ENVIRONMENTAL AND SOCIAL MANAGEMENT FRAMEWORK

FOR THE

WATER AND IRRIGATION SERVICES ENHANCEMENT PROGRAM PHASE 1    

PREPARED BY

Ministry of Territorial Administration and Infrastructure of Armenia

DRAFT

March 2025

TABLE OF CONTENTS

ACRONYMS  1

EXECUTIVE SUMMARY  1

CHAPTER 1. INTRODUCTION   6

1.1 PROJECT DESCRIPTION   6

Component 1:7

1.2 ESMF RATIONALE, OBJECTIVES AND SCOPE  11

1.3 DISCLOSURE AND STAKEHOLDER CONSULTATIONS  12

CHAPTER 2. LEGAL, POLICY AND REGULATORY FRAMEWORK  13

2.1 REPUBLIC OF ARMENIA’S LEGAL FRAMEWORK  13

2.2 WORLD BANK’S ENVIRONMENTAL AND SOCIAL STANDARDS  18

2.3 REGULATORY GAP ANALYSIS  18

CHAPTER 3. ENVIRONMENTAL AND SOCIAL RISK ASSESSMENTS  27

3.1 ENVIRONMENTAL AND SOCIAL BASELINE  27

3.2 POTENTIAL ENVIRONMENTAL IMPACTS OF THE ACTIVITIES  28

3.2.1 Environmental and Social Risk Assessment and Mitigation Measures (Construction Phase)29

3.2.2 Environmental and Social Risk Assessment and Mitigation Measures (Operation and Maintenance Phase)36

CHAPTER 4. ENVIRONMENTAL AND SOCIAL MANAGEMENT PROCESSES  40

4.1 ENVIRONMENTAL AND SOCIAL MANAGEMENT APPROACH   40

4.1.1 Integrating Environmental, Social, Health, and Safety into Technical Assistance  41

4.1.2 Environmental and Social Screening of Subprojects  41

4.1.3 Management of Environment and Social Risks and Impacts for Associated Facilities  48

CHAPTER 5. IMPLEMENTATION ARRANGEMENT FOR ENVIRONMENTAL AND SOCIAL MANAGEMENT  49

5.1 INSTITUTIONAL ARRANGEMENT  49

5.1.1 Project Coordination Team   49

5.1.2 Technical Supervision Consultants  50

5.1.3 Design and Construction Contractors  50

5.1.4 Supervising Agencies  50

5.1.5 The World Bank  52

CHAPTER 6. STAKEHOLDER ENGAGEMENT, INFORMATION DISCLOSURE AND GRIEVANCE MANAGEMENT  53

6.1 PUBLIC CONSULTATION   53

6.2 OUTREACH TO COMMUNITY AND VULNERABLE GROUPS  54

6.3 INFORMATION DISCLOSURE  54

6.4 FEEDBACK AND GRIEVANCE REDRESS MECHANISM    54

CHAPTER 7. ENVIRONMENTAL AND SOCIAL CAPACITY BUILDING AND TRAINING   56

CHAPTER 8. BUDGET AND COST OF IMPLEMENTING ESMF  57

LIST OF ANNEXES  58

ANNEX 1. EXCLUSION LIST  59

ANNEX 2. PROJECT-LEVEL ENVIRONMENTAL AND MONITORING TEMPLATE  60

ANNEX 3. ENVIRONMENTAL AND SOCIAL SCREENING FORM    63

ANNEX 4. OUTLINE OF ESIA REPORT  69

ANNEX 6. ENVIRONMENTAL AND SOCIAL CODES OF PRACTICES  82

ANNEX 7. ASBESTOS MANAGEMENT GUIDANCE  89

ACRONYMS

EXECUTIVE SUMMARY

1. Project Context

Water and Irrigation Services Enhancement Program Phase 1 (or hereafter “the WISE Project”, or “the Project”) aims to enhance the sustainability and reliability of water service delivery by modernizing irrigation and Water Supply and Sanitation (WSS) infrastructure, strengthening policy and institutional frameworks, and improving climate forecasting and management capacity. It focuses on five key areas: (i) expanding irrigated areas through rehabilitation and modernization, with a focus on reducing energy consumption in pumped irrigation; (ii) expanding access to safely managed water supply by improving water systems in unserved rural settlements; (iii) developing a comprehensive NationalWater Strategy, Standalone Irrigation and WSS strategies, National Irrigation Master Plan and a tariff reform program; (iv) strengthening water sector agencies and Water User Associations (WUAs) through capacity-building, financial sustainability measures, and technological upgrades; and (v) data collection and investment planning for WSS in unserved areas.

1. ESMF Approaches, Rationale, Objectives and Scope

A framework approach has been adopted, as decisions on specific investments, their detailed technical designs, and site locations will be made during project implementation. Therefore, the project will utilize framework instruments to guide the necessary assessments and the preparation of site-specific environmental and social management plans (ESMPs).

The Environmental and Social Management Framework (ESMF) applies to all project components (refer to 1.3) and outlines the necessary requirements to comply with the environmental and social (E&S) laws and regulations of the Republic of Armenia (RoA), as well as the World Bank’s (WB) Environmental and Social Standards (ESSs) and the World Bank Group’s (WBG) Environmental, Health, and Safety Guidelines (EHSGs).

The ESMF establishes principles, rules, guidelines, and procedures for assessing the E&S      risks and impacts of each type of anticipated project investment, including screening criteria for proposed activities. It provides a framework for generic mitigation measures to be undertaken at all stages—from identification and selection through design and implementation to monitoring and evaluation of results.

Additionally, the ESMF outlines the responsibilities of agencies tasked with addressing project risks and impacts, including an assessment of their capacity to manage E&S  risks effectively. It also includes templates to facilitate the preparation of management tools as required by established procedures.

 III.            Project Description

The Project Development Objective (PDO) is to provide improved access to efficient and financially sustainable irrigation and rural WSS services in selected areas of Armenia. The project is part of a 10-year Multi-phase Development Approach (MPA) that aims to improve the delivery of irrigation and rural WSS services across Armenia. Phase 1 is designed to enhance climate-resilient irrigation and WSS services. It will equip six Water User WUAs with modern irrigation systems and enhance irrigation service efficiency through upgrades to primary, secondary and tertiary networks in selected schemes to boost climate resilience towards drought, floods and extreme heat. Phase 1 will also improve access to sustainable WSS services by developing rural WSS investment plans and upgrading water supply infrastructure. It will also prepare FSs, designs, and bidding documents for Phase 2 investments. Further, Phase 1 will also include Performance-based Conditions (PBCs) to support policy, legal and institutional reforms as well as a learning program that documents insights to guide implementation through research, data analysis and policy development. The project implementation period of Phase 1 will be six years.

Phase 1 of the project includes four components, including one component with PBCs, as follows:

1. Component 1. Water Sector Reform and Institutional Strengthening (US$20M) supports MTAI and the Water Committee (WC) in key priority areas, including the development of national strategies for water, irrigation, and rural drinking water and sanitation; revision of irrigation tariffs based on land use and water consumption; establishment of an Asset Maintenance Fund and Plan for modernized irrigation schemes (IS); creation of Rural WSS units with defined agreements, performance indicators, and monitoring systems; and the launch of a National Irrigation Water Accounting and Adaptation Center (IWAAC) to enhance water management and adaptation efforts.) with PBCs. This component will also include two PBCs that seek to support institutional capacity building within MTAI, WC and WUAs.
2. Component 2. Rural WSS Enhancement (US$30M) will focus on providing improved access to efficient and financially sustainable rural WSS services in selected areas of Armenia. This includes a combination of institutional strengthening, capacity building as well as regulatory reforms, FS and infrastructure assessments. This subcomponent will support FSs and detailed engineering designs (DEDs) for high-priority WSS investments to enhance resilience against climate-induced droughts, floods, and extreme heat under both phases of the MPA. Based on an agreed investment plan with the Government of Armenia (GoA), it will implement ‘no-regret’ infrastructure and service improvements in the most critical unserved settlements, considering technical, economic, socio-political, and institutional factors.
3. Component 3. Modernizing Irrigation Infrastructure & System Management (US$119M) will finance rehabilitation and modernization of selected irrigation systems at main, secondary, and tertiary canal levels currently managed jointly by WSA at the large main canal and reservoirs level and by WUAs at the secondary and tertiary distributary level. The total command area of the irrigation systems under consideration is about 39,580 ha which will be selected based on hydrological, technical, economic, and agricultural parameters, under a Framework Approach^[1]. Similarly, for Phase 2 a total of additional 4 ISs were short-listed for consideration under this phase.
4. Component 4: Project Management (US$6M). An interim WISE Project Coordination Team (PCT) will be housed within the WC and will assume primary responsibility for project implementation, including implementation of civil works and related procurement and financial management (FM), compliance with agreed E&S management measures, and project monitoring and evaluation (M&E). This component will finance staff costs; coordination of the project-financed activities with other ongoing International Financial Institution (IFI) projects in the water sector; design, implementation, and reporting of baseline and project completion surveys; and the preparation of assessment studies (e.g., pre-feasibility and FSs), DEDs, and construction supervision. The component will also include capacity building support for the PCT, including citizen engagement training skills for the staff of the PCT.

 IV.            Project Financing

The Project will finance four components for the total cost of US$175M (out of which US$80M is proposed to be financed by IBRD, US$70M by AFD, US$20M by GoA, and US$5M will be an EU grant (via AFD)). Project implementation will be six years.

1. Potential Environmental and Social Impacts of the Activities

The overall E&S risk is assessed as substantial for both environment and social. While the Project is envisaged to result in positive E&S outcomes through institutional strengthening of key agencies, as well as improved sustainability, resilience, and quality of water supply and services in Armenia, there could be residual impacts due to the quality of project implementation and institutional capacity for risk management, particularly during the initial stage of the project implementation. Potential impacts that typically result from medium-scale rehabilitation and/or construction works include generation of construction and organic wastes, dusts and noise pollution, land acquisition and restrictions on land use, occupational and community H&S for workers and host communities associated with construction activities. Dam safety requirements will be assessed prior to appraisal considering potential construction of small-scale regulating reservoirs.

Social risks may arise from inadequate stakeholder engagement, excluding vulnerable groups from project benefits, policy decisions, and capacity-building opportunities in the water sector. Inequitable access to water resources, whether real or perceived, could lead to conflicts and community tensions. Tariff reforms may further exacerbate these issues by creating perceptions of unfair benefits or financial burdens, particularly for poor and vulnerable populations facing reduced access to water services. SEA/SH rating is assessed as moderate primarily associated with small- to medium-scale construction activities and labor mobilization and the project's potential operations in rural settings.

Negative impacts, typical for medium-scale civil works under the project include generation of inert construction, hazardous, and organic waste (e.g., from vegetation clearing in existing WSSs and ISs), noise, dust, sedimentation, Occupational and Community H&S risks due to vehicle/machinery movement. These impacts are expected to be low to medium in magnitude, temporary, and revisable. Project activities are not expected to affect any known historical/cultural monuments and intangible cultural; ESS8 is considered relevant as a pre-cautionary measure for potential chance finds of physical cultural heritage. No impacts on intangible cultural heritage are envisaged.

Operation of irrigation and WSSs systems will improve quality of life for rural communities and reduce likelihood of water-borne disease outbreaks, but it may pose E&S risks, primarily due to: (i) increased nutrient and pollutant concentrations at discharge points, which can degrade surface and groundwater quality in natural aquifers; and (ii) increased water uptake from surface or groundwater sources, which may cause environmental impacts, including competition for water use, resulting in moderate to substantial long-term consequences on ecosystem balance, depending on the source and volume of water extracted. Additionally, intensified agriculture may cause soil and water pollution from agrochemical misuse.

The roll out of specific interventions contemplated in the future National Water Strategy, the National Irrigation Strategy, and the National WSS Strategy to be developed under Subcomponent 1.1 could have potential adverse implications if not properly assessed. These could include: i) disruption of water balance and alteration of ecosystems and habitats; ii) pollution from insufficiently treated wastewater near discharge points; iii) lack of resilience in the irrigation sector to climate change impacts. The medium and long-term E&S outcomes will depend on how effectively these risks are addressed during the development of the strategies and managed by the preparation of a Strategic Environmental and Social Assessment (SESA) in line with ToR to be developed as per the Environmental and Social Commitment Plan (ESCP).

 VI.            Management of Environmental and Social Risks and Impacts

E&S risk screening will be conducted to determine the level of assessment and planning required for the sub-project proportionate to the significance of associated risks and potential impacts. E&S risk screening is a two-step process that begins with screening against the exclusion criteria followed by screening of site-specific risks.

The latter will take into account i) the type, location, sensitivity and scale of the sub-project activities being proposed; ii) the nature and magnitude of the potential E&S risks and impacts; iii) the capacity of the responsible implementing entities to manage such risks and impacts in a manner consistent with the ESSs; and iv) other areas of risk that may be relevant to the delivery of E&S mitigation measures and outcomes, depending on the specific sub-project and the context in which it is being prepared.

A site-specific Environmental and Social Impact Assessment (ESIA), along with an ESMP, will be required for subprojects classified as substantial risk to address potential risks and impacts and/or comply with national environmental permitting laws. For moderate-risk subprojects, a stand-alone ESMP will be prepared unless a specific activity presents distinct E&S risks that necessitate an ESIA. A Code of Environmental and Social Practice (ESCOP) will be adopted for low-risk and some moderate-risk subprojects, unless renovation and/or rehabilitation activities pose specific E&S risks that require a site-specific ESMP.

The project’s activities will be guided by a Stakeholder Engagement Plan (SEP), ensuring meaningful stakeholder engagement, public consultations, information disclosure, and grievance management. The SEP will integrate feedback from stakeholders, with a particular focus on project-impacted people and vulnerable groups, incorporating their inputs into technical solutions, project designs, and site-specific ESMPs.

The management of land acquisition and its associated livelihood impacts will be guided by a Resettlement Framework (RF), a standalone document closely linked to the Environmental and Social Management Framework (ESMF). Likewise, labor and working conditions will be governed by the Labor Management Procedures (LMP), another standalone document that remains aligned with the ESMF.

1. Project Implementation Arrangement

Overall responsibilities for the project implementation will be located within the Ministry of Territorial Administration and Infrastructures (MTAI) and the WC. Day-to-day implementation will be supported by the PCT within the WC. Implementation of Components 1 - 3 will be conducted through the MTAI. A project Steering Committee will be established at the level of the Deputy Prime Minister’s (DPM) office to oversee and monitor the overall progress of the project. The project director will likely report directly to the Steering Committee. The development of the National Water Strategy, the National Irrigation Strategy, and the National WSS Strategy will be carried out under the leadership of the DPM’s office and executed by the MTAI’s and the WC with close involvement of all stakeholders engaged in the water sector in Armenia, as well as other entities involved in water sector development

The PCT will be responsible for identifying subproject interventions for each component, developing bidding documents, procuring consultancy services and subproject designs. The PCT will ensure LMP are integrated into the bidding documents/ works contracts. Additionally, it will manage the procurement of civil works and ensure technical supervision.

The PCT’s E&S specialists will ensure project implementation is in consistency with all relevant E&S requirements. These requirements include adoption and implementation of framework E&S management instruments as well as development and application of site-specific environmental and social management tools, oversight on E&S performance, and reporting on the E&S impacts and outcomes of the project. The E&S Specialists will ensure that the Bills of Quantities (BoQ) for the designs of subprojects under Components 2 and 3 include Environmental, Social, Health, and Safety (ESHS) provisions and that the technical proposals submitted by bidders include a budget line for ESHS implementation. The E&S Specialists will also contribute to the development of the ToR for the TA, ensuring that ESMF requirements are incorporated.

The E&S Specialists of the PCT will also carry out supervisory visits to the construction sites of subprojects under Components 2 and 3 to ensure that the implemented works comply with the requirements outlined in the ESMPs and ESCOP.

CHAPTER 1. INTRODUCTION

 The Water and Irrigation Services (WISE) Project is Phase 1 of a 10-year Multi-phase Programmatic Approach Program that is currently being developed to improve the delivery and rural WSS services across Armenia. The program is integral to supporting the government's vision to address the following ten priority areas of investment for responding to critical challenges in the country’s water sector, as laid out by the Prime Minister in May 2024: (i) lack of adequate drinking water supplies to 500+ rural settlements; (ii) low water storage availability; (iii) poor financial sustainability of the water sector; (iv) poor ecological quality of water bodies and limited coverage and efficiency of WWTPs; (v) high water losses in agriculture due to deteriorated irrigation systems; (vi) diminishing Lake Sevan water quantity and quality; (vii) high depletion and poor water quality of the Ararat Artesian Basin (AAB) groundwater aquifer; (viii) low water use efficiency in most irrigated systems,; (ix) limited water use monitoring and no water balance; and (x) high energy consumption and high costs to operate most irrigation infrastructure. The MPA is expected to run over a 10-year period.

Phase 1 (US$175 million, of which US$80 million will be provided by IBRD, US$20 million by GOA, and $75 million from AFD) will enhance climate-resilient irrigation and WSS services. It will equip six WUAs with modern irrigation systems and enhance irrigation service efficiency through upgrades to primary, secondary, and tertiary networks in selected schemes to boost climate resilience towards drought, floods and extreme heat. It will also prepare FSs, designs, and bidding documents for Phase 2 investments. To improve efficiency and operational financial sustainability, the project will strengthen the WSA by establishing a modern asset management system and creating the Irrigation Water Accounting and Adaptation Center (IWAAC) for water and climate monitoring that will support climate adaptation planning and subsequent decision making, including for emergency response plans in the event of a climate disaster. Phase 1 will improve access to sustainable rural WSS services by developing rural WSS investment plans and upgrading water supply infrastructure that will incorporate engineering design principles from the Resilient Water Infrastructure Design Brief in a limited number of settlements, alongside piloting the identified water supply service option. It will also lay the groundwork for Phase 2 by preparing FSs and scaling up service deliver to boost the climate resilience of WSS services. Financial sustainability will be enhanced through institutional strengthening and drinking water tariff reforms to ensure cost recovery and affordability. Additionally, a Performance Based Condition (PBC) Component will support policy, legal, and institutional reforms, while a learning program will document insights to guide implementation through research, data analysis, and policy development.

The overall E&S risk for this project is assessed as substantial for both E&S aspects. The classification considers potential residual impacts due to the quality of project implementation, including designs, and institutional capacity for risk management, particularly during the initial stage of the project implementation. Potential impacts that typically result from medium-scale rehabilitation and/or construction works include generation of construction and organic wastes, dusts and noise pollution, land acquisition and restrictions on land use occupational and community H&S for workers and host communities associated with construction activities. In view of these potential impacts, the following WB ESSs are considered relevant:

1.1 PROJECT DESCRIPTION

The Project will take an integrated approach to infrastructure modernization and water resource management, improving irrigation, drinking water and sanitation services in Armenia. The project aims to enhance the sustainability and reliability of water service delivery by modernizing irrigation and WSS infrastructure, strengthening policy and institutional frameworks, and improving climate forecasting and management capacity. It focuses on five key areas: (i) expanding drought resilient irrigated areas through rehabilitation and modernization, with a focus on reducing energy consumption in pumped irrigation; (ii) expanding access to drought and flood resilient, safely managed water supply by improving water systems and developing capacity for sustainable WSS services in unserved settlements; (iii) developing a comprehensive water strategy, standalone irrigation and WSS strategies, and a tariff reform program; (iv) strengthening water sector agencies and WUAs through capacity-building, financial sustainability measures, and technological upgrades; and (v) data collection and investment planning for WSS in unserved areas.

The project will focus on enhanced climate resilient planning capabilities for key agencies to deliver drinking water and irrigation services in Armenia, while mitigating against and adapting to emerging climate threats to the water sector.

PDO is to provide improved access to efficient and financially sustainable irrigation and rural WSS services in selected areas of Armenia.

The project instrument is Investment Project Financing (IPF) with Performance-Based Conditions (IPF-PBC), organized around four components, including two components with PBCs, as follows: (i) Component 1: Water Sector Reform and Institutional Strengthening (with PBCs); (ii) Component 2: Rural WSS Enhancement (with PBCs); (iii) Component 3: Modernizing Irrigation Infrastructure & System Management; and (iv) Component 4: Project Management.

Component 1: Water Sector Reform and Institutional Strengthening (US$20M) PBC component will provide support to the MTAI and the WC in key identified priority areas including: (i) the development of a consolidated National Water Strategy, a National Irrigation Strategy, a Rural Drinking Water and Sanitation Strategy, and a National Irrigation Master Plan to be approved by GoA; (ii) revision of the irrigation sector tariffs system, to transition to setting fixed fees based on actual irrigated land and variable fees based on actual use of water on the irrigated land; (iii) an Asset Maintenance Fund and an Asset Maintenance Plan to be established by the WC and/or WSA dedicated for the proper operations and maintenance (O&M) of any newly modernized irrigation scheme; (iv) the establishment of RWSS units, contractual agreements to govern RWSS, agreement of key performance indicators (KPI), and establishment of FGRM and M&E systems to better monitor RWSS activities; and (v) establishment of a national Irrigation Water Accounting and Adaptation Center(IWAAC). Component 1 includes two sub-components, and PBC, including:

• Subcomponent 1.1 and PBC 1: Strengthening national water resources policy and planning (US$3.4M). This PBC will provide support to the MTAI and the WC to develop and approve a comprehensive National Water Strategy, a standalone ten-year National Irrigation Strategy and a Rural WSS Strategy, and an Irrigation Master Plan. This subcomponent will also examine all existing legal frameworks for water sector management in Armenia including the Water Code, the WUA law, and other related legislative acts.  PBC 1 includes three sub-PBCs, which are related to the drafting, development, and finalization of (i) a comprehensive National Water Strategy (PBC#1.1), (ii) a National Irrigation Strategy (PBC#1.2), (iii) a Rural Drinking Water and Sanitation Strategy (PBC#1.3). The project will also invest in a National Irrigation Master Plan. The Master Plan will assess technical feasibility, economic viability, environmental sustainability, social inclusivity, and climate adaptation in water-stressed areas. A thorough analysis of agricultural dynamics and market potential will guide investments, with the ToR addressing potential riparian issues under OP 7.5.
• Subcomponent 1.2: Improving irrigation sector management and service delivery (US$16.6M) will finance the following activities: (i) Comprehensive institutional reform program to improve functions of the WC and the WSA (US$5.3M), (ii) Implementation of a revised irrigation tariff (US$1.55M), focusing on reforming irrigation sector tariffs, balancing the main principles of cost-recovery and affordability^[2], and transitioning to fixed fees based on irrigated land and variable fees based on water usage, (iii) PBC 2 includes three sub-PBCs, including a) an asset Maintenance Fund is established and dedicated for operations and maintenance (O&M) of any newly modernized irrigation scheme under the WISE project and b) a revised bulk irrigation tariff and the WUA ISF methodology for 6 WUAs is approved and aligns with the WUA law to include 100 percent recovery of O&M costs as well as a two-part structure (fixed and volumetric) for the ISF(PBC#2.2); and c) a tariff roll out plan with communications strategy for outreach to WUAs that will be impacted by an increased tariff and an increased ISF(PBC#2.3). This sub-component will also finance Capacity building program for WUA (US$1.6M), focusing on six target WUAs in Armenia. The assistance will be provided through the re-established WUAs’ Support Group and will include strengthening legal, administrative, technical, managerial, and financial management capabilities. Lastly, this sub-component will also support establishment of a National Irrigation Water Accounting and Adaptation Center (US$8.15M). This activity will establish IWAAC within the WC or a new land and water agency to enhance water and irrigation management. Building on Armenia’s GIS-based system, it will integrate remote sensing, ground monitoring, and climate data to improve water accounting, crop monitoring, and adaptive irrigation planning.

Component 2. Rural WSS Enhancement (US$30M) will focus on providing improved access to efficient and financially sustainable rural WSS services in selected areas of Armenia. This component consists of the following sub-component:

• Subcomponent 2.1. Institutional strengthening, capacity building, and regulatory reform (US$7M). This component will support activities at the national, marz, and the local levels to build institutional capacity for delivering WSS services and expanding coverage. The project will also support the collection of baseline information on the status of the RWSS services in all Marzes, lay out a roadmap for unserved areas, including improving the institutional set-up of the sector, and develop a framework for the sector-wide monitoring system. Additionally, it will focus on the implementation of monitoring and control tools in the WC, to enhance the effectiveness of supervision and control of the WSS sector; implementation of to-be-determined soft measures to improve water quality, increase water quantity, reduce NRW, and increase community satisfaction; a socio-cultural and gender analysis to examine national policies, strategies, sectoral plans, and programs, and to identify gaps related to RWSS services and access in the target areas; development of a capacity capacity-building strategy along with a detailed capacity-building plan and associated costs; design and delivery of a learning and Information, Education, and Communications (IEC) program that includes trainings on scheme planning, design, and construction; operations and maintenance; procurement procedures and practices; financial accounting and reporting; monitoring and evaluation; etc.; and the completion of sector development studies to develop the national strategy for the WSS sector (supported by Subcomponent 1.1. In addition to the enabling environment, the project will also focus on investment planning. Specifically, based on the comprehensive assessment regarding RWSS services, the project will develop an investment plan for drinking water in the unserved areas in all Marzes in line with the prioritization criteria agreed with the client.
• Subcomponent 2.2. FSs and Infrastructure Investments (US$23M). This subcomponent will support the undertaking of FSs to prepare and structure WSS investments that will withstand climate change exacerbated drought, flood, and extreme heat. Fs and DEDs will be developed for the highest-priority investments for implementation under both phases 1 and 2 of the MPA. Based on the prioritization of activities under the investment plan, the subcomponent will implement infrastructure and service improvement interventions deemed to be ‘no-regret’ in nature for the highest-priority unserved settlements, based on criteria agreed with GoA based on technical, economic, socio-political and institutional considerations. Infrastructure investments will include construction of water networks, including household connections (and connections to schools and healthcare facilities, where necessary), metering, and any necessary water treatment systems, which will incorporate climate resilient engineering principles. In phase 1, these investments are expected to be in Ararat, Kotayk, Aragatsotn, Shirak, and/or Tavush marzes – the confirmation of which will be based on technical, economic, socio-political and institutional considerations.

Component 3. Modernizing Irrigation Infrastructure & System Management (US$119M) will finance rehabilitation and modernization of selected irrigation systems at main, secondary, and tertiary canal levels currently managed jointly by WSA at the large main canal and reservoirs level and by WUAs at the secondary and tertiary distributary level. The total command area of the irrigation systems under consideration is about 39,580 ha (Table 1) which will be selected based on hydrological, technical, economic, and agricultural parameters, under a Framework Approach^[3]. Similarly, for Phase 2 a total of additional 4 ISs were short-listed for consideration under this phase. This component consists of the following sub-components:

• Sub-component 3.1: Modernizing Climate Resilient Irrigation Infrastructure & System Management (US$114 million). The activities to be carried out in schemes selection include detailed FSs, including Economic and Financial Analysis, and ESIA for rehabilitation/modernization. Final selection of schemes will be based on technical feasibility, estimated investment cost, financial and economic viability, and allocated budget. In addition, the project will engage WUAs at an early stage of design to participate and sign-off on the designs. The following structures will be considered for rehabilitation and/or reconstruction/modernization across the selected schemes: headworks; critical sections of main canals inverted syphons; aqueducts, secondary and tertiary network (pipeline or lined); water control/distribution; outlets; mudflows; flood protection; flow and/or volumetric measurement structures, wherever necessary check structures for easy removal or flushing of trash, bridges, maintenance roads, and related pump stations with aim of identifying technological advancements that can modernize selected systems (e.g., conversion from pumping to gravity or transition from gravity to pressurized pipe networks, where feasible, or construction of off-line canal side regulating reservoirs), and other required ancillary structures. Wherever feasible, the project will maximize elevation to convert from pumped to gravity systems, to reduce energy consumption and minimize GHG emissions. While a large part of the rehabilitation/modernization will involve reconstruction/modernization of original systems, the feasibility and detailed design studies will systematically examine the opportunities to consider water control and delivery structures, that are operated to maintain a constant canal water levels over time – regardless of the flow rate. Climate adaptation and hazard resilience principles will be embedded in the selection and in the technical design of investments based on the Water Global Practice's guidelines.

Table 1: Short-List of ISs for Phase 1

• Sub-component 3.2: Introduction of Supervisory Control and Data Acquisition (SCADA) (US$5 million). This sub-component will finance two activities. The first activity will be related to field data from throughout the canal and pipeline systems. Following the development of a comprehensive SCADA plan, the field data activity will include (i) accurate real-time measurement of critical flow rates and water levels, (ii) transmission of that data, (iii) organization and archiving of that data, (iv) providing easy access to real-time as well as historical data, (v) standardization of equipment and software for these purposes, (vi) training of an excellent SCADA team of technicians for installation, troubleshooting, and repair, and (vii) establishment of a high quality, well-stocked SCADA center with spare parts, equipment for testing, diagnostics, and component assembly. Of particular importance will be the establishment of data security and backup. Once the first activity is well established, investments will be made for a second SCADA activity. The second SCADA activity will provide limited remote manual operation and monitoring of headwork gates. This will not be the primary focus of SCADA but will provide valuable experience for future Armenian irrigation investments in remote manual and automatic (not included here) operation of gates and monitoring of water distribution in the larger canal systems, where modernization investments will be made. The use of flow measurement data will be integrated. The SCADA system will not only assist operators with real-time information for improved water management; it will also provide historical databases for later analysis and planning.

Component 4: Project Management (US$6M). An interim WISE PCT will be housed within the WC and will assume primary responsibility for project implementation, including implementation of civil works and related procurement and financial management (FM), compliance with agreed E&S management measures, and project monitoring and evaluation (M&E). This component will finance staff costs; coordination of the project-financed activities with other ongoing International Financial Institution (IFI) projects in the water sector; design, implementation, and reporting of baseline and project completion surveys; and the preparation of assessment studies (e.g., pre-feasibility and FSs), DEDs, and construction supervision. The component will also include capacity building support for the PCT, including citizen engagement training skills to the staff of the PCT.

1.2 ESMF RATIONALE, OBJECTIVES AND SCOPE

Since the specific details and locations of the project investments will be finalized during implementation, with FSs and DEDs conducted in the early stages to guide site-specific investment decisions, a framework approach has been adopted for the project to guide relevant E&S assessments and preparation of the management plans at the sub-project level.

The present Environmental and Social Management Framework (ESMF) serves as a guiding document for the preparation and implementation of all project components, ensuring compliance with the E&S laws and regulations of the RoA, as well as the WB’s ESSs and the WBG’s Environmental, Health, and Safety Guidelines (EHSGs).

The ESMF establishes principles, rules, guidelines, and procedures for assessing the E&S risks and impacts of each type of anticipated project investment, including screening criteria for proposed activities. It provides a framework for generic mitigation measures to be undertaken at all stages—from identification and selection through design and implementation to monitoring and evaluation of results. Additionally, the ESMF outlines the responsibilities of agencies tasked with addressing project risks and impacts, including an assessment of their capacity to manage E&S risks effectively. It also includes templates to facilitate the preparation of management tools as required by established procedures.

This ESMF applies to the Project’s components and activities with potential E&S implications and guides the implementation of relevant ESSs. The Project’s SEP serves as a guiding reference for the implementation of stakeholder engagement, consultations, disclosure, and outreach, to address provision of ESS 10 provisions.

The scope of the ESMF also covers Associated Facilities. These include activities that are “i) directly and significantly related to the Project; ii) carried out or planned to be carried out contemporaneously with the Project; and iii) necessary for the Project to be viable and would not have been constructed, expanded or conducted if the project did not exist. Provisions of ESSs relevant for the WISE Project apply to the Associated Facilities, to the extent that the MTAI has control or influence over such Associated Facilities.

This ESMF builds on lessons learned from previous water sector projects, as well as existing procedures and systems within the WC. These projects include, but are not limited to, the Integrated Water Resource Management (Akhouryan River) Project, the Construction of Kaps Reservoir Project, and the Gravity Irrigation System Project, all funded by KfW.

Communal Infrastructure Program (CIP) II, Phase 3, funded by EIB/KfW

The ESMF comprises the following chapters:

-          Chapter 1 outlines the introduction and rationale of the ESMF

-          Chapter 2 outlines a regulatory analysis of the relevant Armenia’s legal framework and gaps with the WB’s ESSs

-          Chapter 3 outlines the project’s E&S risk assessment along with the proposed mitigation measures

-          Chapter 4 outlines E&S management processes for activities under the project.

-          Chapter 5 outlines implementation arrangements for the E&S management.

The annexes carry technical tools for the preparation of relevant site-specific E&S instruments. The toolkit includes guidelines, forms, and templates that are intended to help implement this ESMF.

ESCP provides overall guidance for the agreed E&S      management commitments, as well as agreed consultation and engagement approaches with relevant stakeholder groups, particularly target communities. SEP serves as a guiding reference for stakeholder engagement, consultations, disclosure, and outreach, to address provision of ESS 10. The ESCP and SEP are available as standalone documents of the WC.

1.3 DISCLOSURE AND STAKEHOLDER CONSULTATIONS

The ESMF, along with other E&S instruments including the SEP, RF, LMP, and ESCP will be publicly disclosed in-country via the WC website. E&S instruments will be consulted at the national level including national, regional and community level stakeholders before project appraisal.

Consultations will be continued during project implementation at the regional level and based on consultation outcomes ESMF, along with other E&S instruments, will be finalized and redisclosed in-country.

Stakeholder consultations at the sub-project level for the purpose of site-specific assessments and preparation of management plans are guided in the project’s SEP.

CHAPTER 2. LEGAL, POLICY AND REGULATORY FRAMEWORK

Investments funded by the WISE project must be implemented in accordance with the principles of sustainable development, including environmental, social, health and safety (ESHS) considerations in line with the applicable RoA legal framework and WB’s ESSs.

Specific provisions have been included in this ESMF to address any provisions in the ESSs that are not fully addressed under the RA laws and regulations.

2.1 REPUBLIC OF ARMENIA’S LEGAL FRAMEWORK

Article 12. Protection of the Environment and Sustainable Development of the RoA Constitution stipulates that the State shall foster the protection, enhancement, and restoration of the environment, as well as the prudent use of natural resources, following the principles of sustainable development and with due regard for the responsibility owed to future generations. All individuals have a duty to contribute to environmental protection.

The table below presents summaries of key legislation most relevant to the WISE project:

Table 2: Relevant National Legal Framework for the Project