El Salvador Water Sector Resilience Project

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The proposed US$100 million Water Sector Resilience Project will be the first World Bank water supply and sanitation operation in El Salvador. Upon Government request, the Project’s physical interventions will focus on improving the quality and efficiency of water supply services in the Metropolitan Area of San Salvador (MASS), which houses about 30 percent of the country’s population. Through these improvements, the Project intends to enhance the beneficiaries’ resilience to climate change-exacerbated droughts, storms, and floods and to reduce greenhouse gas emissions. The proposed Project will support the implementation of priority no-regret actions identified in ANDA’s recently adopted Business Plan, while developing planning instruments for longer-term resilience and sustainability of services. Component 1: Improve the quality, reliability and efficiency of water service provision in selected areas of El Salvador (US$80 million). This component will increase the quality and efficiency of water services by financing works, goods, and services aimed at improving the resilience of water supply infrastructure and water service delivery for the at-risk and underserved population in the urban and peri-urban areas of San Salvador. The investments will make the target population less vulnerable to climate-induced drought and water shortages by encouraging rational use of water and enhancing water availability through reduced physical water losses and improved continuity of water services, leading to more efficient use of limited water resources. The Project will also increase the resilience of water services to droughts, storms, and floods by considering climate hazards in infrastructure design and rehabilitation, as informed by the Bank’s Resilient Water Infrastructure Design Brief, and improving the reliability of water services. This component will finance the implementation of a comprehensive non-revenue water reduction program targeting physical and commercial losses in the area of influence of the Torogoz water supply system, as well as the rehabilitation of existing power supply lines and installing redundant electrical interconnections to assure energy supply to critical bulk water infrastructure in the Torogoz water supply system. This component will also support the design and implementation of an energy efficiency program in the area of influence of the Torogoz water supply system, which will improve the efficiency of energy use and reduce greenhouse gas emissions. Additionally, this component will finance the acquisition of equipment, technical assistance, and training on asset management; predictive, preventive, and corrective maintenance programs; automation; system operation and maintenance for efficiency optimization, and telecontrol systems (SCADA) that contribute to the rapid identification and repair of failures in the Torogoz system, including in response to climate-induced storms and floods.Component 2: Modernize utility management and strengthen planning to improve resilience to climate risks (US$15.75 million). To increase resilience to the identified climate hazards, Component 2 will support ANDA in its modernization process which includes implementing a new institutional structure (including a unit dedicated to non-revenue water reduction), simplifying internal processes for operational and commercial management, and support in the areas of human resource management, and digitalization (though new and/or upgraded technical, operational, administrative and commercial information systems that will be key to further develop a data-driven culture at ANDA), as well as developing key planning instruments for the provision of climate resilient water supply and sanitation services and preparing the utility for a green, resilient and inclusive future. Activities financed under Component 2 include: (i) preparation of master plans for water supply and sanitation for the cities of San Miguel and Santa Ana and (ii) development of risk profiles and contingency plans for climate events and emergencies for ANDA’s priority water supply and wastewater systems. These planning instruments will improve the resilience of communities in t he target areas and improve the resilience of water supply and sanitation systems by considering the impact of climate change on the intensity and frequency of climate hazards (including droughts, storms, and floods) and on the future quality and quantity of available water resources, as well as by incorporating the principles of decision making under uncertainty and circular economy and prioritizing the use of renewable energy where technically and economically feasible. Component 2 will also finance technical assistance to strengthen ANDA’s institutional capacity for climate adaptation and mitigation, including by enhancing ANDA’s responsiveness, efficiency, professionalism, citizen engagement, and inclusion to improve the operations and maintenance of water supply networks and ANDA’s ability to quickly respond to and recover from climate-related hazards such as droughts, storms, and floods. The component will further support ANDA’s commercial and community engagement units on improving citizen engagement and the gender unit and human resources department to increase gender equity in the workplace. Specifically, to increase women’s representation in the water sector, the Project will finance activities including gender sensitivity and bias trainings, technical and operational trainings that include female staff, and selected actions from the recommendations of a gender study (to be developed with financing from the IADB) that are aligned with improving women’s inclusion in the labor force.Component 2 will further finance a tariff study that will propose a roadmap to gradually minimize the distortions found in the current tariff structure, promote rational use of water, and better target subsidies. The tariff study will ensure that the proposed tariffs a guided by the principles of financial sustainability, economic efficiency, equity, and simplicity.Component 3: Project management (US$4 million). This component will provide project management support including financing of operating costs, technical assistance for capacity building, technical support, support towards the implementation of the Environmental and Social Framework as well as the Environmental and Social Commitment Plan, the preparation of progress reports, and independent audits, as well as support on Project financial, procurement, environmental, and social management, as needed. Component 4: Contingent Emergency Response Component (CERC) (US$0). This component will provide immediate response to an eligible crisis or emergency, as needed. An eligible crisis or emergency is an event that has caused, or is likely to imminently cause, a major adverse economic and/or social impact associated with natural or manmade crises or disasters. At the request of the government, the World Bank will reallocate uncommitted funds from other components to this component. The mechanism for the declaration of emergency would be in accordance with the El Salvador’s current legislation. The implementation agency as well as the eligible expenditures for this CERC will be determined in accordance with the CERC Manual.