Implementation Completion and Results Report (ICR)...

Document of

The World Bank FOR OFFICIAL USE ONLY

Report No: ICR00002756

IMPLEMENTATION COMPLETION AND RESULTS REPORT

IBRD-79320; TF-96993

ON A

LOAN

IN THE AMOUNT OF US$42.506 MILLION

TO THE

REPUBLIC OF BELARUS

FOR AN

INTEGRATED SOLID WASTE MANAGEMENT PROJECT

JUNE 19, 2018

Social, Urban, Rural And Resilience Global Practice

Europe And Central Asia Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective May 02, 2018)

Currency Unit = Belarusian Ruble (BYR)

Belarusian Ruble 1.00 US$0.50

US$ 1.00 = 1.99 Belarusian Ruble

FISCAL YEAR

July 1 - June 30

Regional Vice President: Cyril E Muller

Country Director: Satu Kristiina J. Kahkonen

Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez

Practice Manager: David N. Sislen

Task Team Leader(s): Kremena M. Ionkova

ICR Main Contributor: Valerie-Joy Santos

ABBREVIATIONS AND ACRONYMS

CAS Country Assistance Strategy

CII Commercial Institutional Industrial

CPS Country Partnership Strategy

C&D Construction and Development

EA Environmental Assessment

EIA Environmental Impact Assessment

EIRR Economic Internal Rate of Return

EMP Environmental Management Plan

ENPV Economic Net Present Value

ERR Economic Rate of Return

FRR Financial Rate of Return

FM Financial Management

GCCPUC Grodno City Consolidated Public Utility Company

GEF Global Environmental Facility

GEO Global Environmental Objective

GDP Gross Domestic Product

ISR Implementation Status and Results

MHU Ministry of Housing and Utilities

MNREP Ministry of Nature Resources and Environmental Protection

MRF Materials Recovery Facility

MTR Mid Term Review

NPV Net Present Value

PAD Project Appraisal Document

PCT Project Coordination Team

PIU Project Implementation Unit

PMU Project Management Unit

POPs Persistent Organic Pollutants

PDO Project Development Objective

SC Stockholm Convention

S&I Supply and Installation

SWM Solid Waste Management

TA Technical Assistance

TTL Task Team Leader

UE Unitary Enterprise

TABLE OF CONTENTS

DATA SHEET ........................................................................................................................... i

I. EXECUTIVE SUMMARY .................................................................................................... 1

II. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 3

A. CONTEXT AT APPRAISAL .........................................................................................................3

B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) ..................................... 10

III. OUTCOME .................................................................................................................... 11

A. RELEVANCE OF PDOs ............................................................................................................ 11

B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 12

C. EFFICIENCY ........................................................................................................................... 17

D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 20

E. OTHER OUTCOMES AND IMPACTS (IF ANY) ............................................................................ 20

IV. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 22

A. KEY FACTORS DURING PREPARATION ................................................................................... 22

B. KEY FACTORS DURING IMPLEMENTATION ............................................................................. 25

V. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 27

A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................ 27

B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ..................................................... 29

C. BANK PERFORMANCE ........................................................................................................... 29

D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 31

VI. LESSONS AND RECOMMENDATIONS ............................................................................. 32

ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 35

ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 47

ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 49

ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 50

ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 57

ANNEX 6. ICR FOR COMPONENT 3 ....................................................................................... 61

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DATA SHEET

BASIC INFORMATION

Product Information

Project ID Project Name

P114515 Integrated Solid Waste Management Project

Country Financing Instrument

Belarus Specific Investment Loan

Original EA Category Revised EA Category

Full Assessment (A) Full Assessment (A)

Related Projects

Relationship Project Approval Product Line

Supplement P111110-Belarus POPs Stockpile Management Project (GEF)

17-Jun-2010 Global Environment Project

Organizations

Borrower Implementing Agency

Ministry of Housing and Utilities Ministry of Housing and Utilities

Project Development Objective (PDO)

Original PDO

(i) Improve environmental benefits of integrated solid waste management in Grodno through recovery and reuse ofrecycable materials in line with good international standards; (ii) Strengthen national capacity to manage hazardouswastes associated with POPs.

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FINANCING

Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$)

World Bank Financing

P114515 IBRD-79320 42,506,000 40,876,399 40,876,399

P111110 TF-96993 5,500,000 5,494,627 5,494,627

Total 48,006,000 46,371,026 46,371,026

Non-World Bank Financing

Borrower 27,430,000 30,460,000 30,460,000

Total 27,430,000 30,460,000 30,460,000

Total Project Cost 75,436,000 76,831,026 76,831,026

KEY DATES

Project Approval Effectiveness MTR Review Original Closing Actual Closing

P114515 17-Jun-2010 06-Oct-2010 03-Jun-2015 30-Dec-2016 30-Jun-2017

P111110 17-Jun-2010 06-Oct-2010 03-Jun-2015 30-Sep-2013 30-Sep-2013

RESTRUCTURING AND/OR ADDITIONAL FINANCING

Date(s) Amount Disbursed (US$M) Key Revisions

04-Nov-2015 10.90 Change in Financing Plan Change in Procurement

23-Sep-2016 24.33 Change in Loan Closing Date(s)

KEY RATINGS

Outcome Bank Performance M&E Quality

Moderately Satisfactory Moderately Satisfactory Substantial

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RATINGS OF PROJECT PERFORMANCE IN ISRs

No. Date ISR Archived DO Rating IP Rating Actual

Disbursements (US$M)

01 07-Nov-2010 Satisfactory Moderately Satisfactory .52

02 26-Jun-2011 Satisfactory Moderately Satisfactory .16

03 27-Aug-2011 Satisfactory Moderately Satisfactory .16

04 25-Jan-2012 Satisfactory Satisfactory .33

05 07-Aug-2012 Satisfactory Moderately Satisfactory .52

06 01-Jan-2013 Moderately Satisfactory Moderately Unsatisfactory .52

07 30-Jul-2013Moderately

Unsatisfactory Unsatisfactory 1.50

09 27-Oct-2013Moderately


10 03-Dec-2013 Moderately


11 06-May-2014 Moderately

Unsatisfactory Moderately Unsatisfactory 1.60

12 11-Aug-2014 Moderately Satisfactory Moderately Satisfactory 1.60

13 29-Jan-2015 Moderately Satisfactory Moderately Satisfactory 5.55

14 28-Jul-2015 Moderately Satisfactory Moderately Satisfactory 5.55

15 03-Feb-2016 Moderately Satisfactory Moderately Satisfactory 13.46

16 18-Jul-2016 Moderately Satisfactory Moderately Satisfactory 19.59

17 22-Dec-2016 Moderately Satisfactory Moderately Satisfactory 28.72

18 01-Jun-2017 Moderately Satisfactory Moderately Satisfactory 37.02

19 30-Jun-2017 Moderately Satisfactory Moderately Satisfactory 39.45

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SECTORS AND THEMES

Sectors

Major Sector/Sector (%)

Water, Sanitation and Waste Management 100

Waste Management 99

Public Administration - Water, Sanitation and Waste Management

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Themes

Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Urban and Rural Development 50

Urban Development 50

Urban Infrastructure and Service Delivery 50

Environment and Natural Resource Management 51

Environmental Health and Pollution Management 51

Air quality management 17

Water Pollution 17

Soil Pollution 17

ADM STAFF

Role At Approval At ICR

Regional Vice President: Philippe H. Le Houerou Cyril E Muller

Country Director: Martin Raiser Satu Kristiina J. Kahkonen

Senior Global Practice Director: Peter D. Thomson Ede Jorge Ijjasz-Vasquez

Practice Manager: Wael Zakout David N. Sislen

Task Team Leader(s): Maha J. Armaly Kremena M. Ionkova

ICR Contributing Author: Valerie Joy Eunice Santos

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I. EXECUTIVE SUMMARY

1. The Belarus Integrated Solid Waste Management Project (ISWMP) achieved its Project Development Objectives (PDO) and Global Environmental Objective (GEO) in a challenging country context and evolving sector environment. 2. The ISWMP was conceptualized at a time when the Bank was the primary international institution supporting Belarus’ development program, including support for environmental, energy, water and sanitation initiatives. In 2004, Belarus had ratified the Stockholm Convention on Persistent Organic Pollutants (POPs) and in 2007 undertook the required development of a National Implementation Plan (NIP) with the support of the Global Environmental Fund (GEF) and the Bank. Belarus was keen to upgrade its capacity in solid waste management and improve environmental and public health outcomes. The GEF funded project preparation activities, leading to implementation of this Project. The relevance of the PDO was high at the time of appraisal and remains relevant today as evidenced by additional requests for support for the sector, including for financing for another SWM project. 3. Achievement of PDO was substantial. Out of the seven PDO indicators, six were surpassed. Intermediate target indicators were overwhelmingly met. For example, the Project met its target for coverage of recycling within the city of Grodno, expanding from 40% at inception to 100% by Project close. The Project also surpassed its target indicators for amounts of POPs pesticides extracted or destroyed and amount of priority PCBs destroyed: due to the substantially larger quantity of POPs pesticide wastes extracted from Slonim landfill and 7 tons more at Lida, the end target was exceeded by 37%.

4. The one PDO indicator not yet fully achieved at Closing was the one measuring the volume of valuable material sold by the new recycling facility; with the fully integrated waste separation system coming on line only at the time of project close (rather than 2 years earlier, as originally envisioned), it’s unsurprising that the targeted volumes were not yet reached1. However, as the use of the source separation system takes hold in the population, and the MRF continues to improve its operational efficiency, it is expected that this indicator will be exceeded as well. 5. While achievements were substantial, efficiency was Modest. In 2012 and 2013, the Project struggled with a critically low disbursement ratio almost three years after effectiveness. The Project’s largest contract was for the MRF. However, changes in local government leadership caused delays while new decisionmakers came up to speed on the Project, and in particular with the choice of MRF technology. Also, the team underestimated international investors’ and contractors’ lack of awareness and perceptions of country- and sector-specific risks; investors’ lack of comfort and awareness about institutional capacity, regulatory framework and local dynamics in a market relatively closed to international investors led to a failed initial procurement and contributed to delays in implementation. In this context, the Bank supervision team downgraded the rating of progress toward achievement of PDO to Moderately Unsatisfactory. Once the MRF tender was successfully completed in 2014, the disbursement ratio and performance improved and ratings changed to Moderately Satisfactory.

1 Reported strictly, that indicator was achieved at 36%. However, if glass and paper deposited by households into the waste separation containers but ‘collected’ from these containers by scavengers is added in, the actual volume of waste would be 9,500

tons, an achievement rate of 95% (9,500 tons ).

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6. A noteworthy achievement of this Project is that, despite lower waste volumes than originally projected and despite implementation delays caused by a failed initial attempt to procure for the materials recycling facility (MRF), the Project was resilient in performance, achieving a marginally positive 2% financial rate of return, a rate not atypical of recycling plants. The improving performance of the overall integrated SWM system over the 12 months beyond Project close is consistent with the trajectory of the initial targets.

7. While it did achieve its PDO and GEO, perhaps the most relevant and meaningful outcome is that the Project helped engender substantive, high-level dialogue about the viability of the sector, including opening a discussion about potential opportunities for reforms. Although it was largely a stand-alone, city-specific investment operation, the Project in effect created a platform to advance sector policy and reform discussions with the Government.

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II. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES

A. CONTEXT AT APPRAISAL

Context Context and rationale for Bank support

After the collapse of the Soviet Union, Belarus pursued a gradual transition, initially delivering high rates of economic growth. In the late 1990s and the first years of 2000s, skills and capital goods from the late Soviet Union period helped Belarus’ economy grow quickly. During 2001-2008, Belarus’ GDP grew on average by 8.3 percent annually, more rapidly than the Europe and Central Asia (ECA) region (5.7 percent) and the Commonwealth of Independent States (CIS) (7.1 percent). Growth was propelled by strong export demand by key trading partners, underpriced energy imports from Russia and favorable terms of trade for key export goods.

Overall structural reforms have progressed slowly. Belarus continues to have highly centralized decision-making and relatively strong administrative capacity. The slow opening of the economy to the private sector and limited reform of state-owned enterprises (SOEs) prevented asset stripping and the disruption of commercial networks; however, limited managerial independence of SOEs has limited adaptation to market conditions. Although global and regional pressures and country-specific economic challenges have led to some liberalization of the business climate and optimization of social programs, the potential short-term social costs of reforms have limited the speed of improvements. Belarus continues to rely, generally, on an economic model based on the dominance of the state-owned sector and implied “social contract” of broad based income distribution.

Throughout the decades of tumultuous change and rapid economic growth, Belarus placed high policy priority on environmental protection, within a wider context of human health and sustainable development, including on issues associated with waste management. At the time of project conceptualization, Belarusian cities were facing increasing quantities of solid waste generated from residential, commercial and industrial sources. Belarus prioritized the management of chemicals and movement of trans-boundary pollutants, in particular those that cause potential harm to local and global human health and the environment. The country previously invested, for example, including through a World Bank loan, in supporting its population affected within areas affected by the Chernobyl disaster. Its high commitment to these issues is also evidenced in Belarus’ participation in international conventions focused on POPs chemicals management, and in investing in its own national legal and regulatory frameworks.

Standards for solid waste management (SWM) in Belarus in general, and in the city of Grodno which was the main beneficiary of the Project activities in particular, were good, and the Government had sought improvements in the sector. Oblast and local governments had demonstrated expertise in landfill management and solid waste collection. However, relatively low capital costs of landfill construction compared to other waste treatment methods resulted in landfill disposal being the most common practice of municipal SWM. Also, Belarusian cities were facing increasing quantities of solid waste generated from residential, commercial and industrial

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sources as the city populations increased as did consumption of waste-generating products. The Government also sought improvements in the sector in order to prevent adverse environmental impacts associated with municipal and hazardous wastes and to reduce the volume of landfill waste —which would also reduce the need for new landfill sites. Also, meanwhile, Grodno city was keen to move “up the ladder” in integrated SWM technology and to improve efficiency of its resource management through higher rates of reuse and recycling. In this context, the Project would support the Government’s objective of creating more environmentally and economically sustainable solutions to solid waste management.

Solid waste source separation and capture for recycling in Belarus was limited in 2009, although the country was advancing its national program for municipal SWM and seeking to increase the level of source separation and independent collection of separated materials (i.e., paper, plastic and metal) to increase the recycling rate throughout the country. According to the Ministry of Housing and Utilities (MHU), of 170 municipal solid waste landfills at that time, 36 landfills were over 30 years old, and 48 landfills had practically used up their capacity. Only 112 (66 percent) had been equipped with the protective waterproof beds and inspection wells. Communal waste separation covered only 47 percent of town and town settlement population.

The Government passed a 2008 Law on Waste Management that directed that greater emphasis should be placed on the recovery of materials and energy from solid waste streams, as long as such approach was economically rational and environmental requirements could be met. This direction was and is consistent with sound practice throughout the world where governments are investing resources and setting policy to encourage diversion of recyclable solid waste components from disposal facilities thereby increasing such facilities’ life expectancy and decreasing potential negative environmental impacts. In addition, action to minimize and prevent the harmful impacts of POPs on human health and the environment was deemed critical by Belarus, a country with an important share of POPs primarily in the form of POPs pesticides and waste (as part of a larger inventory of obsolete pesticides) and PCBs (polychlorinated biphenyls). Belarus acceded to the Stockholm Convention (SC) in February 2004 as a sign of its deep-seated commitment to POPs elimination.

At the time of the Project appraisal, the World Bank had a history of dialogue with the Government on its environmental and energy initiatives, and was perceived as the primary international development institution supporting Belarus’ development program. The World Bank had extensive international experience in SWM projects, particularly in the ECA, including traditional waste management, and Global Environmental Fund (GEF)-financed hazardous waste management. The Government requested Bank support to tap into international best practices in SWM processes, such as improved recycling and reuse. This Project was aligned with priorities outlined in the Belarus Country Assistance Strategy (CAS) 2008-11 (Report No. 40742-BY, November 7, 2007), and the CAS Progress Report (CASPR), approved December 1, 2009. These strategic documents articulated the Government’s priorities with respect to the environment, improving service delivery, and enhancing efficiency of utilization of public services. The CAS specifically mentioned the reduction of negative environmental impacts from solid waste disposal as an area of support to the Government.

The Bank was well-positioned to help Belarus achieve its global environmental objectives and meet its obligations under the Stockholm Convention on Persistent Organic Pollutants (POPs). The Bank was a designated implementing entity of the GEF, the interim financial mechanism of the

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Stockholm Convention. As such, the POPs stockpile management Component of the Project was designed to contribute significantly to GEF-4 POPs Focal Area Strategy and Strategic Programming objectives, and support GEF’s expanded objectives in promoting sound chemical management.

Theory of Change (Results Chain) The Results Chain below summarizes the links between the Project’s activities, outputs and outcomes.

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Training delivered; Legislation revised

Outcomes

Reduced environmental pollution and associated public health risks due to solid and hazardous waste

Increased sales of recycled material

Landfill waste and CO2 emissions are reduced in a sustainable way

Outputs (intermediate

outcomes)

MRF is constructed and operational

Households and businesses participate in separate collection

Environmentally sound disposal of priority stockpiles of POPs

Provided secure storage for lower priority POPs

Assumptions

• A modern recycling facility can reduce the burden of waste separation.

• Markets for recyclables, despite being volatile, will continue to be robust.

• The share of recyclables in the waste stream will continue to increase.

• If the public becomes aware of recycling benefits, and can source separate easily, the public will consistently do so in future.

Exposure of the population to POPs is reduced in a sustainable way

C2: Provide vehicles and containers to expand coverage of waste collection

Increased coverage of waste services in Grodno

Higher recycling volumes

Intermediary PDO-level Higher-level

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Project Development Objectives (PDOs) The PDO is to: (i) increase environmental benefits of integrated solid waste management in the City of Grodno through recovery and reuse of recyclable materials; and (ii) strengthen national capacity to manage hazardous wastes associated with POPs.

With a GEF-financed Component focused on POPs stockpile management, the Project also had a Global Environmental Objective (GEO), which was: to reduce environmental and health risks associated with the presence and release of POPs in global and local environments.

Achievement of the first development objective was to be measured in terms of: (a) reduction of volume of waste buried in the Grodno landfill; and (b) volume of reuse of valuable recycled materials, as measured by tons of recycled materials sold to users.

Achievement of the second objective, linked to the overall GEO of reducing environmental and health risks, was to be measured in terms of: (a) maintaining Belarus’ obligatory compliance with the Stockholm Convention; (b) reducing exposure of the population to POPs in the project area; (c) securing capture and storage of existing and future POPs stockpiles; and (d) environmentally sound elimination of priority POPs stockpiles.

Main Beneficiaries Project beneficiaries, for Components 1, 2 and 4 in particular, are the residents of the city of Grodno.

Beneficiaries of Component 3, which encompasses the GEF-funded activities related to POPs Stockpiles Management, also include:

(i) the Government, primarily MNREP, the Ministry of Health and line ministries responsible for sectors involving POPs (e.g., Agriculture, Emergency situations). National laboratories and local governments;

(ii) More than 127,000 local residents whose exposure to POPs was reduced

(iii) The population of Belarus and the global population, generally, given the Project’s global environmental objective to reduce environmental and health risks posed by the presence and release of POPs.

Rationale for Changes and Implications to the Original Theory of Change The first restructuring eased the Government funding burden, and enabled investment in additional equipment to improve source separation and waste transport efficiency. The POP subcomponents were not revised. There was budget reallocation to (4% of the total grant) and within Subcomponent 1 to cover costs of destruction of nearly twice the amount of POPs obsolete pesticide waste excavated than estimated under a conservative scenario.

The second restructuring, which extended the Loan Closing Date by six months, enabled the plant to be properly and fully tested. Operating the MRF at full capacity, which requires simultaneous changes in the broader waste collection system, is a technically and logistically complex operation. By design, the Project envisaged that the plant would operate for about one and a half years before the Project closure, in anticipation that multiple adjustments in the first year of operation would be required, and that the client would likely need advice and capacity building along the way.

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Given the delays in the procurement process, extending the Closing Date was necessary in order to allow the plant to be fully tested and to mitigate risks that would have arisen from leaving the client at the time of plant commissioning, so that all final technical and operational issues would be properly addressed, and the client would be able to start to learn how to operate the facility.

Further, extending the Closing Date enabled adjustments that enhanced the Project’s economic and social sustainability: savings of approximately US$5 million were used to procure additional equipment to improve the functioning of the source separation system.

These restructurings did not affect the overall Theory of Change. In fact, the reallocation of cost savings enabled additional, complementary activities, including upgrades to the source-separation system. The additional equipment improved the separate waste collection program throughout the city of Grodno, improved the efficiency of the MRF and increased the recovery rate of recyclables -- enhancing achievement of the PDO.

Key Expected Outcomes and Outcome Indicators

Components The Project included the following components:

Component 1: Construction of a Materials Recovery Facility (MRF) in the City of Grodno. (Original estimated cost: $37 million, to be financed from IBRD loan; actual cost: $32.5 million, with cost savings re-allocated to Components 2 and 4). Component objectives were to: (a) reduce amounts of waste deposited in the Grodno landfill; (b) recycle, extract, and reuse valuable materials (including plastics, waste paper, metals, and glass).

This Component included the design and installation of a 120,000 ton/year modern mechanical separation plant, to be constructed adjacent to the existing municipal landfill, to recover recyclable materials from household and commercial waste. The Component included design and supervision, including technical supervision activities; construction, procurement, and installation of the plant and related equipment; and support to initiate plant operation, and to produce and market recycled materials.

At inception, the Project was envisaged to service primarily the population of Grodno, about 92% of whose residents lived in 1940 multi-story apartment buildings across the city, with more under construction to meet the needs of a growing population. All municipal solid waste would be weighted at the MRF from where, based on its composition, it would be channeled to the MRF or directly to landfill (the remainder).

Component 2: Waste Separation Management Improvements. (Original estimated cost: $4 million, to be financed by Government; actual cost: $8.3 million, financed through cost savings achieved under the IBRD-financed portion of the Project). As discussed in the PAD, the effectiveness of solid waste collection and source separation processes in Grodno would have direct effect on the Project’s success in achieving its target outcomes of reducing landfill waste and increasing materials recycled. Observations of SWM conditions in Grodno at time of Project inception revealed that the Grodno City Consolidated Public Utility Company (GCCPUC) provided a high level of service in SWM collection; at that time, however, it was estimated that only 16% of

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the population participated in waste separation. Further, there was no institutional capacity or prioritization to engage in source separation and recyclables collection.

This Component was intended to be implemented within the first two years, in time to provide improved source-separated materials for the MRF. This Component invested in improvements to waste separation management at source so that the MRF would receive higher quality dry input materials to process. Such improvements included construction of container pads at the source, additional waste containers, upgraded waste collection equipment, and replacement vehicles for fully depreciated waste transport trucks.

The level of public participation in the recycling program affects the success of the source separation process and the efficacy of the overall Project. As such, this Component included a public information and awareness campaign about the new waste containers, behavior adjustments requested of residents (e.g., closure of trash chutes in residential buildings in favor of disposal of separated waste in outside containers) and businesses to separate waste, and explanation of benefits.

Component 3: Persistent Organic Pollutants (POPs) Stockpile Management. (Original estimate: $26.7 million, of which $5.5 million financed by GEF Grant and $20.6 million financed by Government and other resources; Actual cost: $36 million, of which $5.5 million was financed by GEF and the remaining $30.5 million by the Government and in-kind contributions from enterprises and beneficiaries) This Component was designed to align national environmentally sound management (ESM) of POPs with Belarus’ obligations under the Stockholm Convention and to implement priority actions under the National Implementation Plan (NIP). This Component financed (1) Risk reduction of POPs Stockpiles and Wastes; (2) Technical Support for Capacity Development; (3) Institutional and Regulatory Strengthening; (4) Management of the POPs component. POPs stockpile management activities included: capturing and securing storage of POPs stockpiles and waste; removal of priority POPs (i.e., DDT) from a major burial site; environmentally sound management of disposal of priority POPs; and support to development of institutional, technical, and infrastructure capacity to manage POPs.

As a grant, Component 3 was provided with a distinct PDO, results framework and legal agreement (linked to and cross-referencing the ISWMP) but shared with the ISWMP one PAD, one Bank team at project appraisal and effectiveness, and a few other elements of an administrative nature. Nonetheless, this Component was designed to stand on its own in implementation and, from the perspective of the national implementing agency, MNREP, particularly the PIU, and to a certain extent future Bank project teams (witnessed in implementation status reports and back-to-office reports), was a separate project. The ICR that was completed in May 2014 for this GEF-funded Component (TF-96993) is included in the Annex.

Component 4: Project Management and Support Activities for Components 1 & 2: (Original estimate: $2.65 million, with $0.4 million to be financed by the World Bank to support the Project Coordination Team (PCT) and the remainder to be financed by the Government; actual cost: $2.61 million, with government portion financing through reallocation of savings from Component 1). The PCT established at the MHU was responsible for daily coordination of Components 1 and 2 (not included the GEF-funded POPs-focused Component). This Component financed the additional PCT staff and equipment, incremental office operating costs, audits, and training. It also financed

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monitoring and evaluation, including population surveys, and other operations and maintenance costs.

Since, at the local level, municipalities own and implement projects and are responsible for service

delivery, the PCT had coordinate with the Grodno City Consolidated Public Utility Company

(GCCPUC), through its “Specialized Transportation Service” (STS) which is responsible for city solid

waste management including removal, disposal, transport, and cleaning urban and recreation

areas. The PCT also coordinated with the newly established UE Grodno Facility for Recycling and

Mechanical Separation of Waste, which is responsible for ongoing operations of the MRF.

B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE)

Revised PDOs and Outcome Targets The PDO was not revised, nor were revisions made to the GEO over the course of the Project. The composition of the Project components also remains unchanged.

However, due to an increased amount of POPs pesticide waste found at the primary POPs pesticide

stockpile / burial site during project implementation, targets for elimination were increased.

Other Changes

Restructurings The Project underwent two restructurings. The first, approved in November 2015, was in response to a Government request to: (i) change the project's financing plan so that Component 2 could be financed out of IBRD loan proceeds instead of by the Government contribution; and (ii) apply the new Procurement Guidelines of 2011. The original Project design anticipated that Component 2: Waste Separation Management Improvements would be financed by the Government. However, since the Government identified significant savings under the IBRD-financed portion of the Project – an amount which exceeded the US$4 million required to finance Component 2 -- the Government requested to reallocate these uncommitted funds towards Component 2. These uncommitted funds were used, in particular, towards specialized equipment, specifically to replace outmoded waste transport trucks and to purchase new waste collection containers. The cost savings also were used for the procurement of additional equipment, to support the public communication campaign and for construction of container hard stands and podiums at residential building locations (to improve the waste-separation process at residential building complexes).

The second restructuring, approved September 23, 2016, was an extension of the Loan Closing Date by six months, from December 30, 2016 to June 30, 2017 to provide additional time for installation and testing of the MRF.

Rationale for Changes and Their Implication on the Original Theory of Change The first restructuring eased the Government funding burden, and enabled investment in additional equipment to improve source separation and waste transport efficiency.

The second restructuring, which extended the Loan Closing Date by six months, enabled the plant to be properly and fully tested. Operating the MRF at full capacity, which requires simultaneous changes in the broader waste collection system, is a technically and logistically complex operation.

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By design, the Project envisaged that the plant would operate for about one and a half years before the Project closure, in anticipation that multiple adjustments in the first year of operation would be required, and that the client would likely need advice and capacity building along the way. Given the delays in the procurement process, extending the Closing Date was necessary in order to allow the plant to be fully tested and to mitigate risks that would have arisen from leaving the client at the time of plant commissioning, so that all final technical and operational issues would be properly addressed, and the client would be able to start to learn how to operate the facility.

Further, extending the Closing Date enabled adjustments that enhanced the Project’s economic and social sustainability: savings of approximately US$5 million were used to procure additional equipment to improve the functioning of the source separation system.

These restructurings did not affect the overall Theory of Change. In fact, the reallocation of cost savings enabled additional, complementary activities, including upgrades to the source-separation system. The additional equipment improved the separate waste collection program throughout the city of Grodno, improved the efficiency of the MRF and increased the recovery rate of recyclables -- enhancing achievement of the PDO.

III. OUTCOME

A. RELEVANCE OF PDOs

Assessment of Relevance of PDOs and Rating Rating: High

At the Loan closure, the PDO remained aligned with the Belarus CPS for FY14-17, including the focus on: “improving quality and efficiency of public infrastructure services,” use of resources and “global benefits of public goods.”

Further, the Project demonstrated how important increased public awareness and participation are in formulating and implementing local public services, and in raising institutional and service performance levels.

The sector remains a high priority for the Government and the World Bank. In 2017, MHU and Grodno Oblast expressed their strong interest in the World Bank financing as part of a new project supporting the implementation of the recently approved National Solid Waste Management Strategy (2017-2025). This National Strategy builds upon the MRF in Grodno, envisaging that the Grodno plant capabilities are expanded so that it can sort recyclables from a larger capture area beyond Grodno. Further, the Strategy proposes to expand the MRF’s functionality such that it can produce waste based fuels with the residual high in calorific value waste. The new project would assist the government to upgrade the sector and apply the experiences and lessons learned under the ISWMP to a prioritized scaled-up program for selected cities in Belarus. At the time of this ICR, a new solid waste management project is under preparation, with goal of seeking Board approval in February 2019.

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B. ACHIEVEMENT OF PDOs (EFFICACY)

Assessment of Achievement of Each Objective/Outcome Rating: Substantial

The overall PDO of this integrated SWM Project includes two objectives: (1) to increase environmental benefits of integrated solid waste management in the City of Grodno, and (2) to strengthen national capacity to manage hazardous wastes associated with POPs. The overall PDO was generally achieved, and the environmental and health benefits will continue to accrue over time. The PDOs were tied to the indicators summarized in the chart below.

Objective 1: to increase environmental benefits of integrated solid waste management in the City of Grodno

Outcome Indicator Achievement Rate

1. Increase environmental benefits of integrated SWM in Grodno by recovering and reusing recyclable materials

Reduce waste volumes for landfill disposal

23,632 tons of waste not buried in the landfill due to the new recycling plant (baseline: 0; target: 20,000)

Reuse valuable recycled materials efficiently

3585 tons of valuable material sold by the new facility2; 9500 tons of recyclables sold overall (baseline: 0; target: 10,000

The objective is achieved through the upgrade of source separation and transport systems and installation of a new recycling plant (MRF) supported by the Project components 1 and 2. Investments and activities supported by the Project directly increased the capabilities of Grodno’s SWM system, expanding the environmental benefits of integrated SWM in Grodno. The Project contributed to reduction of volume of waste deposited in landfills, which had been a Government policy priority and motivation for investing in this Project. As of December 2017, due to the Project-financed recycling facility, 23,632 tons3 of industrial and/or municipal solid waste have been recycled (therefore, diverted from and not buried in the municipal landfill) – surpassing the target of 20,000 tons. The Project enabled significant improvements to source-separation of waste and created the opportunity to recycle much more commercial and household waste. In addition to expanding the city’s recycling capability through construction of the MRF, the Project closed refuse chutes in apartment buildings and funded construction of new container sheds (providing roof over containers at residential building complexes to protect the containers from the elements);

2 Reported strictly, the target is achieved at 36%. However, if glass and paper deposited by households in the glass and paper containers but ‘collected’ from these containers by scavengers is added, the target is achieved at 95% (9,500 tons). As such, around one third has been achieved by the public and one third by private initiative made possible by the Project. NB: People (scavengers) have been taking glass and paper from the new separated source containers and taking them (in return for payment) to glass and paper recycling facilities. 3 Wood waste is shredded into wood chips and used by an on-site wood burning boiler to supply the electricity needs of the MRF. Bulky waste and construction and demolition waste is shredded and used as cover material at the premises.

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replaced used metal containers with larger volume; standard wheel eurocontainers; provided plastic containers for the separate collection of municipal waste; introduced modern techniques of high level waste compaction; implemented separate collection using three containers for paper, glass and plastic; and acquired equipment for safe handling of medical waste and set up its collection and disposal. The amount of waste disposed of at Grodno’s landfill has been reduced, surpassing targets, with 9500 tons annually sold of recycled material. The plant decreased pressure on landfills, an environmental benefit to Grodno’s citizens. Also, from a higher level policy perspective, raw materials, a finite resource, come with higher CO2 emissions. Re-using materials – instead of using raw materials – is therefore preferable in terms of environmental impact. The MRF was commissioned in early 2017, and operations handed over to Unitary Enterprise (UE)4 ‘Grodno Facility for Recycling and Mechanical Separation of Waste,’ which was established as a separate legal entity responsible for waste treatment and disposal. The MRF was fully staffed by May 2017. Operationalizing the MRF in 2017 (Year 6) met the target, albeit 12-18 months delayed beyond original plan of Year 4. The Project met its intermediate results indicator targets for expanding coverage of recycling within the city of Grodno, from 40% at inception to 100% by the Project close. The MFR commissioning enabled Grodno authorities to pass a city ordinance in March 2017 adopting the separate collection system and the removal of waste chutes from high-rise apartment buildings, which is where more than 90% of Grodno residents live. Between March and June 2017, 843 container pads were constructed within a record two-month period; and thousands of containers for separated and mixed waste were placed on the pads. Each container pad area serves a set number of building blocks; some of the pads host bulky waste open top containers. The separate collection system became fully operational on July 1, 2017. Grodno City UE Specialized Transportation Service continues to be responsible for waste collection from households and CII and transportation to waste treatment facilities. This new system (i.e. separate collection, separation and sorting) is expected to take, as is typical, several years to mature, and performance continues to improve since commissioning. Grodno authorities have been monitoring operations and making adjustments in the processes of collection and transportation as well as in operation of the MRF. Such adjustments have included: optimization of the collection points, optimization of the waste streams based on point of origin to the MRF, and adjustments in the operational sequence (e.g., the order of extraction of individual streams). The concerted public communication campaign improved the composition of the mixed and dry streams, which impacts MRF operations. Taken collectively, the iterative adjustments in the months after the Project closing date have helped optimize MRF operations and improve performance of the overall system. Boosted by the Government’s concerted public communications campaign, the percent of

4 Unitary Enterprises, common in Belarus and other post-Soviet states, are business entities that have no ownership rights to the assets that they use in their operations. This form is possible only for state and municipal enterprises, which respectively operate state or municipal property. The owners of the property of a unitary enterprise have no responsibility for its operation and vice versa.

https://en.wikipedia.org/wiki/Business

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Grodno residents aware of Grodno's solid waste separation program reached 85% by June 2017, surpassing the target of 80 percent, according to research conducted by Grodno University. With the upgrades and enhancements to source separation and transport equipment and processes, 97% of commercial entities and 60% of the population was participating in the source separation program by project close, relative to a target of 80 percent. These numbers should be understood in context of several issues. Firstly, the MRF was fully installed by mid-2017 and underwent testing in August 2017 – an approximately 1.5 year delay relative to the timeframe anticipated in the original design. Also, at the time of the Project preparation, waste generation rate in Grodno was estimated at 200,000 tons annually; this amount has been declining since 2013, possibly on account of channeling large amounts of construction and demolition (C&D) waste to a new specialized C&D landfill as well as an active extended producer responsibility (EPR) scheme capturing recyclables form the CII sector. Another factor affecting some of the volume of waste has been the increase in scavenging of glass (which is heavy) from the separated waste containers; Grodno saw a jump in the glass deposited (for payment) at glass recycling centers after the Project containers were placed around town5.

Objective 2: to strengthen national capacity to manage hazardous wastes

associated with POPs

Outcome Indicator Achievement Rate

2.Strengthen national capacity to manage hazardous wastes

Compliance with Stockholm Convention

Compliance with Stockholm Convention maintained

Secure capture and storage of existing and future POPs stockpiles

127,360 Number of people no longer exposed to POPs waste (baseline: 0; target 100,000)

Environmentally sound elimination of priority POPs stockpiles

8,340 tons of POPs waste destroyed, disposed or contained in environmentally sound manner (baseline: 0; target: 5751) 2,926 tons of priority POPs stockpile disposed in environmentally sound manner (baseline 0; target: 1800)

The second development objective of strengthening national capacity to manage hazardous

5 N.B. The buy-back centers’ data shows that, once the Project-supported separate waste containers were placed around town, the deposited volume of paper and glass increased significantly. From 2015 and 2016, the volume deposited by individuals increased by 2%; from 2016 to 2017, when the waste separation system was rolled out, there was an 86% increase of volume of paper and 117% increase in glass deposited by individuals.

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wastes associated with POPs is considered achieved or exceeded. In terms of achieving the first outcome indicator of maintaining compliance to the Stockholm Convention, the conclusion of compliance at component completion is based on the country’s adherence to all of the SC’s articles related to risk reduction and substantial adherence to Article 7 on NIPs (which also requires Parties to endeavor to establish the means to integrate NIPs into their sustainable development strategies – what Belarus has accomplished with budgetary support for POPs management in its five-year plans). The achievements in key targets depicted in the table above are directly attributable to successful implementation of activities focused on priority POPs pesticide and PCB stockpiles. Furthermore, these results have contributed as a whole to the GEO, the reduction of environmental and health risks associated with the presence and release of POPs in global and local environments:

• Nearly twice as much of priority POPs were disposed of than planned, in an environmentally, cost-effective and permanent manner.

• Eighty percent of Belarus’ last estimated stocks of POPs OPs and associated wastes have been eliminated from the country (and the globe), with the expectation that this figure will increase to 93% by mid-2014.

• A remaining 19 tons of POPs pesticides along with another 5,114 tons of obsolete pesticides are safely packaged and secured in storehouses in four Oblasts.

• Critical obsolete burial sites have been consolidated to 5 from 7 with the successful excavation and remediation of the Slonim burial site through GEF funds, accounting for more than 45% of buried OPs in the country; and with the closure and clean-up of a site in Brest through Government funding. 54% of buried obsolete pesticides (including at least 145 tons of POPs) remain and await elimination as funds are mobilized.

• Best practices have been demonstrated along with a useful lesson learned on completion of the cleanup of a major POPs pesticide burial site at Slonim (the first time in Belarus), including on-site operational screening analysis capability for replication and expertise transfer to other countries where such sites exist and cleanup is being initiated.

• Liquid PCBs in the country have been reduced by more than 50% of the baseline; 17% of the PCB-based equipment has been eliminated.

• A national PCB management plan that specifies targets by sector for phased replacement and elimination of in-service equipment by the Convention deadline is in place – a significant step towards addressing the country’s largest remaining POPs challenge. The achievement of the secure capture and storage of existing and future POPs stockpiles and the environmentally sound elimination of priority POPs stockpiles depended on a combination of factors, which demonstrated effective application of technical expertise, coordination and collaboration, flexibility and resourcefulness, and knowledge sharing among a group of country stakeholders that eventually agreed on a common goal. Because of achieving these results, national capacity to manage and reduce the risks of hazardous wastes associated with POPs was significantly strengthened. In parallel with project implementation, MNREP issued a regulation on quantifying POPs emissions into the atmosphere and on procedures for populating the MIS/POPs database, and also issued rules on inventorying newly added POPs. Basic national institutional, regulatory and technical capacity for future management of POPs and maintaining SC compliance is in place and

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high confidence exists that this can be sustained based on the proven process of adoption and implementation of periodic national programs covering successive five-year periods.

Justification of Overall Efficacy Rating By Project close in June 2017, the entire separate waste collection, separation and sorting system -- including the MRF, the collection pads at residential building complexes, waste containers and mobile equipment for separated and mixed waste – was in place. Targets for public awareness of the recycling initiative and for active public participation – critical to the sustainability and success of the recycling program – were achieved.

The targets for volume of waste diverted from the landfill and for volume of materials recycled were met a few months after the official date of the Project close, and the overall SWM system was on the appropriate trajectory to exceed its targets, as key aspects of system operations got optimized. As a practical matter, the target result indicators related to volume of waste diverted from the landfill and of recycled waste could be achieved only after completion of a successful roll-out of the separate collection system in Grodno and after full operations of the MRF facility.

More qualitatively, the integrated nature of this Project – combining improvements to source-separation processes, waste transport, recycling capacity, public awareness – creates a model for sustainability of SWM that could be replicated elsewhere in Belarus.

The Project also substantially achieved the second development objective of strengthening national capacity to manage hazardous wastes, exceeding the key targets depicted in the above table. Activities included physically securing 8,340 tons of POPs pesticides and PCB waste (exceeding original target by 30%), eliminating 2,616 tons of priority POPs pesticide and PCB waste (exceeding target by 30%), developing technical assistance materials, training and awareness, updating PCB inventories and developing a national PCB management plan.

Importantly, the Project integrated POPs into existing national environmental and health monitoring and environmental information systems, defined a long-term program to eliminate unintentional POPs release, and supported public information and awareness activities. The Project supported the incorporation of a comprehensive approach to manage hazardous wastes associated with POPs into national regulatory and legislative frameworks for solid waste management, and ensured that sustainable long-term capacity exists to maintain and enforce the frameworks, consistent with the global framework for chemicals management.

Furthermore, the Project results have contributed to the GEO of a reduction in environmental and health risks associated with the presence and release of POPs in global and local environments. Nearly twice as much of priority POPs were disposed of than planned, in an environmentally friendly cost-effective and permanent manner. The Project reduced exposure of 127,260 people to POPs (exceeding the target value). Also, more than 90% of Belarus last estimated stocks of POPs and associated wastes have been eliminated from the world.

From a replicability perspective, the Project demonstrated best practices along with useful lessons learned regarding cleanup of a major POPs pesticide burial site at Slonim, the first time in Belarus.

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These strong Project achievements were achieved despite some challenges. The global economic crisis of 2008-2010 saw poverty rise and incomes decline in Belarus, contributing to a Government reluctance to increase tariffs, as would be necessary to achieve MRF cost recovery. The Government indicated in 2017 that it intends to gradually raise tariffs and decrease its subsidy to MRF and landfill operations, all of which would enable the plant to reach cost recovery.

Also, in 2012 and 2013 the Project struggled with a critically low disbursement ratio almost three years after effectiveness. The Project’s largest contract was for the MRF, and problems in the bidding process caused accumulating delays in implementation progress. Although disbursements were expected to pick-up following award of the MRF supply and installation contract, the Bank supervision team downgraded the rating of progress toward achievement of PDO to Moderately Unsatisfactory. Once the tender process for the MRF was successfully completed and Grodno signed a contract in 2014 for delivery, the disbursement ratio improved and therefore ratings improved to Moderately Satisfactory.

Because the objectives were substantially achieved, and in several cases exceeded, the overall efficacy of this Project is rated Substantial.

C. EFFICIENCY

A financial and economic analysis of the Project was carried out to assess the performance and economic viability of the MRF and the improvements in waste separation; a detailed description of the analyses is included in Annex 4: Efficiency Analysis. The POP Component 3 was evaluated at the Interim ICR stage and the findings are integrated into the assessment of the efficiency of the overall project.

The construction of the MRF and the improvements in waste separation (including the purchase of recycling containers, waste transport trucks and public information campaign) are expected to bring about, over a 20-year period, a positive economic net present value (NPV) of about US$11.8 million and achieve an economic Internal Rate of Return (IRR) of 10%. These numbers were arrived at through a cost-benefit approach, the same analytical approach used in the PAD. A cost benefit analysis was also done for the MRF alone, which found the economic IRR to be 12%, very close to that at appraisal (row 2 of Table 1). In addition to a cost-benefit analysis, the MRF’s operating costs per ton of recyclables was compared to two other recycling plants in Belarus, and the MRF was found to be more efficient although this unit cost comparison method has limited implications for efficiency due to the different production methods of the plants compared.

The cost-benefit analysis conducted at appraisal estimated that the recycling plant and the waste management improvements would have a 15% economic IRR and a NPV of BYR 23.5 million (about US$ 8,086 at the exchange rate at the time of the PAD). Project benefits were assumed to include: estimated revenues from sale of recyclables, social benefits of reduced CO2 through recycling and avoided costs of landfilling. The EIRR calculation took into account costs to construct and install the MRF, purchase source separation containers, and purchase waste transport trucks.

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Table 1. Economic NPV and IRR at Completion Grodno MRF and Waste Separation Improvements

Activities Evaluated NPV (million

USD)

IRR

Components 1 & 2 (Construction of MRF and waste separation improvements)

$11.8 10%

Component 1 (Construction of MRF only) $18 12%

Sensitivity Analysis

(i) Revenues equal operating costs each year ($.38) 6%

(ii) No increase in recycling rates, 3% increase in tariffs, 5% increase in costs

($.84) 6%

(iii) Costs rise at 5% per year, revenues as in baseline scenario ($3.8) 5%

Sensitivity analysis was undertaken at completion to show the impact on economic return of (i) revenues equaling operating costs each year; (ii) adjustments in costs and tariffs; and (iii) costs increases. If the revenues are adjusted annually by the government with the goal of cost recovery only, the only benefits to be calculated are the positive environmental externalities of avoided GHG and landfilling. The NPV in this scenario is small and the IRR is close to the social rate of return. The investment costs of the project are accounted for entirely by the positive environmental externalities. Other scenarios suggest that the NPV estimates are very sensitive to the price of recyclables and the efficiency of the operation. Significant economic gains disappear if costs are allowed to increase by 5% per year. Similarly, if the recycling rate (the diverted recyclables as percent of the total waste) does not continue to improve, even with some reasonable expectations of tariff and subsidy increases, the IRR is very close to the social discount rate of 6% and results in a small negative net present value.

The financial analysis showed that the MRF will cover its operating costs and estimated that the discounted flow of future revenues and costs amounts to US$ 23.2 million. However, this will not be sufficient to cover the initial investment for the plant of US$ 32.5 million. Thus, the financial IRR is about 2% and the financial NPV is negative. As was noted in the PAD, globally, recycling facilities are usually built for environmental benefit reasons and require government subsidies in their construction and operation to justify the investment, where financial returns are highly sensitive to the quality and prices of materials produced.

During initial months of its limited operations, the MRF entered into contracts with the recycling industry to sell different types of plastic, metal, paper and glass at prices which, in principle, were higher than prevalent international market prices. Such Government-backed prices are expected to remain stable over time. In addition, according to the contractual arrangements in place, two of the recycling fractions (paper/carton and glass) follow the ‘take or pay’/Extended Producer Responsibility principle. As such, the MRF has managed to sell 65% of the extracted materials. The sale of recyclables is expected to continue to contribute 25% of revenues, with government

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stimulus per ton of recyclable6 contributing another 13-15% of revenue. The volume of recyclables collected is lower than anticipated due to the scavenging of recyclables directly from source separation containers. The remaining revenue is generated by the tariff per ton of waste processed that the MRF receives. The Government has indicated that it does not envision a direct budget subsidy for the MRF following the initial period in fiscal year 2017 but government stimulus for quantities of recycled materials, averaging about 40% of the MRF’s recycling revenues, are expected to stay.

The POP component was evaluated in the Interim ICR using the incremental cost method, the same method used at appraisal. This method takes the difference between "business-as-usual" scenario outcomes without project and the incremental benefits and costs with project. The POP component was found to be efficient because it leveraged a substantially higher amount of co-financing than anticipated at appraisal and because the cost per ton of POP destroyed at completion was lower than the cost estimate at appraisal. The project mobilized US$9.29 million more in counterpart funding than originally committed at baseline. The average cost-effectiveness value of collecting, transporting and destroying the material was $1,545/ton instead of the estimated value of $2,201/ton7.

In terms of implementation efficiency, 96% of the IBRD loan was utilized, with significant cost savings identified under in Component 1 allocated to support Components 2 and 4. There were no cost overruns. The cost savings enabled an extension of the public communication campaign, purchases of additional waste transport equipment, and other procurement of other specialized equipment (including a shredder for bulky waste with a loader/grab, and more than 800 container hard stands). These investments improved and will continue to improve outcomes and promote the sustainability of achieved environmental benefits.

As discussed above, key implementation activities were delayed multiple times. The Closing Date was extended by six months to allow for time for testing of the newly installed recycling plant (whose completion had been delayed by earlier implementation challenges) as well as to utilize funds remaining in the credit. The additional time was also used to refine the integrated SWM system, including through optimization of collection points and adjustments in the operational sequence such as the order of extraction of individual streams.

With respect to administrative efficiency, project preparation cost $311,000 of Bank budget. The Project also benefitted from a $285,000 GEF Project Preparation Grant (PPG), used to prepare Component 3 activities on POPs stockpile management that was funded by $5.5 million GEF grant. Implementation cost $628,227 over six and a half years.

Assessment of Efficiency and Rating The economic efficiency is rated as modest because, despite the project’s healthy EIRR of 10%, the returns were lower than anticipated at appraisal, lower than other recent projects in Belarus, and lower than a recent similar project run by the World Bank in Argentina8. The MRF and the

6 Government stimulus per ton of recyclables is a country-wide policy in Belarus beyond the Grodno’s MRF. 7 Significant variations in the cost estimates of up to $3,023/ton - $5,525/ton are possible if factoring in the costs of excavation of obsolete POPs pesticide wastes or of equipment replacement. 8 The Argentina Separation Plant project completed in 2015 reported 31%, 57% and 17% EIRR with some of the economic benefits accruing from avoided health risks of waste pickers. http://documents.worldbank.org/curated/en/600031487169128320/pdf/ICRR-Disclosable-P089926-02-15-2017-

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waste management activities are run at cost (the revenues set by the government cover the operating costs) thus the incentives are low to minimize costs and operate efficiently. The POP component was estimated as relatively efficient as the cost effectiveness per ton of POPs was higher at completion than at appraisal. In terms of unit cost comparisons with other plants in Belarus, the Grodno MRF shows lower costs per ton of recyclables produced as compared to two other plants in Belarus of similar production capacity, although of quite different production methods. The 2% financial rate of return is not atypical of recycling plants, and is to be expected. The achievements of target outcomes, and the improving performance of the overall integrated SWM system over the 12 months beyond Project close, are consistent with the targets.

The efficiency rating is intended to incorporate both the Economic Analysis and Implementation efficiency. Thus efficiency is rated as Modest -- due to the multiple delays in implementation of key activities.

D. JUSTIFICATION OF OVERALL OUTCOME RATING

Rating: Moderately Satisfactory The relevance of the PDO was high at appraisal and throughout implementation. Some of the output targets were exceeded; the targets that have not yet been met – e.g., volume of recyclable materials sold by the MRF -- are expected to be met within the next year or two, as refinements to operations continue to be made. Efficacy was rated Substantial and efficiency was rated Modest. Hence, the overall project outcome is rated Moderately Satisfactory.

E. OTHER OUTCOMES AND IMPACTS (IF ANY)

Gender The Project did not specifically include a gender empowerment component. Nevertheless, the Project did directly result in creation of 205 new jobs, of which 30 (or 15%) are women, including: 19 workers and 11 administrators/managers (including chief accountant, HR specialist, environmental engineer). Beneficiaries of Component 1 and 2 are all the residents of Grodno, including females who represent about 53% of the population. Further, as the location of obsolete POPs pesticides and PCBs were primarily in poorer areas, it can be argued that by safeguarding the environment, particularly water, air and soil resources from the risk of leakage of POPs, Component 3 contributed to raising the quality of lives of the more vulnerable parts of the population. Lastly, the Project stimulated scavenging from recycling points, and this may have a gender angle.

Institutional Strengthening Institutional strengthening was a key component, in particular, for the POPs-focused activities of this Project. The Government of Belarus instituted regulatory and policy measures to implement the NIP Action Plan in accordance with the Stockholm Convention and in line with national priorities on environmental protection and waste management. The basic national institutional and regulatory capacity for future management of POPs and maintaining

1487169082805.pdf

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convention compliance is in place with high confidence that this will be sustained based on the proven process of adoption and strict implementation of periodic national programs covering successive five-year periods.

To promote stakeholder communication and more efficient implementation of the Project, a joint steering committee comprising the PCT, Grodno Oblast, City of Grodno and GCCPUC was established to improve coordination among key stakeholders, in particular between the PCT and Grodno authorities. Moving forward, the City of Grodno owns the MRF. The GCCPUC, through its “Specialized Transportation Service” is responsible for waste removal, disposal, transport, and cleaning urban and recreation areas. The GCCPUC is responsible for ongoing operations of the MRF. Under Component 3, in the areas around the Slonim and Lida POP sites, local people were empowered to query authorities and participate in decision-making concerning their resources

Sector Strengthening Arguably, the Project’s most lasting achievement is that it created meaningful platform for policy dialogue about issues related to treatment of waste, the waste hierarchy, and RDF. There was significant knowledge transfer and capacity building along the way on each of these various issues, as evidenced by the Government’s request for additional financing as well as for advisory services to support their national SWM strategy. Even though this Project was a city-specific investment operation, it opened meaningful sector dialogue, including about reforms, that likely would not have occurred otherwise.

Mobilizing Private Sector Financing The Project did not directly mobilize private sector financing. As noted above, Belarus generally

continues to rely on an economic model based on the dominance of the state-owned sector and

implied “social contract” of broad-based income distribution; as such, opportunities for

mobilizing private sector financing are limited in Belarus.

Poverty Reduction and Shared Prosperity While no specific poverty reduction and shared prosperity outcomes were identified in the PAD,

some outcomes can be observed:

• Increasing the coverage and quality of SWM services to citizens has positive

environmental, health and economic benefits for society.

• The Project created 78 one-time construction jobs and 185 permanent jobs for locals

in 2017. The number of employed for 2018 is projected to be 210. The Chinese firm contracted

to install the plant used a combination of imported labor and subcontractors for construction

and installation of the MRF. Dozens of jobs were also created with the UEs who are responsible

for operating the expanded collection system and operating the recycling plant.

As POPs pesticides and PCBs were located primarily in poor, rural areas, it also could be argued

that elimination of POPs contributed to raising the quality of lives of the more vulnerable parts

of the population.

Other Unintended Outcomes and Impacts With respect to the GEF-funded POPs Component, opening a channel of communication between local populations and authorities under the pretext of temporary storage and disposal of hazardous pesticide wastes was an unintended outcome of this Component’s

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implementation. The local population was skeptical of publicly discussing and weighing in on an issue previously thought beyond its control. However, inhabitants became engaged, which provided an opportunity for discourse with authorities on all topics of concern. Another positive outcome not anticipated was the degree to which enterprises in the PCB sectors committed human and financial resources to address what would be considered an externality and setting an example industry-wide for accelerated phase-out and drawing regional attention for possible replication.

IV. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME

A. KEY FACTORS DURING PREPARATION

PDO. The PDO was clear and practical and remained highly relevant to the development priorities of the national and Oblast government throughout the Project implementation.

Given the WB-Belarus CPS’ emphasis on the need for structural reforms and on improving efficiency of public service delivery, one could argue that the Project should have also set an objective of addressing, more directly, the financial sustainability of SWM services provided. On this point, understanding the context is critical: at the time of the Project conceptualization, political and institutional environment was neither ready for or conducive to more robust effort to improving efficiency. As has continued to be the case, the Government is balancing its desire (and increasing need) for greater efficiency of the utilities with the social burden of a combined utility bill.

Project Design. The Project design was comprehensive and technically sound, targeting improvements to core elements of an effective, sustainable integrated SWM system. As discussed at length above, there is a clear, causal link between Project activities and achievement of the environmental and public health benefit policy objectives of decreasing landfill waste and permanently decreasing population exposure to POPs pesticides and waste.

The Project benefitted from knowledge generated through World Bank’s extensive international experience in solid waste management projects, particularly in ECA, including traditional waste management, and GEF-financed hazardous waste management.

The design of this Project benefitted from lessons learned from other Bank-financed operations in Belarus, in particular, the concept of having a centralized project implementation and management unit serve as the link between the Bank and local Belarusian stakeholders (especially local governments who are the owners of investments) through the ministry responsible for the sector. This institutional structure was intended – and, in fact, helped -- to keep the central government agency responsible for overseeing the implementation of national plans involved in the monitoring the Project within the national program and to promote sectoral dialogue.

The design also incorporated lessons learned from international experience and other Bank SWM operations, which had found that successful recycling programs require effective public consultation and public awareness campaigns to ensure high levels of citizen participation. The

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Project preparation drew on lessons learned from a 2009 World Bank study, “Solid Waste Management in World Cities,” that emphasized the importance of public cooperation, and on the technical side, pointed out that mitigation requires blending technical approaches such as collecting and using landfill gas with upstream consumer measures such as ‘reduce, reuse, recycle, and compost.’

The POPs Component greatly benefitted from the Belarus process of developing and approving the NIP and subsequently from a GEF project preparation grant (PPG), amounting to approximately six years of upstream study and analysis. The NIP provided initial baseline figures on the scope and nature of the POPs challenge in Belarus and defined the priority actions and a long-term strategy. The PPG was sufficient to cover most aspects of preparation including a comprehensive EIA and environmental and managerial consultancy support to MNREP. Additional funding however would have allowed more accurate quantification of POP stockpiles in burial sites through extensive sampling.

However, despite the best efforts, not all Project concerns were fully anticipated. For example, although blending the GEF project with the ISWMP had major advantages such as elevating its profile and facilitating mobilization of counterpart funding during implementation, this approach had some drawbacks. As previously stated, although the POPs Component’s implementation was largely separate of the ISWMP and performed consistently well, its ratings as per the Bank’s monitoring system were subsumed by the ISWMP.

Additionally, in order to sustain achievement of the Government’s objective to reduce the percentage of waste that is landfilled and to capture recyclables, broader regulatory reforms – such as measures that discourage waste disposal to landfills and that make waste recovery financially and economically feasible -- would have been required. While this issue was broached multiple times with the Government over the course of the Project preparation, the design did not directly address regulatory reforms in the sector.

Results Framework (RF). The RF was generally well designed. The Framework captured implementation progress, as well as the lack thereof during the first two years of implementation.

The RF included an intermediate outcome indicator of “operating ratio of MWSTF,” which was supposed to be calculated as “operating revenue divided by operating costs,” not to include depreciation. However, this ratio proved difficult to calculate, given the particulars of the institutional structure and general business operating environment. A major challenge to calculating this ratio is the operational interdependence, and the cost implications of that interdependence, of multiple government enterprises involved in providing SWM services. In Grodno, solid waste collection and disposal is managed by the GCCPUC, a Consolidated Unitary Production Enterprise comprised of 12 legally autonomous public utility companies with a workforce of more than 4000 people. One of those companies, UE STS, provides solid waste collection and transport services (and is responsible for managing contracts for residential and commercial establishments). Another enterprise, Unitary Housing Repair and Maintenance, is responsible for residential maintenance, repair and safety and other fee-based services for the public. Lastly, the UE Grodno Facility for Recycling and Mechanical Separation of Waste is responsible for operating the recycling plant, which is owned by the city.

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Another challenge to using the MRF’s “operating ratio” as indicator of financial sustainability is that the Government -- consistent with the country’s overall approach to managing its economy -- provides guidance on tariffs9 as well as on pricing and volume of recycled materials. Therefore, neither MRF revenues nor costs can be considered completely ‘market-based.’ At time of project inception, for example, the level of tariffs collected was significantly less than what would have been required to achieve cost recovery in provision of collection and transport services. Public budget sources, approved by the Municipal Executive Committee of the GCCPUC, were utilized to provide the necessary funds to maintain the level of service and bridge the economic gap between tariff levels and actual cost of delivering services. At time of Project closing, the Government indicated that it intends to phase out subsidy to the MRF after its first year of operations and to propose a tariff increase. Since tariffs will almost certainly remain below cost-recovery levels even after planned increases in the year following project close, the main financing source for the MRF will be revenue from recycling materials – but pricing and volume for that, too, is significantly affected by Government policy interventions.

For the POP Component indicators, careful attention was paid to approaches to measuring results and impact under the SC and its financial mechanism, the GEF when modeling project indicators to measure the GEO, including the GEF-4 Strategic Program on POPs. During appraisal, additional indicators were proposed to better measure the strengthened national capacity PDO: “compliance with the Convention” and “reduced risk of exposure of the local population to POPs.”

Government Commitment. The Government’s commitment to the Project was high. Throughout the Project, despite delays caused by changes in key decision makers in the local administration, the Government dedicated staff and mobilized local resources for preparation and implementation.

Adequacy of Identification of Risks and Mitigation Measures. The overall risk rating at appraisal was assessed as substantial.

The Project risks were appropriately identified and calibrated with relevant mitigation measures put in place, such as the loan covenants requiring the Government to prepare and vet its business plan for upgrading source separation and waste transport processes, both of which are critical to success of the MRF.

A full EIA was prepared on the POPs component (and another on Component I) and publicly disclosed and two public consultations were held in line with OP 4.01. No social safeguard issues were triggered at appraisal, such as resettlement and land acquisition aspects. A risk in implementation capacity was identified for all components of the parent project, with a specific concern on Component III that MNREP’s experience with Bank-administered trust funds had been limited to small contracts. In addition, a risk for cost overruns in, and completion of recovery and repackaging of POPs pesticides from the Slonim (obsolete pesticide storage) site was identified and proposed to be mitigated using government funds.

9 For residential solid waste generators, tariffs are set on a per person charge based on the expected amount of solid waste generated on a unit basis. The unit generation rate used for this calculation is based on national norms established by the government. Tariffs for SWM services that are charged to commercial establishments are determined by the overall area of the business and/or number of employees – determined on a case-by-case basis.

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B. KEY FACTORS DURING IMPLEMENTATION

Factors subject to Government or Implementing Agencies control: The Government, across central, oblast and municipal levels, maintained high degree of commitment and engagement to the Project throughout its implementation. The Government was also very responsive to citizen concerns and complaints. For example, in April and May 2017, during the peak of the construction of container pads at residential buildings, multiple complaints (in total 1027 people signed several collective complaints) were received by Grodno authorities related to the location of the pads and their visual effect, the closure of waste chutes, and the cutting of trees in certain cases where the pads had to be placed, and the distance of the pads from the residences (all pads were placed on public land). More than 97% of these complaints were able to be resolved, including through relocation of the container pads (45 instances), changes to the pad layout design (in multiple places), and intense discussions and community consultations. In addition, MHU set up a consultation group that visited Grodno and made recommendations to further improve the communication with the public. By the date of this report, the municipality already adopted several of the recommendations (e.g., printing information about the separate collection program on the back of each household utility bill).

Also, as discussed in the Restructurings and Achievement of PDO sections above, the Project experienced implementation difficulties during the first two years of the Project, in part due to factors that were within the sphere of Government influence, if not direct control, such as: lengthy process for subcontracting of a local design company due to outstanding approvals from local authorities; lengthy process of site investigations to accommodate national regulatory requirements regarding POPs stockpiles; Government requests for re-designs of the specifications for the recycling plant; and procedural difficulties related to the issuance of a Letter of Credit.

Also, changes of implementation staff and changes in key positions at Grodno Executive Committee disrupted continuity of institutional knowledge and contributed to delays. In April 2013, a new Chairman and Deputy Chairman of the Grodno City Executive Committee were appointed, and the new public officials required additional time to familiarize themselves with the Project before making any key decisions. Subsequent changes were also made to some of the key staff who had been involved in the Project design and implementation in Grodno, the second change of key positions within 12 months. The new officials and staff lacked familiarity with the analytical review and input studies conducted during the design phase, which led to requests from newly appointed officials to re-consider the selected technical option for the MRF that had been approved by the Grodno authorities in February 2012 – i.e., to reassess whether the MRF should eliminate manual waste separation and whether it should be designed to produce refuse derived fuel (RDF), changes that would have required significant revisions to the bidding documents. The MHU, Grodno Authorities and the Bank agreed, as way forward in response to this request, to have a specialized consultant, Design and Supervision Engineering Company (Eptisa), analyze the technical, financial, and economic feasibility of the proposed changes; that analysis determined that the proposed changes wouldn’t be economically viable – and the proposal was dropped. The process of re-investigating RDF functionality added time

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to the implementation schedule.

Another issue was that the Grodno authorities, as the final Project beneficiary, had to file an application to exempt the MRF supplier to be contracted from VAT and custom duties for the imported equipment. This process, which could only be initiated once the specific equipment was known, required issuance of a special Presidential decree on VAT and custom duties to grant the exemption.

The changes in local decision-makers created urgency for the PCT to become more proactive in improving coordination and communication among stakeholders, increasing frequency of visits to Grodno and setting regular technical briefings.

Performance was consistently high throughout implementation of the POPs component with planned activities completed by the originally planned closing date of 30 September 2013. Implementation efficiency can be attributed to several factors as summarized below:

• Strong country commitment to project objectives and more generally to the issue of POPs and hazardous waste management as demonstrated by high-level, NIP Action Plan approval and cross-sectoral budgetary allocations in five-year plans;

• Thorough project preparation and a consultative process that took advantage of the momentum created by the development and approval of the NIP and that adequately anticipated potential implementation risks as embedded in the project design;

• Steadfast attention to working out implementation details in the preparation period, including implementation arrangements, procurement planning, the operational procedures, and terms of reference, which allowed MNREP and the project implementation unit to “hit the ground running” as soon as the project became effective;

• Straightforward project components with clearly defined activities that made use of key local and national stakeholders for implementation, monitoring and reporting; and

• Continuity in personnel within MNREP, the project implementation unit (PIU) and the World Bank from early preparation stages through project completion.

Some implementation bottlenecks in the POP component were

1. Delays in priority POPs pesticide excavation and destruction at the Slonim site where works are very season specific. Although the works did extend to the following year, all POPs pesticide wastes were thoroughly and safely removed and fully accounted for, while a country-tailored protocol based on real experience was established for future works at other sites.

2. Identification of additional POPs pesticide waste. By October 2011, it was discovered through the excavation at the Slonim site that there was more POPs pesticide waste to be handled and destroyed with evidence of contamination of other obsolete pesticides and surrounding soil due to rupture of containers and leakage of the pesticides in the largest cell of four that had been buried nearly 40 years. Government funding was secured for the additional volumes.

With the emphasis on due diligence, ensuring that all POPs waste recovered at the priority site was destroyed, some project activities were not funded by the grant as planned nor fully

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developed due to PIU capacity limits. This included creation of a national POPs contaminated site inventory, health monitoring and defining a long-term elimination program with expansion of release estimates for the third major group of POPs, those unintentionally produced (primarily dioxins and furans). While these activities would have certainly enhanced project benefits, they did not detract from the component’s achievement toward project objectives and related outcome indicators. In addition, other activities were found to be no longer needed during implementation, for example clean-up of contamination from movement of PCBs destined for destruction because of no contamination occurring.

Factors subject to World Bank control: The World Bank committed the adequate resources to prepare and supervise the Project properly and the loan amount was substantial and sufficient in order to facilitate the changes to SWM approach in Grodno that the Government and World Bank had agreed upon. The GEF amount was sufficient to leverage Government resources on the POP NIP.

While there were two changes in TTLship during the course of the Project, continuity was not significantly affected. The Bank staff assigned to supervision were experienced and many were retained for much of the Project period. Factors outside control of Government: The city of Grodno experienced an unanticipated uptick in scavenging of glass and paper recyclables. After new source separation containers were placed around the city, 117% more glass and 86% more paper was deposited (in exchange for payment) at glass and paper recycling facilities. As glass is heavy, the reduction of amount of glass processed by the MRF affected measurements of percentage of waste recycled by weight, as well as of volume of waste deferred from landfills by MRF. This issue of scavenging glass is not uncommon, though in the EU new member states, and has been observed in Bulgaria and Croatia, for example.

V. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME

A. QUALITY OF MONITORING AND EVALUATION (M&E)

M&E Design The Project’s design was aligned with its development objectives. As in other aspects, this Project benefitted from experiences gained in other SWM projects as well as from the extent of the WB dialogue with Belarus about the SWM sector and environmental issues faced by the country. The design of the M&E system reflected such knowledge, such as inclusion of targets for awareness and participation by the population in the recycling program.

M&E Implementation The Government understood the importance of monitoring results on the Project. The M&E was generally well implemented. Results under the POPs Component were monitored regularly by the Ministry of Nature Resources and Environmental Protection (MNREP), and progress was satisfactory.

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Since the public awareness campaign to promote recycling and source separation started prior to the completion of the MRF construction, Grodno was able to collect data to monitor the related intermediate outcome indicators: (i) percent of population aware of Grodno's source separation program; and (ii) percent of population participating in Grodno's source separation program.

The public communication campaign carried out under the Project included more than 400 community meetings, TV and other media information programs, theater performances in all schools and children’s summer camps. Grodno authorities have indicated that they intend to continue the communication campaign on a permanent basis with a special focus on schools and educational facilities.

In 2017, near the time of the Project closing, Grodno University conducted a study to ascertain the awareness of Grodno residents regarding separate waste collection, recycling and environmental benefits of the source separation program. At that time, 85% of respondents indicated that they are aware of the separate waste collection and recycling system; 50% stated that they do not need further information and the remaining half expressed interest in receiving further information about the separate collection system. Public support seems to be growing, as 68% believed that separate collection is beneficial.

Because certain results (i.e., tons of waste not buried at landfill due to the new facility) would be available only after commencement of recycling operations, the almost two-year delay in construction and commencement of operations of the MRF meant that progress on MRF-related results indicators could not be monitored during the project period until after the MRF was up and running.

M&E Utilization The M&E system was utilized for monitoring implementation progress. Tools such as the Mid-term review and Implementation and Status Results (ISRs) reports were useful and candidly tracked implementation issues and progress. With project funding, a data registry and information management system for POPs data tracking and reporting was developed. Procedures for maintenance and reporting in the database were formalized through an MNREP regulation which gave PIU the confidence that data it has on a) the existing amount of POPs versus more generally OPs, and b) POPs and POPs waste secured from the numerous sites and locations across Belarus are accurate. Additionally, sound POPs and chemicals management requires the use of environmental and health indicators in combination with standards. Subcomponent 2 provided for expansion of POPs monitoring and analytical capacity. This capacity was also required for the project to test throughout the process of excavating, packaging and transporting POPs and to determine afterwards whether the level of contamination of the sites was at the agreed acceptable level (not more than 50 ppm per the interim low POPs limit adopted by the Convention for POPs pesticides).

Justification of Overall Rating of Quality of M&E The quality of the design and implementation of the M&E was adequate to track progress and challenges, and is rated Substantial.

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B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE

Environmental Compliance. The Project was classified as Category A and environmental risk was deemed Substantial, mainly due to the POPs stockpile management Component (Component 3), related to potential temporary unintended release of POPs into the environment during proposed activities to relocate and store POPs. The environmental risks associated with the construction of a recycling facility at an existing landfill site were considered – and proved to be -- standard and limited. Environmental Assessment (EA) was carried out. An Environmental Management Plan (EMP) detailed the mitigation plans during construction of the MRF, and highlighted personnel safety during operations. The EA detailed risks and mitigation plans. MNREP, the agency responsible for national environmental issues, served as the focal point for POPs handling under this Project and the Stockholm convention. The project remained compliant with the OP/BP 4.01 throughout implementation. Social Compliance. The Project did not trigger safeguards policies beyond OP/BP 4.01. Consultations were carried out with Grodno population as part of the preparation of the EA and EMP for the facility. During implementation, people, assets and livelihoods were not affected. The land where the MRF was constructed was public, within the perimeter of the landfill facility located immediately adjacent to it, and unused by any individuals. Financial Management (FM) was Satisfactory through the Project implementation, with appropriate control measures in place. The Task team included FM Specialist who regularly carried out financial management implementation support missions to review project accounting and reporting, organization and staffing, internal control procedures, planning budgets, funds flow and disbursement. Quarterly interim unaudited financial reports were submitted to the Bank for review within the agree time frame and there were no inconsistencies for follow up. The FM Specialist confirmed, throughout, that accounting, reporting, staffing, and internal controls of the PCT were Satisfactory. Interim un-audited Financial Reports (IFRs) were submitted on time. The audit company, FBK-Bel, issued unqualified audit opinions on the project financial statements. Procurement Performance was carried out in accordance with the Bank policy, and is rated Moderately Satisfactory due to the challenges described above in successfully completing bidding process for the MRF.

C. BANK PERFORMANCE

Quality at Entry

Quality at Entry. Due to its ongoing dialogue with Belarus about solid waste management and environmental management issues generally, and extensive experience in the region with

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comparable Projects, the Bank was able to ensure a robust quality at entry. The PDO was consistent with the Government’s strategy and policy priorities regarding SWM and promoting environmental health. All the Project components complemented each other to promote the target outcomes. The appraisal was thorough and paid close attention to the relevant technical, economic, institutional, fiduciary, social and environmental aspects. Risk assessment was appropriate, as were the proposed mitigation measures. As noted above, however, the design didn’t include still-necessary interventions to promote broader regulatory reforms – which would be necessary to ensure sustainability of the Government’s and Project’s objectives to reduce the percentage of landfilled waste and to capture recyclables.

Quality of Supervision The Bank team was focused on supporting the PIU, as well as the relevant central, Oblast and municipal Government entities throughout Project implementation. Bank supervision input was adequate, with typically two supervision missions each year. Performance reporting was candid, as problems and issues were identified and recorded in the ISRs and Aide Memoires, which were shared with the Government. The Bank closely supervised and monitored Component III with biannual missions, regular fiduciary and safeguard reviews and technical inputs; putting a strong emphasis on responsiveness, monitoring indicators and expeditious project implementation to meet POPs critical disposal milestones. Continuity in the core team from the enabling activity to concept through project implementation contributed to a productive working relationship with the counterpart and efficiency in supervision. In early stages, recognizing the MRF’s – and Project’s - dependence on percentage of public participation and quality of source separation, the Bank paid special attention to encouraging Grodno officials to develop a realistic business plan for the MRF. The Bank team made particular efforts to remind the Government of importance of investing in the public awareness of why and how to recycle, given that the required behavior changes typically are get phased in gradually. The team also made strenuous efforts to encourage the Government to be more proactive about communications (among themselves as well as to the Bank) and to make Project-related decisions in a more timely manner, as the PMU at various times struggled to push through obstacles and questions that emerged over the course of implementation. Although delayed in its installation, the MRF is now fully operational. Bank sectoral and technical specialists and field staff played an important role in providing robust and timely support to the Government in this complex project.

Justification of Overall Rating of Bank Performance Based on the Bank’s performance in ensuring ‘Quality at Entry’ and ‘Quality of Supervision,’ the overall rating for Bank performance is Satisfactory.

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D. RISK TO DEVELOPMENT OUTCOME

Rating: Modest Given that the MRF is dependent on the quality and volume of separated waste that are its inputs, ongoing (high) level of public participation is required for the plant’s sustainability. To mitigate that risk, Grodno authorities have indicated that their public communication campaign will continue indefinitely, with a special focus on schools and educational facilities.

The plant’s financial viability is at risk from potential changes in prices for recyclables as well as from tariffs set at below cost recovery levels. While the UE managing the MRF and the UE managing waste collection will likely improve efficiency of their respective operations through proactive and data-informed management, the Government would need to follow through on its plan to raise tariffs and/or to maintain some subsidy of the integrated SWM system to ensure continued quality of services. Also, a decrease in market prices paid for recycled glass, paper and other recycled materials would affect the financial viability of the MRF; to help mitigate potential impact on financial sustainability, the MRF would need to get more efficient in terms of lowering its cost of operations and raising the volume of recycled material its able to capture and sell per ton. The plant’s sustainability is also sensitive to the country’s dynamic sector environment. The MRF’s financial viability is sensitive to reduced flows, and flows have been less than initially projected because of two factors, in particular: Scavenging of glass did not occur in any meaningful volume at time of project design, likely because pre-separated waste containers did not exist and the city had not yet started promoting waste separation. As the city invested in waste separation containers and made containers easily accessible, however, recyclable glass suddenly became easier and more attractive to scavenge; as such, less glass flowed to the MRF. Secondly, Belarus had not yet envisioned, much less implemented, its Extended Producer Responsibility (EPR) scheme at the time of project design. While EPR is an excellent tool for crowding in additional financing to help cover the cost of waste management and for promoting a more equitable, usage-linked approach to costs of recycling, EPR also contributed to a decrease in volume of waste flowing to the MRF. The EPR system incentivizes commercial businesses to direct their pre-sorted waste towards commercial recycling companies, so that the recyclables can be ‘counted’ against businesses’ EPR mandated targets. The above risks are not unusual for a newly established and gradually maturing waste separation at source and MRF systems as shown repeatedly by international practice. Sustainability is impacted mostly by governmental policy efforts to encourage recycling and reduce landfilling. The National Solid Waste Strategy of Belarus adopted in 2017 envisages gradual reduction in landfilling along with corresponding measures to encourage recycling, reuse and recovery of waste. Both investments as well as economic and regulatory instruments are envisaged to support the shift from a disposal to a reuse/recycling/recovery culture seen in the rest of Europe. More plants like the one in Grodno are envisaged along with recovery efforts to produce waste-based fuels and increase diversion rates from disposal. The medium and long term sustainability of the separate collection program and MRF in Grodno are therefore assessed as modest.

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The Project’s Global Environmental Outcomes are likely sustainable. The destruction of the large amount of POPs pesticide and PCB waste is irreversible. Environmental and health risks posed by the presence or release of 2616 tons of POPs and POPs waste have been permanently eliminated. Further, the Government made strategic, regulatory and budgetary commitments to overall POPs management and SC implementation. Strengthened national capacity to manage hazardous wastes has been demonstrated through project outputs and significant counterpart expenditures.

VI. LESSONS AND RECOMMENDATIONS

The process of upstream analysis and formulation of a sector-wide strategy creates the foundation for successful Project execution. Positive Project outcomes, facilitated as much by the GEF grant as they were by the significant counterpart funding for POPs Component, illustrate the role that “enabling” work has on efficient and effective project implementation. Due to the process of developing and approving the NIP by the time the Project preparation started, the stakeholders had been fully identified, a coordination mechanism established, baseline information collected, a gap analysis done and basic policies were in place. Sometimes, when the latest, ‘shiniest’ technology distracts decision-makers from recognizing more cost-effective and context-appropriate solutions, the World Bank team can add significant value by helping the government sift through options and make an appropriate selection. One of the factors contributing to a delay in finalizing construction of the planned materials recycling facility is that local decision-makers decided to re-open options, including the idea of refused-derived fuel (RDF) technology. The World Bank technical team helped educate the decision-makers about the cost-benefit considerations of the options, and supported the government in selecting a cost-effective approach most appropriate to the local context. The appropriateness of the technology selected has been borne out by the fact that, despite lower volumes (due to uptick in glass scavenging, effect of the EPR scheme), the Project has still achieved breakeven. If a more complex, expensive technology had been selected, the project would not be financially sustainable.

‘Sensitizing the market’ may be necessary to anticipate and assuage international investors’ and contractors’ perceptions of country- and/or sector-specific risks. An investigation of why international equipment suppliers did not respond to the first bidding process to construct and supply the MRF in Belarus revealed that international firms had no prior experience doing business in Belarus, and did not feel comfortable responding to a government tender for goods due to lack of certainty about institutional capacity, regulatory framework and local market dynamics. A lesson is that, in countries with limited private sector investment into the sector, project teams should anticipate potential concerns and proactively reach out to potential bidders. The dynamic nature of a country’s sector environment should be taken into account when making projections of a Project’s sustainability. The MRF is sensitive to potential for reduced flows. Two unanticipated factors contributed to lower flows: Scavenging of glass did not occur in any meaningful volume at the time of project design, likely because pre-separated waste containers did not exist and the city had not yet started promoting waste separation. As the

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city invested in waste separation containers and made containers easily accessible, suddenly recyclable glass became easy and attractive to scavenge; as such, less glass flowed to the MRF. Secondly, Belarus had not yet envisioned, much less implemented, its Extended Producer Responsibility (EPR) scheme at the time of project design. While EPR is an excellent tool for crowding in additional financing to help cover the cost of waste management and for promoting a more equitable, user-linked approach to costs of recycling, EPR also contributed to a decrease in volume of waste flowing to the MRF. The EPR system incentivized commercial businesses to direct their pre-sorted waste towards recycling companies, so that the recyclables can be ‘counted’ against businesses’ EPR mandated targets.

Investing in a waste separation system, even without a municipal recycling facility, can generate some positive social impact. The Project observed that recyclables are extracted by scavengers from the Project’s waste separation containers placed at multi-family residential buildings all over the city and channeled to recycling “buy-back” centers and from there to the recycling industry. This private initiative was made possible by the project by placing separate containers around Grodno and closing high-rise building chutes. Future projects may explore whether cities in lower income areas would consider developing a similar waste separation system but without investing in an MRF; such an approach would result in a higher economic return from the public investment and likely stimulate private initiative among the poorest segments of the population. Such an approach, of course, would need to be considered not just in terms of economic return on public investment, but also in terms of social safeguards, public health and public safety. Stakeholder commitment at all levels amplifies the Project impact and sustained outcomes. Likely project success was bolstered early on when the President of the Republic endorsed the National Implementation Plan (NIP). Blending the GEF grant with a Bank loan gave the Project an additional boost with presidential backing and ensured co-financing for unanticipated expenses could be quickly mobilized. With the regulatory and budgetary underpinning, the PIU was able to effectively navigate between national ministries and agencies to garner support and concrete commitments. The POPs issue also resonated well with community stakeholders primarily because of the legacy of the greatest environmental disaster of the region, Chernobyl. This permitted the PMU to establish a relationship of trust and mutual support with the local population. Necessity of ongoing and multi-channel public outreach and information campaigns to promote participation in recycling. Since the viability of the MRF is dependent on the quality of inputs, this project was and is dependent on the participation by high percentage of residents and businesses in waste separation at source. The government deployed various approaches for getting its message out about the benefits of recycling, and how the new program work (in terms of closing trash chutes in residential buildings). The government also smartly targeted its marketing to audiences more likely to be receptive (e.g., schools and educational institutions). Relatedly, changing people’s habits (and households’ waste disposal behavior) takes time. Early engagement of the population through communication campaigns improves performance. Public campaigns on the benefits as well as mechanics of separation of source should not be viewed as a one-time event but be carried out permanently. As such, for future projects with similar integrated approach to SWM upgrades, the project design should plan on starting project-specific marketing activities at least 12 months in advance of when the actual

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changes in behavior would be required. A city-specific, stand-alone Project can still be a highly effective way to open meaningful sector dialogue, including about reforms – dialogue that likely would not have occurred otherwise. This Project, in demonstrating in real-time the opportunities and challenges within the sector, created a platform to advance policy and reform discussions (including about tariffs, subsidies) with the Government. Most of these lessons learned are applicable beyond Belarus, to SWM projects generally, and particularly to comparable projects implemented in ECA. .

The World Bank Integrated Solid Waste Management Project (P114515)

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ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS

A. RESULTS INDICATORS A.1 PDO Indicators

Indicator Name Unit of Measure

Baseline Original Target Formally Revised

Target

Actual Achieved at Completion

Compliance with Stockholm Convention

Text Compliant Compliant Compliant Compliant

16-Nov-2009 17-Jun-2010 30-Sep-2013 30-Apr-2018

Comments (achievements against targets): Belarus maintained its obligations under the Stockholm Convention on POPs.



Target


Valuable material sold by the new facility to users (tons)

Tones/year 0.00 10000.00 10000.00 3585.00

16-Nov-2009 17-Jun-2010 30-Jun-2017 30-Apr-2018

Comments (achievements against targets): Reported strictly, the target is achieved at 36%. However, if glass and paper deposited by households in the glass and paper containers but ‘collected’ from these containers by scavengers is added, the target is achieved at 95% (9,500 tons). As such, around one third has been achieved by the public and two third by private initiative made possible by the Project. N.B: People (scavengers) have been taking glass and paper from the new separated source containers and taking them (in return for payment) to glass


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and paper recycling facilities.



Target


Reduced exposure of population to POPs Waste

Number 0.00 100000.00 100000.00 127360.00

16-Nov-2009 17-Jun-2010 30-Sep-2013 30-Apr-2018

Comments (achievements against targets): The Project exceeded its target by 27% for reducing the number of persons in proximity of POPs pesticides.



Target


Tons of waste that will not be buried in the landfill due to the new facility

Tones/year 0.00 20000.00 20000.00 23632.00

16-Nov-2009 17-Jun-2010 30-Jun-2017 30-Apr-2018

Comments (achievements against targets): Achieved target >100%. This data was collected by truck scale measurements at the MRF. This ‘actual’ number incorporates recyclable materials extracted by the MRF, including plastic, paper, glass, wood, bulky items, C&D waste, glass collected by individuals from glass containers, and paper collected by individuals from paper recycling containers.



Target


Industrial or municipal solid Tones/year 0.00 0.00 20000.00 23632.00


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waste reduced or recycled under the project

16-Nov-2009 17-Jun-2010 30-Jun-2017 30-Apr-2018

Comments (achievements against targets): Achieved target >100%. This data was collected by truck scale measurements at the MRF. This ‘actual’ number incorporates recyclable materials extracted by the MRF, including plastic, paper, glass, wood, bulky items, C&D waste, glass collected by individuals from glass containers, and paper collected by individuals from paper recycling containers. NB. This is a repeat of the above indicator, as it is an alternate way of describing the volume of waste that will not be buried in the landfill due to the new recycling facility.



Target


POPs&pops waste destroyed,disposed or contained in environmentally sound manner

Metric ton 0.00 5751.00 5751.00 8340.00

16-Nov-2009 17-Jun-2010 30-Sep-2013 30-Apr-2018

Comments (achievements against targets): The Project exceeded its target by 73% for reducing POPs waste.



Target


Environmentally sound disposal of priority POPs stockpiles

Metric ton 0.00 1800.00 1800.00 2926.00

16-Nov-2009 17-Jun-2010 30-Sep-2013 30-Apr-2018

Comments (achievements against targets): The Project exceeded its target by >60%.


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A.2 Intermediate Results Indicators

Component: Component 2: Increased knowledge about Grodno's Solid Waste Recycling Program



Target


Percent of population aware of Grodno's solid waste separation program

Percentage 37.00 80.00 80.00 76.00

16-Nov-2009 17-Jun-2010 30-Jun-2017 30-Apr-2018

Comments (achievements against targets): Reached target. A baseline survey was conducted to establish awareness; a subsequent survey was conducted by Grodno University in May 2017, the Project’s final year.

Component: Component 2: Increased participation in Grodno's Solid Waste Recycling Program



Target


Percent of population participating in Grodno's source separation program

Percentage 16.00 80.00 80.00 33.00

16-Nov-2009 17-Jun-2010 30-Jun-2017 30-Apr-2018

Comments (achievements against targets): This target was exceeded for commercial entities, with percent participation for households expected to improve over time, as public awareness of - and convenience of - source separation improves. Since a citywide source separation system was put in place only as of mid-2017, the percentage of households participating will grow with time, as households become increasingly accustomed to the new system.

Component: Component 1: Mechanical Waste Separation Treatment Facility efficient and sustainable


Baseline Original Target Formally Revised Actual Achieved at Completion


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Target

Operating Ratio of MWSTF Percentage 0.00 1.00 1.00 1.14

16-Nov-2009 17-Jun-2010 30-Jun-2017 30-Apr-2018

Comments (achievements against targets): Target surpassed. The ratio was calculated as revenues over costs, including government subsidies.



Target


Mechanical waste separation facility operaitonal

Text No Yes Yes Yes

16-Nov-2009 17-Jun-2010 30-Jun-2017 30-Apr-2018

Comments (achievements against targets): Target achieved.

Component: Component 2: Increased coverage of solid waste separation in the City of Grodno



Target


% of recycling effort coverage of the city of Grodno

Percentage 40.00 80.00 80.00 100.00

16-Nov-2009 17-Jun-2010 30-Jun-2017 30-Apr-2018

Comments (achievements against targets): The expansion and upgrades to the city’s waste separation and collection program enabled the Project to reach 100% coverage, exceeding the original target of 80%.



Target



40

Tons of separated waste collected

Percentage 0.00 14000.00 14000.00 14306.00

16-Nov-2009 17-Jun-2010 30-Jun-2017 30-Apr-2018

Comments (achievements against targets): Project met target.

Unlinked Indicators



Target


Percent of waste recycled by weight

Percentage 5.00 30.00 30.00 30.00

16-Nov-2009 17-Jun-2010 30-Jun-2017 30-Apr-2018

Comments (achievements against targets): The percentage was calculated as tons of waste not landfilled divided by total waste entering MRF.



Target


Amounts of POPs pesticides recovered, packaged in storage or destroyed

Text 0.00 4486 4486 7068

16-Nov-2009 17-Jun-2010 30-Dec-2016 30-Apr-2018

Comments (achievements against targets): Baseline was equivalent to 3,472 tons of POPs pesticides in unsecured storage or burial sites and 892 tons of priority obsoleted pesticides in Slonim and 43 tons in Lida, and including 450 tons of DDT. Due to the substantially larger quantity of POPs pesticide wastes extracted from Slonim landfill (and 7 tons more at Lida), the end target was exceeded by 37%.



Target



41

Amounts of Priority PCBs destroyed

Number 0.00 816.00 816.00 823.00

17-Nov-2009 17-Jun-2010 30-Dec-2016 30-Apr-2018

Comments (achievements against targets): No disposal had been undertaken at baseline. An additional 7 tons of PCB waste was destroyed slightly exceeding the target. Final 823 tons destroyed represents 17% of the total amount of PCBs in Belarus eliminated including that remaining in service.



Target


Plans and inventories established, laboratories upgraded

Text No long-term plan for PCB phase out. Baseline inventory of PCB equipment

Updated PCB inventory

Full implementation of current PCB regulations

5 expert trainers trained in POPs monitoring.

Environmental/health labs upgraded

Draft long-term plan

Updated PCB inventory

Full implementation of current PCB regulations

5 expert trainers trained in POPs monitoring.

Environmental/health labs upgraded

Draft long-term plan

Long-term PCB phase-out plan developed and approved by the Government

16-Nov-2009 17-Jun-2010 30-Dec-2016 30-Apr-2018

Comments (achievements against targets): Long-term PCB phase-out plan developed and approved by the Government. Plans and inventories established and laboratories upgraded using Government co-financing as had been planned. At ICR, achievement of overall Project Indicator 3 is approximately at 90% with almost all intermediate targets achieved including (in addition to PCB plan and lab upgrading): full implementation of current PCB regulations; PCB inventory updated; local experts trained in POPs monitoring, and 21 contaminated sites assessed (vs. 5). Only two targets were not


42

fully achieved: source specific inventory of unintended releases was partially done for 39 largest enterprises; and investment options for mitigation of unintended POPs releases were not defined.



Target


New and amended regulatory documents

Text Gaps in national legislation for control of POPs. Lack of consistency and coordination for POPs related information

5 educational events, publications, and web postings.

Updated POPs Environmental and Health Standards.

Updated NIP for 2011-2015.

10 educational/events, publications and web postings.

5 educational events, publications, and web postings.

Updated POPs Environmental and Health Standards.

Updated NIP for 2011-2015.

10 educational/events, publications and web postings.

MNREP has developed: i) a regulation on maintenance procedures of the Uniform Database on POPs; and ii) Resolution No. 19-T of December 26, 2012, Technical Code of Common Practice (TCP) 17.11-06-2 012 (02120) “Environmental protection and nature management. Rules of inventorying POPs added to the Stockholm Convention on POPs.”

16-Nov-2009 17-Jun-2010 30-Dec-2016 30-Apr-2018

Comments (achievements against targets): Ten educational events were held (workshops, round table discussions and public hearings). National POPs management web-site was updated <www.popsbelarus.by>. Three methodologies of POPs analysis in breast milk and foodstuffs were revised and updated. There were regular publications in republican and Grodno oblast and Slonim newspapers, web postings, 2 TV news reports on elimination of the


43

Slonim OP landfill. Indicator was mostly achieved with all intermediate targets met or surpassed. However, for one target, instead of updating environmental and health standards per se, methodologies for analysis were updated. In addition, the NIP was not updated during the project because 1) of 2010 and 2012 amendments to the Stockholm Convention which broadened the scope of POPs and 2) of plans for requesting additional GEF support to complete this work taking into account the amendments at one time.


44

KEY OUTPUTS BY COMPONENT

Project Development Outcome 1: To increase environmental benefits of integrated solid waste management in the City of Grodno through recovery and reuse of recyclable materials.

Outcome Indicators 1. Reduce waste volumes for landfill disposal 2. Reuse valuable materials recycled efficiently

Intermediate Results Indicators

1. % of recycling coverage of the city of Grodno 2. Tons of separated waste collected 3. % of population aware of Grodno's solid waste separation program 4. % of population participating in Grodno's source separation program 5. % of waste recycled by weight 6. Operating Ratio of MWSTF 7. Mechanical waste separation facility operational

Key Outputs by Component (linked to the achievement of the Objective/Outcome 1)

Components 1 and 2: 1. 3585 tons of valuable material sold by the new recycling facility to users 2. 23632 tons of waste that not buried in the landfill due to the new facility (and additional diverted waste with each subsequent year of MRF operation) 3. Informational Campaign 4. 843 Container Yards 5. Sociological Survey 6. Medical Waste Incinerator and Trucks 7. Production Line for Plastic Pallets 8. 80 units of Utility Equipment 9. 9,095 metal eurocontainers, of which 4,457 for the collection of secondary material resources.


45

10. 22,856 plastic container volume 0.24 cubic meters for the collection of mixed waste and recyclables in the private sector. 11. 219 metal containers of 8 cubic meters for collecting bulky waste. 12. 2 machines for cleaning containers that allow them to keep on container areas of the city in a satisfactory technical and sanitary condition, thereby preventing the spread of odors

Project Development Outcome 2: To strengthen national capacity to manage hazardous wastes associated with POPs

Outcome Indicators

1. Compliance with Stockholm Convention 2. Reduced exposure of population to POPs 3. POPs and POPs waste destroyed, disposed or contained in environmentally sound manner

Intermediate Results Indicators

1. Amounts of POPs pesticides recovered, packaged in storage or destroyed 2. Amounts of Priority PCBs destroyed 3. Plans and inventories established, laboratories upgraded 4. New and amended regulatory documents

Key Outputs by Component (linked to the achievement of the Objective/Outcome 2)

Component 3:

• 80% of Belarus’ estimated stocks of POPs obsolete pesticides and associated wastes have been eliminated from the country (and the globe)

• Obsolete burial sites have been consolidated to 5 from 7 with successful excavation and remediation of the Slonim burial site (including site prepared for re-vegetation with a cover layer of new soil and custody returned to the forestry authorities), which accounted for more than 45% of buried obsolete pesticides in the country; and with closure and clean-up of a site in Brest with Government funding.

• 21 PCB contaminated sites assessed, PCB inventory updated, and a national PCB management plan in place that specifies targets by


46

sector for phased replacement and elimination of in-service equipment by the Stockholm Convention deadline

• Environmentally sound disposal of 2926 tons of POPs Stockpiles and Waste. All identified obsolete pesticide (OP) stockpiles in Belarus were inventoried and a national program developed to address deficiencies in this storage using GEF-funded local consulting resources

• Environmentally sound disposal of 8340 tons of POPs pesticide waste, including waste from the Slonim site and Lida Storehouse


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ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION

A. TASK TEAM MEMBERS

Name Role

Preparation

Alexander Sharabaroff Associate Operations Officer

Allan Rotman Lead Procurement Specialist

Anarkan Akerova Counsel

Anna L. Wielogorska Senior Procurement Specialist

Daniel A. Hoornweg Consultant

Elena Klochan Sr. Country Program Officer

Frank Van Woerden Senior Environmental Engineer

Hannah M. Koilpillai Senior Finance Officer

Irina Babich Finanical Management Specialist

Leo R. Larochelle Senior SWM Consultant

Maha J. Armaly Senior Urban Finance Specialist

Maria L. Amelina Senior Social Development Specialist

Maria Teresa R. Lim Program Assistant

Milane De Jesus Reyes Program Assistant

Richard J. Cooke Consultant

Ruxandra Maria Floroiu Senior Enviromental Engineer

Sandra Cointreau Consultant

Supervision/ICR

Kremena M. Ionkova Task Team Leader(s)

Barbara Ziolkowska Procurement Specialist(s)

Irina Babich Financial Management Specialist

Frank Van Woerden Team Member

Elena Klochan Team Member

Arcadii Capcelea Environmental Safeguards Specialist


48

Aimonchok Tashieva Social Safeguards Specialist

Valerie Joy Santos ICR Team Lead

Anna I. Gueorguieva ICR Economic and Financial Analysis

Delphine Alberta Hamilton Senior Program Assistant

B. STAFF TIME AND COST

Stage of Project Cycle Staff Time and Cost

No. of staff weeks US$ (including travel and consultant costs)

Preparation

FY09 18.255 145,523.45

FY10 28.893 164,954.94

FY11 0 528.88

Total 47.15 311,007.27

Supervision/ICR

FY11 15.932 90,687.96

FY12 18.222 80,898.21

FY13 13.514 92,362.60

FY14 15.127 86,000.78

FY15 15.872 83,619.94

FY16 15.475 98,239.13

FY17 14.917 96,417.97

Total 109.06 628,226.59


49

ANNEX 3. PROJECT COST BY COMPONENT

Components Amount at Approval

(US$M) Actual at Project

Closing (US$M) Percentage of Approval

(US$M)

Mechanical Materials Recovery Facility

37.00 37.00 100

Waste Separation Management Improvements

4.00 4.00 100

Persistent Organic Pollutants (POPs) stockpile Management (GEF)

26.68 26.10 102

Project Management 2.65 2.65 100

Total 70.33 69.75 100.80

Belarus POPs Stockpile Management Project (GEF) - P111110

Components Appraisal Estimate

(USD millions)

Actual/Latest Estimate (USD

millions)

Percentage of Appraisal

Sub-component 1: POPs Stockpile and Waste Risk Reduction 23.752 33.199 140

Sub-component 2: Technical Support and Capacity Development 2.049 1.863 91

Sub-component 3: Institutional and Regulatory Strengthening 0.225 0.241 107

Sub-component 4: Project Management 0.650 0.658 101

Total Baseline Cost 26.676 35.961 135

Physical Contingencies 0.00

Price Contingencies 0.00

Total Project Costs 26.676 35.961 135

PPF 0.285 0.261 92

Front-end fee IBRD 0.00 0.00

Total Financing Required 26.961 36.222 134


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ANNEX 4. EFFICIENCY ANALYSIS

Overview

An economic and financial analysis was undertaken for the Project based on the available data and considering the approach at the PAD stage. The analysis covered the construction works of the MRF, the purchase of containers and trucks, the public information campaign and the activities for management of POPs. At appraisal, a cost-benefit analysis was conducted to examine the economic viability of the MRF (Component 1). The economic internal rate of return (EIRR) for the MRF was estimated at 15%, with a Net Present Value (NPV) of BYR 23.5 million (about US$ 8,076 at the exchange rate at the time of the PAD). The average annualized per ton cost of recycling was calculated to be $78, as compared to the $3 per ton cost for landfilling reported in Grodno (which was very low by international standards and did not include costs of closure and mitigation). Revenue per ton of recycled material was estimated at US$68. In addition, to assess public and private willingness to pay (WTP) for the solid waste recycling plant, and the services it would imply, a survey was conducted in July/August 2009 among a random sample of households and corporate entities in served and non-served areas in the City of Grodno. Based on the reported willingness to pay, the EIRR of the project was estimated at 27% and NPV of BYR 18.5 million (about US$ 6,366 at the exchange rate at appraisal). Component 1. Construction of a Material Recycling Facility (MRF): A cost-benefit analysis was undertaken for this ICR to assess the economic viability of the MRF, taking into account construction costs and plant operational costs as well as the benefits in reducing greenhouse gas emissions, sale of recyclables, and avoided landfill costs. The MRF construction cost US$ 4 million less than originally estimated. Since cost savings were achieved in Component 1, those savings were reallocated to Component 2 and used to expand purchase of containers and trucks. Component 2. Waste Separation Management Improvements: Investments under this Component included purchase of 9,000 source separation (recycling) containers, 54 waste trucks and a public information campaign. The containers and the trucks, purchased for about US$8 million, are an important part of the integrated waste management and contribute directly to an improved separation at source and collection. The revenues and operating costs of collecting trash and recyclables in these containers and trucks by Transport Hazajstvo are included in the cost-benefit analysis. The costs of the public informational campaign of about US$ 100K were reflected in the economic costs for the MRF as the campaign resulted in better source separation and higher quality materials, thus increasing the economic benefits from the MRF operation. Component 3. Persistent Organic Pollutants (POPs) Stockpile Management: The EFA for this component was completed in May 2014 for the intermediate ICR conducted for the GEF grant. It utilized two approaches – first, incremental reasoning at baseline and completion, and second, cost-effectiveness analysis. These two approaches found that incremental costs and benefits at completion were better than at baseline and that the ending cost-effectiveness was higher than planned. The incremental cost method takes the difference between "business-as-usual" scenario outcomes without project and the incremental benefits and costs with project. The POP component was found to be efficient because it leveraged a substantially higher amount of co-financing than anticipated at appraisal and because the cost per ton of POP destroyed at completion was lower than the cost estimate at appraisal. The project


51

mobilized US$9.29 million more in counterpart funding than originally committed at baseline. The average cost-effectiveness value of collecting, transporting and destroying the material was $1,545/ton instead of the estimated value of $2,201/ton at appraisal. Since Component 3 was evaluated at the intermediate ICR stage, this economic analysis focused on Components 1 and 2 but the overall assessment draws on the findings for all components Economic Analysis for the Integrated Waste Management System Costs: The costs considered in the analysis include the construction costs of the plant, the operational costs for the MRF plant including labor, the purchase of the recycling containers and trucks and the public information campaign costs.

Table 2 Investment, Operation and Maintenance Costs and Public Information Campaign Costs, in Million US$

Investment Costs

Construction MRF

Investment Costs Recycling Containers and

Trucks

Annual operation and maintenance

costs MRF

Public Information Campaign

32.510 8.3 1.911 .1

Benefits: The benefits considered were the revenues from the sale of recyclable, the government stimulus for recyclables, the avoided costs of landfilling of the recycled or composted materials, and the benefits related to the reduction in greenhouse gas emissions. The social cost of carbon of US$37/tCO2 with a discount rate of 2.25% was applied based on the most recent World Bank guidance12. The avoided costs of landfilling were calculated by taking the amount of waste diverted from the landfill multiplied by the average costs for the wider region of landfilling of US$45. The Transport Hazajstvo reported a modest net benefit of the operation of the waste trucks and containers of about US$ 4 per ton of waste for 2018. We take the net present value of these future benefit flows.

Table 3. Benefit Analysis for the MRF Investments.

Item Basis Grodno 2017

Revenues from sale of recyclables

Average tariff and subsidy for mixed recyclables based on plant

data13 in 2017

US$ 171/ton of recyclables

10Non-discounted sum of all consulting, architectural, Public works, Mechanical equipment, Mobile equipment. 11 Estimated by MRF based on 2017 data, transport hazajstvo operating costs and amortization excluded 12 World Bank. 2017. Guidance note on shadow price of carbon in economic analysis. http://pubdocs.worldbank.org/en/911381516303509498/2017-Shadow-Price-of-Carbon-Guidance-Note-FINAL-CLEARED.pdf 13 Weighted average per ton of recyclables = total revenues and subsidies divided by total tons of recyclables


52

Avoided costs of landfilling

Cost per ton based on regional averages14

US$ 45/ton of waste

Reduction in GHG emissions

Using the MRF recycling mix and the US EPA WARM model15

2.0 tCO2e/ton of recyclables

Transport Hazajstvo

Average estimated difference in revenue and cost per ton of

transported waste in 2018

US$ 4/ton of waste

Source: Author’s calculations using MRF and Transport Hazajstvo provided actuals for 2017 and projections for 2018-2037.

The revenue flow for the MRF consists of five main streams. First is the recycling operation which generates revenues from sale of recyclables and from government stimulus per ton of recyclables. The MRF has long term contract prices in place for its recyclables. The government stimulus per ton of collected recyclables accounted for about 40% of the total revenues from recyclables in 2017. The MRF is paid tariffs per ton of waste processed (stored or sorted). Waste tariffs are expected to bring about half of MRF’s revenues. The fifth source is payments for the medical waste processed that MRF is expecting to start receiving in 2018. According to the contractual arrangements in place, two of the recycling fractions (paper/carton and glass) follow the ‘take or pay’/Extended Producer Responsibility principle. As such, the MRF has managed to sell 65% of the extracted materials. The sale of recyclables is expected to continue to contribute 25% of revenues, with government stimulus per ton of recyclable contributing another 13-15% of revenues. The volume of recyclables collected was lower than anticipated due to scavenging of recyclables directly from source separation containers.

14 World Bank 2012. Estimates for Upper Middle-Income Countries.

15 http://www.stopwaste.org/recycling/greenhouse-gas-reductions-calculator


53

Figure 1. Revenue Streams for the MRF, 2017 actual and 2018-2020 projected, in US$.

Source: Author’s calculations using MRF and Transport Hazajstvo provided actuals for 2017 and projections for 2018-2037 A comparison of the appraisal and completion calculations suggests that the revenue/cost ratio is higher than was expected at appraisal. The actual 2017 revenues and the costs per ton of recyclables in US$ are three and two times respectively the estimates in the PAD. The PAD estimates BYR 3,836 million = US$ 1.3 million in revenues the first year and states that the revenues per ton of recyclables are US$68. The expected tons of recyclables at appraisal was 19,412 tons. At completion, the 2017 yearly estimates of tons of recyclables based on the observed April – December for 2017 is 5,519 tons.

Table 4. Average annualized revenues and costs per ton of recyclables, in US$ Appraisal Completion

Revenue 68 218

Cost 78 192

Revenue/cost ratio 87% 114%

Source: PAD and authors’ calculations using MRF-provided data for 2017 actuals. Projections: Experience worldwide has shown that once recycling programs are established it is an evolutionary process and over time, with the improvement of source segregation, overall recycling volumes and associated plant efficiencies improve. In the case of Grodno, efforts have been and continue to be made, with campaigns and institutional efforts for improvement in participation in source segregation. Grodno already has a high 30% recovery rate of recyclables but this includes bulky waste (krupno gabaritni). If we exclude bulky waste, the recycling rate is about 13%. An analysis of the Belarus household mixed waste found that that the waste stream consists of about 20% recyclables (excluding bulky waste) on average in urban areas. The projections assume that over the next 10 years with

23%24% 23% 23%13%

15% 15% 14%45%

20% 20% 21%19%

33% 34% 35%

0%

8% 8% 8%

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2017 Apr-Dec 2018 2019 2020

recyclables subsidies storage sorting med waste


54

improved source segregation the recycling plants can improve efficiency from 30 to 40% (including bulky waste). This is a conservative projected growth as the mix of recyclables in the waste stream is likely to increase.

Table 5. Basis for the Projections of Performance in the Plant

Facility

Plant operational capacity

Improvement in efficiency of separation of recyclables

Grodno No changes Grew from 30% to 40% from 2018 to 2028

Net Present Value and Results: Applying a 6%16 discount rate for the opportunity cost of capital, the following results were obtained.

Table 6. Economic Net Present Value and Internal Rate of Return for Grodno Separation Plant and Waste Separation Improvements

Activities evaluated NPV (million US$) Economic IRR

Component 1 and 2 $11.8 10%

Component 1 only $18 12%

Source: Author’s calculations using MRF and Transport Hazajstvo provided actuals for 2017 and projections for 2018-2037.

The economic IRR for construction of the MRF and the purchase of containers and trucks is about 10%. The benefits in 2017 were about evenly split between the economic benefits of avoided CO2, of avoided landfilling and revenues from recyclables. In 2018, it is expected that revenues would account about 50% of economic benefits with increased production and will slowly increase with the increase in the recycling rate. The activities at the Transport Hazajstvo are expected to contribute about 7% of future economic benefits. The government stimulus per ton of recyclables contribute about 40 % of the revenues from recyclables. The EIRR for component 1 for the construction of the MRF, which excludes the costs of trucks and containers and the benefits of the Transport Hazajstvo activities, is about 12% and close to the PAD estimate. It is difficult to benchmark these figures to international examples as transport costs and revenues do not accrue to MRF but are handled separately by the Transport Hazajstvo. When compared to other recycling plants in Belarus of similar capacity, Grodno’s operating costs per ton of recyclables is significantly lower suggesting that the plant runs efficiently. There are significant differences between the types of plants compared below and drawing strong conclusions about the efficiency of Grodno is limited. Brest primarily produces gas from food waste and generates electricity. The sorting plant in Mogilev has an additional site for production of plastic pallets.

16 WB note on discount rates for economic analyses


55

Table 7. Comparator recycling plants in Belarus

Operating costs, in 000s BYR

Metric Tons of recyclables,

2017

Cost per ton of recyclables, in 000s

BYR

Cost per ton of recyclables, in

US$

Brest 14,880 5,762 2.58 1317.04

Mogilev 4,105 5,585 0.74 374.85

Grodno 2,076 5,519 0.38 191.84

Source: MRF actuals for 2017. MRF provided information on the Brest and Mogilev plants. Financial Analysis Over the next 20 years, the MRF will cover its operating costs, and the NPV of its profits is estimated at about US$ 23.2 million. However, this will not be sufficient to cover the financial outlay for the plant of US$ 32.5 million. Thus, the financial IRR is about 2% and the financial NPV is negative. Without the government stimulus, the IRR is 0% and the NPV of future profits is US$ 17.1 million.

Sensitivity Analysis The estimates are very sensitive to the price of recyclables and the efficiency of the operations. Significant economic gains disappear if costs are allowed to increase by 5% per year. Similarly, if the recycling rate (the diverted recyclables as percent of the total waste) does not continue to improve, even with some reasonable expectations of tariff and subsidy increases, the IRR is very close to the social discount rate of 6% and results in a small negative net present value. Another scenario analyzed is for the revenues to be adjusted annually by the government with the goal of cost recovery only. In this case, the revenues equal operating costs and the only benefits to be calculated are the positive environmental externalities of avoided GHG and landfilling. The NPV is small and the IRR is close to the social rate of return. The costs of the project are accounted for entirely by the positive environmental externalities.

Table 8. Sensitivity Analysis

Baseline scenario: Recycling rate increases from 30 to 40% US$ / %

NPV $11.8 Million

IRR 10%

Scenario 2: Costs rise at 5% per year, revenues as in baseline scenario

NPV ($3.8 million)

IRR 5%

Scenario 3: No increase in recycling rates, 3% increase in tariffs, 5% increase in costs

NPV ($838,233)

IRR 6%

Scenario 4: Plant revenues equal operating costs each year17

NPV ($379,307)

IRR 6%

17 Since revenues equal costs each year, this scenario estimates the benefit flows of the positive

environmental externalities of avoided GHG and landfilling only.


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Economic benefits and costs not quantified: Some of the benefits that were not quantified include the 210 jobs that were generated and a wider set of environmental positive externalities. Some of the positive environmental externalities not quantified include the pollution avoided by recycling, some materials that are recycled by MRF but whose GHG benefits are not known (e.g. domestic appliances).


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ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS

The Republic of Belarus prioritizes protection of the environment and especially waste management. The City of Grodno, in order to improve its ecological situation, designed a project for the treatment of solid waste, with the goal to minimize the amount of waste disposal to landfill and increase the extraction of recyclables. In order to implement this project, the Government of the Republic of Belarus requested World Bank assistance. The World Bank is the main international organization providing support for the implementation of environmental programs and in the energy sector of Belarus. The City and the Government wanted to take advantage of WB’s international experience in the use of treatment technologies for solid waste and in more sophisticated methods of recycling and secondary utilization of resources. To finance the Integrated Project on Solid Waste Management in the city of Grodno, the Ministry of Finance of the Republic of Belarus signed an investment loan in the amount of 42.51 million US dollars. Legislative Framework and National Strategies To promote waste management, the following laws have been put in place: The legislative framework in this sector consists of the following laws

• January 7, 2012 "On the sanitary-epidemiological welfare of population"

• November 26, 1992 "On Environmental Protection" and on

• July 20, 2007 "On waste management." The National Strategy for the Management of Solid Municipal Waste and Secondary Material Resources” and the State Program "Comfortable accommodation and a favorable environment" for 2016 - 2020 regulate the general principles of management of municipal waste in accordance with the provisions of similar directives of the European Commission and the country's international commitments. The national objectives are:

• one hundred percent coverage of separate collection of municipal waste in large cities and the maximum into the commercial production of secondary raw materials, and

• environmentally safe handling of polluting chemicals and in particular persistent organic pollutants.

Project Activities To improve the existing SWM collection system in the city of Grodno, the following measures were envisioned:

• Closing the refuse chutes in apartment buildings and construction of new container yards;

• Replacement of used metal containers with standard wheel eurocontainers volume of 1.1 cubic meters;

• Providing individual plastic container volume 0.24 cubic meters for the separate collection of municipal waste;

• Introducing modern techniques of high level waste compaction;

• Implementing separate collection using three containers for paper, glass and plastic;

• Constructing a plant for recycling and mechanical sorting of waste.

• Acquiring equipment for the safe handling of medical waste and set up its collection and disposal


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Informational Campaign An important part of the Project was the campaign to inform and raise public awareness. According to international experience, technical solutions for successful implementation of recycling programs depend on community participation. Outreach was conducted by highlighting the topic in the media and organizing meetings with citizens. An advertising campaign on public transport was also carried out which asked citizens to meet their obligations under the separate collection of waste not as a burden, but as a necessity. The Grodno newspapers "Hrodzenskaya prauda" and "Evening Grodno" published articles with an explanation of how to separate waste. Posters are periodically hung in doorways of apartment buildings and the receipts for payment of utility services contain reminders. Schools were also engaged in the campaign. Container Yards In building the container yards, a major issue was finding suitable sites. In electing sites for the container platforms, the authorities took into account the wishes of the citizens, the interests of the companies located at adjoining locations proximity to communication and utility lines. A necessary condition was the observance of sanitary norms in a residential area, near playgrounds, schools and kindergartens. Short walking distance was also an important consideration. As a result of the construction, the city of Grodno is equipped with 843 container platforms, which have at least one container for mixed waste, paper and cardboard waste, glass and polymers. Sociological Survey In 2017, a sociological survey was conducted evaluating changes in the public perception of the environmental policy pursued by the authorities, as well as assessing any change in the readiness of the population to pay for services of separate collection of household waste. Indicators in 2017 were compared with the measurement in 2009. The share of residential houses which have containers for separate waste collection, increased by more than 50%. In 2009, the proportion of respondents who reported disposing of trash in the proper receptacles was 69.9% of citizens and 71.9% for legal entities. In 2017, a similar rate among residents was 84.4% and 92% among companies. Improvement in Logistics To improving the logistics of SWM collection, a set of interrelated organizational and technical measures were taken. Large and different load types of containers were obtained; an upgraded fleet of special trucks were provided to the Grodno municipal unitary enterprise "Specialized automotive industry". The collection and transportation of waste follow the most efficient routes for collection and removal. Medical Waste In order to comply with the national requirements for safe handling of medical waste, the City acquired equipment under the project for the collection of medical waste (2 trucks) and an incinerator. The incinerator exceeds sanitary and hygienic state environmental requirements. Services are expected to start in the third quarter of 2018, due to time required to procure an environmental permit. Production of Plastic Pallets In order to increase the use of plastic waste, a line for the production of polymer-sand products was acquired and is currently undergoing state inspection. The Recycling Plant will start operating this line in April 2018


59

Equipment Purchased 80 units of utility equipment worth 3.81 million US dollars were purchased, including:

Number of equipment units.

Volume, cubic meters

for garbage collection in the private sector 3 24

2 10

1 15

for debris removal in the housing stock 11 10

6 15

12 18

to collect:

glass (a housing, the private sector)

1 10

Paper (the housing stock) 1 10

plastic (in the private sector) 1 18

plastics (in the housing stock) 1 18

2 15

1 10

waste disposal recreation areas, parks, gardens and garage cooperatives

1 10

for the removal of waste from the cemetery 1 15

Other equipment purchased:

Quantity units.

equipment based on MAZ (for technical assistance technique on the line) 1

Gazelle NEXT (for container repair and maintenance of container sites) 2

crushing plant (Shredder) 1

backhoe loader 1

Machine for production of wood chips with a tractor (schepodrobilka) 1

bulldozer caterpillar BELARUS 1501 1

fueling vehicle 1

terrain vehicle UAZ Patriot 2

KAMAZ dump truck 1

• Purchased 9,095 metal eurocontainers, of which 4,457 for the collection of secondary material resources.

• Acquired 22,856 plastic container volume 0.24 cubic meters for the collection of mixed waste and recyclables in the private sector.

• Acquired 219 metal containers of 8 cubic meters for collecting bulky waste.

• Purchased 2 machines for cleaning containers that allow them to keep on container areas of the city in a satisfactory technical and sanitary condition, thereby preventing the spread of odors.

Tariff Changes for Cost Recovery Formation of a stable financial system in the field of management of municipal waste is based on the provision of full cost recovery for services rendered for the collection, removal, sorting, use and disposal


60

of SW. Financial stability of companies that operate in the field of treatment of SW is provided by tariffs for the treatment of the waste, which are set by local executive and administrative bodies. Taking into account changes in the cost of services in 2018, tariffs were increased for residents and legal entities. Tariff increased for residents by 125.3% and for legal entities - 121.1%. Benefits of the Project As part of the Project on Integrated Solid Waste Management, the Unitary Enterprise "Grodno factory for recycling and mechanical sorting of waste" created 175 jobs, of which 99 were created in 2017. Thanks to the project, the city of Grodno has achieved significant results in the improvement of SWM systems, namely:

• An operational plant for the mechanical sorting of waste;

• Organized system of separate waste collection throughout the city of Grodno;

• Updated material and technical base of the existing system of handling MSW;

• Increased service life of the existing landfill for waste disposal;

• Production of products from waste plastics began in May 2018;

• Collection and disposal of medical waste. Cooperation with experts of the World Bank and the national subsidiary of the investment production enterprise "Belkomtehinvest” helped ensure implementation of a comprehensive project for solid waste management in the city of Grodno. Vice-chairman, Grodno regional executive committee V.I.Deshko


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ANNEX 6. ICR FOR COMPONENT 3

IMPLEMENTATION COMPLETION AND RESULTS REPORT:

SUMMARY NOTE

ON A

GLOBAL ENVIRONMENT FACILITY GRANT

IN AN AMOUNT EQUIVALENT TO US$5.5 MILLION (TF-96993)

TO THE

REPUBLIC OF BELARUS

FOR

COMPONENT III: PERSISTENT ORGANIC POLLUTANTS STOCKPILE MANAGEMENT

OF AN

INTEGRATED SOLID WASTE MANAGEMENT PROJECT

MAY 5, 2014


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ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy C.E. Cost effectiveness CPS Country Partnership Strategy DDT Dichloro-diphenyl-trichloroethane EA Environmental Assessment ECA Europe and Central Asia EMP Environmental Management Plan ESM Environmentally sound management EU European Union FAO Food and Agriculture Organization GEF Global Environment Facility GEO Global Environmental Objective ISR Implementation Status and Results ISWM Integrated Solid Waste Management ISWMP Integrated Solid Waste Management Project MES Ministry of Emergency Situations MHU Ministry of Housing Utilities MNREP Ministry of Natural Resources and Environment Protection MTR Midterm Review NCC National Coordination Committee NIP National implementation plan OPs Obsolete pesticides POPs Persistent Organic Pollutants PCB Polychlorinated Biphenyls PIU Project Implementation Unit QAE Quality at Entry QAG Quality Assurance Group QSA Quality of Supervision Assessment SAICM Strategic Approach to International Chemicals Management SC Stockholm Convention SIL Specific investment loan UNDP United Nations Development Programme UNEP United Nations Environment Programme


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Implementation Completion and Results Report: Summary Note

Component III of the Integrated Solid Waste Management Project (P114515) Belarus Persistent Organic Pollutants Stockpiles Management (P111110)

Background

Persistent organic pollutants (POPs) are toxic, resist degradation, are transported through air, water and migratory species, and bioaccumulate in animals, food chain, and ecosystems. In extremely low concentrations POPs demonstrate toxic and carcinogenic effects in humans. They thus pose a major risk to both local and global populations and the environment. Action to minimize and prevent the harmful impacts of POPs on human health and the environment was deemed critical by Belarus, a country with an important share of POPs primarily in the form of POPs pesticides and waste (as part of a larger inventory of obsolete pesticides) and PCBs (polychlorinated biphenyls). Belarus acceded to the Stockholm Convention (SC) in February 2004 as a sign of its deep-seated commitment to POPs elimination.

During the time of accession, Belarus took decisive measures to implement provisions of the

Convention while gradually building the policy and institutional foundation for sustainable management and elimination of POPs. The country began developing a National Implementation Plan (NIP) in 2004 through the Ministry of Natural Resources and Environmental Protection (MNREP) and with the assistance of the World Bank in its capacity as a Global Environment Facility (GEF) Implementing Agency. The NIP18 is required by the Convention and sets forth short-term country actions and a long-term strategy for ultimate elimination of the production, use and stockpiles of POPs.

As the vehicle for achieving the Convention’s ultimate goal of protecting human health and the

environment from POPs, the NIP was elevated to one of the Government’s major programs of action on the environment. It was structured to promote integration of POPs activities into established national programs, including waste management. The NIP Action Plan was adopted in 2006 and with that came an annual budget, environmental fund allocations and leveraged state enterprise contributions. The resources that Belarus committed however were not sufficient to fully implement the NIP Action Plan and tackle priority actions in a timely and efficient manner, including dispersed PCB stockpiles, regulation gaps for PCBs still in use and final disposal of obsolete pesticides that threatened to leak into the environment.

The Government of Belarus envisioned GEF implementation support as follow-up to the NIP

(commitments and actions had been predicated on the understanding that there would be external support) and requested Bank assistance, as noted in the FY08-11 Belarus Country Assistance Strategy (CAS) wherein environment was one of the nine areas specified for increased support. The CAS reflected the country’s articulated priorities of protecting the environment, including the global environment, strengthening environmental institutions, and reducing negative environmental impact from waste management. A project that would allow fulfillment of international POPs commitments, build capacity to manage and reduce the perpetual environmental and health risk of POPs release in Belarus, and complement national priorities for integrated waste management was considered opportune.

18 “The National Plan of the Republic of Belarus for the Implementation of its Obligations under the SC on POPs for the Period of 2007-2010 and until 2028,” was completed in 2006 and transmitted to the SC on 17 January 2007 after approval by the President.


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Initially prepared as a stand-alone project, the GEF-supported POPs Stockpiles Management Project was considered well-suited to incorporation into a Bank-financed solid waste management operation particularly by virtue of addressing a Belarus priority waste issue. It was consequently blended into the IBRD-financed Integrated Solid Waste Management Project (ISWMP) as the third of four project components. This report documents the main implementation results and achievements of the POPs component as it completed in September 2013, well in advance of the rest of the ISWMP activities.

Project Objectives

As “fully blended19” with the Integrated Solid Waste Management Project (P114515), the GEF component (Component III: POPs Stockpile Management) aimed to support the achievement of the second of two overall project development objectives (PDOs): to strengthen national capacity to manage hazardous wastes associated with POPs.

The global environment objective (GEO) of the ISWMP which is fully attributable to its third

component was to reduce environmental and health risks associated with the presence and release of POPs in global and local environments.

Key indicators of the POPs Stockpile Management Component, as approved, were: (i) Compliance with the Stockholm Convention maintained; (ii) Reduced exposure of the population to POPs in the project area; (iii) Secure capture, storage and disposal of existing POPs stockpiles and capacity to address future

stockpiles; and, (iv) Environmentally sound elimination of Priority POPs stockpiles.

The GEO and PDO were not revised, nor were key indicators. However, due to an increased

amount of POPs pesticide waste found at the primary POPs pesticide stockpile/burial site during implementation, targets for elimination were increased. Design

Taking advantage of the waste management synergies, the initial GEF-financed POPs Project was integrated with the US$42.506 million, IBRD-financed ISWMP. The leveraging effect of the GEF grant was intended to improve the likelihood of sustainable outcomes in the waste and chemicals management areas. Total GEF grant financing approved for the POPs Stockpile Management Component was US$5.5 million, supplemented by US$21.18 million in co-financing. The POPs Component consisted of four subcomponents outlined below.

Subcomponent 1: Risk reduction of POPs Stockpiles and Wastes. As the Component’s main investment activity, the subcomponent sought to secure and provide environmentally sound management in the destruction of high-priority POPs stockpiles and of associated contaminated equipment; provide secure storage for lower-risk stockpiles (contaminated soils, equipment and mixed OPs); support infrastructure planning to manage future POPs generation; and initiate plans to address POPs-contaminated sites. The subcomponent was designed to directly contribute to lower environmental and health risks of POPs releases through permanent elimination.

19 Meaning that grant financing provided by the GEF was combined with Bank lending within one Bank project.


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Subcomponent 2: Technical Support for Capacity Development. The subcomponent strengthened technical capacity to implement the NIP while sustaining long-term compliance with the Stockholm Convention. It aimed to further integrate POPs into existing national environmental and health monitoring and environmental information systems; help define a long-term program to eliminate unintentional POPs release; and, support public information and awareness activities. Capacity development under this component aimed to complement the POPs institutional and regulatory framework (Subcomponent 3) towards overall strengthened national capacity to manage hazardous wastes associated with POPs. Subcomponent 3: Institutional and Regulatory Strengthening. Subcomponent 3 comprised support activities to ensure that comprehensive POPs management was included in national regulatory and legislative frameworks for solid waste management, and that sustainable long-term capacity exists to maintain and enforce the frameworks, consistent with SC requirements and the emerging global framework for chemicals management. Subcomponent 4: POPs Component Management. A project implementation unit (PIU) dedicated to Component III was financed to ensure compliance with Bank fiduciary and reporting requirements, and to supplement MNREP staff in managing technical and operational costs, including annual financial audits. Subcomponents were not revised although budget was reallocated to and within Subcomponent 1 (4% of the total grant) to cover costs of destruction of nearly twice the amount of POPs obsolete pesticide waste excavated than estimated, despite the buffer factored in. The Government contributed more than US$8 million of its own resources for Subcomponent 1. Additional Government co-financing ensured that planned activities under all subcomponents were adequately implemented. Project restructuring was not necessary as the grant agreement provided for one disbursement category. Key Factors Affecting Implementation and Outcomes

Analysis of the key factors and events throughout the POPs Component’s implementation that determined the degree objectives were met and that affected project outcomes are summarized below. Project Preparation, Design and Quality at Entry

The POPs Component greatly benefitted from Belarus’ process of developing and approving the NIP and subsequently from a GEF project preparation grant (PPG) amounting to approximately six years of upstream study and analysis. The NIP provided initial baseline figures on the scope and nature of the POPs challenge in Belarus and defined the priority actions and a long-term strategy. The PPG funded a comprehensive environmental impact assessment (EIA) and environmental and managerial consultancy support for MNREP. However, obsolete POPs pesticides that were not used for more than 30 years were dispersed, in often unknown quantities and condition and estimated quantities had to be revisited several times. Additional funding for extensive sampling would thus have allowed for more precise quantification of POP stockpiles in burial sites.

A project was initially designed to meet the GEF strategic objectives for POPs during the GEF-3

replenishment period (July 2002–June 2006). However, after finding itself caught in a GEF transition period, the project was shifted to the GEF-4 funding period (July 2006–June 2010). This caused some delay and consequently not only required a reexamination of the design to ensure that the GEF-4 strategic objective and programs for POPs were adequately prioritized, but also to ensure it was still relevant to


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the current POPs context in Belarus. Reshaping of project design entailed a NIP status review, gap analysis and most notably Bank decision to include it in a Bank lending operation as a way to shore-up co-financing and embed the work in the larger context of sustainable waste management.

Because of different mandates and intended aims of the funds, two national implementing

agencies were designated, the Ministry of Housing and Utilities (MHU) for Components I, II and IV on a waste separation and treatment facility for the City of Grodno and MNREP for Component III of the ISWMP. As a grant, Component III was provided with a distinct PDO, results framework and legal agreement (linked to and cross-referencing the ISWMP) but shared with the ISWMP one PAD, one Bank team at project appraisal and effectiveness, and a few other elements of an administrative nature. Nonetheless, the component was basically designed to stand on its own in implementation and, from the perspective of the national implementing agency, MNREP, particularly the PIU, and to a certain extent future Bank project teams (witnessed in implementation status reports and back-to-office reports), was a separate project.

Component design was largely based on short-term priority actions of the country’s national plan

for implementing the Stockholm Convention (embodied in the NIP). The four project subcomponents were clear-cut, capturing the main categories of work deemed necessary to achieve in combination, overall development and global environmental objectives.

After the two-year hiatus, the reincarnated POPs activity was delayed again during ISWMP

appraisal by several months. Although the GEF component was ready by the planned March 2010 Board date, start-up was postponed until the October 2010 effectiveness date, following Board and country approval. Another disadvantage rested primarily on achieving congruency in stated objectives and indicators throughout project documentation because of essentially separate preparation streams. In the end, documentation was not fully congruent (witnessed by comparison of the PDOs in the PAD with those in the grant agreement for example or within the PAD with separate results frameworks).

Of additional concern stemming from the design which only became evident later in

implementation through markedly different levels of performance between Component III and the remaining components, is that the Bank’s monitoring system allows for one rating per category where a project has been fully blended. Although associated comments in the implementation status reports (ISRs) were diligent in separately assessing the POPs component that consistently performed satisfactory as opposed to other ISWMP components, the combined, official rating strongly leaned towards non-performing components. This was most likely seen as necessary to attract managerial and country attention to areas which required additional support.

The lengthy period from initial concept in 2006 to approval in 2010 within the ISWMP however

had a net benefit. First, the scope of POPs targeted was narrowed. A review of the status of NIP implementation was done in July 2008 and as a result, the focus of contaminated site assessment was directed to highest-risk areas: PCB-contaminated sites and burial sites containing significant quantities of DDT. A second benefit of the preparation time was ample consultation between key stakeholders, primarily MNREP with ministries of agriculture, industry and energy that allowed for clear agreement on and delineation of priority actions to be funded as well as clarity on viable POPs management contractors to minimize implementation delays. Third, and most critically to sustainability of the Belarus POPs program and as validation of the decision to approach POPs through the wider lens of waste management, is that through inclusion in the ISWMP, the POPs Component was able to receive high-level support


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(approval by presidential decree) that guaranteed a matching Government budget and inter-ministerial commitment to defined targets and objectives throughout project implementation and beyond.

ISWMP risks were considered to be substantial given that the matter at hand involved securing,

relocation, transport and disposal of hazardous waste and substances. The ISWMP was consequently given a safeguards classification of “A.” A full EIA was prepared on the POPs component (and another on Component I) and publicly disclosed and two public consultations were held in line with OP 4.01. The EIA incorporated an environmental management plan (EMP) that in turn included risk mitigation and monitoring plans to reduce environmental and public health risks related to project implementation. No social safeguard issues were triggered at appraisal, such as resettlement and land acquisition aspects. A risk in implementation capacity was identified, with a specific concern on Component III that MNREP’s experience with Bank-administered trust funds had been limited to small contracts. In addition, a risk for cost overruns in, and completion of recovery and repackaging of POPs pesticides from the Slonim (obsolete pesticide storage) site was identified and proposed to be mitigated using government funds. Implementation

Performance was consistently high throughout implementation of the POPs Component with activities completing by the originally planned closing date of 30 September 2013. Implementation efficiency can be attributed to several factors that stem from adequate preparation:

• Strong country commitment to project objectives and more generally to the issue of POPs and hazardous waste management as demonstrated by high-level, NIP Action Plan approval and cross-sectoral budgetary allocations in five-year plans;

• Thorough project preparation and a consultative process that took advantage of the momentum created by the development and approval of the NIP and that adequately anticipated potential implementation risks as embedded in the project design;

• Steadfast attention to working out implementation details in the preparation period, including implementation arrangements, procurement planning, the operational procedures, and terms of reference, which allowed MNREP and the Project Implementation Unit (PIU) to “hit the ground running” as soon as the project became effective;

• Straightforward project components with clearly defined activities that made use of key local and national stakeholders for implementation, monitoring and reporting; and,

• Continuity in personnel within MNREP, the PIU and the World Bank from early preparation stages through project completion.

Component III encountered some challenges with the potential to disrupt project efficiency and,

to a certain extent outcomes, but which in the end could be addressed in a satisfactory manner with minor implementation changes and budget adjustments.

Delays in priority POPs pesticide excavation and destruction. The main concern for potential delay related to works under Subcomponent 1, namely excavation, repackaging and temporary storage of POPs pesticides at the Slonim site. Works were highly dependent on a seasonal window between May and November when surfaces were dry and unfrozen to ensure that no POPs were left exposed and at risk for escape into the environment. However, with only small crews initially assigned by the Ministry of Emergency Services (MES) to manually excavate at the site, the risk that work would spill into the next year was imminent, possibly leading to cost overruns and logistical challenges with the disposal company slated to transport and destroy the POPs waste. Rapidly responding to Bank recommendations, MES


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mobilized additional forces and equipment to accelerate excavation and established a temporary camp to allow work to continue steadily into December 2011. In addition, MES used its own resources for a gas chromatograph to test material being packaged and to better establish the baseline and monitor its work.

However, improvement of the efficiency of excavation in combination with performance issues

of the international contractor selected to remove and destroy the POPs pesticide and associated waste caused another bottleneck. The contractor was late to initiate the vital step of securing prior informed consent of EU countries through which the hazardous waste was to be moved on its way to the final destination of the waste facility in Germany and also fell behind in processing barrels of POPs waste for shipment. As the winter months approached in 2012, the risk of environment exposure to POPs reemerged. Upon revisiting its obligations with the country, the contractor agreed to start moving the waste out through the winter. Although the exercise did in the end extend to the following year, all POPs pesticide wastes were thoroughly and safely removed and fully accounted for, while a country-tailored protocol based on real experience was established for future works at other sites.

Identification of additional POPs pesticide waste. By October 2011, it was discovered through

the excavation at the Slonim site that there was more POPs pesticide waste to be handled and destroyed with evidence of contamination of other obsolete pesticides and surrounding soil due to rupture of containers and leakage of the pesticides in the largest cell of four that had been buried nearly 40 years. As excavation continued into additional cells in the spring, it was confirmed that POPs waste recovered was 700 tons more than estimated and more lied buried. Although contingency amounts had been factored into the budget as a result of some sampling done by MNREP during project preparation, the magnitude of additional material demanded urgent action.

The country and the Bank agreed that savings in the GEF grant from exchange rate gains in

contracting as well as funding from other project line items would be used for securing another destruction contract. This was on the understanding that MNREP would substitute its own funding for the remaining project activities in other components to ensure that the MES was also contracted anew, at the cost of the Government, to excavate, package and safely store POPs waste exceeding estimated amounts.

With the emphasis on due diligence, ensuring that all POPs waste recovered at the priority site

was destroyed, some project activities were not funded by the grant as planned nor fully developed due to PIU capacity limits. This included creation of a national POPs contaminated site inventory, health monitoring and defining a long-term elimination program with expansion of release estimates for the third major group of POPs, those unintentionally produced (primarily dioxins and furans). While these activities would have certainly enhanced project benefits, they did not detract from the component’s achievement toward project objectives and related outcome indicators. In addition, other activities were found to be no longer needed during implementation, for example clean-up of contamination from movement of PCBs destined for destruction because of no contamination occurring.

Monitoring and Evaluation (M&E), Design, Implementation, and Supervision

M&E design. Careful attention was paid to approaches to measuring results and impact under the SC and its financial mechanism, the GEF when modeling project indicators to measure the GEO, including the GEF-4 Strategic Program on POPs. During appraisal, additional indicators were proposed by ECA Quality to better measure the strengthened national capacity PDO: “compliance with the Convention” and “reduced risk of exposure of the local population to POPs.”


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M&E implementation. The PIU regularly collected data according to the indicators developed

during project preparation and reported on them in each progress report in a log framework similar to that in the PAD, permitting project outputs to be easily and continually tracked. With project funding, a data registry and information management system for POPs data tracking and reporting was developed. Procedures for maintenance and reporting in the system were formalized through an MNREP regulation which gave PIU the confidence of the accuracy of data it has on the existing amount of POPs versus more generally OPs, and, POPs and POPs waste secured from the numerous sites and locations across Belarus.

M&E supervision and utilization. The indicator measuring environmentally sound POPs disposal

was made more explicit in the ISR during implementation by referring to POPs “destruction.” This was to fully incorporate the core sector indicator, “POPs and POPs waste destroyed, disposed of or contained in an environmentally sound manner (tons).” In addition, although Convention compliance was intended to be a function of strengthened national capacity (the PDO), it was concomitantly seen as a useful indicator for the ISRs of the degree to which the country could actively reduce risks associated with the presence and release of POPs (the GEO).

A review of the data reported on tons of POPs destroyed in the form of contracts and statements

of contract completion, with the two destruction providers (one for PCBs and one for POPs pesticides) led to the finding that independent verification of actual destruction would provide greater assurances that the POPs had been permanently eliminated from the planet. The reporting methodology for destruction was consequently slightly modified at mid-term.

Safeguards

Safeguard reviews consistently indicated compliance with the EMP with the exception of the first few months of implementation. Planned baseline analytical work at the Slonim site where priority POPs pesticide wastes were stored could not be completed because MNREP’s initially selected national laboratory could not be accredited for analysis of POPs pesticides. Thus, as reflected in the revised EMP, the baseline was by default established during preparation with MNREP’s own laboratory. A third-party lab was contracted for regular soil and air monitoring during the excavation work. The work was supplemented by regular monitoring by MES with its gas chromatograph. This arrangement was deemed adequate in the end as no major contamination issues had been found beyond the site.

Fiduciary Compliance

Financial management (FM). Continuity of FM staff and well-functioning disbursement arrangements in the POPs component of the ISWMP permitted seamless project preparation and project implementation. MNREP’s automated accounting system was customized for accounting and reporting under the grant. Staffing arrangements were found acceptable throughout project implementation, as were internal controls, accounting and reporting arrangements. Audit reports were submitted on a timely basis with no qualified opinions, as were financial management reports.

Procurement. MNREP was somewhat familiar with World Bank procurement procedures through

previous implementation of Bank-supported activities but less so with larger contracts. Because the bulk of grant funding was destined for large contracts in Subcomponent 1 with time-sensitive elements, it was seen essential to initiate procurement planning early on. As the work of excavating and handling POPs


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pesticides is only permitted by a specialized Government entity, the procurement method agreed upon was by Force Account with the MES. Prequalification procedures for selection of technical services to destroy the POPs were completed by grant effectiveness although ICB extended well into 2011 with two separate contracts signed by June 2011. Prior review of the procurement packages and procedures conducted under the project as well as post-review of randomly selected contracts showed satisfactory document quality and full compliance with applicable guidelines and established rules and procedures. At least one-third of the contracts were prior review and this occurred without delay. No rebidding or misprocurement was reported.

Post-completion Operation/Next Phase

Transition arrangements. Prior to and during implementation, the Government of Belarus instituted regulatory and policy measures to implement the NIP Action Plan in accordance with the Stockholm Convention and in line with national priorities on environmental protection and waste management. Hence the basic national institutional and regulatory capacity for future management of POPs and maintaining convention compliance is in place with high confidence that this will be sustained based on the proven process of adoption and strict implementation of periodic national programs covering successive five-year periods.

The Inspectorate for Waste Management in MNREP will assume PIU responsibilities, that at

project completion translate to oversight of established reporting and monitoring protocols, compilation of POPs data reported annually by agricultural and other sector enterprises, supervision of POPs sites (through local MNREP authorities) and overall implementation of the national program. In addition, in its capacity as the regulatory authority on waste management, it will serve as focal point at MNREP for coordinating with the Ministry of Housing Utilities and the Bank on the ongoing ISWMP as required.

POPs monitoring and evaluation. Belarus has put into place a mandatory registry, monitoring and

reporting framework for implementation of the Stockholm Convention. The online, data registry and information management system created in MNREP under the project captures the data along with POPs pesticides, PCBs, U-POPs and POPs contaminated site inventories. The system will be integrated into the overall national environmental data management system.

Future support for POPs management and elimination. Although Belarus has to date backed its

commitment to the Convention with resources allocated from the national budget, remaining POPs management and elimination is still at scale and scope that would highly benefit from supplemental financial and technical resources. The Government of Belarus intends to pursue a follow-on GEF project with one of the GEF IAs, most likely a Bank development partner that not only brings added technical value but is able to provide support in the wider context of solid waste management, sound chemicals management and sustainable economic development. This is particularly the case to maintain momentum and tap into the institutional and human resources developed through the project. While now secure and managed in an environmentally sound manner, stockpiles of obsolete pesticides in storehouses and burial sites remain a significant hazardous waste legacy for the country but one that is now more suited for targeted and rapid mitigation actions, namely final disposal. In first order will be the destruction of the remaining 310 tons of POPs pesticides waste recovered from the Slonim and Lida sites under Subcomponent 1. In the meantime, the stockpile is supervised by local environmental authorities and regular public consultations will be held to keep it apprised of the situation.


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Assessment of Outcomes Relevance of Objectives, Design and Implementation

Overall relevance of the project is rated high. The POPs Component’s objectives, along with the design and implementation, remain relevant to Belarus and its current reform and sustainable growth agenda. Improvement of the population’s living conditions is one of the objectives of the country’s Program of Social and Economic Development for 2011-2015 that resonates with the project’s emphasis on hazardous waste management and reducing risks from POPs. Part of the second pillar of the World Bank’s FY14-17 Country Partnership Strategy for Belarus that echoes Belarus’ 2011-2015 Development Program aims to increase global benefits of public goods and improve the living environment. More specifically, it supports waste management under a result area of improved infrastructure and municipal public utility services through the ISWMP and its third component on POPs.

As regards global priorities, objectives of the POPs Component continue to be highly relevant to the international commitment that Belarus made as a Party to the SC to protect human health and the environment from POPs. Capacity to implement the Convention has been augmented, as demonstrated through project outputs ranging from new regulation and policy, testing protocols, data management systems and elimination or containment of POPs. This capacity and experience also better positions Belarus to fulfil future obligations to other chemical-based treaties and agreements. Achievement of Project and Global Environmental Objectives

The activity is rated satisfactory in having achieved and exceeded its objectives. This was done largely through Subcomponent 1 which consisted of activities to not only physically secure and/or eliminate POPs pesticides and PCBs but also on developing technical assistance materials, training and awareness, updating PCB inventories and developing a national PCB management plan. Hence the subcomponent was instrumental in achieving both the GEO, as well as the PDO of strengthening national capacity to manage hazardous wastes associated with POPs. Main project results as compared to targeted outcome indicator values are summarized in the following table. Nearly twice as much priority POPs were disposed of than planned and 30% more POPs pesticides and PCB waste secured, leading to additional risk reduction of the local and global population and environment.

Indicator Target Actual Value Assessment of Achievement

Compliance with the Stockholm Convention maintained*

• Compliant Submission to the SC: -POPs inventory -5-yr compliance report -Updated NIP

• Compliant Submission to the SC: -POPs inventory -5-yr compliance report -NIP Action Plan updated**

• Compliant. Compliance to the SC mostly achieved with only the submission of an updated NIP Action Plan pending.

Secure capture and storage of existing and future POPs stockpiles**

• 5,751 tons of POPs pesticide and PCB waste

8,340 TONS OF POPS PESTICIDE AND PCB WASTE

TARGET VALUE ACHIEVED AND SURPASSED BY 30%.


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Environmentally sound elimination of priority POPs stockpiles**

1,751 TONS OF PRIORITY POPS PESTICIDE AND PCB WASTE

• 2,616 tons of priority POPs pesticide and PCB waste

• Target value achieved and exceeded by 33%

Reduced exposure of the population to POPs in the project area

101,832 PEOPLE • 127,260 people • Target value more than 100% achieved.

*This indicator measured achievement of the original PDO to strengthen national capacity to manage hazardous wastes associated with POPs. Targets for years 2-5 were “Yes”, i.e. compliant with the SC. **GEO level indicators. 310 tons of are pending destruction. Destruction is expected to be financed with EU funds under a new, regional FAO project. Hence with the destruction, 2,926 tons would have been achieved as is claimed in the final ISR of Component III (no. 9). In terms of achieving the first outcome indicator of maintaining compliance to the Stockholm Convention, target values specified reports and action plans that required updating. During project implementation, MNREP updated its NIP Action Plan for the period 2011-2015 which will feed into the officially updated NIP for submission to the SC in accordance with Article 7 on NIPs. The updated NIP was technically due in August of 2012 to reflect the addition of new POPs by the SC in 2010 but a subsequent addition of a substance in 2012 means that the NIP requires revision again by 2014. MNREP is eligible for and is seeking GEF assistance to finalize one combined NIP update for submission, including inventory work on all eleven of the new POPs added by amendment in 2010 and 2012. Still, the degree of compliance with the SC for any country is difficult to quantify given that the Parties to the Convention have yet to define compliance and non-compliance. In the case of Belarus, the conclusion of compliance at component completion is based on the country’s adherence to all of the SC’s articles related to risk reduction and substantial adherence to Article 7 on NIPs (which also requires Parties to endeavor to establish the means to integrate NIPs into their sustainable development strategies – what Belarus has accomplished with budgetary support for POPs management in its 5-year plans). Efficiency

As the purpose of the GEF grant financing was for global environmental benefits from the mitigation and elimination of risks associated with POPs releases, incremental cost reasoning was applied to determine the additional cost of the intervention. The baseline at appraisal was considered to be the situation in 2006, prior to the Government’s decision to emphasize POPs management and NIP implementation in its programming. The business-as-usual case where no GEF funding would leverage government and enterprise action and funding for NIP implementation, was limited to “maintenance level” attention.

The original incremental cost summary indicated that the GEF alternative scenario would cost

US$26.68 million of which GEF would finance US$5.5 million. The GEF alternative after project completion amounts to US$35.96 million, including an additional US$9.29 million in counterpart funding than originally committed. However, more POPs pesticide waste was secured from release into the environment and more POPs pesticides than planned were destroyed. Cost-effectiveness (C.E.) is therefore not reduced as a commensurate amount of POPs has been eliminated or safely secured, while grant effectiveness is significantly improved. Global environmental benefits accrued are higher than


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planned at no extra cost to GEF. Average C.E. of the grant for POPs destruction is about US$1,545/ton.

Other Outcomes

Opening a channel of communication between local populations and authorities under the pretext of temporary storage and disposal of hazardous pesticide wastes was an unintended outcome of the Component’s implementation. The local population was skeptical of publicly discussing and weighing in on an issue previously thought beyond its control. However, inhabitants became engaged. This provided an opportunity for discourse with authorities on all topics of concern. Another positive outcome not anticipated was the degree to which enterprises in the PCB sectors committed human and financial resources to address what would be considered an externality and setting an example industry-wide for accelerated phase-out and drawing regional attention for possible replication. This followed successful demonstration of good PCB management practices under Subcomponent 1.

Another unintended outcome was the impact that limited training can have on stakeholders

depending on its approach. Reallocation of GEF funding to Subcomponent 1had reduced funds in Subcomponent 2 for expanding POPs monitoring and analytical capability. However, training of lab technicians was funded nonetheless and done in an innovative manner with a comparative study between a Belarus Lab and an equivalent lab in Lithuania. This mutual exchange facilitated accreditation and enhanced lab testing capacity in Belarus. Overall Outcome Rating

Overall outcome is rated satisfactory on the basis of the continued high relevance of the Component to Belarus’ national priorities and international commitments, the realization of both the PDO and the GEO as measured by POPs-related outputs that exceeded expectations, and efficiency of the investments made. Some lesser activities in terms of allocated grant resources were not implemented in full or were absorbed by Government programs. However, this did not impede GEO achievement. The component has notably strengthened institutional, regulatory and technical capacity to manage and reduce the risks of hazardous wastes associated with POPs. Sustainability (Risk to Development Outcome)

Risk to project outcomes in terms of the global environmental objective is rated moderate as outcomes are likely to be sustainable in part because the destruction of the large amount of POPs pesticide and PCB waste is irreversible. Local and global environmental and health risks posed by the presence or release of 2616 tons of POPs and POPs waste have been permanently eliminated. Another 310 tons destined for destruction but which was left unfunded during the life of Component III of the ISWMP has been secured and safely stored according to international standards and is expected to be addressed with funds of a new FAO project. Release or leakage of the POPs in the expected duration of storage of up to one year, is highly unlikely, but an extremely small risk that increases with time does exist as it does for all POPs secured under the project component.

The major actions taken in parallel to and under the component which thwart any risks associated

with the remaining POPs pesticides and PCBs are strategic, regulatory and budgetary commitments made by the Government to overall POPs management and Stockholm Convention implementation. Strengthened national capacity to manage hazardous wastes has not only been demonstrated through


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project outputs and significant counterpart expenditures, but is expected to remain, at least in the short-term as the current 5-year national plan completes its cycle. The planning infrastructure to manage existing and future POPs has been created, but macroeconomic instability experienced the last four years could lead to budgetary constraints for some public programs as priorities shift, including the subsequent 2015-2020 national action plan for SC implementation. A donor-supported follow-on project, dealing primarily with the large remaining stock of PCB-based equipment may be even more necessary than before to leverage possibly scarce Government co-financing. Bank and Recipient Performance Bank Performance

Bank performance in ensuring quality at entry is rated as satisfactory. Original identification of the POPs project in 2006 was a natural extension of the GEF enabling activity which supported the development of the Belarus NIP. As such, the project concept was part and parcel of the Government’s plan to address the NIP’s short-term priorities, among which included strengthening its capacity to manage POPs. The Bank remained committed to the concept developed with Belarus throughout processing delays experienced in the crosshairs of GEF restructuring and replenishment and assisted in reshaping the concept as it was shifted to the next funding cycle.

During preparation, the Bank was consistent in its message that activities to excavate, repackage

and destroy POPs had to start immediately upon project effectiveness. This reflected its foresight of the efforts required with the myriad of technical and stakeholder inputs and logistics, as well as a clear understanding of the possible risks to the development and environmental objectives. Particular attention was paid to procurement arrangements and mechanisms that took into account the specialized type of chemicals that were to be addressed, relying on national bodies and local authorities with express mandates and technical skills.

Despite best efforts, not all project concerns could be fully anticipated. For example, although blending the GEF project with the ISWMP had major advantages such as elevating its profile and facilitating mobilization of counterpart funding during implementation, it had some drawbacks. Efforts to merge and streamline the POPs project into the parent project as a component resulted in inconsistencies between the PAD, its annexes and the GA. As previously stated, although the component’s implementation was largely separate of the ISWMP and performed consistently well, its ratings as per the Bank’s monitoring system were subsumed by the ISWMP.

Another caveat in the Bank’s otherwise strong performance in ensuring quality at entry was a

slightly overambitious reach of project subcomponents in comparison to the programmed resources, timeframe and capacity for implementation, and the matter at hand (recovering obsolete POPs with their share of unknowns). The latter aspect relates to the challenges in quantifying old, obsolete stockpiled substances and the discovery of far more POPs than had been assessed during preparation. Subcomponent 1, which from the start covered many activities, consequently required additional efforts and resources. Although leading to sufficient results in terms of project objectives, activities in Subcomponent 2 which touch upon very different aspects of POPs management might have had greater potential if they had been treated in a separate project. This is namely the case for the activity aimed to expand inventory work on POPs from unintentional release as well as initiate a review of pollution abatement and alternative technology options for the country in developing related sectors. The


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allocation was small in comparison to what is generally considered a technically challenging and costly part of SC implementation.

The Bank’s quality of supervision of Component III is considered to be satisfactory. The Bank

closely supervised and monitored the component with biannual missions, regular fiduciary and safeguard reviews and technical inputs; putting a strong emphasis on responsiveness, monitoring indicators and expeditious project implementation to meet POPs critical disposal milestones. Continuity in the core team from the enabling activity to concept through project implementation contributed to a productive working relationship with the counterpart and efficiency in supervision. In addition, coordination and alignment of performance monitoring and reporting between the POPs component and the ISWMP were facilitated with the TTL (based in Minsk) of the POPs part also serving as a core ISWMP team member. This was important for promoting coordination between the two implementing agencies, MNREP and MHU, particularly for the initiation of the project. Nevertheless, during implementation, Bank project teams were somewhat separately managed, somewhat emulating the technically distinct responsibilities and separate objectives of the two national implementing agencies.

Quality of Bank supervision is further attributed to the team’s composition which included a

technical expert on POPs and hazardous waste management in five of six project missions and complemented by an environmental safeguards specialist who participated in three missions. This facilitated not only judicious identification and vetting of technical issues and potential roadblocks during the missions with the PIU and stakeholders but also onsite technical guidance and recommended actions. Examples include advice it provided to the PIU on dealing with delays by the disposal facility and the suggestion that independent verification of POPs destruction be redone for quality assurance purposes. Borrower Performance

The Government and more specifically, MNREP, are rated highly satisfactory in performance, showing strong commitment to the POPs Stockpile Management Component throughout which was essential for inspiring action by, and progress in government partners and enterprises. First, understanding that GEF financing would be the opportunity to maximize NIP impacts, great efforts were made to make the NIP a government program through presidential decree at project inception. This guaranteed that the country’s commitment to the project and more precisely the Stockholm Convention was matched with national resources. Second, integration of the project within the ISWM automatically elevated it to the highest level given that a lending operation also requires adoption by decree of the President before effectiveness. This political and financial backing gave MNREP the wherewithal to respond rapidly and appropriately to challenges encountered during year one of the ISWMP and proved pivotal to timely and successful component completion. Third, inter-ministerial coordination of the activity and more generally Stockholm Convention implementation was assured through the National Coordination Committee.

The PIU, located in the Inspectorate for Waste Management at the MNREP, is also rated highly

satisfactory. MNREP appointed the First Deputy Minister as the National Project Director while empowering the PIU to report directly to the minister. The PIU was made up of a strong staff with an adequate balance of technical and coordination skills required to mobilize the specialized skills and services required for Subcomponents 1 and 2 while fostering cooperation with and action by local government, other line ministries, research institutes, and NGOs to deliver outputs and results in all three subcomponents. The PIU gained the trust of the local population needed to complete main component


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activities with frequent consultations and outreach. The PIU was effective in carrying out all aspects of project management. Reporting was reliable and complete, and agreed actions between missions were always implemented on time where possible. Lessons Learned

• The process of upstream analysis and formulation of a sector-wide strategy creates the foundation for successful project execution. Positive project outcomes, facilitated as much by the GEF grant as they were by the significant levels of counterpart funding, illustrate the role “enabling” work has on efficient and effective project implementation. Due to the process of developing and approving the NIP by the time project preparation started, stakeholders had been fully identified, a coordination mechanism established, baseline information collected, a gap analysis done and basic policies were in place.

• Stakeholder commitment at all levels amplifies project impact and sustained outcomes. Likely project success was bolstered early on when the President of the Republic endorsed the national plan. Blending the GEF grant with a Bank loan gave the project an additional boost with presidential backing and ensured co-financing for unanticipated expenses could be quickly mobilized. With the regulatory and budgetary underpinning, the PIU could effectively navigate between ministries and agencies to garner support and concrete commitments. The POPs issue also resonated well with community stakeholders primarily because of the legacy of the greatest environmental disaster of the region, Chernobyl. This permitted the PIU to establish a relationship of trust and mutual support with the local population.

• Rigorous site assessment and analysis of POPs burial, storage and contaminated sites at preparation stage is critical to minimize cost overruns, capacity constraints and delays. The project demonstrated the importance of rigorous site assessment in POPs projects involving burial of chemicals and land contamination. While the project had some built-in flexibility and degree of assured co-financing to respond to the substantial underestimation of quantities, project experience reinforces the need for these provisions to be made in the project design and for the allocation of sufficient resources and expertise to front-end site assessment to more precisely estimate the scope and scale.

• Demonstrated analytical monitoring capability needs to be available before commencement of works involving hazardous substances. The Slonim site work started without establishing a baseline on the level of POPs in the soil, air, and water because a laboratory that could qualify for the work under Bank procurement procedures was not available. Monitoring for the baseline was executed and financed by MNREP as a stopgap measure until a laboratory could be contracted for periodic monitoring. In addition, MES introduced on-site analysis during the process of excavation and packaging which could be considered a best practice approach to due diligence and environmental safeguarding. The component demonstrated that analytical monitoring capability needs to be available prior to initiating POPs activities but also that inevitable implementation adjustments can be accommodated where there is overall flexibility in Bank procedures and where counterparts are able to backstop gaps with their resources.

• Knowledge exchange is an effective tool to bolster impact of technical capacity investments while gauging levels of and needs in national capacity. Development and use of protocols for comparative


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sampling and analysis of POPs in the environment and food supply between labs in Belarus and Lithuania was cited as one of the most valued project outputs. Technicians not only culminated and corroborated their extensive training with hands-on testing matched to that done in Lithuania, the testing served as a measure of Belarus’ new national POPs testing capacity and permitted accreditation. Accreditation in turn sustains capacity to operate labs through fees that can now be levied. Capacity to monitor POPs content benefits Belarus and the global environment. Actual outputs of the sampling and analysis done are suitable as inputs to the SC’s Global Monitoring Plan which provides a framework for the collection of comparable monitoring data on the presence of POPs from all regions to identify changes over time.

• The demonstration effect can help overcome capacity barriers to environmental mitigation when paired with clear policy direction. PCB management plans at the sector and enterprise level were prepared in accordance with the Government’s approved Action Plan on POPs. However, it was only when the “how to” contain, manage and dispose of unwanted PCBs was demonstrated through the GEF grant that PCB owners could better understand the risks and technical requirements as well as their concomitant responsibilities and liabilities (including financial). The missing ingredients of awareness and technical know-how instilled confidence to implement plans at owners’ costs. Sector plans were consequently revised by line ministries to reflect more ambitious enterprise plans. The positive results, including agreement for accelerated PCB phase-out, has caught the attention of regional industrial concerns interested in learning how to manage their PCBs. Participants of the Slonim site disposal activity had a similar experience, for example, MES’ increased technical capacity to effectively serve as a specialized agency for safe disposal of POPs OPs, will support full execution of the POPs Action Plan.

• Due diligence is a cornerstone of POPs and hazardous waste lifecycle management. When dealing with highly toxic chemical wastes which have local and global impacts, every last molecule must be accounted for whether the substances are destined for temporary storage or final destruction. The obligation to ensure that the total POPs waste to be destroyed was in fact destroyed ended only after receipt of a verification report from the incineration facility. In terms of lessons learned, the value of including this feature in similar projects was demonstrated.

• Combining GEF grant funding with lending can bolster outcomes as seen in high-level commitment for an issue with global environmental reach, but there are different ways to achieve this that are unique to each project. The likelihood of sustainable environmental outcomes grounded in national strategic planning and budgeting would have been lower if the GEF grant and IBRD financing had not been blended. In particular, efforts made in project design to blend the GEF component resulted early on in a presidential decree that elevated the issue of POPs elimination. However, because blending was not organic at the outset but more of an amalgamation of two distinct interventions, some challenges were encountered in terms of processing delays, additional efforts required in stakeholder coordination, ensuring complementarity and consistency of objectives and components, and effects of joint performance rating. Moreover, the underlying separation of the GEF component as per design, with a separate PDO and GEO, national implementing agency and results framework, became more manifest in implementation, where ISWMP components diverged in performance and required overlapping but separate Bank project teams, given also the need for differentiated technical expertise.


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Annex I Data Sheet

A. Basic Information

Country: Belarus Project Name: Component III of the ISWMP: POPs Stockpile Management

Project ID: P111110 L/C/TF Number(s): TF-96993

Lending Instrument: SIL Borrower: MINISTRY OF FINANCE - BELARUS

Original Total Commitment:

USD 5.50M Disbursed Amount: USD 5.48M

Revised Amount: USD 5.50M

Environmental Category: A Global Focal Area: P

Implementing Agencies: Ministry of Natural Resources and Environmental Protection

Cofinanciers and Other External Partners: NATO EU

B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 03/27/2009 Effectiveness: 10/06/2010

Appraisal: 11/16/2009 Restructuring(s):

Approval: 06/17/2010 Mid-term Review: 02/28/2012 04/27/2012

Closing: 09/30/2013 09/30/2013

C. Ratings Summary

C.1 Component Performance Rating by ICR

Outcomes: Satisfactory

Risk to Global Environment Outcome: Moderate

Bank Performance: Satisfactory

Borrower Performance: Highly Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance

Bank Ratings Borrower Ratings

Quality at Entry: Satisfactory Government: Highly Satisfactory

Quality of Supervision: Satisfactory Implementing

Agency/Agencies: Highly Satisfactory

Overall Bank Performance:

Satisfactory Overall Borrower Performance:

Highly Satisfactory


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C.3 Quality at Entry and Implementation Performance Indicators

Implementation Performance

Indicators QAG Assessments (if

any) Rating:

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

No Quality at Entry (QEA) None

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

Yes Quality of Supervision

(QSA) None

GEO rating before Closing/Inactive Status

Satisfactory

*The designation as a problem project refers specifically to Component I of the Integrated Solid Waste Management Project (ISWMP). Taken separately from the other ISWMP components, Component III: POPs Stockpile Management was not problematic at any time during implementation.

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

Public administration- Water, sanitation and flood protection 100 100

Theme Code (as % of total Bank financing)

Environmental policies and institutions 48 48

Pollution management and environmental health 52 52

E. Bank Staff

Positions At ICR At Approval

Vice President: Laura Tuck Philippe H. Le Houerou

Country Director: Qimiao Fan Martin Raiser

Sector Manager: Kulsum Ahmed John V. Kellenberg

Project Team Leader: Elena Klochan Maha J. Armaly

ICR Team Leader: Mary-Ellen Foley

ICR Primary Author: Mary-Ellen Foley

F. Results Framework Analysis Project Development Objectives (PDO) and Key Indicators (as approved) As fully blended20 with the Integrated Solid Waste Management Project (P114515), the GEF component, POPs Stockpile Management, focused on the second of two overall project development objectives: to strengthen national capacity to manage hazardous wastes associated with persistent

20 Meaning that grant financing provided by the Global Environment Facility was combined with Bank lending within one Bank project.


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organic pollutants (POPs). The first PDO as per the PAD is to increase environmental benefits of integrated solid waste management in the City of Grodno through recovery and reuse of recyclable materials. The global environmental objective (GEO) was to reduce environmental and health risks associated with the presence and release of POPs in global and local environments. Key indicators of the GEF-financed POPs stockpile management activity were:

• Compliance with the Stockholm Convention maintained;

• Reduced exposure of the population to POPs in the project area;

• Secure capture, storage and disposal of existing POPs stockpiles and capacity to address future stockpiles; and,

• Environmentally sound elimination of Priority POPs stockpiles.

Revised Project Development Objectives (as approved by original approving authority) and Key Indicators and reasons/justifications Not applicable.

(a) GEO Indicator(s)

Indicator Baseline Value Original Target Values (from approval documents)

Actual Value Achieved at Completion or Target Years

Indicator 1: Compliance with the Stockholm Convention (SC)

Value quantitative or Qualitative)

Compliant Compliant Compliant

Date achieved 16-Nov-2009 30-Sep-2013 30-Sep-2013

Comments (incl. % achievement)

Maintenance of compliance with the SC mostly achieved with adherence to all SC articles and substantial adherence with the article on NIP reporting (Article 7). (The value “Compliant” was noted as “Yes” in the PAD.) Second national report submitted to the Convention Secretariat on 5 Aug. 2011. National Implementation Plan (NIP) action plan update was endorsed by Decree of the President (No. 271) on 27 Jun. 2011. A long-term PCB phase-out plan was prepared as required by the SC.

Indicator 2: POPs and POPs waste destroyed, disposed or contained in an environmentally sound manner


0.00 5,751 8,340



Target value surpassed by 30% with 1,793 tons of POPs pesticides and wastes destroyed as of October 2013, another 5,133 tons of obsolete pesticide waste contained as compared to a partially unsecured inventory of 4,663 tons in 2009; and 823 tons of priority PCB waste stockpiles destroyed and 964 tons of remaining stockpiles secured and total remaining inventory including in-service equipment of


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4,068 as compared to a total of 1,246.5 tons of stockpiled PCB waste and total inventory of 4,664 tons. Final ISR was prepared as work was completing. Given the volatility of USD/Euro exchange rate, the PIU could not forecast the exact amount of POPs that was exported for destruction for final ISR reporting.

Indicator 3: Environmentally sound disposal of priority POPs stockpiles


0.00 1,751 2,616



Baseline is equivalent to no disposal undertaken of the 1,509 tons of stockpiled priority POPs plus a contingency of approximately 15% (for a total of 1,751 tons). Due to a larger quantity of POPs wastes extracted from the Slonim landfill as compared to the original estimated 935 tons total of obsolete pesticides and 816 tons of PCB waste to be destroyed, the end target will have been exceeded by 33%. 310 tons are still to be destroyed with EU funds that will be made available through a new regional FAO project. With that disposal, the target will have reached 2,926 tons which is the level that was reported as achieved in ISR No. 9.

Indicator 4: Reduced exposure of population to POPs waste in project area


100,000 101,832 127,360



Originally, 100,000 people were living/working in the proximity of targeted POPs waste. More than 100% achieved with the elimination of exposure risk to about 11,360 people to PCB waste in project area and to about 116,000 people to POPs pesticides (in the Slonim District, and Zelva and Lida areas).

(b) Intermediate Outcome Indicator(s)



Indicator 1: Amounts of POPs pesticides recovered, packaged, in storage or destroyed


0.00 4,486 7,068



Baseline was equivalent to 3,472 tons of POPs pesticides in unsecured storage or burial sites and 892 tons of priority obsoleted pesticides in Slonim and 43 tons in Lida, and including 450 tons of DDT. Due to the substantially larger quantity of POPs pesticide wastes extracted from Slonim landfill (and 7 tons more at Lida), the end target was exceeded by 37%.



Indicator 2: Amounts of Priority PCBs destroyed

Value 0.00 816 823


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quantitative or Qualitative)



No disposal had been undertaken at baseline. An additional 7 tons of PCB waste was destroyed slightly exceeding the target. Final 823 tons destroyed represents 17% of the total amount of PCBs in Belarus eliminated including that remaining in service.

Indicator 3: Plans and inventories established, laboratories upgraded


No long-term plan for PCB phase-out. Baseline inventory of PCB equipment.

Updated PCB inventory Full implementation of current PCB regulations 5 expert trainers trained in POPs monitoring. Environmental/health labs upgraded Draft long-term plan

Long-term PCB phase-out plan developed and approved by the Government



Long-term PCB phase-out plan developed and approved by the Government. Plans and inventories established and laboratories upgraded using Government co-financing as had been planned. At ICR, achievement of overall Project Indicator 3 is approximately at 90% with almost all intermediate targets achieved including (in addition to PCB plan and lab upgrading): full implementation of current PCB regulations; PCB inventory updated; local experts trained in POPs monitoring, and 21 contaminated sites assessed (vs. 5). Only two targets were not fully achieved: source specific inventory of unintended releases was partially done for 39 largest enterprises; and investment options for mitigation of unintended POPs releases were not defined.

Indicator 4: New and amended regulatory documents


Gaps in national legislation for control of POPs. Lack of coordination/consistency for POPs related information.

5 educational events, publications, and web postings. Updated POPs Environmental and Health Standards. Updated NIP for 2011-2015. 10 educational/events, publications and web postings.

MNREP has developed: i) a regulation on maintenance procedures of the Uniform Database on POPs; and ii) Resolution No. 19-T of December 26, 2012, Technical Code of Common Practice (TCP) 17.11-06-2 012 (02120) “Environmental protection and nature management. Rules of inventorying POPs added to the Stockholm Convention on POPs.”



Ten educational events were held (workshops, round table discussions and public hearings). National POPs management web-site was updated <www.popsbelarus.by>. Three methodologies of POPs analysis in breast milk and foodstuffs were revised and updated. There were regular publications in republican and Grodno oblast and Slonim newspapers, web postings, 2 TV news reports on elimination of the Slonim OP landfill. Indicator was mostly achieved with all intermediate targets met or surpassed.


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However, for one target, instead of updating environmental and health standards per se, methodologies for analysis were updated. In addition, the NIP was not updated during the project because 1) of 2010 and 2012 amendments to the Stockholm Convention which broadened the scope of POPs and 2) of plans for requesting additional GEF support to complete this work taking into account the amendments at one time.

G. Ratings of Project Performance in ISRs*

No. Date ISR Archived

DO GEO IP

IP Rating for

Component III in

“Comments”

Actual Disbursements (USD millions)

Project 1 Project 2

1 11/07/2010 S S MS - 0.00 0.00

2 06/26/2011 S S MS - 0.05 0.55

3 08/27/2011 S S MS S 0.05 1.22

4 01/25/2012 S S S S 0.22 1.91

5 08/07/2012 S S MS S 0.41 2.77

6 01/01/2013 MS S MU S 0.41 4.28

7 07/30/2013 MU S U S 1.39 5.20

9 10/27/2013 MU S U S 1.39 5.33

*Ratings reflect the performance of the ISWMP, in line with the rating approach for fully-blended operations. Comments corresponding to IP and other rating categories singled out the POPs component for its performance and consistently indicated it as satisfactory. An additional column added above for IP of Component III to illustrate this differentiation.

H. Restructuring (if any)

Restructuring Date(s)

Board Approved GEO Change

ISR Ratings at Restructuring

Amount Disbursed at Restructuring in USD millions

Reason for Restructuring & Key Changes Made

GEO IP

Not applicable.


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I. Disbursement Profile


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Annex II Component Costs and Financing

(a) Cost by Sub-component (in USD Million equivalent)

Components Appraisal Estimate (USD millions)

Actual/Latest Estimate (USD

millions)


Sub-component 1: POPs Stockpile and Waste Risk Reduction

23.752 33.199 140

Sub-component 2: Technical Support and Capacity Development

2.049 1.863 91

Sub-component 3: Institutional and Regulatory Strengthening

0.225 0.241 107

Sub-component 4: Project Management 0.650 0.658 101

Total Baseline Cost 26.676 35.961 135

Physical Contingencies 0.00 0.00 --

Price Contingencies 0.00 0.00 --

Total Project Costs 26.676 35.961 135

Project Preparation Fund 0.285 0.261 92

Front-end fee IBRD 0.00 0.00 --

Total Financing Required 26.961 36.222 134

(b) Financing

Source of Funds Type of Co-financing

Appraisal Estimate

(USD millions)

Actual/Latest Estimate

(USD millions)


Borrower Grant, In-kind 14.887 23.54 158

GEF Trust Fund Grant 5.5 5.5 100

Enterprises/Beneficiaries with POPs* Grant, In-kind 5.851 6.281 107

National Ecological NGOs (UNDP GEF Small Grants)

Grant 0.088 0.098 111

NATO Technology Transfer Program Grant 0.349 0.349 100

EU Pesticides Project Grant -- 0.193 --

Total 26.676 35.961 135

*Includes financing from operating and capital budgets of agricultural enterprises and holders of PCB equipment.


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Annex III Achievements and Outputs by Component

Implementation of the POPs Stockpile Management Component of the ISWMP resulted in

achievement of both the POPs-oriented PDO and the GEO within the approved timeframe of 39 months. Three of the four key targets were surpassed in reaching the component’s objectives. This outcome can be traced to achievements under separate subcomponents which are largely the fruit of the intermediate outcome indicator targets. ACHIEVEMENTS BY SUBCOMPONENT Subcomponent 1: In addition to achievement of targeted values of the four main outcome indicators depicted in the table on p. 8, the results under the subcomponent include:

• Eighty per cent of Belarus’ last estimated stocks of POPs obsolete pesticides and associated wastes have been eliminated from the country (and the globe)

• Critical obsolete burial sites have been consolidated to 5 from 7 with successful excavation and remediation of the Slonim burial site, accounting for more than 45% of buried obsolete pesticides in the country; and with closure and clean-up of a site in Brest with Government funding.

• Best practices have been demonstrated along with a useful lesson learned on the completion of the cleanup of a major POPs pesticide burial site at Slonim (the first time in Belarus), which offers replication and expertise transfer opportunities to other countries.

• Liquid PCBs in the country have been reduced by more than 50% of the baseline and 17% of PCB-based equipment has been eliminated.

• 21 PCB contaminated sites assessed, PCB inventory updated, and a national PCB management plan that specifies targets by sector for phased replacement and elimination of in-service equipment by the SC deadline is in place.

Subcomponent 2: Degree of achievement of the three main activities under the subcomponent is as follows:

• Monitoring and analytical capability expanded. Reallocation of GEF funding to Subcomponent 1 reduced funds. However, training of lab technicians was funded and done in an innovative manner with a comparative study between a Belarus Lab and an equivalent lab in Lithuania. This mutual exchange facilitated accreditation and enhanced lab testing capacity in Belarus. National initiatives were also done with addition of a mobile lab and sampling equipment for POPs analysis in soil and water; a POPs analytical program for food as part of an ongoing food safety program; and updating of 3 methodologies for POPs analysis in breast milk and foodstuffs.

• National POPs registry and management information system which is backed by mandatory reporting on all categories of POPs is fully operational. The system gives MNREP oversight of the state of POPs in the country and will be mainstreamed into the country’s national pollution control data management system.

• Unintentional POPs release reduction. US$70,000 in grant funds was reallocated and the work left largely to MNREP. Regulations issued (see below) will help control some unintended releases as will industry investments for pollution abatement at three large plants.

Subcomponent 3: MNREP issued regulations on quantifying POPs emissions into the atmosphere, on procedures for populating the MIS-unified POPs database, and on inventorying newly added POPs. In addition, under the project full implementation of current PCB regulations was achieved. Basic national


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institutional, regulatory and technical capacity for future management of POPs and maintaining SC compliance is in place and a high confidence exists that this can be sustained based on the proven process of adoption and implementation of periodic national programs covering successive five-year periods.

Another significant project outcome is the level of engagement achieved with NGOs and the public in comparison to the budget. Through ten educational events and media outreach, the POPs issue and Belarus’ commitment to the SC have entered into the public realm and are likely to remain there. This is also thanks in part to the involvement of NGOs in the NIP, and project preparation and implementation.

Most planned outputs under Subcomponents 1-3 were delivered, although there were some

changes in the financing as a result of the additional POPs obsolete pesticides excavated at Slonim that had to be addressed. OUTPUTS BY SUBCOMPONENT Subcomponent 1: POPs Stockpiles and Waste Risk Reduction I. Obsolete Pesticide Stockpiles 1. General Obsolete Pesticide Management Activities (Subcomponent 1.1.1): All identified obsolete

pesticide (OP) stockpiles in Belarus have been inventoried and a national program has been developed to address deficiencies in this storage using GEF-funded local consulting resources. The current as well as historic inventories are summarized in Tables A-2.1. Utilizing national resources and those of local agricultural organizations, these storage sites have now been secured and upgraded with appropriate ventilation, security and regular monitoring practices, as well as consolidation and elimination of sites completed. Additionally, there is continued Government activity to address the large OP burial site at Petrikov which is scheduled for completion in 2014 with material being transferred to secure storage at Chechersk. Overall there is a remaining 5,132.7 tons inventory of OPs in secure storage inventories, a small portion of which is considered POPs (19.1 tons). There has been an increase in this inventory over time, in small part due to the additional historical stores, but primarily due to the transfer of material from burial sites to secure storage at Chechersk. This is compensated by a reduction in the OP inventory associated with burial sites by approximately half during the project. Further activity on the development of the Chechersk site has been funded nationally, including additional secure OP storage and initiation of evaluation and testing of small scale destruction technologies potentially to be employed at the site in the longer term.

2. Slonim site POPs pesticide waste excavation/packaging (Subcomponent 1.1.2): Excavation and packaging of all residual waste at the Slonim burial site is complete, all materials/equipment has been removed, the site has been prepared for re-vegetation with a cover layer of new soil and custody returned to the forestry authorities. Final restoration involving reforestation was delayed until the spring of 2014 due to poor weather conditions in September 2013. Inspection of the site indicated natural vegetation was returning as was wildlife. A final round of operational site sampling has been completed and reported indicating that while residual localized contamination <50 ppm OCP exists this is deemed acceptable for the intended purpose. A post closure monitoring plan, primarily involving ground water was developed for implementation by local environmental authorities with results to be reviewed by MNREP and to be available publicly.


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3. Disposal of POPs pesticide wastes from the Slonim site and Lida Storehouse (Subcomponent 1.1.3): In total, 1,793t of POPs pesticide wastes extracted from Slonim have been shipped for environmentally sound destruction in Germany at facilities operated by SAVA, along with 50 tons of OPs from the Lido storehouse. The due diligence analysis of the disposition of this material as tracked from site through to destruction generally verifies that this was accomplished, although some qualifications were made regarding the firm’s tracking procedures and demonstration of actually achieving the required destruction efficiencies. An additional 310 tons of packaged POPs waste from Slonim is stored at the Mizgiri storage site. This facility was upgraded as required through the project with the exception of requiring appropriate signage is considered a secure facility suitable for near and medium-term storage. The disposal of this material is expected to be financed with EU funds from a new FAO project. A high probability exists that the project will have achieved complete elimination of all POPs wastes from the Slonim site with the overall quantities destroyed substantially exceeding that originally contemplated.

II. PCB Stockpile Management and Phaseout 4. Control of In-Service PCB Equipment and Stockpiles (Subcomponent 1.2.1): This component

involved the development of technical guidance materials, undertaking updated inventories including addressing potential cross contamination issues, training and awareness related to PCB management, and securing remaining stockpiles. Overall, a relatively small GEF investment leveraged substantial government and particularly enterprise investment in these activities. The experience with the priority stockpile elimination funded primarily by the GEF has been documented and disseminated in the form of handling and storage guidelines through training workshops for holders of PCBs. The national PCB inventory was updated which indicated at project completion that 4,070 tons of PCB-based equipment remains as stockpiles or in-service. All remaining stockpiled PCBs have been secured, along with provisions by major holders of in-service equipment to ensure this is maintained as equipment is retired in accordance with the adopted PCB Phase-out Plan (Subcomponent 1.2.3). A comprehensive survey of all regions and major transformer maintenance facilities was also undertaken to evaluate the possibility of cross-contamination of non-PCB equipment with the result that no such cross-contamination was found. Notwithstanding this result, a project recommendation to monitor this with test kit screening tools introduced by the project will be adopted by users.

5. Disposal of Priority PCB Stockpiles (Subcomponent 1.2.2): In total, 823 tons of PCBs and PCB

contaminated equipment from 14 enterprise sites were removed, packaged and shipped for destruction at TREDI facilities in France. This represents 93% of current identified stockpiles of PCB equipment including all associated with high priority sites. The due diligence analysis of the disposition of this material as tracked from site through to destruction verifies that this was accomplished with a high degree of confidence. Additionally, all storage sites from which material was removed have been evaluated for residual contamination and surficial clean-up has been completed. There was one exception (Belshina Tire Company) which had particularly high soil contamination at some points (>500 ppm) suggesting a possible larger issue, for which a formal analytical site assessment is being planned under MNREP supervision using enterprise funding.

6. PCB Phase Out Plan (Subcomponent 1.2.3): The development of a national PCB management plan

has been completed, formally adopted by the National Coordination Committee for the Implementation of the Stockholm Convention, and has formed a key part of the National Action Plan. This plan specifies targets by sector for replacement and elimination of existing in-service equipment


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in a phased fashion within the deadlines specified in the Stockholm Convention. Also developed and adopted are eleven sector phase-out plans that specify targets and timing for individual enterprises and the required financing. This process was particularly effective in stimulating accelerated phase-out among a number of key sectors and individual enterprises, notably the Belarussian Railways which has programed complete phase out of PCB-based equipment by 2015. Based on initial experience with the project, collaboration on replication of this has been initiated with Russian Railways which has very large inventories of PCB based equipment. Design work is underway for a dedicated central PCB storage facility at Chechersk with budgeted funding and potentially PCB destruction capability. The detailed inventory available along with an adopted national PCB phase-out plan and established national capacity on the issue developed under the GEF component offers an opportunity for accelerated PCB phase-out provided there are available resources.

III. Obsolete Pesticide Stockpiles 7. Priority POPs Contaminated Sites (Subcomponent 1.3): GEF funding for this activity was re-allocated

for priority POPs pesticide waste disposal under the understanding that the contemplated project activities would be substantively supported with national co-financing. This was generally the case, with MNREP proceeding to use national resources in the development of an overall national POPs contaminated site inventory and supporting regulatory measures. Local contamination at all PCB stockpiles that were addressed by the project has been cleaned up during the stockpile disposal work. In only one case is it being addressed by a continuing enterprise-financed program. Overall, it is estimated that 62 locations having PCB contamination exist which will require attention with a total area of 1,000 m2. Regulatory developments include approval and enactment of MNREP Resolution No. 20-T of December 29, 2012, Technical Code of Common Practice (TCP) 17.12-04-2012 entitled "Environmental protection and nature management. Territories. Procedure of rehabilitation of territories contaminated with persistent organic pollutants."

SUBCOMPONENT 2: Technical Support Capacity Development 8. Expanding POPs Monitoring and Analytical Capability (Subcomponent 2.1): Project funding in this

area was reallocated for priority POPs pesticide waste disposal, except for a laboratory technician training program completed in 2013. National initiatives include the addition of a mobile laboratory and sampling equipment for analysis of POPs content in soil and water by the State Establishment "Republican Center for Analytical Control in Environmental Protection." The Ministry of Health has undertaken an extensive POPs analytical program applied to food as part of its on-going food safety program. The country is currently active in the UNEP Regional POPs monitoring initiative mandated by the Stockholm Convention as a data and expertise contributor.

9. Data Registry and Information Management System (Subcomponent 2.2): This activity involved the development and implementation of a comprehensive POPs data management system covering key POPs pesticides, OPs, PCBs, U-POPs and POPs contaminated site inventories along with provision for “new” POPs when these are addressed. The system is operational within MNREP and is being integrated with the overall national environmental data management system. It is an on-line system that permits public access.

10. Unintentional POPs Release Reduction (Subcomponent 2.3): Project support in this area was

reallocated for priority POPs pesticide waste disposal and work largely left to MNREP. Regulatory


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action in this area includes approval and enactment of MNREP Resolution No. 10-T of August 19, 2011, Technical Code of Common Practice (TCP) 17.08-13-2011 (02120) "Environmental protection and nature management. Atmosphere. Emissions of pollutants into the atmospheric air. Rules of estimation of emission of persistent organic pollutants," and permitting practice applicable to permissible emissions includes POPs releases since 2012. This is supported by guidelines on the best available techniques of reduction of unintended emissions of POPs developed by the Belarus National Academy of Sciences. Specific industry investment in pollution abatement that would contribute to the reduction of unintended releases include: i) upgraded air pollution controls at an industrial incineration facility in Lakokraska OJSC (Lida); ii) upgrading of electric arc furnace dust/gas treatment and associated control systems at Belarusian Steel Works RUE (Zhlobin); and iii) upgrading of air purification systems on electric arc and induction furnaces at the Mogilev Automobile Plant (Mogilev).

SUBCOMPONENT 3: Institutional and Regulatory Strengthening

11. Legislative and Regulatory Development (Subcomponent 3.1): Project funding in this area was

reallocated to Subcomponent 1 and action in this area left to MNREP. In addition to the regulatory initiatives noted above, MNREP has developed: i) a regulation on Maintenance Procedures of the Uniform Database on Persistent Organic Pollutants; and ii) Resolution No. 19-T of December 26, 2012, Technical Code of Common Practice (TCP) 17.11-06-2012 (02120) "Environmental protection and nature management. Rules of inventorying persistent organic pollutants added to the Stockholm Convention on Persistent Organic Pollutants." Associated with this component and an overall objective of the project is the compliance status in relation to the SC. In that regard, Belarus is current in its reporting obligations having submitted data for both the first and second on-line reporting rounds. An outstanding reporting requirement at the time of project completion relates to updating the 2007 NIP filed with the Convention Secretariat, something that is required periodically, particularly to address the new POPs added to the Convention. This requirement arose during project implementation with 2010 and 2012 amendments. The Government updated the NIP Action Plan for the period 2011-2015, and is planning to undertake the additional analytical and inventory activities on the ten new POPs in 2014, and submit an updated NIP to the Convention Secretariat. To this end MNREP is preparing a request to GEF for grant support.

12. Public Awareness and Information Exchange Activities (Subcomponent 3.2): Component III of the ISWMP generally maintained the modest initial GEF resources allocated in this area and was able to leverage significant additional funding from national budgets and an international support NGO. Activities included extensive local public consultation related to activities at the Slonim site and establishment of the storage facility at Mizgiri, workshops for PCB holders, a project web-site, and general information materials related to POPs.

SUBCOMPONENT 4: Project Management

13. Project Implementation Unit: The PIU was established within MNREP, reporting directly to the

Deputy Minister level but closely affiliated with the Waste Management Department. It employed experienced staff who had undertaken previous international projects including the GEF-funded National Implementation Plan Enabling Activity with the Bank. Overall, the PIU performed well beyond expectations. It slightly overran its budget in part from additional audit costs but it also benefited from savings obtained by employment of a low-cost international due diligence consultant.


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The government met its equal co-financing obligation, largely through in-kind support administratively and through the provision of supporting infrastructure.

14. Technical Due Diligence Verification on POPs Waste Elimination: Component III originally made provision for employment of an independent international expert to verify POPs waste elimination as specified and contracted. The rationale for this provision was recognition that liability and reputational risk issues can arise respecting the actual fate of hazardous waste exported as reflected in a number of recent cases involving transfers from CIS countries to Western Europe. Overall this objective was achieved albeit with some detailed qualifications on how the tracking and destruction technology performance demonstration can be improved. Because results were assessed as not of a sufficiently high quality to be deemed fully creditable, a second round of due diligence records evaluation was undertaken using a national consultant whose product ultimately provided the level of assurance required.


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Tables A.2.1. Summary of Obsolete Pesticide Inventories including POPs Pesticides Remaining in Storehouses and Burial Sites Oblast Obsolete Pesticide Inventory (Tons) – Storage Sites

NIP (2006) 2009 2012

Stores Non-POPs5

POPs Total OP

Stores Non- POPs5

POPs Total OP Stores6

Non- POPs5

POPs4

Total OP

Brest1 15 38.8 0.8 39.6 0 0 0 0 0 0 0 0

Vitebsk 35 411.6 2.3 413.9 35 457.4 2.3 459.7 19 550.5 0 550.5

Gomel2 1 298.6 3.0 301.6 1 1260.8 57.5 1,318.3 1 2,158.7 9.6 2,162.3

Grodno 24 1,365.7 0.3 1,646.0 24 2,009.6 0.3 2009.9 523 1,481.23 3.7 1,484.9

Minsk 95 752.5 0 752.5 95 875.3 0 875.2 72 923.2 5.8 929.0

Mogilev1 6 24.1 0 24.1 0 0 0 0 0 0 0 0

Totals 171 3,171.6 6.4 3,178 155 4,603.4 60.1 4, 663.3 144 5,113.6 19.1 5,132.7

1. All OPs from Brest (110.1 tons) and Mogilev (116,1 tons) Oblasts transferred to Cherhersk between 2007-2009 2. All OP stores from Gomel Oblast consolidated at a single store in Cherhersk prior to 2006 3. Three storehouses were consolidaed at Lida and 50 tons of OPs were shipped for destruction under the GEF project in 2013 4. POPs remaining consists of 14.3 tons of DDT and 4.8 tons of HCH 5 Trace amounts of DDT and HCH in mixtures 6 All storage sites upgraded and secured in 2012 and 2013

Oblast Site Obsolete Pesticide Inventory (Tons) - Burial Sites

NIP (2006) 2009 2013

Non-POPs OP5 POPs Total OP Non-POPs OP5 POPs Total OP Non-POPs OP5 POPs Total OP

Brest Brestsk1 41.5 0 41.5 0 0 0 0 0 0

Vitebsk Verknedvinsk2 444.4 7.1 454.5 444.4 7.1 454.5 444.4 7.1 454.5

Postav n/a n/a 100.0 n/a n/a 100.0 n/a n/a 100.0

Gordok n/a n.a 411.4 n/a n.a 411.4 n/a n.a 411.4

Gomel Petrikov3 1,264.8 158.5 1,423.3 804.0 104.8 906.8 316.2 39.6 355.8

Grodno Slonim4 173.2 447.2 620.4 449.8 447.2 892.0 0 0 0

Mogilev Dribin 255.0 98.7 353.7 255.0 98.7 353.7 401.3 98.7 530

Totals 711.5 3,404.8 657.8 3,118.4 145.4 1,851.7

1. Bural site eliminated and 241.7 tons transferred to Cherhersk between 2007-2009 2. Preparatory work initiated by MES in 2013 for removal in 2014-2015 3. Excavation, packaging and removal of (1423 tons) to Cherhersk initiated in 2010 and scheduled for completion in 2014 4. Excavation packaging and removal if 2,103 POPs waste (OP/contaminated soil > 50 ppm) completed in 2013 under the GEF project. 1,793 tons

destroyed and 310 tons securely stored at the Mizgiri storage site in Grodno Oblast 5. Trace amounts of DDT and HCH in mixtures


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Table A.2.2. Summary of PCB Inventories including Post-project (2013)

NIP (2006) 2009 2013

# of Enterprises

# of Units

Total Wt1

PCB Wt

# of Enterprises

# of Units

Total Wt1

PCB Wt

# of Enterprises

# of Units

Total Wt1

PCB Wt

Transformers

In-service 40 342 2,360 786.5 34 267 1,910 636.8 33 262 1,903 634.4

Decommissioned- Containing Oil

16 36 228.8

76.3

16 41 288 95.9 11 28 233.7 77.9

Decommissioned w/o Oil2

0 0 0 0 10 30.8 1.0 0 0 0 0

Eliminated3 0 0 0 0 0 0 0 0 5 23 156,8 52,3

PCB Liquid (Containers)

3 29 7.8 7.8 30 32.0 32.0 3 3 2 2

Eliminated3 0 0 0 0 0 0 0 0 3 27 27 27

Power Capacitors

In-service 682 33,947 1,525.0 508.2 683 34,195 1,497 499.0 543 26,604 1,201 400.4

Decommissioned 300 12,996 555.0 185.0 370 20.431 894 298.0 384 14,272 730.2 243.4

Eliminated3 0 0 0 0 0 0 0 0 14 13,506 640,3 213,4

Small Capacitors

In-Service 34 40,647 15 5 24 31,442 12.0 4.0 16 15,902 6 2

Stored as Waste 1 11 <1 <1 1 198 <1 <1 2 187 <1 <1

Eliminated3 0 0 0 0 0 0 0 0 0 0 0 0

PCB Contaminated Solids

Soil - - - - 9 33.2 9 33.2

Misc. Contaminated Waste

- - - 2 1.6 1 1.6

Eliminated3 0 0 0 0 0 0 0 0 0 0 0 0

1. Filled transformer weight estimated at 3 times oil weight based on typical specification data of TNZ type transformers 2. Drained decommissioned transformers are assumed to retain 10% of their original PCB oil charge as residual contamination. 3. Total PCB equipment, liquids and contaminated materials eliminates under the GEF project amounted to 814 tons at 14 priority enterprises 4. Survey results indicate negligible PCB cross-contamination in non-PCB transformers.


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