Prioritized Urban Investments in Four Provincial Capital Cities
COMPONENT 3: PRIORITIZED URBAN INVESTMENTS IN FOUR PROVINCIAL CAPITAL CITIES (US$25 m)
In line with the overall objectives and the programmatic approach of EZ‐Kar, this component will leverage the CIP platform within IDLG to strengthen the municipalities’ public financial management (PFM) systems and invest in priority investments that enable local economic development and business growth. This component will be implemented by IDLG in the four PCCs of Jalalabad, Kandahar, Herat and Khost.
Subcomponent 3.1: Prioritized Urban Investments. Performance grant allocations for Prioritized Urban Investments (Priority Projects) will be awarded against achievement of specific performance criteria in three cycles. Upon Project effectiveness, four participating PCCs will receive 5 percent of the formula‐based allocation investment financing amount following the submittal of a “Municipal Investment Platform” (Cycle‐1) as required under the CIP project. The remaining financing for investments will be distributed in two subsequent budgetary cycles. These will be aligned with budgetary cycles in FY2019 (Cycle 2) and FY2021 (Cycle 3). Performance allocations in the Cycle‐2 (45 percent of the overall financing allocation) and Cycle‐3 (50 percent of the overall financing allocation) will be awarded based on the level of compliance by the municipality with the public financial management triggers (as per the principles of the parallel World Bank funded CIP) as well as the construction permit trigger. Achieving the latter will be funded and supported by technical assistance provided under Subcomponent 2.3 of EZ‐Kar. Furthermore, progress in the implementation of reforms under the CIP will determine the rate of release of funds for the implementation of Priority Projects (see Table 1). The payments would be made upon receipt of third party verification.
Table 1: Release of Funds under subcomponent 3.1 of EZ‐Kar
|First Investment tranche (Cycle‐1): |
5% Release condition
|Available to all four cities upon project effectiveness and following the submittal |
by each municipality of a “Municipal Investment Platform”. Financing is aimed
at helping to establish the project, undertake design work and complete the 2nd
tranche release condition.
|Second Investment tranche (Cycle‐2): |
45% release condition
|The three cities of Jalalabad, Kandahar and Herat satisfactorily complete a |
construction permit reform implementation plan and meet the Cycle‐2 reforms
under the CIP.
Khost will only need to comply with Cycle‐2 reforms under the CIP.
|Third Investment tranche (Cycle‐3): |
50% release condition
|The three cities of Jalalabad, Kandahar and Herat satisfactorily complete the construction permit reforms and meet the Cycle‐3 reforms under the CIP. |
Khost will only need to comply with Cycle‐3 reforms under the CIP
Priority Projects will be selected through inclusive and participatory consultations led by municipalities, in coordination with Municipal Advisory Boards (MABs) and the private sector. Furthermore, budget allocation per participating city will be allotted according to the number of returnees in the past 3 years (2016‐2018). As such the four participating cities will receive the following allocations: Jalalabad (US$9million); Kandahar (US$4million); Herat (US$ 4million) and Khost (US$3million). This subcomponent is also fully aligned behind the implementation Along with Public Financial Management (PFM) reform triggers. arrangements under the parallel World Bank‐funded CIP project. A clearing mechanism (within the IDLG CIP PIU)
will be established to decide which of the Priority Projects will be financed under the CIP or the EZ‐Kar Window. Priority Projects with high economic returns and located within areas of heavy returnees’ presence will be financed under the EZ‐Kar window.
Subcomponent 3.2: Project management. Given that Component 3 will be implemented by the CIP PIU at IDLG, subcomponent 3.2 will finance the cost of feasibility studies, detailed engineering designs, construction supervision, and monitoring and evaluation for a budget equal to US$5million. Progress and financial reporting, as well as output and outcome monitoring under this component will be reported upon under a separate reporting system along the same format of the CIP.