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Municipal Services Improvement Project in Refugee Affected Areas (P169996) refugees) managed solid waste water services in the selected municipalities that have been provided through this Project.

**ME PDO Table SPACE**

progress reports, based on updated beneficiary’s records from respective SKIs.

**Monitoring & Evaluation Plan: Intermediate Results Indicators**

**Methodology for Data**
**Indicator Name** **Definition/Description** **Frequency** **Datasource**
**Collection**

**Responsibility for Data**
**Collection**

Municipal PIUs and ILBANK PMU Municipal PIUs and ILBANK PMU Municipal PIUs and ILBANK PMU Municipal PIUs and ILBANK PMU Municipal PIUs and ILBANK PMU Page 43 of 94 Reports from PIUs Reports from PIUs Reports from PIUs Reports from PIUs Reports from PIUs Water supply network constructed, rehabilitated and/or extended Water treatment plants constructed or rehabilitated Water reservoirs constructed or rehabilitated Water pumping stations constructed or rehabilitated Sewerage network constructed, rehabilitated and/or extended Length of water supply network constructed, rehabilitated and/or extended due to project activity.

Number of water treatment plants constructed or rehabilitated due to project activities.

Number of water reservoirs constructed or rehabilitated due to project activities.

Number of water pumping stations constructed or rehabilitated due to project activities.

Length of sewerage network constructed, rehabilitated and/or extended due to project activities.

Semiannually Semiannually Semiannually Semiannually Semiannually


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Municipal Services Improvement Project in Refugee Affected Areas (P169996) Reports from PIUs Reports from PIUs Targeted beneficiary satisfaction survey Reports from PIUs Reports from PIUs Wastewater treatment plants constructed or rehabilitated Landfills constructed or rehabilitated Satisfaction rate of female users of environmental infrastructure services and facilities provided by the project Number of municipal authorities and SKIs provided with capacity building support through the Project Number of municipal authorities and SKIs that have prepared a Performance Improvement Action Plan through the project Number of wastewater treatment plants constructed or rehabilitated due to project activities.

Number of landfills constructed or rehabilitated due to project activities.

Satisfaction rate of female users of environmental infrastructure services and facilities provided by the project and their perception of responsiveness of the project to their needs and preferences.

This indicator measures the number of municipal authorities and SKIs benefitted from capacity building activities in the selected municipalities that have been provided through this Project.

This indicator measures the number of municipal authorities and SKIs that have prepared a Performance Improvement Semiannually Semiannually Start and end of the project.

Semiannually Annually A targeted beneficiary satisfaction survey will be carried out among the targeted community groups at the start of the project and at an appropriate time after the services have been provided, towards the close of the project.

Municipal PIUs and ILBANK PMU Municipal PIUs and ILBANK PMU The survey will be carried out by selected NGOs and consultants supported through the project, and results will be reported to the municipalities and ILBANK and the World Bank and EU.

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Municipal Services Improvement Project in Refugee Affected Areas (P169996) Action Plan through this Project.

Semiannually Before the hygiene and sanitation facilities are selected and after the facilities are implement ed.

Grievances registered related to delivery of municipal services that are actually addressed and recorded Percentage of women’s needs and investment choices that were implemented by selected municipalities and SKIs

**ME IO Table SPACE**

This indicator measures the number of grievances registered related to delivery of municipal services that are actually addressed and recorded in the selected municipalities through the Project.

Measuring women’s needs or investment choices regarding the hygiene and sanitation facilities under Component 2d that were implemented by selected municipalities and SKIs (baseline 0%; target 70%).

Reports from PIUs Needs assessment, Post-survey.

A survey will be conducted among women who participated in needs assessment activities after facilities are constructed. The survey will measure if their needs or investment choices are reflected in decisions made by municipality and SKI, and the built facilities are constructed in the way that they requested.

Municipal PIUs and ILBANK PMU Ilbank PMU and Municipalities/SKIs.

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**ANNEX 1: Implementation Arrangements and Support Plan**

**Project Implementation Roles and Responsibilities**

**1.** The roles and responsibilities for the implementation of the project are outlined below:

2. **The Government of Turkey**, represented by the Ministry of Treasury and Finance, is the Guarantor of the loan.

3. **ILBANK** . ILBANK is the Borrower for the IBRD loan and will also be the primary recipient of the EU FRIT grant when it is approved. ILBANK is a state-owned development and investment bank, subordinated to the _[Ministry of](https://en.wikipedia.org/wiki/Ministry_of_Environment_and_Urban_Planning_(Turkey))_ _[Environment and Urbanization](https://en.wikipedia.org/wiki/Ministry_of_Environment_and_Urban_Planning_(Turkey))_ . ILBANK, as the national development and investment bank providing financial intermediary services for municipal infrastructure in Turkey, will also be the implementing agency for the Project.

4. ILBANK will carry out its roles as implementing agency through an existing Project Management Unit (PMU), under the bank’s International Relations Department. The PMU was originally established in 2005 for a Bank financed Municipal Services Project (MSP). It has since been responsible for implementing subsequent operations, including MSP-II (Additional Loan), Sustainable Cities Project (SCP), and SCP-II and SCP-II Additional Loan, and it has demonstrated its capacity for managing World Bank loans through these operations. Relevant technical and financial departments of ILBANK, as well as the regional directorates supporting the targeted municipalities will support the PMU in project implementation. ILBANK will procure or support municipalities/utilities to procure works, TA services and goods as required and will manage the implementation of project activities. The PMU has professional staff responsible for various aspects of project management, including procurement, financial management, social and environmental safeguards, communications, technical/engineering and monitoring and evaluation. Detailed operational modalities will be described in the Project Operational Manual. The PMU’s existing capacity will however be strengthened through hiring of additional staff and/or consultants in line with a staffing plan agreed with the Bank before project effectiveness.

5. **Local/Municipal Level PIUs.** The selected municipalities and utilities/SKIs as applicable based on the specific sub project will be responsible for sub-project investment implementation and will set up municipal project implementation units (PIUs) at local level to ensure effective implementation. The local PIUs will comprise competent staff responsible for technical, procurement, financial and safeguards aspects of the sub-project activities. The staff may be seconded from the respective local institutions or may include individual consultants hired by these entities if existing capacity is not sufficient.

6. **World Bank:** The World Bank, as the EDF Trust Fund administrator, and IBRD lender, will be responsible for monitoring the implementation of project activities and will ensure compliance with the former`s procedures and guidelines. World Bank’s fiduciary arrangements, including its procurement and FM procedures, as well as its Environmental and Social Framework will apply. Detailed fiduciary and safeguards arrangements will be agreed with the implementing institutions, namely ILBANK and the municipalities/ water and wastewater utilities and will be reflected in the relevant legal documents and the Project Operations Manual.

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**Figure 1.1: Project implementation roles and responsibilities**

7. **European Union Delegation:** The EDF will co-finance the project through the FRIT Grant. The World Bank will enter into an Administration Agreement (AA) with the EUD to set up a Recipient-Executed Trust Fund. The AA will provide for the establishment of a Trust Fund to be administered by the World Bank, in the amount of EUR 139.8 million, which the World Bank will provide as a grant to ILBANK. After the AA is signed, the World Bank will enter into a Trust Fund Grant Agreement with ILBANK, which will be the recipient of the funds. ILBANK will be responsible for implementing the funds in accordance with overall project design, including fiduciary and safeguard arrangements, as set out in the POM. The implementation time frame of the EU grant is 48 months from AA signing.

8. **Contractors:** Qualified contractors will be competitively selected to implement sub-projects as per the needs of construction and/or rehabilitation works described within the activities.

9. **Design Review and Supervision Consultants:** A design review and supervision consultant will be awarded to provide supervision services for the construction and rehabilitation works. These Consultants will also support review of existing design documents and preparation of tender documents.

10. **Capacity Building Consultants:** Consultants will be hired to provide trainings and other capacity building activities as required for target groups. Capacity Building events will be organized for the staff of target Page 48 of 94


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Municipal Services Improvement Project in Refugee Affected Areas (P169996) municipalities/utilities to develop required skills in the municipalities to ensure the sustainability of project outcomes.

**Financial Management and Disbursement**

11. Banks in Turkey are subject to strict regulations and supervision by the Banking Regulation and Supervision Agency (BRSA). BRSA’s regulatory and supervisory framework meets modern standards preserving the solidity of the system. Banks in Turkey are required to prepare financial statements in compliance with the Turkish Accounting Standards which are based on and correspond to IFRS. The BRSA also issues rules governing the external audit of bank financial statements, and only auditors approved by the BRSA may carry out such audits. The external auditor is required to report to the BRSA on the internal control and risk management systems of banks as well as being obliged to report directly to the BRSA with respect to certain issues which may threaten the going concern nature of a Bank.

**Implementing Entity**

12. ILBANK first established as Belediyeler Bankasi in 1933 to finance the reconstruction activities of municipalities.

ILBANK law (Law 4759) was updated in 2011 making it a joint stock development and investment bank that is subject to the banking law. Its objectives are meeting the financing needs of special provincial authorities, municipalities and their affiliated organizations and of local administrative associations and to provide consultancy services to these organizations on urban projects. ILBANK is a related establishment of Ministry of Environment and Urbanization of Turkey. The shareholders of the bank are the municipalities and special provincial administrations. Law 5779 on Allotments of General Budget Revenues to be allocated to Special provincial Authorities and Municipalities (2008) requires 2 percent of total tax allotment revenues distributed by the Ministry of Treasury and Finance through ILBANK to be deducted to contribute as capital to Iller Bank.

**Implementation Arrangements**

13. ILBANK has a Project Management Unit (PMU) under its International Relations Department responsible for foreign financed projects including SCP I, SCP II and SCP II Additional Financing (SCP II AF). The PMU is organized according to functions and its financial management department is responsible for such arrangements under SCP I, II and II AF. They will continue with this responsibility under the FRIT MSP. ILBANK will provide technical support to qualifying municipalities and utilities in identifying and appraising investments. ILBANK will also provide funding for the eligible investment projects both from the EU grant and WB loan. ILBANK will be responsible for the procurement of all activities under component 2 including the consultancy services for design review, support for preparation of bidding documents and supervision of construction and rehabilitation works under Component 1.
Procurement of investments will also be done by ILBANK with the representatives from the beneficiary municipalities and utilities in the bid evaluation committees and the contracts will be signed by the municipality/utility and the firm. Payments to the suppliers will be registered directly by ILBANK upon submission of acceptable approval documents. PMU in ILBANK will be responsible for the management of the Designated Accounts and project accounting and reporting.

**Staffing**

14. The PMU at the ILBANK has a dedicated financial management unit responsible for FM functions of all foreign financed projects. There are currently 11 staff working in this department and ILBANK will assign at least one Page 49 of 94


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Municipal Services Improvement Project in Refugee Affected Areas (P169996) financial management specialist to work solely on the financial management aspects of the MSP FRIT Project.
ILBANK has the option to hire consultants to enhance its implementation capacity since Component B of the FRIT MSP has funding available for this purpose. The qualifications and experience of the current staff are satisfactory to the Bank. They have worked in the implementation of the Municipal Services project, its additional financing and currently working for SCP I, II and AF. The experience they have gained in the implementation of these projects will be utilized in conducting the financial management arrangements of the FRIT MSP.

**Accounting Policies and Procedures**

15. ILBANK has a web-based information system (IL_BIS) that links all departments of the institution, allowing them to execute, monitor and report using the same data source. All the regional offices are also connected to the central IL_BIS system. Project accounting for the SCP I and II are integrated into this system using sub-accounts that were created under the Bank`s main chart of accounts. The PMU staff prepares the payment orders and the accounting entries into the Bank`s main accounting system are made by the Accounting Department`s staff. Financial Interim Unaudited Financial Reports are also generated automatically through the system. FRIT MSP will also rely on the same systems and the accounting and reporting for the project will also be fully integrated into the IL_BIS system.
ILBANK will conduct the necessary modifications/additions to the IL_BIS system and these arrangements are expected to be in place before project effectiveness.

16. ILBANK has robust systems, manuals and guidelines regulating the internal controls environment. The accounting and reporting systems at ILBANK are geared toward producing statements and information as required by Turkish laws and regulations. Additionally, lLBANK has developed and executed specific internal control procedures for the implementation of the foreign financed projects including the SCP Program and these procedures are clearly defined in the project financial management manual which is available in the ILBANK web-site.

**17.** FRIT MSP will disburse through sub-loans and grant agreements that will be made between ILBANK and qualifying

municipalities and utilities. The municipalities will submit the payment requests to the PMU after verifying completeness of all documentation is complete will prepare the payment order through its financial management department. The payment will be made directly from the designated accounts to the constructer’s bank account.

18. The PMU has been utilizing detailed checklists that are completed and signed by the relevant staff before processing the payments. Those checklists include financial controls on advance payments made for works in progress, financial controls on payments to individual consultants and corporate consultants, financial controls on works progress payments, financial controls on goods purchases. These checklists with a few modifications to enable funding source identification will also be utilized for MSP FRIT.

**Internal** **Audit**

19. ILBANK has an Internal Controls Department, Risk Management Department and an Inspection Department. All three departments report directly to the Board of Directors. The Internal Controls Department has identified “standard control points” for foreign financed loans. This is standard for all departments and controls points are defined for each function of ILBANK. The International Relations Department, like other departments of ILBANK, is required to complete the form monthly and provide assurance through self-declaration that all control points have been complied with. As a part of its normal procedures, the Department conducts quarterly on-site review of compliance with the control points. There have not been any irregularities observed in foreign financed loans as a part of the internal control review. MSP FRIT will also be a part of regular review of internal controls department.

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Municipal Services Improvement Project in Refugee Affected Areas (P169996) The Risk management Department reviews loans before they are granted and through their effectiveness. ILBANK, through its special status, is required to provide provisions for its loan portfolio. The Risk management Department conducts continuous monitoring and reports to the Board on the status of ILBANK`s loan portfolio. Loans that will be granted to municipalities /utilities under MSP FRIT will be monitored by the Risk Management Department. The Inspection Department is responsible for investigating irregularities, as well as conducting regular reviews of ILBANK systems.

**External Audit**

20. Annual project financial statements (integrating both sources of financing) for the project, as well as ILBANK financial statements will be subject to independent audit by auditors that are acceptable to the Bank. ILBANK has been submitting audited entity and project financial statements to the Bank for MSP and SCP. ILBANK`s entity financial statements prepared in accordance with International Financial Reporting Standards (IFRS) have been audited by private sector auditors in accordance with International Auditing Standards. The entity audited financial statements had unqualified (clean) audit opinions for the last three years. ILBANK additionally prepares financial statements for the projects it is implementing, and these financial statements are audited by the Treasury Controllers who are the government auditors who are responsible for the audit of World Bank financed projects implemented by government institutions. The project financial statements for SCP (separately prepared for the loan and the EU grant) have been received on time and include unqualified (clean) audit opinions as well. (SCP II audit report has not yet been submitted as ILBANK did not utilize any funds from the project in 2018 which is the year with the most recent audit reports available). No material issues were identified in the management letter either.

21. Under the MSP FRIT project ILBANK will be required to submit its audited entity financial statements prepared in accordance with Turkish Accounting Standards (which are fully compatible with International Financial Reporting Standards) and project financial statements to the Bank within 6 months following the end of year. The project financial statements are required to be made publicly available in accordance with the World Bank guidelines. The following chart identifies the audit reports and their due dates:

**Table 1.1 Audit Reporting Requirements**
**Audit Report** **Due Date**
Entity financial statements (FI) prepared in accordance with Turkish Accounting Standards and also at the closing of the project.

Entity financial statements (FI) prepared in accordance Within six months after the end of each calendar year with Turkish Accounting Standards and also at the closing of the project.

Project financial statements (PFS) for the loan part Within six months after the end of each calendar year including SOEs and the designated accounts. and also at the closing of the project.

Project financial statements (PFS) for the loan part Within six months after the end of each calendar year including SOEs and the designated accounts. and also at the closing of the project.

Project financial statements (PFS) for the grant part Within six months after the end of each calendar year including SOEs and the designated accounts. and also at the closing of the project.

Project financial statements (PFS) for the grant part Within six months after the end of each calendar year including SOEs and the designated accounts. and also at the closing of the project.

22. Currently the financial statements prepared by the municipalities are not subject to independent external audit except the annual audit conducted by the Turkish Court of Accounts (TCA), the supreme audit institution in Turkey.
Annual TCA audit reports will be reviewed by the project team as a part of project supervision.

**Reporting and Monitoring**

23. ILBANK will prepare Interim Unaudited Financial Statements (IFRs) for the project following the same format utilized for the SCP I and II. The agreed formats of the IFRs are attached to the negotiations and technical discussion Page 51 of 94


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Municipal Services Improvement Project in Refugee Affected Areas (P169996) minutes. ILBANK will also ensure that the reports with financial content are automatically generated from IL_BIS system.

**Disbursement Arrangements**

24. The project will be disbursing on the traditional disbursement techniques. Two Designated Accounts will be created for the project (one for EU grant and one for the WB loan). ILBANK will open the designated accounts at a commercial bank that is acceptable to the World Bank. Designated accounts for SCP I and SCP II are at Ziraat Bankasi. Two authorized signatures who will be specified in the project FM manuals will sign the withdrawal applications. The minimum application size for payments directly from the loan account for the issuance of Special Commitments, as well as the Statement of Expenditure (SOE) limits, will be described in the disbursement letters.
Full documentation in support of SOEs, including completion reports and certificates, would be retained by the ILBANK for at least two years after the World Bank has received the audit report for the fiscal year in which the last withdrawal from the loan account was made. This information will be made available for review during supervision visits by World Bank staff and for annual audits. Disbursements for expenditures above the SOE thresholds will be made against presentation of full documentation of the expenditures.

**Figure 1.2. Funds Flow**

**World Bank Project Implementation Support Plan**

25. The Implementation Support Plan (ISP) is tailored to the specific context and characteristics of the project, based on the dispersed geographic scale of investments, and existing capacity of the implementing agencies and arrangements. The ISP will be reviewed periodically to ensure that it remains fit for purpose and responsive to the project’s implementation support needs over its lifetime.

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Municipal Services Improvement Project in Refugee Affected Areas (P169996) 26. **Project Launch Workshop.** A project launch workshop will be held soon after project approval. It will bring all project stakeholders together to ensure that the project scope, design, process and responsibilities are understood.

27. **Implementation support missions.** The project would be supervised at least twice a year and the recommendations of such supervisions would be presented to ILBANK and recorded in an Aide Memoire. The World Bank would be represented by a task team leader, supported by a team of experts with various skills as needed, including fiduciary (Procurement and financial management), safeguards (Social and environmental), monitoring and evaluation, and technical specialists. The goal would be to: (a) undertake required policy dialogue with the Government of Turkey, ILBANK, and local governments, related to the project and the sector; and (b) coordinate with other donors.

28. The semiannual supervision missions and short/ follow-up technical missions as needed in specific areas, will focus on the following areas: a) **Strategic support.** Supervision missions will meet with ILBANK PMU and relevant municipality PIU representatives to: (i) review progress on the project’s activities; (ii) discuss strategic alignment of the project’s different activities, especially at the planning level, between the relevant stakeholders; and (iii) evaluate progress on cross-cutting issues such as M&E, training, communication, knowledge exchange, innovation, dissemination of project results and experiences, and coordination between the relevant stakeholders.

b) **Technical support.** Supervision will concentrate on ensuring the technical quality of bidding documents, TORs, evaluation reports, construction plans, products delivered by consultants, and investment activities/targets, working in close collaboration with ILBANK and the design review and construction supervision consultants.
During construction and commissioning, technical supervision will be provided to ensure that technical contractual obligations are met. Regular site visits will be carried out during project implementation and will involve technical specialists from the World bank, ILBANK and consultant teams as needed.

c) **Fiduciary support.** Periodic supervision of procurement and FM support will be carried out by the World Bank semiannually to (i) perform desk reviews of project interim financial reports and audit reports, following up on any issues raised by auditors, as appropriate; (ii) assess the performance of control systems and arrangements; (iii) update the FM rating in the FM Implementation Support and Status Report as needed; (iv) provide training and guidance on carrying out procurement processes in compliance with the Procurement and Anticorruption Guidelines and the POM; (v) review procurement documents and provide timely feedback to the PIU; (vi) carry out the post review of procurement actions; and (vii) help monitor project progress against the Procurement Plan and identified performance indicators of the contracts.

d) **Safeguards support.** The coordination that began during preparation will continue throughout project implementation, especially to ensure that the relevant safeguards concerns are included in the works financed under the project through due diligence from applications of the site-specific ESIAs, ESMPs, and RAPs and effective mitigation measures. Supervision from the World Bank safeguard specialists will take place at least twice a year.

29. **Mid-term review.** A mid-term review of the project will be carried out about two years into implementation to assess overall progress towards meeting the development objective, and to address any changes to project design or implementation required to meet the objectives.

30. **Implementation Resource Requirements.** Table 1.2 below reflects estimates of skill requirements, timing, and resource requirements over the life of the project. these projections are subject to modification as needed over the course of implementation.

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**Table 1.2. Implementation Support Resource Estimates**

**Resource Estimates**
**Time** **Focus** **Skills Needed**

**(Staff Weeks)**
First 12 Project rollout, management, and implementation Task team leads 6 per task team leader months support coordination per year Project rollout, management, and implementation support coordination Project rollout, management, and implementation Task team leads 6 per task team leader support coordination per year Refine subcomponent activities and ensure quality Task team leads/technical 2 per task team leader of detailed designs specialists per year Refine subcomponent activities and ensure quality Task team leads/technical 2 per task team leader of detailed designs specialists per year Social and environmental safeguards, including risk Social and environmental 4 per year mitigation measures specialist Task team leads/technical specialists Social and environmental specialist 4 per year Technical and procurement review of TORs and bidding document Task team leads, technical specialists, procurement specialists 6 per year Fiduciary arrangements and FM systems FM specialist 3 per year Promoting innovation in the project Task team leads/technical 3 per year specialists 12 to 72 months Procurement review and feedback of bidding documents and consultant contracts Technical review of TORs, technical reports, and bidding documents Non-lending TA, capacity and institutional strengthening efforts Procurement specialist 6 per year Task team leads, technical specialists Task team leads, technical specialists 6 per year 4 per year FM supervision FM specialist 3 per year Social safeguards – supervision Social Development specialist 4 per year Environmental safeguards – supervision Environmental specialist 4 per year Project management, M&E, and project Task team leads, technical 8 per year supervision coordination specialists Task team leads, technical specialists 8 per year Operational support, M&E, lessons learned, progress and final reporting.

Technical specialists and operations officer 6 per year

**Table 1.3. Skill Mix Requirements**
**Skill Needs for Supervision** **Comment**
Task team leader Headquarters based Co-Task team leader Region based Co-Task team leader Country based WSS/technical specialist Country based (including consultant) Solid Waste Management Specialist Region based (including consultant) FM specialist Region based Procurement specialist Region based Social Development specialist Country based Gender Specialist Country/HQ based Environmental specialist Country based Lawyer Region based Disbursement officer Region based Page 54 of 94


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**ANNEX 2: Detailed Project Description**

1. **Background.** The Project aims to improve host and refugee communities access to safely managed water supply,

sanitation and solid waste services in targeted municipalities affected by the influx of Syrians Under Temporary Protection in Turkey. The project focuses on five municipalities or provinces (i.e. Adana, Kahramanmaras, Kayseri, Konya and Osmaniye) out of the ten most impacted by the refugee influx in Turkey as identified in the EU Needs Assessment. The selection of the five municipalities to be supported through the current project was based on not just the identified needs, but also eligibility for World Bank financing of sub-projects that do not trigger _World Bank_ _OP 7.50 Projects on International Waterways_ . Sub-projects triggering this policy are to be supported by other development partners, including AFD.

2. **Target Group and Final Beneficiaries.** The final beneficiaries comprise the populations in the affected municipalities, including the refugees and host populations. Only a small share (less than 10 percent) of the refugee population resides in camps, while the majority live outside camps, mostly in urban areas. There are two designated camps in the targeted provinces: Kahramanmaras' Merkez Container Camp which hosts about 14,811 refugees, and Adana Sancam Container Camp which hosts about 26,700 refugees. The primary project beneficiaries include both the refugees and host communities in the five municipalities of Adana, Kahramanmaraş, Osmaniye, Kayseri and Konya targeted under this project and is estimated to be more than 3.3 million.
Approximately 301,890 refugees (or 9 percent of the total beneficiaries) and 3,021,000 of the host population will be direct beneficiaries of the environmental infrastructure investments under Component 1.

3. **Project Components and Estimated Costs** **[39]** **.** The Project will comprise two components (i) **Component 1. Environmental Infrastructure Investments:** This component will finance the construction and rehabilitation works for water supply, sanitation, and solid waste management infrastructure in the targeted municipalities to achieve improvements in access, service quality and continuity of municipal services; and smaller scale critical facilities to address immediate municipal service needs of vulnerable SUTP and host communities at the neighborhood or settlement level, to be identified in a participatory manner by the beneficiaries. Individual infrastructure facilities will, where appropriate, consider adaptive designs that would allow for a scale up or down of capacity in the event of unanticipated changes in the refugee population. The component may finance goods, works, non-consulting and consultant services towards these activities.

(ii) **Component 2. Technical Assistance for Project Management and Supervision, Capacity Building,**

**Communication and Citizen Engagement.** This component will finance goods and consultancy services for
the following activities: a) **Project Management.** This activity will finance goods and consulting services required for coordination and day-to-day project management, including management of procurement and financial management aspects, management of social and environmental safeguards, including dam safety requirements associated with the project, technical and contract management, monitoring and evaluation (M&E), and project reporting and communications.

b) **Consultancy services for design review and supervision of environmental infrastructure investments.** This 39 Please see footnote 15, which is applicable for all references to the grant in this Annex.

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Municipal Services Improvement Project in Refugee Affected Areas (P169996) activity will finance consultancy services for design review and preparation of bidding documents, taking into account climate change considerations, and supervision of construction and rehabilitation works for proposed environmental infrastructure investments under Component 1.

c) **Citizen Engagement, Public Communication and Visibility activities.** This activity will finance: (i) **Communications and Visibility activities for the project.** A detailed Communication and Visibility Plan will be developed at the start of implementation, in line with EU Communications and Visibility Manual for EU External Actions [40], as well as the World Bank’s external communications guidelines.
Communications activities will also seek to target critical public education messaging to different stakeholder groups, including children and youths, and adults in relevant languages.

(ii) **Citizen/Community engagement activities** to facilitate effective two-way engagement among stakeholders, including Turkish citizens and SUTPs and municipalities and SKIs to identify the needs and priorities for enhancing service delivery to all people in the beneficiary communities.

d) **Institutional Capacity Building activities targeting the participating municipalities, utilities and ILBANK.** This activity will finance capacity building activities, including inter-alia, training and workshops aimed to improve performance efficiency, positively change behavior, and increase capacity within municipalities and SKIs/utilities to further modernize their operations to optimize efficiency and effectiveness in service delivery while embracing principles such as resilience, financial and environmental sustainability, and inclusion. These activities will also seek to contribute to increased water security through more efficient delivery, and thus increased resilience to climate change.

A breakdown of detailed cost estimates for activities to be financed under the project, as tentatively agreed at appraisal stage, is presented in Table 2.1 below.

**Table 2.1 Indicative Detailed Activities and Cost Estimates** **[41]**

**FRIT Grant**
**Category**

**FRIT Grant (%**
**IBRD (EUR)**
**(EUR)** **of total (EUR))**

**Total Cost**

**(in EUR)**

**Total Cost**

**(EUR)** **of total (EUR))** **(in EUR)** **(in US$)**

**Component 1: Environmental**
**Infrastructure**

**1a. Water Supply Investments**
**Adana**
Kozan İmamoğlu Yedigöze Drinking Water Transmission Line 0 21,850,000 0 21,850,000 24,253,500 Yedigöze Water Treatment 0 13,150,000 0 13,150,000 14,596,500 Plant Kozan Pınargözü Drinking Water Transmission Line and Network

**Kahramanmaras**
Kahramanmaraş (Centrum) Drinking Water, Sewerage and Stormwater Project West Part 28,070,000 0 100 28,070,000 31,157,700 0 17,000,000 0 17,000,000 18,870,000 40 https://ec.europa.eu/europeaid/work/visibility/_en 41 The US$ amounts are subject to changes due to exchange rate changes.

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**FRIT Grant**
**Category**

**FRIT Grant (%**
**IBRD (EUR)**
**(EUR)** **of total (EUR))**

**Total Cost**

**(in EUR)**

**Total Cost**

**(EUR)** **of total (EUR))** **(in EUR)** **(in US$)**

Elbistan Drinking Water 8,000,000 0 100 8,000,000 8,880,000 Network Project Elbistan Drinking Water 0 25,000,000 0 25,000,000 27,750,000 Transmission Line

**Konya**
Akşehir Water Supply Project 4,710,000 0 100 4,710,000 5,228,100
**Osmaniye**
Osmaniye (Centrum) Drinking 0 27,650,000 0 27,650,000 30,691,500 Water Project

**Priority public hygiene**
**investments at neighbourhood**
**level**

500,000 0 100 500,000 555,000

**1a. TOTAL Water Supply**
**41,280,000** **104,650,000** **28** **145,930,000** **161,982,300**
**Investments**

**1b. Sanitation Investments**
**Kahramanmaras**
Ceyhan Basin Wastewater Treatment Plants (Goksun & Ekinozu) Ceyhan Basin Wastewater Treatment Plants (Caglayancerit & Andirin) Kahramanmaraş (Centrum) Drinking Water, Sewerage and Stormwater Project East Part 0 5,500,000 0 5,500,000 6,105,000 2,900,000 0 100 2,900,000 3,219,000 18,800,000 0 100 18,800,000 20,868,000

**Kayseri**
Kayseri Wastewater Treatment 12,500,000 0 100 12,500,000 13,875,000 Plant - Phase 1 Kayseri Wastewater Treatment 0 12,500,000 0 12,500,000 13,875,000 Plant - Phase 2

**Konya**
Ilgin Wastewater Treatment 3,900,000 0 100 3,900,000 4,329,000 Plant Çumra Wastewater Treatment 4,560,000 0 100 4,560,000 5,061,600 Plant

**Osmaniye**
Osmaniye (Centrum) Sewerage 29,910,000 0 100 29,910,000 33,200,100 Project

**Priority public hygiene**
**investments at neighborhood**
**level**

500,000 0 100 500,000 555,000

**1b. TOTAL Sanitation**
**73,070,000** **18,000,000** **80** **91,070,000** **101,087,700**
**Investments**

**1c. Solid Waste Investments**
Kahramanmaraş Northern Districts Integrated Solid Waste Project 17,000,000 0 100 17,000,000 18,870,000

**Category** **FRIT Grant** **IBRD (EUR)** **FRIT Grant (%** **Total Cost** **Total Cost**

Page 57 of 94


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996)

**(EUR)** **of total (EUR))** **(in EUR)** **(in US$)**
**1c. TOTAL Solid Waste**
**17,000,000** **0** **100** **17,000,000** **18,870,000**
**Investments**

**Sub-total (Component 1:**
**131,350,000** **122,650,000** **52** **254,000,000** **279,230,000**
**Environmental Investments)** **[42]**

**Component 2: Technical**
**Assistance for Project**
**Management, Supervision,**
**Capacity Building,**
**Communication and Citizen**
**Engagement**

**2a. Project Management**
i) Operating Costs 0 500,000 0 500,000 550,000 ii) Consultancy services for 780,000 0 100 780,000 857,500 PMU iii) Procurement of Video Conference System/s for ILBANK HQs and Regional Directorates 0 1,325,000 0 1,325,000 1,456,600

**2b. Design Review and**
0 10,250,000 0 10,250,000 11,268,000
**Supervision**

**2c. Institutional capacity**
0 630,000 0 630,000 692,600
**building activities**

**2d. Citizen and Community**
370,000 0 100 370,000 407,000
**Engagement Activities**

**2e. Communications and**
735,000 0 100 735,000 808,000
**Visibility activities**

**Sub-total (Component 2:**
**Technical Assistance for**
**Project Management,**
**Supervision, Capacity Building,**
**Communication and Citizen**
**Engagement)**

**1,885,000** **12,705,000** **52** **14,590,000** **16,039,700**

**TOTAL** **133,235,000** **[43]** **135,355,000** **[44]** **50** **268,590,000** **295,269,700**

**Detailed description of sub-project investments at Appraisal Stage**

**A: Adana Municipality**

4. **Adana context.** During the Syrian war Adana became one of the most preferable arrival points for Syrian refugees.

The refugee population in Adana mostly includes Syrians and Iraqis majority of whom are living in central districts of Adana. Adana province has a total population of about 2,220,125 people out of which 238,556 (or 10.8 percent of the total population) are SuTP’s [45] . There is one refugee camp, the Saricam Container Camp, in the province of 42 A contingency amount for investments in the amount of about Euro 984,904 will be included in the grant amount for component 1 bringing the total grant amount for the entire project to Euro 134,219,904.
43 See 42 above i.e. total Grant amount includes the contingency will add up to Euro 134, 219, 904.
44 This amount includes the front-end fee of US$372,040 shall be included in the project cost.
45 As per the address-based census45 for 2018 Page 58 of 94


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996) Adana which hosts about 20,700 SuTP’s [46] . The increased population due to the high influx of refugees resulted in additional demand for municipal and infrastructural services including water systems.

5. The water supply and sanitation services are provided by Adana Water and Sewerage Administration General Directorate (ASKİ). The service provision area of ASKI has increased considerably with the change of Adana to a metropolitan municipality. Majority of the settlements in the region use well water. In drought years and seasons, well yields significantly reduces. The use of groundwater wells and associated pumping in these areas have caused high energy expenditures and operational costs for ASKI. The ageing water supply and distribution networks in the service areas are characterized by high NRW (61.6 percent) and water losses (57.7 percent) [47] . In order to solve water deficiency problems in some settlements of Adana, ASKI has initiated a design for Yedigöze Drinking Water Transmission Line and Water Treatment Plant Project.

6. **Adana Sub-Project.** This Sub-Project aims to supply water to 141 settlements from Yedigöze Dam Reservoir which will eliminate well usage in these settlements. The total project beneficiaries are estimated at 506,636 people out of which 49,423 (or 10 percent of the total population) are SuTP’s. Investments in Adana cover:

- Kozan Imamoglu Yedigoeze Drinking Water Transmission Line (35.4 km transmission line),

- Yedigoeze Water Treatment Plant (capacity: 115,776 m3/day), and

- Kozan Pinargoezu Drinking Water Transmission Line and Network (28.12 km transmission line and 310 km
network).

7. Through the Project, water will be taken from the existing Yedigöze Dam reservoir (in Ceyhan Basin) and transferred to a new Water Treatment Plant (with a planned capacity of 115,776 m3/day) which will be constructed through the project. The treated water from the Yedigöze WTP will be used to supply safe drinking water to the 4 districts of Imamoglu, Kozan, Ceyhan and Yumurtalik and 137 neighborhoods in the Ceyhan basin. The new system is expected to eliminate the existing use of groundwater wells. Energy costs of the system are expected to decrease significantly as the water from the reservoir will be distributed by gravity. In Kozan, existing asbestos pipes will be replaced with ductile iron and high-density polyethylene (HDPE) pipes which will lead to significant decrease in water losses. The proposed investments in Adana metropolitan municipality are summarized in table below.

**Table A2.2: Adana investment components**
**No** **Investment name** **Scope** **Budget (million**

**EUR)**
A-1 Kozan İmamoğlu Yedigoeze - 35.4 km transmission line to Kozan (Ø700 mm-Ø1,400 21.85 Drinking Water Transmission mm ductile iron pipes) with auxiliary structures Line (washout and air relief valve chambers, etc.) 21.85 A-2 Yedigoeze Water Treatment Plant A-3 Kozan Pınargoezue Drinking Water Transmission Line and Network

- 35.4 km transmission line to Kozan (Ø700 mm-Ø1,400
mm ductile iron pipes) with auxiliary structures (washout and air relief valve chambers, etc.)

- Construction of a new WTP with a capacity of 115,776
m3/day (1,340 l/s)

- Renewal of existing 28.12 km transmission line;

- 310 km water distribution network including

- 8 Pumping stations, water reservoirs (4 new), 2
collection tanks and auxiliary structures 13.15 28.07

**TOTAL** 63.07

**B: Kahramanmaraş Municipality**

46 UNHCR Turkey: Syrian Refugee Camps and Provincial Breakdown of Syrian Refugees Registered in South East Turkey (January 2020): _[https://data2.unhcr.org/en/documents/details/73300](https://data2.unhcr.org/en/documents/details/73300)_, accessed on January 15, 2020 47 According to PID for Adana Page 59 of 94


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996) 8. **Kahramanmaraş context.** Kahramanmaraş is one of the 10 provinces in Turkey with the highest Syrian refugee population. The Syrian population in the Province has increased by 78 percent in the last six years, 2012-2018. In 2018, Kahramanmaraş province had a total population of about 1,144,851 people out of which 92,630 (or 8.1 percent of the total population) were SuTP’s [48] . There is one refugee camp, the Merkez Container Camp, in the province of Kahramanmaraş which hosts about 10,859 SuTP’s [49] . Kahramanmaraş became a Metropolitan Municipality following the administrative reforms, and the water supply and wastewater service utility, Kahramanmaraş Water and Sewerage Administration General Directorate (KASKİ) was established in 2014. In accordance with the changes in municipal legislation, the service area of the Metropolitan Municipality and KASKI is defined by provincial boundaries. Accordingly, the personnel, assets, investments, liabilities, and receivables related to the provision of water and wastewater services carried out before 2014 by the sub-provincial municipalities, the Special Provincial Administration (SPA) and other service providers within the provincial boundaries, were transferred to KASKİ. The provision of solid waste services in terms of waste collections remains with sub-province municipalities, while the disposal and/or recovery of the collected municipal waste is the responsibility of the Metropolitan Municipality.

9. **Kahramanmaraş Sub-Projects** . The proposed subprojects are aimed to improve access to safely managed water supply, sanitation and solid waste services in the proposed project areas in Kahramanmaraş metropolitan municipality. At appraisal stage, six investment sub-projects were identified:

- Kahramanmaraş Northern Districts Integrated Solid Waste Project

- Kahramanmaraş (Centrum) Drinking Water Project

- Kahramanmaraş (Centrum) Sewerage and Storm Water Project

- Elbistan Drinking Water Network Project

- Elbistan Drinking Water Transmission Line

- Ceyhan Basin Wastewater Treatment Plants

10. **Kahramanmaraş Northern Districts Integrated Solid Waste Project.** The sub-project is composed of construction of a sanitary landfill (including a mechanical separation facility of 757 tons/day and a composting plant of 410 tons/day), two transfer stations (in Goksun and Elbistan) and rehabilitation of 24 wild dumpsites. Rehabilitation of 22 wild dumpsites (mainly of former small towns) will be done mainly by transferring dumped wastes to the new landfill site and 2 wild dumpsites (Afsin and Elbistan) will be rehabilitated on site.

11. **Kahramanmaraş (Centrum) Drinking Water Project.** The sub-project includes rehabilitation and construction works in water distribution network including establishment of pressure zones, DMAs, SCADA system and installation of flow meters and pressure reduce valves. Within the scope of this sub-project, there are 59 water reservoir areas of which 38 are planned to be constructed. For the remaining, some of them will be abandoned or rehabilitated. Currently, varying pressure in the distribution network cause problems and the NRW in city is above 60 percent.

12. **Kahramanmaraş (Centrum) Sewerage and Storm Water Project.** The sub-project includes rehabilitation and construction of 400 km sewerage network and 100 km storm water network. The sub-project aims to solve the problematic areas in terms of sewerage and storm water networks in the city center, specifically Onikişubat and 48 As per the address-based census48 for 2018 49 Calculations based on PID for Adana and projected estimates for the year 2020 Page 60 of 94


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996) Dulkadiroğlu neighborhoods. The city center is located to foothill of Ahır Mountain. The rainwater from the high slopes of the mountain arrives to city center and causes flooding in streets since the closed storm water boxes are not capable of carrying the surface water flow. Recently in June 2018, a storm disaster, caused 3 losses in the city center besides the economic losses. It is reported that some of the storm water manhole lids and grids are covered or remain under roads which also prevents storm water entering through these grids/lids.

13. **Ceyhan Basin Wastewater Treatment Plants.** Ceyhan basin is one of the 25 basins in Turkey extends from İskenderun Bay to inner Anatolia region. Ekinözü, Çağlayancerit, Andırın and Göksun are sub-provinces of Kahramanmaraş and part of Ceyhan basin. According to the Ceyhan Basin Pollution Prevention Plan prepared in 2016, the wastewater treatment plants for Ekinözü, Çağlayancerit, Andırın and Göksun are parts of the measures required to prevent pollution in the basin. The increased population with the addition Syrian refugees increases the pressure on the river basin due to untreated wastewater discharges. The project aims to enable KASKI (General Directorate of Kahramanmaraş Water and Sewage Administration) to provide local population and Syrian refugees with improved wastewater services. The project will also contribute to the prevention of pollution in Ceyhan River Basin.

14. The following 4 WWTPs and relevant collector line constructions are included under the sub-project:

- Ekinoezue WWTP and Collectors: 0.95 km of Ø400 Concrete Pipes, 1.1 km of Ø200 Concrete Pipes, 23
Manholes, 1 pumping station, 1 WWTP

- Çağlayancerit WWTP: 1 WWTP

- Andırın WWTP and Collectors: 4.23 km of Ø400 Concrete Pipes, 3.51 km of Ø200 Concrete Pipes, 163
Manholes, Pumping Station and 600 m Pressure Line (600 m), 1 WWTP

- Goeksun WWTP and Collectors: 4.617 km of (Ø600) HDPE Pipes, 107 Manholes, 1 WWTP

15. **Elbistan Drinking Water Network Project.** Under this sub-project, rehabilitation of 255 km water distribution network, 4,128 km house connections, 3 km pressure lines, six new water reservoirs and five pumping stations will be rehabilitated/constructed. Elbistan city centre’s water is supplied by a group of caisson wells drilled near Ceyhan River. Water from these wells are pumped to 5 existing reservoirs that feed 5 pressure zones. The existing drinking network was first constructed in 1956-1957, then in 1984-1987 and finally in 2009. The pipeline constructed before 2009 is in poor condition. The water losses are high, estimated as 50 percent. Thus, some of the lines need to be renewed and new pipes need to be constructed for extending the distribution network to new developing areas.

16. **Elbistan Drinking Water Transmission Line.** Elbistan Drinking Water Transmission Line includes 120 km water transmission line and 6 water reservoirs (volumes between 100-2000 m3). First part of the transmission line will be constructed by DSI.

17. The proposed investments in Kahramanmaraş are summarized as follows (Table 2.3):

**Table 2.3: Kahramanmaraş investment components**
**No** **Investment name** **Scope** **Budget**

Page 61 of 94


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996)

**(million EUR)**
B-1 Kahramanmaraş Northern - Construction of a new landfill in Afşin. A composting facility 17.00 Districts Integrated Solid and collection and separation facility in landfill site. Two Waste Project transfer stations in Elbistan and Goeksun.

- Construction of a new landfill in Afşin. A composting facility
and collection and separation facility in landfill site. Two transfer stations in Elbistan and Goeksun.

- Provision of waste collection equipment (container and pickup trucks).

- Rehabilitation or closure of existing dumpsites.

17.00 B-2 Kahramanmaraş (city centre) Drinking Water Project B-3 Kahramanmaraş (city centre) Sewerage Project B-4 Ceyhan Basin Wastewater Treatment Plants B-5 Elbistan Drinking Water Network Project B-6 Elbistan Drinking Water Transmission Line

**Kayseri Municipality**

- Rehabilitation and construction of water distribution network
including:

- Establishment of pressure zones and DMAs; introduction of
SCADA systems, installation of flow meters and pressure reduce valves;

- Rehabilitation of water reservoirs and pumping stations;

- Construction of one new water reservoir.

- Rehabilitation and construction work of sewerage network
(400 km)

- Construction of stormwater network (100 km)

- Ekinözü WWTP and Collectors: 0.95 km of Ø400 Concrete
Pipes, 1.1 km of Ø200 Concrete Pipes, 23 Manholes, 1 pumping station, 1 WWTP (for 12,350 people; in 2037 capacity 889 m3/day, 14,750 people in 2052 capacity 1,062 m3/day)

- Çağlayancerit WWTP: 1 WWTP (for 15,000 people; in 2038
capacity 1,650 m3/day, 17 600 people in 2053 capacity 1,936 m3/day)

- Andırın WWTP and Collectors: 4.23 km of Ø400 Concrete
Pipes, 3.51 km of Ø200 Concrete Pipes, 163 Manholes, Pumping Station and 600 m Pressure Line (600 m), 1 WWTP

- Goeksun WWTP and Collectors: 4.617 km of (Ø600) HDPE
Pipes, 107 Manholes, 1 WWTP (for 25 000 people; in 2037 capacity 5 508 m3/day, 30 000 people in 2052 capacity 6480 m3/day)

- Rehabilitation of water distribution network (255 km) and
house connections (4128), Pressure lines (3 km), Construction of water reservoirs (6 new), 5 Pumping stations

- Construction of water transmission line (120 km) and 6 water
reservoirs (volumes b/w 100-2000 m3) 10.80 25.00 8.4 8.00 25.00 18. **Kayseri context.** The refugee population in Kayseri consists mainly of Syrians, Afghans and Iraqis. Most of the refugees are living in Melikgazi district. In 2018, Kayseri province had a total population of about 1,389,680 people out of which 79,758 (or 5.74 percent of the total population in Kayseri province) were SuTP’s. There are no refugee camps in Kayseri province [50] .

19. The existing WWTP (with a capacity of 110,000 m3/day) in Kayseri started operation in 2004 and was designed to 50 UNHCR Turkey: Syrian Refugee Camps and Provincial Breakdown of Syrian Refugees Registered in South East Turkey (January 2020): _[https://data2.unhcr.org/en/documents/details/73300](https://data2.unhcr.org/en/documents/details/73300)_, accessed on January 15, 2020 Page 62 of 94


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996) serve the central districts of Kayseri, namely Kocasinan and Melikgazi, until 2025. However, three more districts (Talas, Hacilar and Incesu) were connected to the WWTP which led to an additional population of 160,000. In addition, the increased population in the city center with refugees, the capacity of the WWTP became insufficient.
In 2016, the average wastewater received to the WWTP was 163,200 m3/day [51] .

20. **Kayseri Sub-Project.** Under this proposed sub-project, the capacity of the existing WWTP will be increased and improved through the installation of screens, aeration tanks, and primary and secondary sedimentation tanks. The sludge dewatering unit will also be renewed by replacement of the existing belt filter press with decanters. Through the added units, the capacity of the WWTP is planned to increase up to 183,000 m3/day for a PE of 1.4 million. In addition, a solar sludge drying facility will be constructed. The expected beneficiaries are 1,330,500 people out of which 79,830 (or 6 percent of the total population) are SuTP’s.

21. The proposed investments in Kayseri are summarized as follows (Table 2.4):

**Table 2.4: Kayseri province investment components**
**No** **Investment name** **Scope** **Budget**
**(million EUR)**
C-1 Extension of Kayseri - Extension of existing WWTP (2nd phase) and installation of solar sludge 25 Wastewater drying facility; replacement of existing belt filters with decanter units.
Treatment Plant

- Extension of existing WWTP (2nd phase) and installation of solar sludge
drying facility; replacement of existing belt filters with decanter units.

25

**.Konya Municipality**

22. **Konya context.** The refugee population in Konya consists mainly of Syrians and Afghans. In 2018, Konya province had a total population of about 2,205,609 [52] people out of which 109,124 (or 4.95 percent of the total population) were SuTP’s [53] . There are no refugee camps in Konya [54], refugees are mainly living in the central districts of Konya.
Since 2014, water supply and sanitation services for the metropolitan municipality of Konya are provided by Konya Water and Sewerage Administration General Directorate (KOSKİ). Due to high seasonal variations in the availability of water resources and the high NRW (57 percent) [55], KOSKİ has developed the following investment project for Akşehir district.

23. **Konya Sub-Project.** The proposed Akşehir Water Supply Project will finance the construction of:

- 29 km of water transmission lines,

- 97 km of distribution network including house connections,

- three water reservoirs (3,000, 1,000 and 500 m3) and pressure reducing chambers.

24. Existing water distribution network was constructed in 1990 and the capacity of the system is already reached.

Thus, the project aims to renew the existing water system for the city of Aksehir in order to provide healthier and sustainable water services to customers. In Aksehir, drinking water is currently supplied from groundwater wells.

51 According to PID for Kayseri.
52 As per the address-based census for 2018 53 Calculations based on PID for Konya and projected estimates for the year 2020.
54 UNHCR Turkey: Syrian Refugee Camps and Provincial Breakdown of Syrian Refugees Registered in South East Turkey (January 2020): _[https://data2.unhcr.org/en/documents/details/73300](https://data2.unhcr.org/en/documents/details/73300)_, accessed on January 15, 2020 55 According to PID for Konya Page 63 of 94

dress-based census f

D for Konya a

D for Konya P

dress-based census for 2018 5


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996) Through the project, spring waters in Gemen (15 lt/s), Sucikan (50 lt/s) and Ilica (20 lt/s) will be transmitted and distributed to Aksehir for drinking water purposes. The Project is expected to lead to a significant decrease in energy consumption as spring water will be transmitted by gravity. The total project beneficiaries are estimated at 134,524 people out of which 16,270 (or 12.1 percent of the total population) are SuTP’s [56] .

25. At appraisal stage, two further sub-projects in Konya metropolitan municipality were identified:

- Ilgin Wastewater Treatment Plant

- Cumra Wastewater Treatment Plant

26. The proposed investments for Konya are summarized as follows (Table 2.5):

**Table 2.5 Konya province investment components**
**No** **Investment name** **Scope** **Budget (million**

**EUR)**
D-1 Akşehir Water Supply - Construction of water transmission lines (29 km). 4.71 Project - Rehabilitation/construction of 3 water reservoirs (3000, and

- Construction of water transmission lines (29 km).

- Rehabilitation/construction of 3 water reservoirs (3000, and
500 m3) and installation of pressure reducing chambers construction of network pipelines (97 km) including house connections will be prioritized according to available budget.

4.71 D-2 Ilgin Wastewater Treatment Plant Project D-3 Cumra Wastewater Treatment Plant Project

- Construction of Ilgin Wastewater Treatment Plant Project 3.85

- Construction of Cumra Wastewater Treatment Plant Project 5.38

**Osmaniye Municipality**

27. **Osmaniye context.** In 2018, the total population in Osmaniye province was 534,415 people out of which 51,160 (or 9.6 percent of the total population) are SuTP’s. There is one refugee camp, the Cevdetiye Container Camp, in the province of Osmaniye which hosts about 12,610 SuTP’s [57] .

28. The city center of Osmaniye municipality receives drinking water from three main sources, which are: Zorkun Springs (400 l/s; by gravity), Yenikoey Wells (360 l/s; by pump) and 7 groundwater wells (270 l/s; by pump). The design report indicates that the existing resources are only capable to meet water demand until 2026. For this reason, Osmaniye Municipality has contacted DSİ and 786 l/s water allocation from Aslantaş Dam is received.

29. The existing water distribution network has high NRW (56 percent) and real losses (49 percent) in the system [58] .

There are no ‘as built drawings’ of the existing water distribution network available, hence, the Municipality receives around 200 system failure calls per month due to failure of pipes (mainly PCV, asbestos and cast-iron pipes exist) in the system or house connections. As there are no ‘as built’ drawings the site operations are carried as trial and error actions. Most of the cast iron pipes have corrosion problems and collapse. These issues extend the repair times and create secondary contamination risks to the system.

56 Calculations based on PID for Konya and projected estimates for the year 2020.
57 UNHCR Turkey: Syrian Refugee Camps and Provincial Breakdown of Syrian Refugees Registered in South East Turkey (January 2020): _[https://data2.unhcr.org/en/documents/details/73300](https://data2.unhcr.org/en/documents/details/73300)_, accessed on January 15, 2020 58 According to PID for Osmaniye Page 64 of 94

ID for Konya

ID for Osmaniye


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996) 30. The existing wastewater system has a length of around 400 km and consists of concrete and reinforced concrete pipes with diameters ranging from 200 to 1000 mm. The wastewater collection network was mainly constructed in 1985 therefore it is aged, and the pipe material and connection type used are reported in the Project Identification Document (PID) as not suitable to the area specific soil characteristics. Due to the high groundwater level in the project area, most of the existing pipes are full of groundwater and soil granules brought by groundwater infiltration. The Municipality receives 250 failure calls monthly as a result of sediments causing pipe clogging or failures/collapses of the pipes. The municipality cleans annually 250 km of wastewater pipelines by vacuum trucks from sediments and clogging. These problems make operation of the system inefficient due to economic circumstances and staff capacity.

31. **Osmaniye Sub-Project.** The two proposed sub-projects aim at improving the existing water supply and sewerage systems in the city center of Osmaniye. The total project beneficiaries in the proposed project area are estimated at 334,298 people out of which 57,109 (or 17.1 percent of the total population) are SuTP’s [59] .

32. **Osmaniye Centrum Drinking Water Project.** Osmaniye drinking water project will focus on the distribution network and will include construction of approximately 598 km water distribution network (pipe diameters changing from 110 to 900 mm), 5 water reservoirs, pressure release valves, DMAs and auxiliary infrastructure.
These activities seek to address critical water supply service constraints faced by the municipalities in delivering effective and efficient services, including: (a) frequent pipe breakage and subsequent contamination of water due to severe corrosion of existing pipes (cast iron, asbestos cement), and high pressure fluctuations – water utility records show about 200 calls per month, with about 30 percent of these related to the main network and 60 percent to customer connections; and (b) non-revenue water is very high at 56 percent, of which 49 percent are real losses.

33. **Osmaniye Centrum Sewerage project.** Osmaniye sewerage project aims renewal of 403 km of wastewater collection network. The existing collection network was mainly constructed in 1985 and is prone to deficiencies due to aging and connection types used at that time. The high groundwater level also creates problems such as high amount of infiltration to the pipes and entrance of soil granules to network, which creates additional costs for operation. It is stated that approximately 100 failure calls are received from customers due to failure and/or collapse of pipes.

34. The project is expected to lead to significant efficiency improvements for the operation of water distribution network and wastewater collection system for Osmaniye Municipality. The investments in the water distribution network will decrease energy consumption, water losses and non-revenue water. This will also allow the Municipality to meet water demand until water is received from Aslantaş dam. Also, failure calls received for both water and wastewater pipelines will be decreased. The improvement in wastewater collection network is also expected to reduce possible groundwater infiltration to the system thus may reduce the wastewater flow to the WWTP. The proposed investments for Osmaniye are summarized as follows (Table 2.6):

**Table 2.6: Osmaniye investment components**
**No** **Investment name** **Scope** **Budget**

59 Calculations based on PID for Adana and projected estimates for the year 2020.

Page 65 of 94

PID for Adana

Project Identification Document

water utility records

water utility records


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996)

**(million EUR)**
E-1 Osmaniye (Centrum) Drinking Water Project - Construction of water distribution network (598 27.65 km; 110-900 mm) to be prioritized, 5 water reservoirs, pressure release valves, DMAs and auxiliary structures E -2 Osmaniye (Centrum) Sewerage Project - Wastewater collection network (403 km) will be prioritized according to available budget.

29.91

**Priority Water Supply and Sanitation Investments**

35. Priority water and sanitation investments at neighborhood or settlement level in low income areas most affected by vulnerable SUTPS and host communities may range from facilities such as, inter alia, household water facilities, including taps and laundry facilities, and appropriate toilet facilities, which may be introduced semi-permanent solutions in informal settlements that can be relocated if desired. The following paragraphs conceptually describe one form of potential priority investments that have been used in other countries in similar situations where environmental infrastructure services are urgently required in informal settlings. In this case, priority investments are required to address kay concerns such as risks to public health, high levels of environmental degradation and pollution due to grey water run-off or lack of toilets, and social risks to the most vulnerable, including women and children who are often most impacted by lack of access to safe water and sanitation services.

36. **Non-permanent or movable Community Ablution Blocks (CABs) for informal settlements.** CABs comprise blocks of water and sanitation facilities such as toilets and showers that can be made out of lower cost but durable materials such as refurbished shipping containers to provide services in informal low-income settlements. Various CAB models have used successfully elsewhere in similar situations in countries such as South Africa. The project will support the development of a conceptual design for CABs made from locally available facilities, to be piloted in selected low-income settlements in collaboration with municipalities.

37. Required considerations to implement CABs shall include: (i) land availability to implement a CAB project, with landownership needs to be formally agreed on with municipalities; (ii) space consideration; ideally sites or plots must be greater than 250 m2; (iii) ideally the average slope of the ground must be less than 1:3 for the ease of installation; (iv) environmental considerations, including connection to the main sewer and further treatment etc.; and (v) site having a basic level of water supply. Containers may be designed or tailor-made for the local context and may be equipped with water meters to monitor. They should also be designed in a gender sensitive manner with separated male and female units in different blocks, and fitted with other gender appropriate facilities such as menstrual hygiene facilities for females, facilities for disabled people, and women with small children.

38. Development and introduction of CABs will require engagement of both municipalities and selected recipient communities with vulnerable SUTP and host communities, to be identified by the municipalities, initially on a pilot scale with potential to scale up the model. Community members will continue to be involved in operating and maintenance of the CABs to ensure their proper use and management. Management of such facilities may provide employment / income generating activities for local community members, including women. However, appropriate design of the operation and maintenance arrangements will be determined in collaboration with the respective municipalities and communities during development of the facilities. Below is an example of a conceptual layout of CABs.

Page 66 of 94


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996)

**ANNEX 3: Economic and Financial Analysis**

**Rationale for Public Sector Investment**

1. The rationale for public sector financing under the proposed project is mainly linked to the important social

and political goals of the Government of Turkey and the EU to address the impacts of the Syrian refugee crisis in the most affected parts of the country. Direct fiscal impact depends on what the state would have done in the absence of the project financing for the subprojects. In this case the fiscal savings are direct and significant given cost savings arising from the reduced state and local governments financing to provide certain services, owing to project investments. Limited capacity to attract private sector financing by the municipalities in the targeted investment areas due to the overall perceived risks, necessitates public sector financing.

**Rationale for Bank’s Involvement**

2. The World Bank has been a long-term partner of Turkey in the water and sanitation, and water resources management sectors. In this instance, the Bank’s involvement occurs at the backdrop of severe service pressures on the municipal services due to the refugee situation, providing contingent funding for critical works to preserve adequate service provision. In this context the knowledge and global experiences of the Bank are highly valuable to the GoT. The Bank has substantial global experience in supporting programs and managing policy dialogue to improve service delivery in areas affected by refugees. Bank support has been provided in form of financial support, Advisory Services and Analytics (ASA) services, and operational support towards implementation of multi-donor funded programs. Globally, the Bank has supported the preparation of needs assessments for refugee host countries, AAA on affected communities, and implementation of activities for provision and expansion of basic services in various sectors to accommodate the increased pressure on existing systems due to refugees. The Bank has also used its convening power in the past to bring together different stakeholders, including municipalities affected by refugees and others to share lessons across sectors.

**Cost Benefit Analysis**

3. The financial and economic analysis focus on the project’s subcomponents with specific investments that materialize direct or indirect economic benefits and costs. The economic viability of subprojects will assess the value from project infrastructure investments without considering sub-project’s benefits from technical assistance aimed at building capacity or improving knowledge and technical expertise.

**Methodology**

4. Costs and benefits are estimated at constant prices for 2018. All benefits and costs were appraised measuring their flow of costs and benefits for the lifetime of the sub-projects, ranging from 25 to 33 years. Costs and benefits were expressed in constant prices as of 2018 at an exchange rate of 5.4852 TL per Euro. The discount recommended by the World Bank guideline is 6 percent, and the analysis used a higher discount rate of 10 percent to weigh in economic risks in discounting flows to present values. The main approach used for this economic analysis is to compare the costs and benefits with and without project scenarios using European Commission CBA Guide.

Page 67 of 94

European Commission CBA Guide


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996)

**A) Adana Sub-projects**

5. Kozan Drinking Water and Transmission Line Project: This activity includes the renewal of water network pipes including house connections, construction of 28 km gravity and pressure transmission lines, pump stations, reservoirs, collection tanks and auxiliary structures. These investments will ensure effective operation of the whole water supply system, contribute to the reduction of non-revenue water to regulation limits and increase service delivery quality levels.

6. A Cost Benefit Analysis (CBA) was carried out as part of the Feasibility Study in line with the Guide to Cost Benefit Analysis of Investment Projects, EC Directorate General Regional Policy, 2014. This reflected an ENPV of EUR1.9 million and EIRR of 11.0 percent. The financial analysis resulted in a FRR/C of -3.29 percent and a FRR/K of 18.36 percent. The social affordability analysis showed that no affordability constraints will be faced throughout the analysis period as the full cost recovery tariffs (EUR 0.96/m3) are below maximum affordable tariff which is set at 2.5 percent of median household income equating to EUR 1.05/m3 (both figures are excluding VAT).

7. Sensitivity analysis has been carried to see the impact of the variations of the critical variables including investment, personnel and power costs as well as health benefits on the economic performance of the project. Accordingly, 1 percent change in investment costs and health benefits led to a change above 1 percent in the ENPV in absolute terms at -1.98 percent and 2.41 percent respectively.

8. Proposed Kozan Drinking Water Project will significantly contribute to the reduction of non-revenue water (app. 61 percent) to the Regulation limits and provide benefits for the efficient operation of the whole network afterwards. Pınargözü Transmission Line Project will ensure safe gravity water supply to District centrum in the short term. Both investments will increase service delivery quality levels of the consumers, which suffer from frequent water interruptions and low pressure.

9. Yedigöze Drinking Water Transmission Line and Yedigöze Treatment Plant Project will serve 141 settlements of Adana city. These settlements include 4 sub-provinces (Kozan, İmamoğlu, Ceyhan and Yumurtalık districts) and 137 surrounding neighborhoods on the route of the transmission line.

10. Specific objectives of these two proposed projects are; Construction of a treatment plant with a capacity of 115K m3/day introducing a conventional treatment process including coagulation, flocculation, filtering and disinfection, construction of 35.4 km ductile iron transmission line with auxiliary structures (washout and air relief valve chambers, etc.). Therefore, lack of safe water sources problem for 4 Sub-provinces and 137 neighborhoods (total 141 settlements) shall be solved. It will eliminate well usage in these settlements and so contribute reduction of the energy costs. Improvement of the underground water levels shall be achieved which also suffer from high withdrawal rates caused from irrigation and water supply activities.

Page 68 of 94


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996) 11. The financial analysis resulted in an FNPV of EUR -23.1 million an economic analysis was performed taking into account pollution reduction benefits, health benefits, GHG emission savings and resource cost savings, resulting in ENPV of EUR -24.5. million and an EIRR of 6.4 percent.

**B) Kahramanmaras Sub-projects**

12. 12.Construction of Andırın and Göksun (Ceyhan Basin) WWTPs is developed as part of the plan to prevent pollution in Ceyhan Basin and alleviate the extra pressure due to the increased population as a result of the Syrian refugee population influx on the infrastructure services in the province.

13. WTP (Willingness to Pay) is used to estimate shadow price of project output, or in the absence of WTP data, the commonly accepted practice is to take a conservative assumption for the monetization of the project benefits due to uncertainties of the estimation and also to calculate avoided costs for users to get this service from an alternative source. The feasibility classified the benefits of Kahramanmaras WWTP Project into 3 categories detailed below:

- Monetarization of project benefits: A per capita benefit value estimated by the consultants has been
set over the reference period of the project yielding an economic benefit of EUR 29.671.122.

- Disposable income for new employment: According to the TURKSTAT data, Marginal Propensity to Save
in January 2019 in Turkey is 19.40 percent which means Marginal Propensity to Consume is 80,60 Page 69 of 94

TURKSTAT data

WTP data


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996) percent. The direct economic benefit is calculated as EUR 1.457.517 over the operational period (20222052) of the project.

- Avoided Cost of Opening Septic Wells: The connection ratio to sewer system of Kahramanmaras
households is 80 percent which, by assumption, means that 20 percent of the households should open a septic tank to get rid of wastewater they generate. At the first year of operation period the consultant assumes that 20 percent of not connected households avoid investing in septic tanks for the wastewater generated by themselves which in return if the cost of opening a septic tank is assumed to be EUR 500 per household then the total saving will be calculated as EUR 9.500 in the first year, 2022. For the following years of project reference period, 20 percent of additional subscribers will do the same saving and at the end of project’s reference period, total savings from avoided costs of opening sewer wells become EUR 382.100.

14. The Economic NPV of the Project is EUR 170.145,97 and Economic IRR is 10.43 percent which is greater than the social discount rate of 10 percent which is used in economic analysis. Benefit-Cost ratio is calculated as 1,02 at 10 percent of social discount rate.

**Table 3.1: Kahramanmaras Andırın and Göksun WWTP**

**Economic Benefit, NPV and IRR Calculation** **EUR**

NPV of Monetization of Direct Benefit (Instead of WTP) Per Inhabitants 6.851.827 NPV of Avoided Cost of Opening Septic Wells 84.817 NPV of Disposable Income Addition 368.324 NPV of Total Economic Benefits 7.304.967 NPV of Investments 4.061.870 NPV of O&M and Replacement Costs 3.072.952 NPV of Total Economic Costs 7.134.821 Economic NPV (EUR) 170.145,97 Economic IRR 10,43% Benefit/Cost Ratio 1,02 15. The Project will contribute to the prevention of pollution in Ceyhan River Basin comprising several water resources. The project will lead to increasing the overall effectiveness and efficiency of wastewater management in the region. The health standards of the public will be improved. Project is expected to have a positive impact on the environment by protecting natural resources.

16. Kahramanmaraş Northern Districts Integrated Solid Waste Management (ISWM) System Project intends to upgrade the existing waste management practices through the implementation and operation of a sanitary landfill incorporating optimal routing to minimize transport and emissions, and safe recovery and disposal of Page 70 of 94


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996) waste with environmental controls for the collection and treatment of leachate and landfill gas. ISWM system project is justified based on financial and economic returns through generation of benefits by closing the existing non-sanitary landfill and switching to a coordinated regional system with collection, separation and composting facilities.

17. In calculating the tariffs for the future ISWM system, the average tariff has been set to comply with the polluter pays principle within the limit of household affordability. The maximum affordable tariff has been defined as 1 percent of disposable income for an average household. Evaluation period has been taken as 2017- 2047 coinciding with the bulk of the planned operational lifetime of the landfill – the largest component of the proposed project.

**Table3. 2: Kahramanmaras ISWM Project**

**Value**
**Financial Analysis**
**Discounted (NPV)**

Financial discount rate (%), real 10% Total investment cost (in EUR, discounted) (*) 21,407,525 Residual value (in EUR, not discounted) (**) 2,909,431 Residual value (in EUR, discounted) (**) 166,735 Revenues (in EUR, discounted) (**) 27,941,825 Operating costs (in euro, discounted) (**) 22,809,183 Net revenue (in euro, discounted) = (7) - (8) + (6) 5,299,377 18. The social discount rate of 10 percent is assumed when considering the economic welfare implications of the proposed investment for the provision of ISWM services for society in the Kahramanmaraş Metropolitan area. In order to convert the project costs from financial costs – both investment and operating costs – based on market prices to economic costs based on the impacts to society, the following steps were made:

- Taxes and subsidies are removed from the cost estimates. Transfer payments (such as social security
taxes) are also removed from cost estimates (both investment and operating costs)

- Costs based on domestic prices are converted to be comparable with costs based on international prices
as internationally traded goods are assumed to reflect actual economic value, whereas domestic prices can be distorted by market imperfections.

**Table 3.3 Kahramanmaras ISWM Project**
**Economic Cost Benefit Analysis** **Values**

1. Social discount rate (%) 10.0%

2. Economic rate of return (%) 11.5% 3. Economic NPV (in Euro) 3,832,084 4. Benefit-cost ratio 1.15 19. Due to collection and (future) utilization of landfill gas, the negative effects of greenhouse gases will be Page 71 of 94


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996) reduced. Using the World Bank GHG accounting tool Climate Action for Urban Sustainability (CURB), it was estimated that the project avoided about 63,962 tCO2 of being emitted into the atmosphere over the next 30 years. Using data on the waste production, it was found that the GHG emission reduction was positive because of the shift from open dumping to management of waste in a landfill with landfill gas capture.
Emissions decreased because of landfill gas capture, which prevents the methane generated by waste within landfills from entering the environment. Using the market price of EUR 24.6/tCO2, the social benefits of the avoided GHG are worth about EUR 1.6 million for the entire project life.

**Table 3.4 Methane Emissions**

**Methane emissions impact calculation*** **2017** **Project�Life**

**30�years**
With�action For�Managed�landfill�(tons�CO2e)=�A 19.189 Baseline For�Unmanaged�landfill�-�less�than�5m�deep�(tons�CO2e)=�B 21.321 Avoided�methane�emissions�(CO2e)=�B-A 2.132 63.962 Avoided�GHG�Monetary�Benefits�(EUR)** 52.470 1.574.107

*World�Bank�Climate�Action�for�Urban�Sustainability�GHG�Accounting�Tool
**Price�data�from�https://origin.markets.businessinsider.com/commodities/co2-european-emission-allowances

**C) Kayseri Sub-project**

20. Kayseri WWTP Capacity Extension Project 21. Kayseri WWTP project is designed to meet the needs of the city with increasing population and expanding industrial facilities. Year of 2025 is selected as target year as of when all the wastewater will be discharged after being treated. Kayseri has a reported Syrian guest percentile at 4.3 percent of its local population. Over its lifetime of 30 years, project will have a FNPV of EUR3,545,000 with an FIRR of 12.2 percent.

22. The project will yield an E-NPV of 10,918,408 with an ERR of 25.6 percent and has a cost/benefit ratio calculated as 1.62. According to the World Bank Water GP GHG Calculation Model, project’s gross emissions were 369,064 tons CO2e, net emissions were 118,894 tons CO2e and net average annual emissions were 3,963 tons CO2e.

**E) Osmaniye Sub-project**

23. Osmaniye (Centrum) Drinking Water and Sewerage Network Projects 24. Osmaniye needs to enlarge its sewerage and drinking water networks to meet the legislative requirements for the collection of urban wastewaters and for the supply of good quality water. In accordance with Turkey’s physical planning guidelines for water and wastewater infrastructure, the Osmaniye wastewater collection system is designed using a 35-year horizon in order to respond to the needs of increasing population with an over 20 percent ratio of Syrian guests.

25. The project will produce a negative FNPV of -EUR10.6 million with an FIRR of 7.5 percent. Economic analysis yields ENPV of EUR 65,019,026 with an ERR of 23.82 percent and benefit/cost ratio of 9.17 thus justifying the project on economic basis. Using World Bank Water GP GHG Calculation Model, project’s gross emissions were 244,082 tons CO2e, net emissions were 990,958 tons CO2e and net average annual emissions were Page 72 of 94

data on the waste production

data on the waste production


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996) 28,299 tons CO2e.

**Financial Estimates of Utilities and Municipality**

26. Financial budget results for the last three years covering 2016-2018 and estimates for the next three years of the water utilities and for Adana, Kahramanmaras and Kayseri together with Municipality of Osmaniye are provided below. These constitute a baseline assessment of their financial position reflecting level of financial sustainability. Based on their past budget results all three utilities have generated positive current balances enabling them to finance part of their capital expenditure after debt interest payment. Municipality of Osmaniye has also been reporting positive current balances though with narrow margins reflecting its relatively limited revenue potential due to its non-metropolitan status.

27. For three-year projections operating revenue from water services and other tax related central government transfers are assumed to increase at least by consumer inflation rate with some real tariff adjustments in 2020 and 2021 above expected inflation. These would amount to a combined tariff increase of 30 percent over the three-year period still enabling the affordability rates remaining below 2.5 percent of median household income.

**Table 3.5 Adana SKI Budget Results**

**Adana Water and Sewerage Entity**
**Budget Results (TRY/EUR ave. rate)**
**(EURm)**
Water and Other Tariffs Other Revenues Transfers Grants Received
**Total revenues**

Personnel Expenditure Other operating expenditure

**Operating balance**

Interest paid

**Current balance**
Capital Expenditure
**Surplus/(Deficit) Before Debt**
New Borrowing Debt repayment

**Overall results for the year**
Debt (EUR equivalent) Source: Budget results and consultant calc **u** 0,2691 0,2211 0,1652 0,1652 0,1652 0,1652
**2016** **2017** **2018** **2019F** **2020F** **2021F**
91,9 93,3 81,6 91,4 105,1 113,5 0,0 0,0 2,4 2,7 3,1 3,4 23,0 21,5 16,7 18,7 21,6 23,3
**114,9** **114,7** **100,8** **112,9** **129,8** **140,2**

-20,0 -17,4 -14,0 -15,6 -18,0 -19,4

-73,8 -74,6 -66,4 -74,4 -85,5 -92,3

**21,1** **22,7** **20,5** **22,9** **26,3** **28,5**

-1,5 -1,1 -4,7 -5,5 -6 -7,5

**19,6** **21,6** **15,7** **17,4** **20,3** **21,0**
-20,3 -35,8 -40,3 -35 -58 -65
**-0,7** **-14,2** **-24,6** **-17,6** **-37,7** **-44,0**
0,0 0,0 31,0 35 42 30 0,0 0,0 -6,1 -8 -9,5 8

**19,6** **21,6** **40,6** **44,4** **52,8** **59,0**
44,3 47,7 58,7 85 110 130 lations Page 73 of 94


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996)

**Table 3.6 Kahramanmaras SKI Budget Results**

**Kahramanmaras Water and Sewerage Entity**
**Budget Results (TRY/EUR ave.rate)** 0,2691 0,2211 0,1652 0,1652 0,1652 0,1652
**(EURm)** **2016** **2017** **2018** **2019F** **2020F** **2021F**
Water and Other Tariffs 27,1 26,7 21,9 24,5 28,2 30,5 Other Revenues 7,4 9,6 5,1 5,7 6,6 7,1 Transfers Grants Received 10,3 9,7 8,1 9,1 10,5 11,3
**Total revenues** **44,8** **46,0** **35,1** **39,4** **45,3** **48,9**

Personnel Expenditure -7,6 -7,1 -5,2 -5,8 -6,7 -7,2 Other operating expenditure -18,7 -20,1 -17,4 -19,5 -22,5 -24,3

**Operating balance** **18,5** **18,7** **12,5** **14,0** **16,1** **17,4**

Interest paid -1,7 -1,1 -1,2 -2,0 -3,0 -5,0

**Current balance** **16,8** **17,6** **11,3** **12,0** **13,1** **12,4**
Capital Expenditure -20,8 -23,7 -26,1 -30,8 -31,5 -35,2
**Surplus/(Deficit) Before Debt** **-4,1** **-6,1** **-14,9** **-18,9** **-18,4** **-22,9**
New Borrowing 0,0 12,0 29,5 22,0 34,0 27,0 Debt repayment -2,8 -9,4 -11,4 -14,0 -16,4 -17,0

**Overall results for the year** **14,0** **20,2** **29,3** **20,0** **30,7** **22,4**
Debt (EUR equivalent) 24,5 23,2 24,6 35,1 52,7 62,7 Source: Budget results and consultant cal **c** ulations

**Table 3.7 Kayiseri SKI Budget Results**

**Kayseri Water and Sewerage E**
**Budget Results**
**(EURm)**
Water and Other Tariffs Other Revenues Transfers Grants Received
**Total revenues**

**ntity**

Personnel Expenditure Other operating expenditure

**Operating balance**

Interest paid

**Current balance**
Capital Expenditure
**Surplus/(Deficit) Before Debt**
New Borrowing Debt repayment
**Before Debt**
**Overall results for the year**
Debt (EUR equivalent) Source: Budget results and consult **a** 0,2691 0,2211 0,1652
**2016** **2017** **2018** **2019F** **2020F** **2021F**
47,3 44,1 38,2 42,8 49,2 53,2 1,5 1,2 1,4 1,6 1,8 2,0 14,2 14,3 11,8 13,2 15,1 16,4
**63,0** **59,6** **51,4** **57,6** **66,2** **71,5**

-11,6 -9,6 -8,0 -9,0 -10,3 -11,2

-32,9 -29,5 -24,0 -26,9 -31,0 -33,4

**18,4** **20,4** **19,3** **21,6** **24,9** **26,9**

-1,5 -2,6 -2,1 -2,4 -3 -3,2

**16,9** **17,9** **17,3** **19,2** **21,9** **23,7**
-24,4 -25,7 -23,6 -27,8 -28,4 -31,8
**-7,5** **-7,8** **-6,3** **-8,6** **-6,5** **-8,1**
31,4 31,1 45,3 35 42,5 28
-6,0 -7,4 -9,8 -10 -12 -14

**17,9** **15,9** **29,2** **16,4** **24,0** **5,9**
51,6 51,1 45,2 70 100 114 nt calculations Page 74 of 94


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996)

**Table 3.8 Osmaniye SKI Budget Results**

**Municipality of Osmaniye**

**Budget Realizations**

**(EUR million)**

TRY/EUR Taxes Transfers received Fees, fines and other operating revenue

**Operating revenue**

**ACTUAL** **ACTUAL** **ACTUAL** **PROJECT** **PROJECT** **PROJECT**

**2016** **2017** **2018** **2019** **2020** **2021**

0,2691 0,2211 0,1652 0,1652 0,1652 0,1652 4,1 3,4 4,1 4,5 5,1 5,7 29,6 29,1 34,0 36,7 41,1 46,0 7,8 7,1 6,8 7,8 8,7 9,4

**41,5** **39,5** **44,9** **49,0** **54,9** **61,1**

Operating expenditure -37,5 -32,6 -35,8 -38,7 -43,4 -48,6

**Operating balance**

**Operating Margin**

Financial revenue Interest paid

**Current balance**

Capital revenue Capital expenditure

**4,0** **7,0** **9,0** **10,3** **11,5** **12,6**

_**10%**_ _**18%**_ _**20%**_ _**21%**_ _**21%**_ _**21%**_ 0,6 0,6 0,4 0,4 0,4 0,4

-6,6 -4,0 -8,3 -6,6 -5,3 -5,7

**-** **1,9** **3,5** **1,1** **4,1** **6,7** **7,3**

0,8 5,3 0,1 0,2 1,8 2,7

-7,2 -24,5 -17,7 -8,8 -14,4 -24,3

Capital balance -6,4 -19,2 -17,6 -8,6 -12,6 -21,7

**Surplus (deficit) before debt variation** **-8,4** **-15,7** **-16,5** **-4,5** **-5,9** **-14,4**

28. Further detailed financial management assessments and creditworthiness analysis have been carried out for sub-borrowers Adana, Kahramanmaras and Kayseri water utilities along with municipalities of Kahramanmaras Metropolitan and Osmaniye. These have covered qualitative financial management areas as well as fiscal performance, expenditure coverage and indebtedness for the last five years and a projection period of five years.

29. The capacity of Adana SKI to clear its debts using the operating surplus is 1.1 years in 2014 and increased to 2.2 years in 2018 with an average of 2 years over the period from 2014 to 2018. The number of years for the 2019 – 2021 budget period is expected to be less than a year. The capacity of Kahramanmaras SKI to clear its debts using the operating surplus is 3.5 years in 2014 and decreased to 0.9 years in 2018 with an average of
1.2 years. The number of years for the 2019 – 2021 budget period is expected to be 1.5 years. The capacity
of Kayseri SKI to clear its debts using the operating surplus is 1.4 years in 2014 and increased to 2.3 years in 2018 with an average of 2.1 years over the period from 2014 to 2018. The number of years for the 2019 – 2021 budget period is expected to be 1.96 on the average.

30. Financial projections for the water utilities and municipalities have indicated that these entities will incur additional debt in the project implementation period with debt outstanding to current revenue peaking at 32 percent for Adana SKI, 45 percent for Kahramanmaras SKI, and 21 percent for Kayseri SKI. For the municipalities debt service burden will increase and self-funding ability from current balance will be stretched with debt service to current revenue reaching 43 percent for Kahramanmaras MM and 42 percent for Osmaniye. Sub-borrowers are forecast to maintain ability to meet financial commitments nonetheless remain exposed to adverse economic conditions.

Page 75 of 94


Input:
**The World Bank**
Municipal Services Improvement Project in Refugee Affected Areas (P169996)

**Table 3.9: Summary Economic Analysis Results**

NPV of Total Costs NPV of Total Benefits E-IRR (%) (EUR) Adana Kozan Drinking Water and Transmission Line Adana Yedigöze Drinking Water Transmission and WWTP Kahramanmaras Ceyhan Basin (Andırın&Goksun) WWTP Kahramanmaras Northern Districts Integrated Solid Waste Management Kayseri WWTP Expansion Osmaniye Water and Sewerage Network

**Conclusion**

Economic NPV 1,913,523 22,009,027 23,922,550 11.0

-24,497,839

170,146 3,832,084 10,918,408 65,019,026 44,492,053 7,134,821 26,118,978 20,369,926 7,956,038 19,994,214 7,304,967 29,951,062 30,955,334 72,975,064 6.4 10.4 11.5 25.6 23.8 31. The influx of Syrian guests to several Municipalities of Turkey over the past years has led to an increase in infrastructural requirements caused by increasing water demands, wastewater generation and solid waste generation. This has burdened Municipalities’ ability to provide effective level of service both to their local residents, as well as to the guest population.

32. The entire project comprising various sub-projects by different implementing authorities will not produce commercially profitable results in each instance. Nonetheless, it will create viable results underpinned by net economic benefits to be accrued in total. With the implementation of the proposed projects, the capacity of the water entities (SKI) and their municipalities will be strengthened in terms of infrastructure and technical capacities, enabling them to better respond to the significant increase in demands for municipal services.
Through the technical assistance components, SKIs are also expected to prepare Performance Improvement Action Plans, which will, among other things focus on improving their performance efficiency and financial viability through appropriate actions targeting results such as improved revenue collection, cost reduction, non-revenue water reduction, etc.

Page 76 of 94