DOCUMENT OF THE WORLD BANK

FOR OFFICIAL USE ONLY

ARAB REPUBLIC OF EGYPT

PROJECT PAPER

ON A PROPOSED RESTRUCTURING

OF THE

EARLY CHILDHOOD EDUCATION ENHANCEMENT PROJECT (Loan No. 7274-0-EGT)

January 14,2010

HUMAN DEVELOPMENT SECTOR MIDDLE EAST AND NORTH AFRICA

Th is document has a restricted distribution and may be used by recipients only in the performance o f their official duties. I t s contents may not otherwise be disclosed without World Bank authorization

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PROJECT PAPER ON A PROPOSED RESTRUCTURING OF THE ARAB REPUBLIC OF EGYPT EARLY CHILDHOOD EDUCATION PROJECT

Table of Contents

I . I1 . I11 . I V . V . V I . VI1 . VI11 .

Data Sheet .......................................................................................................................... 3

Background and Reasons for Restructuring .................................................................. 4 Introductory Statement .................................................................................................... 4

Proposed Changes ............................................................................................................. 6 Allocation of Loan Proceeds ............................................................................................ 7 Project Implementation .................................................................................................... 7 Analysis .............................................................................................................................. 8 Expected Outcomes ........................................................................................................... 9

Annex 1: Key Performance Indicators ............................................................................................... 11 Annex 2: Environmental and Social Management Plan ................................................................... 12

Annex 3: Resettlement Policy Framework ........................................................................................ 14

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I. Data Sheet

Recipient: the Arab Republic o f Egypt Responsible agency: Ministry o f Education Revised estimated disbursements (Bank FY/US$m) FY I FY06 I FY07 I FY08 I FY09 IFYlO IFY11 I F Y 1 2

Current closing date: 12/3 1/20 10 Revised closing date: 06/30/20 12 Indicate if the restructuring is:

_L

X Board approved - - RVP approved -

Does the restructured project require any exceptions to Bank policies? Have these been approved by Bank management? I s approval for any policy exception sought from the Board?

Yes xNo - - Yes -No - Yes -No

I Revised project development obj ective/outcomes

To support the Arab Republic o f Egypt to increase access to early childhood education o f 4 and 5 year-old children, particularly the disadvantaged, and to equip kindergarten (KG) classes with learning materials.

Does the restructured project trigger any new safeguard policies? Yes

Others Canada CIDA World Food Program Local Communities

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11. Introductory Statement

1. During the Bank-wide PAD Consistency Review o f 2008, it was found that there was a discrepancy between the project activities and the environmental classification in the Egypt Early Childhood Education Enhancement Project (ECEEP) which required reclassifying the environmental category from category C to B because the project contemplated building classrooms in both existing as well as in new school buildings. A subsequent inspection o f a representative sample o f project funded refurbished and new classroom conducted by a Wor ld Bank consultant showed compliance with Bank standards.

2. The PAD review also revealed some discrepancies between the project funded activities and the respective output indicators. After consulting with the Borrower it was decided to redefine these indicators to better align them with expected impact o f project funded activities.

3. This Project Paper seeks the approval o f the Executive Directors to introduce the following changes in the Early Childhood Education Enhancement Project (ECEEP) - Loan No.: 72740, Project ID PO82952 - and in accompanying amendments to the project’s legal documents. The proposed changes were requested by the Government in a letter from Ministry o f International Cooperation (MOIC) dated July 29, 2009. The changes consist of: (i) reclassification o f environmental rating from category C to B; (ii) revision o f the project performance indicators; (iii) expansion o f the project from 18 to 19 governorates and districts from 152 to 165 as illustrated in Annex 5; (iv) reallocation o f US$550,000 from the unallocated Category 5 to c iv i l works, public KGs Category 1 (a); and (v) extension of the project closing date by eighteen months, from December 3 1,2010, to June 30,2012.

111. 4. The US$20.0 mil l ion ECEEP Project was designed to support the Government’s Early Childhood Education Strategy which not only intends to increase access to early childhood education by the year 2012 to 60 percent o f the 4 and 5 year-old children, but also seeks to improve school readiness among these children by developing a child-centered curriculum based on national standards; training pre-school staff on the new curriculum; develop appropriate education materials; and linking health and nutrition to early childhood education. The ECEEP Loan was approved by the Board on February 15, 2005 and became effective on October 9,2005. About 50 percent o f the funds have been committed, and about 36 percent have been disbursed to date.

Background and Reasons for Restructuring

5. While the original formulation o f the project development objective (to provide quality early childhood education that improves the school readiness o f 4 and 5 year-old children, particularly the disadvantaged) describes well the overall objective o f the Government’s early childhood development program, it does not capture well the potential impact o f the Bank funded project which i s mainly focused on the narrower goal o f increasing access to early childhood education. Thus, in order to better align the project interventions with the anticipated project results, the planned restructuring proposes the following definition o f the project development objective: “to support the Arab Republic o f Egypt to increase access to early childhood education o f 4 and 5 year-old children, particularly the disadvantaged, and to equip KG classes with learning materials.

6. While the Government ECE Strategy consists o f several interlinked interventions, the Canadian International Development Agency (CIDA); the World Food Program (WFP); and the World Bank are supporting through parallel financing the following three activities:

Component 1. Classroom construction and refurbishment -- US$74.39 million; o f which IBRD contribution represents approximately 23.6 percent (US$17.55). This component finances the construction, maintenance and furnishing o f about 4,950 new kindergarten (KG) classrooms; the refurbishment and maintenance o f approximately 1,400 community (NGOs) based KGs classrooms. The Wor ld Bank i s contributing US$17 mi l l ion toward financing 750 KG

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public classrooms while GoE i s financing the other 4,200 classrooms. Under the NGO component the Bank i s financing the refurbishment o f 500 classrooms while GoE and C IDA are financing the remaining 900 classrooms.

Component 2. Improve Quality -- US$28.45 million; of which IBRD contribution represents approximately 8.2 percent (US$2.35). This component finances the development o f a KG child- centered curriculum; the development, production and distribution o f KG educational materials based on the new curriculum; the development and delivery o f a teacher training program aligned with the new standards and curriculum; and the implementation o f a KG targeted feeding program. The World Bank is contributing U32.35 million towards financing the production and distribution of new learning materials in 2,000 NGO andpublic KG classrooms that wi l l be used to support the new curriculum. The GoE and C IDA are financing the technical work for preparing the standards and curriculum as well as teacher training. The GoE and WFP are financing the targeted nutrition program for KGs throughout Egypt.

I n addition to these two components, the GoE i s implementing, with CIDA’s support, a program to build institutional capacity in the education sector to manage and monitor ECE activities and programs. This program consists mainly o f technical assistance and training needed to build ECE planning, management and monitoring capacity o f MOE’s KG department as well as the KG units in six governorates: Fayoum, Beni Suef, Minya, Assiut, Sohag and Qena. It also supports activities to strengthen inter-ministerial coordination necessary to expand KGs. The World Bank i s not financing these activities.

7. The World Bank funded project will be restructured for the following reasons:

The original environmental classification o f the project did not take into account that component one contemplated the construction o f new KG classrooms in new schools; consequently the project was rated as category C instead o f B which i s what this restructuring seeks to rectify. The project halted al l bidding processes related to the construction o f KG classrooms in new schools and the General Authority for Educational Buildings (GAEB), which i s responsible for school construction, prepared the required Environmental and Social Management Plan (ESMP) and a Resettlement Policy Framework (RPF), which have been cleared by the World Bank. A consultant (environmental specialist) hired by the Bank confirmed that GAEB has only started the construction activities where the school sites complied with the Wor ld Bank standards.

The project development objective and related performance indicators need to be revised in order to better align them with the expected impact o f the Bank funded project activities as explained earlier and as illustrated in section IV o f this Project Paper.

There i s a need to expand the number o f participating Governorates from 18 to 19 (by adding Aswan Governorate) and o f the districts from 152 to 165 in order to cover governorates and districts which meet the project’s poverty selection criteriaand for which there was not sufficient information by the time o f project preparation. According to the latest Bank report No. 39885-EGT “Arab Republic of Egypt - Poverty Assessment Update” dated 16 September, 2006, Aswan is the 7‘h poorest Governorate in Egypt. The additional thirteen districts are also among the poorest in the country.

As a way to compensate for significant cost increases o f c iv i l works due to price escalation o f steel and cement, the agreed ‘fixed amount’ that i s reimbursed for each new KG classroom built by GAEB and financed by the loan proceeds will be increased from LE100,OOO to LE150,OOO. To cover part o f the increase, US$550,000 will be reallocated from the unallocated Category 5 to c iv i l works, public KGs Category 1.

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(v) The project experienced an init ial delay in starting up due to a joint decision between the MOE and the World Bank to accommodate longer processing time o f the Canadian (CIDA) grant that was going to support access, quality and capacity building activities. The purpose was to ensure that the different project components could start together so that the newly built classes would have trained teachers, equipment and newly developed teaching materials. The delay period amounted to more than 12 months. The environmental reclassification and preparation o f related guidelines, while important, has also been a source o f delay that has affected the bidding process for the construction o f new schools for more than six months. The implementation period o f the project needs to be extended in order to account for these delays.

IV. Proposed Chinges 8. As stated in the previous section, the proposed changes consist of: (i) reclassification of environmental rating from category C to B; (ii) reformulation o f the project development objective and intermediate outcome indicators as detailed in Table 1 below; (iii) expansion o f the project into one additional governorate (Aswan) and thirteen additional districts; (iv) reallocation o f funds; and (v) extension o f the project closing date by eighteen months, from December 3 1, 2010 to June 30, 2012. The 6

necessary amendment to the legal agreement to incorporate these changes will be entered into on approval o f this restructuring.

Table 1

Project Development Objective (PDO)

PDO indicators

Component 1 Intermediate outcome indicators related to construction and refurbishment

Component 2 Intermediate outcome indicator related to learning materials

Original Project

To support the Arab Republic o f Egypt in providing quality early childhood education that improves the school readiness o f 4 and 5 year-old children, particularly the disadvantaged

20% increase in enrollment over baseline in KG1 -2 o f adequate quality in targeted areas

Restructured Project

To support the Arab Republic of Egypt to increase access to early childhood education o f 4 and 5 year-old children, particularly the disadvantaged, and to equip KG classes with learning materials 1. Increase in K G 1 -2 enrollment by about 30,000 children in the facilities financed by the Bank Project 2. Two thousand KG classrooms in targeted areas receive learning materials

Intermediate Outcome Indicators 1 19,000 boys and girls reached by public I 1. Number of new public KG KGs plus 192,000 boys and girls reached by NGO KGs

classrooms built in targeted areas with support from the Bank loan 2. Number of NGOs run KG classrooms refixbished in targeted areas with support from the Bank loan

N e w KG curriculum and educational materials developed and implemented in 18 Governorates.

Number o f new KG learning materials produced with support from the Bank loan

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V. Allocation of Loan Proceeds

9. Due to the increase in construction cost, the Government has requested reallocating US$550,000 from the unallocated category 5 to l(a) (works for public KG) as illustrated in the table below:

Category of Expenditure 1. Works

(a) Public KGs (b) Community

KGs

2. Goods

3. Front end fees

Amount o f the Loan Percentage of Expenditures to be Allocated (US$) Financed

16,550,000 100% o f fixed amount financing

1,000,000 100% 100% for foreign expenditures and 100% o f local expenditures (ex-factory cost) and 75% o f local expenditures for other items procured locally

2,350,000

100.000

VI. Project Implementation

10. The start up o f project activities financed by the loan was delayed in order to wait for the approval o f the Canadian (CIDA) Grant which was required for supporting most o f the quality enhancement and capacity building initiatives. Also, coordination between the Ministry o f Social Solidarity (MOSS) and the Ministry o f Education (MoE) in implementing project activities proved to be more diff icult than initially expected due to lack o f experience o f line units within these ministries in jo in t implementation o f activities.

11. Despite initial project delay, the Government has made significant progress (after the change in project management that took place in April 2008) in implementing activities related to access as well as quality improvement and capacity building.

Considerable progress has been achieved on construction and rehabilitation o f KG classrooms: (i) the Government o f Egypt has built more KG classrooms (3,821) than was originally envisioned under the project (994) i.e 384 percent o f the original target; (ii) over 60 percent o f the targeted World Bank funded public KG classroom are at different implementation stages'; (iii) more than 450 NGO classrooms, representing almost 90 percent o f the targeted number o f the Bank contribution, have been identified. O f these, 139 have been completed and 105 are under contracting; and (iv) C IDA has renovated 247 NGO classrooms and UNICEF an additional 160, representing 39 percent o f the whole ECEEP target in this area. New KG standards were developed and approved by the Ministry o f Education and are being used in the design o f the new curriculum which i s expected to be completed by January 2010. Once this i s done, new ECE materials will be produced and distributed. Over 1,220 individuals have been trained in system management, technical supervision, master training and community involvement related topics. A total o f 90 community grants have been made available to support communities' efforts to improve KG quality and access.

0

141 new KG classrooms in public schools are completed while 354 additional KG classes are at different stages o f implementation including the identification o f 88 classroom sites

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A total o f 564,940 children were covered under the school feeding program in 2008/09 (427,460 by the GoE and 137,480 by the World Food Program). School nutrition budgets from both GoE and the World Food Program (WFP) have been increased dramatically (GoE by more than 40 percent and WFP by about 25 percent). Disbursement in the last 12 months has more than tripled (going from about US$2 mil l ion to almost 6.1 1 million).

12. The Project Management Team in collaboration with GAEB prepared the attached Environmental and Social Management Plan, and the Resettlement Policy Framework (see Annex 2 and Annex 3 respectively for the executive summaries). These documents have been cleared by the Bank. GAEB will be responsible for implementing the recommendations and activities described in the ESMP and RPF.

Procurement

13. The Bank’s approval Date o f the updated Procurement Plan o f the proposed restructured project i s August 18,2009.

14. The procurement methods and thresholds under the project remain the same with no change. The updated procurement plan has identified the contracts which shall be subject to the Bank’s Prior Review and those that shall be subject to Post Review.

Financial Management

15. The Project continues to use the same financial management (FM) arrangements, with the project control procedures already assessed by the region’s Financial Management Specialist. The project complexity and transactions are l imited and the recent Special Purpose Review that was made on the project’s SOE expenditures revealed no exceptions. Yet the project s t i l l has FM shortcomings that need to be addressed such as updating the FM manual and reconciling i t s accounts with the Banks Client Connection.

16. The June 2009 project Interim Financial Report was timely received, reviewed by the project’s external auditor with no exceptions noted.

17. The audit report for the year ending December 3 1, 2008, was timely submitted with an “unqualified- clean” audit opinion. The current audit contract covers the Project activities until June 30,2009.

Disbursement

18. The Project continues to fol low the same disbursement arrangements outlined in the disbursement letter dated March 4,2005.

VII. Analysis 19. The restructuring o f the project along the proposed l ines will help improve the project implementation and the compliance with the Wor ld Bank guidelines by addressing key design issues related to environmental, social and resettlement aspects associated with the construction o f KG classes in new schools and by orienting project management to focus on a set o f indicators that are more closely related to the activities funded by the project, allowing for a closer monitoring o f progress towards achieving the project objectives.

20. The Borrower has shown an unbroken commitment to the goals o f the project and to the partnership with the World Bank as demonstrated in the prompt preparation o f the requested Environmental and Social Management Plan, and the Resettlement Policy Framework (their executive summaries are both attached as annexes 2 and 3 respectively). The General Authority for Educational Buildings (GAEB) has

already put the ESMP and RPF on i ts Web site and agreed to use them not only for the project financed classrooms but also for al l the classrooms financed by GoE under i t s own budget which i s an evidence o f their commitment to the goals o f the project and beyond.

VIII. Expected Outcomes

21. The proposed changes will help to have a clearer formulation o f the project focused on the achievement o f the proposed project’s outcome o f improving access to quality ECE in Egypt through the: (i) construction o f KG classrooms in existing and new schools, as well as in NGOs that provide KG services; and (ii) provision o f KG learning materials aligned with the new curriculum. The performance indicators have been revised in order to: (i) align them better with the formulation o f the original project activities; and (ii) make them more relevant to reflect changes in children’s participation in KG and behavioral changes o f KG students that are good predictors o f active student engagement as illustrated in the table below as wel l as in Annex 1 which contains the revised key performance indicators.

PDO

PDO indicators: i) related to access

(ii) related to learning materials Component 1 Output indicators related to construction and refurbishment

Component 2 Output indicators related to learning materials

Benefits and R i s k s

Restructured Project

To support the Arab Republic o f Egypt to increase the access to early childhood education o f 4 and 5 year-old children, particularly the disadvantaged, and to equip kindergarten classes with learning materials

(i) Increase in KG1-2 enrollment by about 30,000 children in the facilities financed by the Bank Project

(ii) 2,000 KG classrooms KG in targeted areas receive learning materials

750 public KG classrooms built in targeted areas with support from the World Bank loan

500 NGOs’ run KG classrooms refurbished in targeted areas with support from the World Bank loan

2,000 new KG learning materials produced with support from the World Bank loan

22. With the building o f 6,350 new KG classes (both public and NGO) and the distribution o f early childhood didactic materials to project’s refurbished NGO and a l l public KG classes, the Government ECE program supported in part by the World Bank funded project will benefit 564,940 KG age children in 29 governorates.

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23. The following risks could affect the achievement o f the project’s key performance indicators:

Risk U S $ depreciates against L.E. will result in less classrooms financed under the project Increasing the fixed amount reimbursed to GAEB per classroom from L.E. 100,000 to 150,000 will result in less classrooms to be financed from the loan proceeds (from 893 down to 750). This i s l ikely to affect negatively the expected increase in enrolment. Financial Management Risks

Overall FM risk Overall Proiect Risk rating

Mitination Measures MOE to increase i ts contribution o f public classrooms

MOE to increase i ts contribution o f public classrooms (MOE has already exceeded i t s contribution by 284%).

- The project will update the FM manual to reflect current procedures and controls applied. - The project to close additional unnecessary account for better cash management.

Risk Rating L

L

After applying the mitigating measures, the FM risk will become Moderate.

M L

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PDO INDICATORS BASE LINE YEAR4 YEAR5 YEAR6 YEAR7 ACCESS No. o f newly enrolled 0 7,500 17,000 24,000 30,000

children LEARNING Number o f leaning 0 0 1,000 1,500 2,000 MATERIALS materials distributed

INTERMEDIATE OUTCOME INDICATORS

TARGET 30,000

2,000

umber o f new public G classrooms built in F argeted areas with 750

upport fiom the Bank

umber o f NGOs' run KG oan (Cumulative)

refurbishment construction and E efbrbished G classrooms in targeted

750

500

140 I 350

500 -L 1,000 New KG learning materials

600

areas with support fiom the Bank loan (Cumulative)

materials produced (Cumulative)

New KG learning 0

~~

400

1,500

I

I

2,000 I 2,000

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ANNEX 2: ENVIRONMENTAL AND SOCIAL MANAGEMENT PLAN

Executive Summary

The EMP prepared by the General Authority for Educational Buildings (GAEB) provides sufficient guidance on the mitigation measures associated with the potential impacts o f the likely sub-projects (Le. school construction) to be built under the project. The main activity under the project i s the construction o f new schools which include the project newly built classrooms, or the construction o f new classooms in existing schools. Also refurbishment o f existing NGO classrooms will be financed under the project. However, this last activity does neither have any negative impact on the environment nor any resettlement issues. The mitigation measures include the following:

- GAEB follows the criteria for selecting and assessing sites for new schools such as: (i) the need to build a new school and if it i s needed to serve a deprived area or to eliminate shifts or t o lower class densities or to replace a dilapidated building; (ii) assessment o f the location and i ts configuration; (iii) assessment o f the walking distance students will walk to such site; and (iv) use o f neighboring land.

The site selection criteria also cover that the site must be away from direct access to railroads, highways, high voltage power lines, rivers, uncovered waste water systems, garbage collection areas and cemeteries. The documents required before beginning any construction activities are as follows (according to site characteristics):

- The allocation Decree by the Government - the decree o f accepting the donation -the contract of purchasing the land. Approval o f the Ministry o f Agriculture. Approval o f the C iv i l Defense Department in case the road i s less than 6 meters. Approval o f the Environmental Authority. Approval o f the Roads Dept. Approval o f the Electricity bept. Approval o f the Health Dept. Approval o f the Railroad Authority.

Approval o f the Local Unit. Approval o f the Dept. o f Antiquities.

- - - - - - - - Approval o f the Army. - -

The above approvals ensure that no resettlement issues exist either formally or informally. GAEB does not start any construction activity if there i s any problem exists on the intended site.

General conditions for school buildings:

- -

Connected safely to sources o f electricity as illustrated in the EMP. Connected by pipes to waste water networks.

Mitigating Measures: - - -

Closing the site by having protecting walls/fences around it. Providing lights and guarding the site. Taking the necessary precautions to protect the water and wastewater pipes and electric cables, etc. from breaking or damaging. Covering the excavation machines to minimize the dust resulting from excavation. Watering the dust in the site with water to minimize the dust resulting from excavation. Providing ducts for throwing materials from high floors. Excavation and destruction works must be in the day light to minimize noise during the night for neighbors.

- - - -

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- - - -

Workers on the site must have the helmets during the construction works. Electric cables must be under observation and well marked and supervised a l l the time. Excavation and other resulting residuals must be removed from the site regularly. Contractors must fol low the safety regulations in the law and in their contracts.

Based on the above, we believe that the Borrower has the capacity to plan (already in the EMP) and to implement the measures as described above. The affected people are usually very happy to have a school built in their area as it means for them that the education service has finally gotten to their neighborhood. The affected people who are next to the school building are the most affected. They are in fact represented by the school Board o f Trustees as well as the local authorities. Training will be provided to the education and NGO leaders with special focus on Boards o f Trustees for better awareness. GAEB i s fully responsible for the EMP and RPF before and during the construction phase. Education Mudiriyas, GAEB branches, Boards o f Trustees in every school and NGOs will be responsible for the EMP after the completion o f the school construction activity.

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ANNEX 3: RESETTLEMENT POLICY FRAMEWORK

Executive Summary

Resettlement Policy Framework (RPF):

1:

2.

The objective o f this RPF i s to illustrate that the policy adopted under the project goes along with the World Bank resettlement policy.

Resettlement i s avoided to the extent possible through good planning. If land acquisition must take place and could not be avoided, then resettlement activities can take place and citizens that are resettled are compensated and they should be participating in the resettlement plans and their implementation. Assist the resettled people in getting similar locations to those which they lost or better if possible.

GAEB’s Mechanisms for Selecting Sites for New Schools:

Sites which are owned by the State. Sites which are donated by citizens. Sites which are bought or exchanged.

In case o f donation by citizens, the following steps are followed:

- - - - -

Donation i s made by the citizen to the local unit or the Governorate. The local council approves the donation o f land for building a school. The local unit notifies GAEB o f the allocation o f the site for a school t o be built on it. GAEB and MOE review the need o f the area for a new school. A Committee i s formed at the Governorate level in order to review the appropriateness o f the site selected technically and if it meets the criteria (area, configuration, walking distance, surrounding activities ,etc. and if there are any negative obstacles such as high voltage power lines, rivers, highways ,etc. GAEB submits a report stating that the site i s acceptable and make the layout and site plans. The local unit finalizes al l the required documentation and gets a l l necessary approvals (ministry o f agriculture, roads dept., electricity dept., health dept., railroads, c iv i l defense, environment and the army). The local unit obtains the approval o f the local elected council to allocate the site for a school and the governor endorses this approval. The local unit provides GAEB with the full documentation and GAEB keeps these documents in their records. GAEB starts the bidding process after al l the above steps.

- -

-

-

-

Similar steps are taken under the government-owned or purchased sites.

The Egyptian constitution since 1923 respects private properties. The 197 1 constitution also does the same in its article number 34.

Under the Egyptian laws (Law No. 10 for 1990), if a piece o f land has to be confiscated, a fair compensation to the owner i s made. Confiscation i s only done for energy projects, water and

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wastewater projects, roads and railroads, bridges and ramps and for urban planning services as well as improving utilities and services.

Conclusion:

GAEB does not accept the donation o f any site except if the documents are complete from a l l authorities and the allocation procedures are legally correct as explained earlier. GAEB, subsequently does not start construction unless the allocation process i s complete. The chances o f requiring resettlement i s very rare and has never happened under this project or any previous Bank project, and if it happens, the compensation procedures take place as per the Egyptian constitution and laws.

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