Uganda Development Response to Displacement Impacts Project Phase II

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BackgroundThis operation will be the second phase of the Development Response to Displacement Impacts Project (DRDIP) in Uganda. Phase I, which closed on June 30, 2024, was a regional operation (P152822) that covered Djibouti, Ethiopia, and Uganda. A sister regional project in Kenya (P161067) closed on April 28, 2024. A second phase of DRDIP is currently being implemented in Ethiopia (P178047). This operation (P510476) will be exclusively for Uganda, though will remain part of the DRDIP Series of Projects.Uganda is the largest refugee-hosting country in Africa and the fifth largest worldwide. Uganda currently hosts over 1.8 million refugees, most of whom originate from South Sudan or the Democratic Republic of the Congo. The majority of refugees face protracted displacement and reside in settlements, which are mostly located in the periphery of the country. The refugee-hosting areas are generally poor. In some cases, the development challenges in these locations are exacerbated by the refugee presence, which can place a strain on access to basic services, such as education, health, water and sanitation. The refugee presence also offers significant economic opportunities through labor, remittances, existing capital and by attracting humanitarian and development assistance.Uganda's progressive policies for refugee protection are recognized worldwide. Uganda is a signatory to the Global Compact on Refugees. Its legal framework provides refugees with key rights, including the right to access land inside refugee settlements. The 2010 Refugee Regulations and also integrate refugee concerns into local development plans. Project ObjectiveThe project development objective is to "improve access to basic social and economic services, expand economic opportunities and enhance environmental management for host communities and refugees in the target areas."As per Phase I, the main implementation approach will be community driven development (CDD), whereby host communities and refugees will be facilitated to analyze their own development problems, identify solutions and then implement and maintain their own subprojects, working with the local government.In addition to enhancing access to services, environmental management and economic opportunity, the project will also include a strong focus on strengthening social cohesion between refugees and host communities. Project Financing and ComponentsThis US$328 million project will include US$295 million from the IDA Window for Host Communities and Refugees (WHR). Activities will be implemented through five components:1. Social and economic services and infrastructureThis component will support community-based infrastructure to enhance access to and quality of basic services, such as education, health, water supply and sanitation. It will also support economic and connective infrastructure, including roads, bridges and markets. Three sub-components will be supported, including: (i) Community & Strategic Investment Fund; (ii) Strengthening Local Planning and Decentralized Service Delivery; and (iii) Displacement Crisis Response Mechanism.2. Integrated natural resource managementThe project will support Integrated Natural Resource Management activities to mitigate the impact of the refugee presence on the environment and to contribute to the addressing Uganda's major land degradation crisis. Most activities will be implemented using a Labor Intensive Public Works (LIPW) approach to put cash in the hands of poor host community members and refugees. There will be two sub-components: (i) Restoration of degraded ecosystems; and (ii) Expansion of tree cover. 3. Economic Opportunity This component will enhance economic opportunities and investment capacity of host communities and refugees across agriculture, livestock, and non-farm enterprises. It strongly aligns with the Government of Uganda’s strategic emphasis on agri-business-based industrialization, value addition, entrepreneurship mindset, and economic transformation. The component will support accelerated investments in priority value chains, advance the integration of science, technology, and innovation, and expand access to finance. There will be two sub-components: (i) Resilient value chains and enterprise investments; and (ii) Advancing community institutions for market integration. 4. Project management, accountability systems and coordinationThis component will ensure effective management, monitoring and evaluation and learning for the project implementation support team. For Phase II under this component a particular emphasis will be placed on strengthening the capacity of the Office of the Prime Minister to coordinate and oversee the extensive portfolio of humanitarian and development assistance for refugee inclusion in Uganda. The Inspectorate of Government will support transparency, accountability and anti-corruption measures. 5. Contingent Emergency Response Component (CERC)Under the CERC, in the event of an eligible crisis or emergency, funds may be reallocated from other components of the project. This component, if activated, would finance rapid response measures and early recovery activities to address disaster, emergency and/or catastrophic events at the community level.Geographic coveragePhase II will cover the 12 Refugee-Hosting Districts. The project coverage area will also be expanded to include selected transit districts and secondary cities. The project will run from for six years from 2025 to 2031. It will be implemented by the Office of the Prime Minister and the Inspectorate of Government of the Government of Uganda.