Senegal River Valley Connectivity and Integration Project

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This Phase Two follows from Phase One of the Regional Project, which was approved by the Bank board in February 2024, and became effective in Senegal in June ad in Mauritania in September of the same year. Phase One adopted a Community Driven Development (CDD) approach aimed at improving the access of the border communities of the Valley to climate resilient and inclusive infrastructure and services. Phase Two adopts a territorial Development approach aimed at supporting the economic growth and jobs creation in selected parts of the valley through the development of value chains in Agriculture, Tourism and Regional Trade. Phase Two Concept DesignThe proposed SOP-2’s main objective is to improve connectivity, transport and logistics services to support selected agricultural and tourism value chains by enhancing territorial development, and sub-regional trade. The aim is to facilitate the integration of the sub-region and lay the foundation for the development of trade, through road infrastructure, secondary and rural roads construction, logistics centers and technical assistance to unlock the agricultural potential of the SRV. This approach includes investments in the road infrastructure and logistics services that ensure basic access to improve welfare and trade opportunities. Beyond infrastructure provision, the SRV has an important role to play in achieving food security, building resilience and improving welfare of the communities in the sub-region. This SOP-2 will contribute to enhance regional integration by unlocking agricultural and tourism areas and set the scene for better trade between Senegal and Mauritania in the next phase of the programmatic approach. As such, the project will promote the concept of Basin of Integration and Stability by financing the construction of large roads and logistics infrastructure, complemented by technical assistance including financial resources to support farmers, SMEs and sub-regional trade. The SOP-2 will be designed around three main and complementary components detailed as follows, based on information available at this stage. Prioritization will be undertaken based on activities readiness and IDA funds availability.C. Phase Two ComponentsComponent 1: Improvement of connectivity infrastructure and core urban infrastructure in urban centers and rural towns of the Senegal River Valley to support the development of selected value chains (150 million USD)The component comprises two subcomponents:a. Subcomponent 1.1: Improve connectivity and associated core climate-resilient transport infrastructure in the agricultural production areas of the SRV. The intention is to connect the rural hinterland to the main roads and open up areas with high agricultural, pastoral and commercial potential on both sides of the Valley. To achieve this objective, this sub-component will finance the construction and pavement (upgrade to asphalt concrete surface) of the main road section and the construction of earth (laterite) roads feeding to the main road sections. The length of the roads to be financed and their associated cost will be determined during the project preparation. The focus will be in the following regions/towns: Rosso (MR), Kaedi (MR), M’Bagne (MR), Selibabi (MR), Podor (SEN), Matam (SEN) and Kanel (SEN). Capacity building activities to foster road safety and road maintenance incorporating climate resilience considerations will also be undertaken as part of this component in both countries.b. Subcomponent 1.2: Urban infrastructure center development. The aim is to invest also in the main urban centers to enhance land use management, improve waste management, construct stormwater drainage network, rehabilitate and improve green and public spaces to foster territorial and economic development and tourism, particularly on the Senegal side of the Valley. This component will be focused on the same regions of subcomponent 1.1. Component 2: Support the development of selected agricultural value chains while protecting, restoring natural capital, and sustaining modernization of the governance of the SRV (100 million USD).a. Finance and invest in agro-hydrological infrastructure to improve the productive agricultural base (75 million USD). The irrigated area will expand by 15,000 ha. All these constructions will be secured through the mobilization of State funds for their maintenance. b. Support to the rice, onion, and livestock value chains (24 million USD). The project will support farmers and SMEs investment from farm to fork, using a cost-share investment approach, linked with technical assistance for business plan and agroecological plan preparation and implementation. c. Institutional support and capacity building for SAED advisory services: 1 MUS$Leveraging private investments, systems and processes are areas where SAED needs to develop its leadership. The creation of a private sector partnership or agribusiness desk could benefit from both FCI and IFC support to build the capacity of the organization in leveraging private sector investments across the board. To boost regional cooperation and benefit from SAED capacity, a prospective service could be created in the SAED working with Mauritania and Senegal. Its strong presence in the field will facilitate information sharing and connections between the various players in the 2 countries. Further, the governance of the program could involve an independent committee chaired by the Ministry of Agriculture where SAED and the private sector are treated as complementary partners – as a reflection of the irrigated areas under existing management by both parties. This would enable better information sharing/reporting, and better consideration of the needs of the private sector. Component 3: Support to development of the business eco-system in the SRV (25 million USD). This component is sub-divided into two subcomponents described as follow: a. Sub-component 3.1. Development of an SME strategy and strategic action planning for the region (5 million USD). The aim of this subcomponent is to conduct field research to write a SVR SME strategy plan for the period 2025 - 2035. The strategy plan will identify the challenges faced by the private sector in the SRV to tackle them according with the new government’s priorities of regionalization. This sub-component will work, also, closely with the IFC to collect information on SMEs in the region, identify local champions and gather data on previous and ongoing investments in the area.b. Sub-component 3.2: Building a regional platform with SME services “La Maison des PME” (20million USD). This sub-component aims to build a regional platform of institutional SME services bringing together various institutional resources to support SMEs within the SRV. The platform (physical first and later online) would act as a central hub or one stop shop where SMEs can access a variety of tools, information, and services offered by different institutions. These could include the following: (i) Government and local government agencies and institutions (APIX; ADEPME; BMN; DER; 3FTP, regions, and municipalities, General Directorate of Taxes and Domains): providing information on regulations, permits, access to specific financing, business and training programs. These governmental organizations will also conduct field survey about the status of existing SRV SME such as size, level of formalization, type of activity, level of productivity, value-add created and competitiveness. ii) Business associations: offering training programs, networking opportunities, and industry-specific resources. iii) Financial institutions (Fongip; Fonsis; MFIs): connecting SMEs with loan options, investment opportunities, and financial literacy resources. iv) Educational institutions: Providing access to training programs, workshops, and expertise from universities, vocational schools, and research centers.Component 4: Project management/monitoring and in