of an open access network (open to all operators) on the basis of PPPs, leveraging private sector investment; (ii) Finance the purchase of capacity on the CAB for targeted users (schools, universities, hospitals eGovernment use) with discounted capacity prices; (iv) Support to extend ICT in rural areas on the basis of PPPs and/or with competitive award of subsidies (including country-specific innovative demand stimulation programs such as Digital Villages and the SMS eService programs)

15. Component 3 – Good Governance and Transparency, E-Government and Flagship ICT applications – This component will include the following activities: (i) Finance the establishment of government Virtual Private Networks (VPNs) to collect all the government communication needs (voice and data) to be routed via the CAB and the establishment of

78

national and regional Internet Exchange Point (IXP), (ii) Support the relevant government or public authority to ensure that the ccTLD is being administered in the public interest, within the framework of its national public policy and relevant laws and regulations, and (iv) Deploy flagship applications for which country champion and commitment have been identified to improve internal systems, deliver services more efficiently and effectively, and make information & services more accessible to the population.

16. Component 4 – Project Management – This component will consist of support to finance management related issues at the Project level. Depending on the specific implementation arrangements for each country, this component may include elements such as human resources support with management, procurement, financial management, M&E, internal and external audit, and communications expertise, operating expenses and equipments.

C o n g oC o n g o

B a s i nB a s i n

BRAZZAVILLEBRAZZAVILLE

DjambalaDjambala

SibitiSibiti

ImpfondoImpfondoOuéssoOuésso

OwandoOwando

EwoEwo

KinkalaKinkala

DolisieDolisie MadingouMadingou

EpénaEpéna

BétouBétou

SembéSembé

GambomaGamboma

OkoyoOkoyo

NgabéNgabé

ZanagaZanagaMossendjoMossendjo

MossakaMossaka

SouankéSouanké

NkolaNkola

MbindaMbinda

LirangaLiranga

EtoumbiEtoumbi

NgoNgo

MakabanaMakabana

S A N G H AS A N G H A

C U V E T T EC U V E T T E

W E S T E R NW E S T E R NC U V E T T EC U V E T T E

P O O LP O O L

KOUILOUKOUILOU

BOUENZABOUENZA

L I K O U A L AL I K O U A L A

P L AT E A U XP L AT E A U X

N I A R IN I A R I

LÉKOUMOULÉKOUMOU

B a t é k éB a t é k é

P l a t e a uP l a t e a u

Epéna

Bétou

Sembé

Gamboma

Okoyo

Ngabé

Kayes

ZanagaMossendjo

Mossaka

Souanké

Nkola

Mbinda

Liranga

Etoumbi

Ngo

Makabana

Djambala

Sibiti

ImpfondoOuésso

Owando

Ewo

Pointe-Noire

Kinkala

Dolisie Madingou BRAZZAVILLE

S A N G H A

C U V E T T E

W E S T E R NC U V E T T E

P O O L

KOUILOU

BOUENZA

L I K O U A L A

P L AT E A U X

N I A R I

LÉKOUMOU

G A B O N

A N G O L A

CABINDA(ANGOLA)

C A M E R O O N

C E N T R A L A F R I C A NR E P U B L I C

DEMOCRATICREPUBLIC

OF CONGO

Niari

Nkéni

Alim

a

Kwa

Kouyou

Likouala Sangha

Ngoko

Uba

ngi

Fimi

Likouala

Congo

Congo

Ibenga

Motaba

Koui

lou

Djo

ué

Loué

ssé

Mambili Lengoué

ATLANTICOCEAN

LakeTumba

LakeMai-Ndombe

To Batouri

To Ebolowa

To Lambaréné

To Lambaréné

To Booué

To Kikwit

To Lusanga

To Matadi

To M'banza Congo

C o n g o

B a s i n

B a t é k é

P l a t e a u

4°N

2°N

0°

2°S

4°S

4°N

2°N

0°

2°S

4°S

6°S

12°E 14°E 16°E

14°E 16°E

18°E

18°E

CONGO

0 20 40 60 80

0 20 40 60 80 100 Miles

100 Kilometers

IBRD 33390

SEPTEMBER 2004

CONGOSELECTED CITIES AND TOWNS

REGION CAPITALS

NATIONAL CAPITAL

RIVERS

MAIN ROADS

RAILROADS

REGION BOUNDARIES

INTERNATIONAL BOUNDARIES

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, o r any endo r s emen t o r a c c e p t a n c e o f s u c h boundaries.