MINISTRY OF URBAN DEVELOPMENT &CONSTRUCTION

URBAN REVENUE ENHANCEMENT, FUND MOBILIZATION

AND FINANCE BUREAU

URBAN INSTITUTIONAL & INFRASTRUCTURE

DEVELOPMENT PROGRAM
(UIIDP)

PROGRAM OPERATIONS MANUAL

(POM)
Volume 1

REVISED FINAL

Urban Revenue Enhancement, Fund Mobilization & Finance Bureau

Ministry of Urban Development &Construction
Revised Final, February 6, 2020
 TABLE OF CONTENTS

Contents
ABBREVIATIONS AND ACRONYMS.............................................................................................9
SECTION 1: INTRODUCTION.......................................................................................................13
1.1. Objectives of the Program Operations Manual.....................................................................13
1.2. Users of the Manual..............................................................................................................13
1.3. Structure of the Manual.........................................................................................................14
SECTION 2: BACKGROUND AND CONTEXT............................................................................15
2.1. Country Context....................................................................................................................15
2.2. Sector and Institutional Context............................................................................................17
2.3. Ministry Policies, Strategies, Goals, Plans and Programs for the Urban Sector....................20
2.3.1. Ethiopia Urban Development Policy.................................................................................20
2.3.2. National Urban Development Spatial Plan........................................................................21
2.3.3. Ethiopian Cities Sustainable Prosperity Goals..................................................................22
2.3.4. Urban Local Government Development Programs (ULGDP I & ULGDP II)...................27
2.4. Linkages between the UIIDP and the Ministry’s urban strategies, goals and plans...............31
2.5. Long-term Financial Sustainability of ULGs........................................................................31
SECTION 3: PROGRAM OBJECTIVES, KEY RESULTS AND EXPECTED OUTCOMES...37
3.1. Program Development Objective..........................................................................................37
3.2. Key Results and Expected Outcomes....................................................................................37
SECTION 4: PROGRAM DESCRIPTION AND KEY FEATURES.............................................41
4.1. Program Duration..................................................................................................................41
4.2. Program Scope and Coverage of Urban Centres...................................................................41
4.3. Key Features and Financing Modalities................................................................................50
4.4. Disbursement Linked Indicators, Minimum Conditions, Performance Measures and
Verification Protocols.......................................................................................................................54
4.5. Eligible Investment Areas for Infrastructure and Services for ULGs....................................55
SECTION 5: ANNUAL PERFORMANCE ASSESSMENT & QUALITY ASSURANCE OF
RESULTS............................................................................................................................................60
5.1. Annual Performance Assessment & Quality Assurance of Results under PforR...................60
5.2. Processing of Complaints submitted by ULGs/Regions on the APA results/findings...........64
5.3. Quality Assurance of Results under IPF...............................................................................65
SECTION 6: PROGRAM ORGANIZATION AND MANAGEMENT.........................................66

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 6.1. Federal Level........................................................................................................................66
6.2. Regional Level......................................................................................................................71
6.3. ULG Level............................................................................................................................74
SECTION 7: PLANNING AND BUDGETING...............................................................................77
7.1. Budgeting Cycle...................................................................................................................77
7.2. Federal Level........................................................................................................................82
7.3. Regional Level......................................................................................................................82
7.4. ULG Level............................................................................................................................82
7.5. Capital Investment Planning by ULGs& PublicParticipation................................................83
7.6. Revenue Enhancement Plans................................................................................................83
7.7. Asset Management Plans......................................................................................................84
7.8. Planning and Budgeting under the IPF Window...................................................................84
SECTION 8: PROCUREMENT MANAGEMENT.........................................................................90
8.1. Policy, Legal, Institutional& Operational Framework..........................................................90
8.2. Federal LevelResponsibilities...............................................................................................91
8.3. Regional Level Responsibilities............................................................................................91
8.4. ULG Level Responsibilities..................................................................................................92
8.5. Procurement under the IPF Window for the Federal Level...................................................92
SECTION 9: FINANCIAL MANAGEMENT AND AUDIT...........................................................98
9.1. Financial Management Arrangements under the P4R Window.............................................98
9.2. Financial Managementunder the IPF Window....................................................................101
9.3. FM roles and responsibilities..............................................................................................104
9.3.1. Federal Level..................................................................................................................104
9.3.2. Regional Level................................................................................................................105
9.3.3. ULG Level......................................................................................................................105
SECTION 10: ENVIRONMENTAL AND SOCIAL MANAGEMENT, HEALTH & SAFETY106
10.1. Policy, Legal, Institutional& Operational Framework.....................................................106
10.2. Environmental and Social Management System& Resettlement System........................107
10.3. Environmental, Occupational and Community Health & Safety.....................................108
SECTION 11: ACCOUNTABILITY AND TRANSPARENCY IN CITY OPERATIONS &
SERVICE DELIVERY.....................................................................................................................118
11.1. Policy, Legal, Institutional& Operational Framework.....................................................118
11.2. Procedures, Outputs &Responsibilities...........................................................................118
SECTION 12: URBAN PLANNING...............................................................................................120

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 12.1. Policy, Legal, Institutional & Operational Framework....................................................120
12.2. Procedures, Outputs &Responsibilities...........................................................................122
SECTION 13: LAND DEVELOPMENT, MANAGEMENT&INVENTORY SYSTEM............123
13.1. Policy, Legal& InstitutionalFramework..........................................................................123
13.2. Implementation Manuals.................................................................................................124
13.3. Institutional set up........................................................................................................125
13.3.1. Urban Land Lease.....................................................................................................125
13.3.2 Servicing of Urban Land..............................................................................................125
13.3.3 Urban Land Inventory..................................................................................................126
13.4. Procedures, Outputs & Responsibilities.................................................................................126
SECTION 14: LOCAL ECONOMIC DEVELOPMENT.............................................................128
14.1. Background.....................................................................................................................128
14.2. Policy, Legal, Institutional and Operational Framework.................................................129
14.3. Definition of Local Economic Development...................................................................129
14.4. Who does LED?..............................................................................................................130
14.5. LED Process...................................................................................................................130
14.6. Procedures for conducting public private dialogue that informs CIP preparation...........131
14.7. Procedure for conducting open business plan competition for MSEs..............................133
14.8. Capacity Building Program & Requirements for a Functional MSE One Stop Centre....135
14.9. LED Monitoring & Evaluation........................................................................................137
14.10. One Stop Centre Establishment and Operation...............................................................137
14.11. Major Actions, Outputs &Responsibilities for LED........................................................138
SECTION 15: JOB CREATION.....................................................................................................139
15.1. Background.....................................................................................................................139
15.2. Policy, Legal, Institutional & Operational Framework....................................................139
15.3. Definitions of Permanent & Temporary Job...................................................................139
15.4. Preparation of a Job Creation Plan..................................................................................140
15.5. Job Measurement Methodologies & Procedures.............................................................140
SECTION 16: GENDER EQUITY AND DEVELOPMENT........................................................141
16.1. Background, Policy, Legal & Institutional Framework...................................................141
16.2. Key gender challenges and the role of UIIDP.................................................................141
16.3. Specific gender-mainstreaming aspects supported under UIIDP.....................................144
16.4. Gender Analysis & Gender Audit...................................................................................145
16.5. Gender Mainstreaming....................................................................................................146

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 16.6. Steps in Gender and Development Planning and Budgeting...........................................146
16.7. Capacity Building for Gender Equity & Development....................................................147
16.8. Monitoring & Evaluation of Gender Equity & Development..........................................148
SECTION 17: URBAN RESILIENCE& DISASTER RISK MANAGEMENT...........................150
17.1. Background, Policy, Legal & Institutional Framework...................................................150
17.2. Key Challenges in Urban Resilience and Disaster Risk Management.............................151
17.3. Specific Urban Resilience Components Supported Under UIIDP...................................152
17.4. Key Actions, Outputs& Responsibilities.........................................................................152
SECTION 18: COMPLAINT HANDLING SYSTEM...................................................................154
18.1. Procedures for General Complaints, Environment and Resettlement Complaints...........154
18.2. Procedures for Procurement Complaints.........................................................................158
18.2.1. Legal & Institutional Framework................................................................................158
18.2.2. Procedures...................................................................................................................159
18.2.3. Notification of Results Procedure...............................................................................160
18.2.4. Consequences of Submission of Complaint................................................................161
18.2.5. What can be Subject to the Complaint Procedure?......................................................162
18.2.6. Establishment of a procurement complaint handling register......................................162
18.3. World Bank Grievance Redress Service (GRS)..............................................................163
SECTION 19: FRAUD, ETHICS AND CORRUPTION HANDLING SYSTEM.......................164
19.1. Background,Policy, Legal & Operational Framework....................................................164
19.2. Alignment with the WB’s Anti-Corruption Guidelines...................................................167
SECTION 20: CAPACITY BUILDING.........................................................................................169
20.1. Challenges & Lessons Learned from ULGDP II.............................................................169
20.2. Intuitional and Operational Framework..........................................................................173
20.3. Capacity Building Objectives & Key Principles.............................................................174
20.4. Thematic Focus Areas of Capacity Building under UIIDP.............................................175
20.5. Capacity Building Modalities..........................................................................................177
20.6. Capacity Building Support Systems under UIIDP...........................................................178
20.7. Preparatory Capacity Building of new 73 cities..............................................................180
20.8. Capacity Building Planning for Federal, Regional & ULG levels...................................181
20.9. Capacity Self-Assessment...............................................................................................183
SECTION 21: RESULTS MONITORING, EVALUATION & REPORTING SYSTEM..........184
21.1. Program Results Framework...........................................................................................184
21.2. Objectives of the Monitoring, Evaluation & Reporting System......................................184

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 21.3. System Design & Guidelines..........................................................................................184
21.4. Data Generation and Collection......................................................................................185
21.5. Reporting........................................................................................................................185
21.6. UIIDP Performance Review & Evaluation......................................................................185
21.7. Capacity Building for M & E..........................................................................................187
SECTION 22: RISKS MITIGATION AND MONITORING SYSTEM& PROGRAM RISK
LOGICAL FRAMEWORK.............................................................................................................188
22.1. Introduction.....................................................................................................................188
22.2. Purpose of the Program Risk Logical Framework...........................................................188
22.3. Users of the Risk Logical Framework.............................................................................188
22.4. Format of the Risk Logical Framework..........................................................................188
SECTION 23: PROGRAM ACTION PLAN (PAP).......................................................................196
SECTION 24: KEY ANNEXES.......................................................................................................204
Annexes attached to the POM..........................................................................................................204
1. Results Framework and Monitoring...........................................................................................205
2. Program Participation &Performance Agreement between MUDCo, Region & ULG...........210
3. Memorandum of Understanding between MUDCo and Federal Ministries/Agencies........216
4. Memorandum of Understanding between MUDCo and Federal Ministries/Agencies........233
5. Memorandum of Understanding between BUDHo and Regional Agencies.........................235
6. TOR for UIIDP Federal Steering Committee.........................................................................248
7. TOR for UIIDP Federal Technical Committee.......................................................................261
8. TOR for UIIDP Regional Steering Committee.......................................................................273
8. TOR for UIIDP Regional Technical Committee........................................................................285
9. Template for Annual Capacity Building Plan............................................................................297
10. Format for Capacity Building Implementation Report...........................................................300
11. Checklists for Review and Approval of CIPs, AMPs & REPs.................................................305
12. Checklists for Review of Capacity Building Plans of Regions.................................................320
13. Checklists for Review of Capacity Building Plans of ULGs....................................................321
Additional Annexes in Volume II of UIIDP POM..........................................................................323
List of Standalone Annexes of the POM.........................................................................................323

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LIST OF TABLES
Table 1. ECSPG Pillars, Programs & Projects......................................................................................24
Table 2. Envisioned Trajectory of Support Varied by ULG Groups.....................................................35
Table 3. List of Participating Cities & Allocations...............................................................................46
Table 4. Program Financing (US$ million)...........................................................................................51
Table 5. Investment Menu for ULGs - Eligible Areas in Infrastructure & Services..............................56
Table 6. Eligible Capacity Building Areas for ULGs and NRS............................................................58
Table 7. Program DLIs.........................................................................................................................59
Table 8. Schedule for 1st APA of UIIDP: Allocations for DLI 1-9 forEFY 2012 (2019/20)................61
Table 9. Schedule for subsequent APAs...............................................................................................62
Table 10. Schedule for Assessment:Allocations for DLI 10 - Prior Results Achieved in Last Year of
ULGDP II.............................................................................................................................................64
Table 11. Staffing of the Federal Mobile Team....................................................................................70
Table 12. Deployment of Regional Mobile Teams (RMTs) under UIIDP............................................72
Table 13. Staffing of the Regional Mobile Teams (RMTs) under UIIDP.............................................73
Table 14. Staffing of the UIIDP Coordination Team (ULG Focal Persons)..........................................75
Table 15. Budget Calendar - Integrated Planning and Budgeting Cycle...............................................78
Table 16. IPF Supported Areas.............................................................................................................86
Table 17. UIIDP Gender Action Plan.................................................................................................144
Table 18. Procurement Complaint Procedure Timeframe...................................................................159
Table 19. Lessons Learnt and Reflected in UIIDP..............................................................................171
Table 20. Eligible Capacity Building Areas for ULGs and NRS........................................................176
Table 21. Capacity Building Modalities.............................................................................................177
Table 22. Data Generation & Collection.............................................................................................185
Table 23. Overall Program Risk Rating..............................................................................................189
Table 24. Program Risks Logical Framework.....................................................................................190
Table 25. Program Action Plan...........................................................................................................197

LIST OF FIGURES
Figure 1. Ministry's Policies, Strategies, Goals, Plans & Programs for the Urban Sector.....................20
Figure 2. ECSPG Developmental Framework for Performance Measurement.....................................23
Figure 3. PDO & Key Result Areas......................................................................................................38
Figure 4. Cities Participating in UIIDP.................................................................................................44
Figure 5. ULG & Regional Contributions to UIIDP (Matching Funds)................................................45
Figure 6. UIIDP Windows & Main Expenditure Items.........................................................................52
Figure 7. Organizational Structure for Federal Level............................................................................66
Figure 8. Organizational Structure for Regional Level.........................................................................71
Figure 9. Organizational Structure for ULG Level...............................................................................74
Figure 10. Process for Review and Approval of IPF Procurements......................................................95
Figure 11. Funds Flow & Reporting Chart for the PforR......................................................................99
Figure 12. Funds Flow & Reporting Chart for the IPF Window.........................................................103
Figure 13. Hierarchy of Urban Plans..................................................................................................120
Figure 14. Steps in the LED Process...................................................................................................131
Figure 15. Complaint Handling Flow Chart for ULGs........................................................................155
Figure 16. ESMSG/RSG Complaints Handling & Dispute Management Mechanism........................157
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Figure 17. Complaint Handling System for Fraud & Corruption Cases..............................................166

Exchange rates used (as at December 31, 2017)

Currency Unit = Ethiopian Birr (ETB)

ETB 27.40 = US$1
US$1.42413 = SDR 1
US$1.102 = Euro 1
Currency US$1

Ethiopian Calendar

The Gregorian and Ethiopian calendars are used throughout this document. The abbreviations used are: GC =
Gregorian calendar, EC = Ethiopian Calendar and EFY = Ethiopian Fiscal Year. The current year according to
the Ethiopian calendar is 2010, which finishes on September 10, 2018 of the Gregorian calendar. The Ethiopian
Financial Year commences on 1st Hamle (8th July) and ends on 30th Sene (7th July) each year. In government
documents the financial year 1st Hamle EC 2009 to 30th Sene EC 2010 is referred to as the Ethiopian Fiscal Year
(EFY) 2010 and covers the Gregorian period 8 July 2017 to 7 July 2018.

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ABBREVIATIONS AND ACRONYMS

AFD Agence Française de Développement(French Development Agency)

AMP Asset Management Plan
APA Annual Performance Assessment
APACRC Annual Performance Assessment Complaints Resolution Committee
APAG Annual Performance Assessment Guidelines
ARAP Abbreviated Resettlement Action Plan
BoFED Bureau of Finance and Economic Development (Regional)
BoLSA Bureau of Labour& Social Affairs
BUDCo Bureau of Urban Development and Construction (part of regional governments)
CBP Capacity Building Plan
CIP Capital Investment Plan
CPF Country Partnership Framework
CSA Central Statistics Agency
DRM Disaster risk management
EFY Ethiopia financial year
EMP Environmental Management Plan
EOI Expression of Interest
ECSPG Ethiopian Cities Sustainable Prosperity Goals
EFCCC Environment, Forest & Climate Change Commission
ESMF Environmental and Social Management Framework
ETB Ethiopian birr
FEACC Federal Ethics and Anti-Corruption Commission
FMT Federal Mobile Team
FSC Federal Steering Committee
FTC Federal Technical Committee
FPPPAA Federal Public Procurement and Property Administration Agency
FUJCFSA Federal Urban Job Creation & Food Security Agency

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FY Financial Year
GC Gregorian Calendar
GoE Government of Ethiopia
GRS Grievance Redress Service
GTP Growth and Transformation Plan
IBEX Integrated Budget and Expenditure
ICB International Competitive Bidding
IDA International Development Association
IDA SUF IDA Scale Up Facility
IPF Investment Project Financing
LED Local economic development
MoF Ministry of Finance
MoLSA Ministry of Labour& Social Affairs
MoR Ministry of Revenues
MoTI Ministry of Trade & Industry
MOWCY Ministry of Women, Children and Youth
MSE Micro and small Enterprise
MTR Midterm review
MUDCo Ministry of Urban Development and Construction
NBE National Bank of Ethiopia
NDRMC National Disaster Risk Management Commission
NUDSP National Urban Development Spatial Plan
O&M Operations and maintenance
OFAG Office of Federal Auditor General
OFED Office of Finance and Economic Development (city level)
ORAG Office of Regional Auditor General
PAP Program Action Plan
PDO Program Development Objective
PEFA Public Expenditure Financial Assessment
PforR Performance for Results
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PM Performance Measure
POM Program Operational Manual
PPA Participation and Performance Agreement
PPD Policy & Planning Bureau in MUDCo
PPSD Project Procurement Strategy Document
PR & AB Policy, Research & Advisory Bureau
QCBS Quality and Cost Based Selection
RAP Resettlement Action Plan
REACC Regional Ethics and Anti-Corruption Commission
REFCCC Regional Environmental, Forest and Climate Change Commission
REOI Request for Expressions of Interest
REP Revenue Enhancement Plan
RMT Regional Mobile Team
RRB Regional Revenue Bureau
RPF Resettlement Policy Framework
RSC Regional Steering Committee
RTC Regional Technical Committee
RUJCFSA Regional Urban Job Creation and Food Security Agency
SNNPRS Southern Nations, Nationalities, and People’s Regional State
SoE Statement of Expenditure
TA Technical Assistance
TAC Tender Award Committee
ToRs Terms of Reference
ToT Training of trainers
UDS Urban Development Sector
UGCBB Urban Governance and Capacity Building Bureau
UIIDP Urban Institutional and Infrastructure Development Program
ULG Urban Local Government
ULGDP Urban Local Government Development Project (or ULGDP I)
ULGDP II Second Urban Local Government Development Program
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UREFMFB Urban Revenue, Fund Mobilization and Finance Bureau in MUDCo
WCO Women and Children Affairs Office
WMP Waste Management Plan
ZOFED Zonal Office of Finance and Economic Development

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SECTION 1: INTRODUCTION

This Program Operations Manual (POM)has been developed for the Ministry of Urban
Development and Construction (MUDCo), Government of the Federal Democratic Republic of
Ethiopia (GoE) for the Urban Institutional and Infrastructure Development Program (UIIDP), which
the World Bank (WB) and Agence Francaise de Developpement (AFD) is supporting with a Program-
for-Results (PforR)financing instrument at the regional and ULG levels and an Investment Project
Financing (IPF) instrument at the federal level. The UIIDP will provide Performance Grants (PGs) for
investments in infrastructure and services and in capacity building for 117 urban local governments
(ULGs) and capacity building in all nine Regional Governments (RGs),MUDCo and several Federal
Ministries/Agencies. Cities and Regional States will contribute to UIIDP investments with their own
funds. Funding available under the UIIDP will depend on the performance of each city and RG
assessed annually against verifiable results described in this manual and in the Annual Performance
Assessment Guideline which is a standalone Annex of this manual.
The UIIDP will be implemented over a period of 5 years and four months (from March 2018 to July
2023), with four rounds of performance-based grant allocations: EFY 2012 (2019/20), EFY 2013
(2020/21), EFY 2014 (2021/22), and EFY 2015 (2022/23). Total UIIDP expenditures over this period
are estimated at Ethiopian Birr (ETB) 23.5 billion (US$ 859.5 million), of which ETB 16.4 billion
(US$ 600 million) - 70% - will be provided by the World Bank and ETB 296 million (US$10.8
million)1. -1%- will be provided by AFD and ETB 6.8 billion (US$248.7 million) – 29% - will be
provided by regions and ULGs as matching fund contributions.

1.1. Objectives of the Program Operations Manual

The objective of the UIIDP Program Operations Manual is to provide procedures and guidance for the
implementation of the UIIDP on all key issues such as: how the project will be managed and how
decisions will be made; what participating cities must do to access funds; how performance will be
measured to determine UIIDP performance grants; what investments may be made with UIIDP
performance grants – in infrastructure and services and in capacity building; what environmental and
social safeguards will be followed; what actions ULGs will take to ensure efficient urban planning and
land management; how ULGs will promote local economic development and facilitate job creation,
how gender issues will be addressed; what actions ULGs will take to promote resilience to chronic
stresses and acute shocks and to reduce the impact of disasters, how monitoring, evaluation and
reporting will be carried out; how procurement and financial management of UIIDP funds will be
carried out; and how IDA will disburse allocated funds to ULGs, RGs and MUDCo.

1.2. Users of the Manual

The Manual will be used by the following: -

 Federal Ministries and Agencies participating in the program

 Regional Bureaus and Agencies participating in the program
 ULGs
1
Assuming an exchange rate of 1 euro is to 1.102 USD.
13
  World Bank and AFD

1.3. Structure of the Manual

The Manual is in two Volumes.

Volume 1 is the main text of the POM with important Annexes.
Volume 2 contains Additional Annexes which are also important but due to their bulky nature are
better accommodated in a separate Volume of the POM.
There are also Standalone Annexes to the POM, which are listed in Volume 1, which are mainly
Guidelines and Manuals that provide detailed procedures of some of the thematic areas covered in the
main text of the POM Volume 1.
Volume 1 of the Manual is structured into 24 sections, including the first two sections on introduction,
background and context, each dealing with important aspects of the UIIDP and the main supporting
activities that cities undertake in planning, implementing and managing infrastructure investments to
deliver services to their citizens.
Section 3 to 6provide the objectives, key results and expected outcomes of the program, describing in
detail the program, the annual performance assessment and quality assurance of results as well as the
organization and management structures that have been put in place for the program.
Section 7 to 13provide the guidelines and procedures on systems and processes that support the
implementation of the program such as planning and budgeting, procurement management, financial
management and audit, environmental and social management, accountability and transparency
mechanisms, urban planning and land management.
Section 14to 17provide guidelines and tools to be used by ULGs in promoting local economic
development, job creation and in addressing issues of gender equality, urban resilience and disaster
risk management.
Section 18and 19 provide the framework, operational guidelines and procedures for handling
complaints (general complaints, environmentaland social impact complaints, resettlement complaints
and procurement complaints) and for handling, fraud, ethics and corruptioncases.
Section 20 provides guidance and procedures on how capacity building for the program will be
provided and implemented at the federal, regional and ULG levels.
Section 21 provides the results expected from the program during the course of its implementation and
at the end of the program as well as the system for monitoring, evaluating and reporting these results.
Section 22 assesses the risks involved in program implementation and in achieving the expected
results as well as the mitigation measures and risk monitoring system that the Ministry has put in
place.
Section 23 contains the Program Action Plan that sets out the actions to be taken on critical issues in
each thematic area and on some of the risks that have been identified.

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The last section, Section 24, contains Annexes which are either attached to the POM and or are
standalone Annexes that provide more detailed procedures and other important documentation on
issues mentioned above.

SECTION 2: BACKGROUND AND CONTEXT

2.1. Country Context

1. Ethiopia has experienced strong economic growth over the past decade and is amongst
the fastest growing in the world. Although still one of the poorest countries in the world, Ethiopia’s
per capita income has increased from US$350 per capita in 2010 to US$619 in 2016. 2 Economic
growth averaged 10.7 percent per year in 2003/04 to 2011/12 compared to the regional average of 5.4
percent and had a continued high level throughout FY 2013/14 and 2014/15 with some decline to
estimated 8 percent in FY2015/16 due to especially severe drought and global economic factors. 3 Over
the medium-term, IMF projected that growth will sustain 8.0-8.3 percent. 4 If the trend continues,
Ethiopia may reach middle-income status by 2025. The rapid growth is based on a mix of factors,
including agricultural modernization, the development of new export sectors, strong global commodity
demand, and government-led development investments. Private consumption and public investment
have driven demand side growth, with the latter assuming an increasingly important role in recent
years.

2. Ethiopia is urbanizing rapidly and has one of the fastest growing urban populations in
the world. The number of people living in urban centers is expected to nearly triple in the next two
decades, from 15.2 million in 2012 to 42.3 million in 2037, growing at 3.8 percent a year. The
Ethiopia Urbanization Review 2015 indicates that the rate of urbanization will be even faster, at about
5.4 percent a year.5 That would mean that the urban population will triple by 2034, with 30 percent of
the country’s people in urban areas by 2028. Ethiopia is undergoing a demographic transition. The
labor force has doubled in the past 20 years and is projected to rise to 82 million by 2030, from 33
million in 2005. Well-functioning cities will be essential if Ethiopia is to reap this demographic
dividend and avoid agglomeration diseconomies.

3. Rapid urbanizationposes challenges as cities struggle to provide infrastructure and

services and jobs and run the risk of becoming unattractive places for people and economic
activity.Coverage for sanitation services is low, even by Sub-Saharan Africa standards. Ethiopian
cities (except Addis Ababa) do not have municipal sewerage systems, and are struggling to manage
solid waste, which is often dumped into open areas, endangering public health. Roads and drainage
density are below the African average, although higher in urban areas than the national average.
Estimates from the Ethiopia Urbanization Review revealed that the average actual spending of ETB
300 per urban resident (around US$17) would be required to maintain the existing level of services for
current urban residents, let alone meeting the needs of rapidly increasing urban populations and the
existing gaps.

2
World Bank Indicators, 2017 and Gross National Income, World Bank Atlas Method.
3
IMF, January 17 2018, Article IV consultation, http://www.imf.org/en/News/Articles/2018/01/17/pr1806-imf-executive-
board-concludes-2017-article-iv-consultation-with-ethiopia.
4
ibid
5
World Bank and Cities Alliance. Ethiopia Urbanization Review. 2015.
15
4. Formal job creation is not keeping pace with population increases and demand for jobs
in urban areas. While urban unemployment and underemployment have recently reduced, they
remain high in comparison to other African countries. 6 It is estimated that an additional around 1
million urban jobs per year will be required between now and 2035 to maintain the current levels of
unemployment, and more to reduce unemployment. 7Although cities in Ethiopia offer migrants greater
employment opportunities than rural areas, most jobs in the cities are in the informal or household
sectors. Ethiopia needs to aggressively expand job opportunities in urban areas, especially in formal
sectors which are more productive and higher paying.

5. The urbanization challenges are exacerbated by climate change impacts and limited
disaster preparedness and management. Climate change impacts in Ethiopia include an increase in
average temperature and changes in rainfall distribution or occurrence of extreme rainfall events which
is likely to increase flood and drought risks. In addition, these are exacerbated by current
vulnerabilities that are highly interlinked with rapid urbanization. For example, the vulnerability to
flooding is intimately linked with informal settlements along river banks or in flood plains, use of
housing material such as mud and wood that is not resilient to flooding, and poorly constructed and
maintained drainage systems along roadways. Many Ethiopian cities are exposed to earthquake and
volcano risks, but lack resilient building construction. In addition, the current emergency preparedness
and response capacities of Ethiopian cities are non-existent or low. Most lack basic emergency
response resources (for example, fire suppression, search and rescue, and emergency communications
equipment) and qualified personnel. Strengthening urban resilience and disaster risk management will
be crucial to improve living conditions in Ethiopian cities for residents and increase their attractiveness
for private sector investment and job creation.

6. However, if managed well, urbanization presents a huge opportunity in bringing about

structural transformation and in reducing poverty in Ethiopia by shifting the structure and
location of economic activity from rural agriculture to larger and more diversified urban
industrial and service sectors. Urban centers already play an important role in the economy,
contributing to 38 percent of GDP, although they employ (both formally and informally) only 15
percent of the total workforce. This is due primarily to the high productivity associated with sectors
such as services and manufacturing, which are located mostly in urban areas. The higher productivity
in urban areas has been associated with poverty reduction. In recent years, poverty has fallen much
faster in urban than in rural areas. The proportion of urban residents living below the poverty line
decreased from 26 percent in 2010/11 to 15 percent in 2015/16, while the proportion of those living in
rural areas fell much less sharply from 30 to 26 percent over the same period. 8 In addition, of the
nearly 2.8 million new jobs created in Ethiopia between 2005 and 2011, 60 percent were in urban
areas9. The decline in urban poverty is likely due to government policies in recent years to promote
private sector investment, create jobs, and establishment of urban safety nets, and food subsidies.

7. Ethiopia has a federal, democratic government

system, established in the early 1990s, with nine
6
Urban unemployment was 17 percent in 2014, compared with 7 percent in Rwanda, 9.5 percent in Uganda,6.5 percent in
Ghana, and 8.8 percent in Nigeria.
7
Government of Ethiopia. 2016. “National Urban Development Spatial Plan.” Prepared by Egis International in
association with IAU-IdF &Urba Lyon, March.
8
Government of Ethiopia. 2017. “Ethiopia’s Progress Towards Eradicating Poverty: An Interim Report on 2015/16
Poverty Analysis Study.” National Planning Commission, September.
9
World Bank Group. 2015. “Ethiopia Urbanization Review: Urban Institutions for a Middle-Income Ethiopia.”
Washington, DC. Available at https://openknowledge.worldbank.org/handle/10986/22979 License: CC BY 3.0 IGO.”
16
autonomous states (‘regions’) and two chartered cities.10Although the federal constitution formally
establishes two government levels, in practice, Ethiopia has three main government levels: Federal,
regional, and local government.11Regional states have their own constitutions and are typically
subdivided into administrative zones, which is a de-concentrated territorial level. Local governments,
as the third tier, are established by regions according to their own constitutions and governance
structures. City administrations/urban local governments (ULGs) and woredas (or rural local
governments) are semi-autonomous local government entities, with legal status as corporate bodies
with their own political leadership (council) and their own budget.

2.2. Sector and Institutional Context

1. ULGs have the primary mandate to provide state and municipal services and in
enhancing local economic development (LED), although these were established only
recently.Urban areas in Ethiopia have had functioning governments only since 2000, when
proclamations to establish urban local governments were first issued. Combined with acommitment to
fiscal decentralization, the proclamations are intended to give local governmentsmore direct and
transparent control over public spending. The objective has been to create and strengthen ULGs that
will ensure public participation in making choices andwill enhance urban service delivery. ULGs
became responsible for an extensive list of public service delivery functions 12, including those which
they are required to execute on behalf of their regions. In addition, ULGs have a significant role to
play in local economic development and job creation. Legislatively,cities are mandated to lead and
coordinate LED activities. Practically, all cities have major roles in (a) infrastructure investments and
facilitating access to land, (b) providing support to micro and small enterprises (MSEs), and (c)
encouraging private sector investment.

2. However, cities still lack the capacity of exercising adequately their mandate; such
deficiencies in the urban institutions for municipal governance, municipal finance, and land
management underlie the gaps in infrastructure and services and jobs. Despite progress over the
past decade in building institutions, and providing infrastructure and services across all urban sectors,
there is still much to do. While decentralization efforts have increased the role of ULGs, they often
lack the financial, system and professional capacity to govern and deliver services. Further, certain
important powers are still retained at the regional level due to continuous need to support and
complement ULGs. However, some of these existing regional roles particularly in municipal finance,
personnel management, and city operating practices make it harder for cities to carry out their
mandates. These challenges directly translate to low and poor provision of infrastructure and services
in the cities. This further prevents cities from maximizing their potential productivity and
agglomeration effects and limits their ability to contribute to overall economic growth.

3. In general, municipal finances are inadequate to fund urban development.

Intergovernmental transfers and own-source revenues cover local expenditures but are insufficient to
fully fund urban services and infrastructure. State functions are financed through regional transfers,
often barely enough to cover recurrent needs. Municipal functions are expected to be funded from own
local revenues, both for recurrent and capital spending. But revenues rarely meet demand for services.
10
The Regions are Afar, Amhara, Benishangul-Gumuz, Gambella, Harari, Oromia, Somali, SNNPR (Southern Nations,
Nationalities and Peoples), and Tigray. The chartered cities are Addis Ababa and Dire Dawa.
11
The constitution refers to “member states.”
12
ULGs are tasked with providing state services, such as education, health, justice, and security, as well as municipal
services, such as roads, drainage, street lighting, and solid waste collection and disposal.
17
Moreover, many cities lack control over rate-setting, while larger cities rely heavily on unsustainable
land-lease revenues. Federal and regional government tiers, in addition to the existing focus on
mobilization of state revenues, urgently need to focus their support on municipal finance mobilization
at the local government level.

4. The key challenge is to ensure that all Ethiopian cities are urbanizing smartly. This
means strengthening the institutional performance and capacity of ULGs and putting in place
the right policies, systems, and investments now, when incomes and urbanization levels are
low. To do so, innovative ways are required to help ULGs develop the capacities, incentives, and the
financial resources needed to deliverinfrastructure and services to residents effectively and efficiently,
as well as to create a conducive and competitive business environment for job creation and the private
sector. In deepening the decentralization process, Ethiopia would benefit from strengthening the
overall capacity of local governments and the legislative functions of city councils for greater
fiscal autonomy and better service delivery. The roles for national, regional, and ULGs will also
need to evolve as they transition from urban planning, management, and implementation to
enabling and coordinating action by a growing number of stakeholders, both public and private.

5. The Government of Ethiopia (GoE) acknowledges these challenges and has prioritized
resilient urban development to enable overall economic growth and poverty reduction. The
government’s 5-year development plan, currently the Second Growth and Transformation Program
(GTP 2) (2015/2016–2019/2020), and the strategies of policies of the Ministry of Urban Development
and Construction’s (MUDCo), the Ethiopian Cities Sustainable Prosperity Goals (ECSPGs): Building
Green, Resilient and Well Governed Cities, and the National Urban Development Spatial Plan
(NUDSP)provide the frameworks for the urban strategic engagement and the development of resilient
urban systems in Ethiopia. Additionally, the 2013 National Policy and Strategy on Disaster Risk
Management recognizes the need to strengthen urban resilience, as well as Ethiopia’s Climate Change
National Adaptation Program of Action. These lay out its medium and long-term strategy for urban
development and present the ECSPGs for 2015/2016–2024/2025. The GTP promises doubling of GDP
in the next five years, driven by industrial and manufacturing growth, while the ECSPGs aim to
promote green growth, resilient, and well-governed cities that support Ethiopia’s transformation. As
part of the preparation of the ECSPGs and GTP 2, it has been estimated, that cities’ capital investments
will need to increase by over three-fold during the next 10 years to enable Ethiopia to attain middle-
income status by 2025.

6. The GoE and the World Bank have been working in partnership since the early 2000s to
foster smart urbanization and help Ethiopia’s ULGs effectively meet their responsibilities. The
Bank has supported the government’s strategy through a series of projects, 13 and continued doing so in
the first phase of Urban Local Government Development Program (ULGDP) since its initiation in
2008 and the second phase of the program (ULGDP II) since 2014. The ULGDP and ULGDP II are
jointly funded by the government and the World Bank, where the Bank contributed US$300 million
and US$380 million respectively; while the counterpart funding was US$116 million and US$176.55
million respectively.

7. The ULGDP and ULGDP II have demonstrated remarkable achievements in improving

the institutional performance of local governments and contributed significantly to job creation
and poverty reduction and serve as the foundation upon which this proposed Operation is built .

13
Capacity Building for Decentralized Service Delivery project (2003) and the Public-Sector Capacity Building program
(2004).
18
For example, the ULGDP II introduced several firsts in the country for ULGs. These include: the
undertaking of value for money audits, procurement audits, and environment and social safeguard
compliance audits. Institutional capacity for planning, revenue mobilization, asset management,
budgeting, financial management, investment planning, procurement, and project execution has grown
significantly in the cities participating in the ULGDP II. These improvements have enabled cities to
provide critical infrastructure and services and to create jobs. An in-depth study on the employment
impact of cobblestone construction (the largest infrastructure expenditure item) under the ULGDP II
found that the program created a considerable number of jobs and has become instrumental in
employing the urban jobless in participating cities. In fact, in selecting the cobblestone workers to
organize into MSEs, the unemployed are the main target group (with priority given to women and
vulnerable groups, including people with moderate disabilities, returning refugees, ‘poorest of the
poor’, and ex-combatants). Beyond the jobs created, the cobblestone work also serves as a reliable
‘boot-camp’ for the unemployed to receive training on construction techniques, financial management
etc. and provided the critical seed capital for self-employment later on. The annual jobs directly
created by ULGDP has increased from 60-80,000 per year under the first phase of ULGDP to around
140,000 under ULGDP II, with a continued increase due to investments in labor intensive
infrastructure.

19
2.3. Ministry Policies, Strategies, Goals, Plans and Programs for the Urban Sector

National Urban
Development
Spatial Plan

Ethiopia Ethiopian
Cities
Urban Sustainable
UIIDP
Development Prosperity
Goals
Policy

ULGDP I & II

Figure 1. Ministry's Policies, Strategies, Goals, Plans & Programs for the Urban Sector

2.3.1. Ethiopia Urban Development Policy

The objectives of the Policy are: -

 To enable cities become the centers of development and impact development at both rural
and national levels; and
 To enable urban dwellers exercise authority and benefit from development so that they enjoy
the standard of living enjoyed by middle income countries.

20
There are seven principles which govern this policy: -

 Enable cities to establish a sustainable mutual complementarity with rural centers as well as
other cities;
 Expand the opportunity for growth of all urban centers by creating balanced growth
between different cities;
 Enable urban centers at all levels to grow in a mutually complementarity way;
 Make poverty reduction and eradication the central point of urban development;
 Encouraging the public to participate in development activities;
 Establish strong partnerships with development partners; and
 Grant urban centers authority and freedom to self-administer by establishing a
decentralized administration.
The Policy document also provides subsets of policies on land, housing development, infrastructure
development, social services, urban planning, democracy and good governance in cities, capacity
building etc.

2.3.2. National Urban Development Spatial Plan

The National Urban Development Spatial Plan (NUDSP) which has been approved by MUDCo and is
currently under implementation, provides the framework for the development of urban systems in
Ethiopia for the next 30 to 35 years.

The NUDSP 2035 Vision envisages a high level of urbanization in Ethiopia (40%) with population
growth concentrated in a selected number of large cities which will be closely linked to each other as
well as to lower-ranking urban centers and rural settlements in their respective hinterlands.

The NUDSP 2035 Vision also envisages a polycentric system of urban development scenario as
opposed to corridor and disbursed urban scenario development. The polycentric scenario is a situation
in which the urbanization process is dominated by the growth of large secondary cities and the
consolidation of urban cluster forming macro-urban regions, reducing the primacy of Addis Ababa.
Under this scenario, secondary cities develop a range of functions and services commensurate with
their population levels.

Many large cities will be at the apex of an ‘urban cluster’, which will consist a group of variously
sized cities and towns that are functionally interlinked. A few cities of a million-plus inhabitants (in
addition to Addis Ababa) will emerge as hubs of Ethiopia’s most dynamic urban clusters. Large
secondary cities and urban clusters will thus become more relevant in the national (urban and
economic) landscape, acting as a counterbalance to the Addis Ababa Metropolitan region.

The clustering of cities will be associated with strong agglomeration effects which are expected to
underpin higher productivity growth and the improved competitiveness of the productive sector, so
allowing Ethiopia to accelerate the process of reaching MIC status. The dispersed urban scenario is
about the development of small and medium sized city as the primary mode of urbanization. The
corridor development is a pattern of urbanization which will be concentrated along the major transport
and communication corridors. The polycentric approach appears to integrate elements of the other two
21
scenarios and is meant to provide services to the rural areas and avoids excessive congestion along the
main transportation and development corridors and offers a platform on which to build balanced
regional development.

A number of the 73 new cities that will join UIIDP, in addition to the current 44 enrolled in
performance-based grants, are within these urban clusters and their participation in UIIDP would
support the role they are expected to play in these clusters in contributing to economic growth.

2.3.3. Ethiopian Cities Sustainable Prosperity Goals

The Ministry of Urban Development and Construction (MUDCo) has introduced the Ethiopian Cities
Sustainable Prosperity Goals (ECSPG) that will lead to the establishment of Green Growth,
Resilient and Well Governed Cities that support Ethiopia’s transformation from a predominantly
agricultural nation to a nation with a rapidly growing industrial sector that contributes to the economic
growth necessary to achieve middle income country status by 2025. The ECSPG is the Ministry’s
contribution to the Government of Ethiopia’s Growth and Transformation Plan (GTP1) 2010/11-
2014/15 and (GTP 2) 2015/16-20/2020.
The continuous and substantial movement of people from rural villages and homesteads to urban
villages, small, medium, and large towns, and to the capital city, and the resulting rapid urbanization,
is necessary to support the development of industrial, manufacturing, and service sectors. The societal
change that will accompany the agricultural to industrial transformation can only be accomplished
successfully with careful and meticulous advance planning that addresses all aspects of the
transformation simultaneously. It is for this reason that the Ministry has developed the Ethiopian Cities
Sustainable Prosperity Goals. Its aim is to build the frameworks and provide the foundations – in our
towns and cities – to achieve the country’s vision and for the continued advancement of that vision.
The ECSPG comprises nine plus one pillars – or dimensions - that will contribute to the achievement
of middle income country status and bring the desired political-economic transformation. Growth is a
key objective of the Ministry’s initiatives and programs for urban development; the main economic
objective. The main elements of the political component of the pillars that make up the ECSPG are
good governance, democratization at local level and the satisfaction of citizens and residents with the
delivery of public services and performance of government – at local, regional and federal levels.
Together, the economic and political interventions of the ECSPG will produce the prosperity that
accompanies achievement of middle income country status.
The ECSPG’s nine plus one strategic pillars will contribute to Ethiopia’s achievement of middle
income country status by producing a transformation in the economic productivity and in the good
governance of cities. Economic transformation will be achieved by increased good urban governance
in general and in the focus of the ECSPG on Job Creation - Micro & Small Enterprise Development in
particular. This focus will be supported by improvements in land use planning, serviced land delivery,
housing development, infrastructure, services and green growth development. Investments in all these
areas and mobilization of resources to meet increasing operating and investment costs are a focus of
the MUDCo.
The attention given to economic development and governance does not neglect social and
environmental development, nor will the key GTP cross cutting issues be neglected. These include
22
gender and children’s affairs, youth and sports development, HIV/AIDS prevention and control, social
welfare, labor affairs, population and development, culture and tourism, science and technology,
environment and climate change.
The developmental framework for the ECSPG aims to bring prosperity to Ethiopia’s cities. The
ECSPG programs, sub-programs and projects will be implemented through to 2025 with GTP, SDG
and benchmarked middle-income country indicators measured against achievement of targets in three
indexed areas: good governance, economic and social development (growth) and citizens’ satisfaction.

In terms of achievement of the targets, goals and vision, MUDCo will continuously ask questions,
learn lessons and fine tune the Ministry’s interventions to answer the following:

 Governance Index (supply side): What is required to achieve good governance in federal,
regional and local government operations and in delivery of urban public services in terms of:
efficient & effective service delivery, sustainability, equity and participation, transparency and
accountability, rule of law and security, and subsidiarity - administrative and fiscal
decentralization.

ECONOMIC & SOCIAL DEVELOPMENT

SUSTAINABLE PROSPERITY

CITIZENS’ SATISFACTION DEVELOPMENTAL GOOD GOVERNANCE

Figure 2. ECSPG Developmental Framework for Performance Measurement

 Development Index (supply side) What is required in the development of Ethiopia’s urban
centers to create jobs, encourage entrepreneurs, increase investment, develop land, industry,
housing and public utilities and strengthen the framework for job creation (e.g.: trade, industry,
telecommunications, leadership, increase trade and exports); and lastly:

 Citizens’ Satisfaction (Public Perceptions) Index (demand side): What are public perceptions
of the development of urban centers and cities? How can we, continuously, identify public

23
 perceptions and attitudes, incorporate them into policies, strategies and programs and thus
effectively mobilize public opinion and public resources for the achievement of the 2025 Vision,
The Economic and Social Development, Developmental Good Governance and Citizens’ Satisfaction
indices will be measured to determine: the current baseline; the GTP2 and GTP 3 performance
targets; and the benchmarked performance targets to 2025, linked to comparable middle-income
country achievements.
This baseline data, GTP2 and 2025 benchmark targets will, in the three areas described, comprise
overall our “Prosperity Index”. The aim is to establish the Cities’ Prosperity Index, containing the
three elements described – growth, governance and citizens’ satisfaction for: a) urban centers and
cities with a population of 20,000+ in the Central Statistical Agency census, and add cities that achieve
this population level; and b) rural development centers that contain basic clustered education, health
and administrative facilities as well as commercial services.
The ECSPG contains ten pillars, 12 programs / sub-programs and 43 projects for urban development:-
Pillar 1. Urban Transformational Leadership

Pillar 2. Micro & Small Enterprise and Urban Productivity (Economy)

Pillar 3. Urban Developmental Good Governance &Services

Pillar 4. Urban Planning, Land Development and Management

Pillar 5. Housing Development, Shelter Provision and Administration

Pillar 6. Integrated Urban Infrastructure

Pillar 7. Environment, Green Services and Recreation

Pillar 8. Resilient, Inclusive and Safer Cities

Pillar 9. Urban Finance

Pillar 10. Urban Social Development

Table 1. ECSPG Pillars, Programs & Projects

Pillar Program / Sub-program

Pillar 1. Urban Transformational Leadership
1.1 Urban Transformational Leadership Development Program
1.1.1 Urban Leadership Centre of Excellence Project
1.1.2 ECSPG Management Information System Project
1.1.3 ICT Infrastructure Project
1.1.4 Communication and Public Participation Project
1.1.5 Digital (Smart) Cities Development Project
Pillar 2. Micro & Small Enterprise and Urban Productivity (Economy)
2.1 Micro and Small Enterprise Development Program
2.1.1 Entrepreneurship Capacity Building Project

24
Pillar Program / Sub-program
2.1.2 Micro and Small EnterpriseSupport and Facilitation Project
2.1.3 Micro and Small Enterprise Extension Services Project
2.1.4 Micro and Small Enterprise Management Information Systems Project
2.1.5 One Stop Shop Service CentreProject
2.2 Urban Food Security and Job Creation Program
2.2.1 Job Creation through Public Works Project
2.2.2 Livelihood Development project
2.2.3 Cash Transfer Project
Pillar 3. Urban Developmental Good Governance & Services
3.1 Urban Good Governance & Capacity Building Program
3.1.1 Urban Services Provision Project
3.1.2 Urban Skills Development and Capacity Building Project
3.1.3 Deepening Decentralization and Benchmarking Project
3.1.4 Community Leadership & Neighbourhood Management Project
Pillar 4. Urban Planning, Land Development and Management
4.1 Urban Plan Preparation and Implementation Program
4.1.1 Urban Planning Institutions and Systems Project
4.1.2 Regional Spatial Plan and City Clusters Project
4.1.3 Urban Geo-Coding and Parcel Addressing Project
4.2 Urban Land Development and Administration Program
4.2.1 Urban Land Administration Project
4.2.2 Urban Renewal & Redevelopment Project
4.2.3 Urban Expansion and New Township Project
4.2.4 Livelihood of Farmers Project
4.3 Urban Mapping, Survey and Land Use Right Registration Program
4.3.1 Surveying & Mapping Project
4.3.2 Urban Legal Cadastre Project
4.3.3 Urban Property Valuation & Registration Project
Pillar 5. Housing Development, Shelter Provision and Administration
5.1 Urban and Rural Housing Program
5.1.1 Urban Housing Capacity Building Project
5.1.2 Rural Development Canters Project
5.1.3 Housing Administration Project
Pillar 6. Integrated Urban Infrastructure
6.1 Urban Infrastructure Facilitation and Management Program
6.1.1 Integrated Urban Infrastructure Management Project

25
Pillar Program / Sub-program
6.1.2 Urban Infrastructure Asset Inventory and Management Project
6.1.3 Urban Mobility Planning and Management
6.2 Integrated Urban Infrastructure Development
Program
6.2.1 Urban Tele-com Development Project
6.2.2 Urban Energy Supply Project
6.2.3 Urban Water Supply and Sanitation Project
6.2.4 Waste Water Treatment Project
Pillar 7. Environmental, Green Services and Recreation
7.1 Environmental, Green Services and Recreation Program
7.1.1 Environmental, Green Services and Recreation Project
7.1.2 Solid Waste Management Project
7.1.3 Urban Watershed Management Project
7.1.4 Urban Energy Efficiency Project (biogas; biomass, electricity etc.)
Pillar 8. Resilient, Inclusive and Safer Cities
8.1. Resilient, Inclusive and Safer Cities Program
8.1.1 Fire and Emergency Response Capacity building project
8.1.2 Youth, Women and Vulnerable Groups Project
8.1.3 Urban Code Enforcement and Safer Assurance Project
Pillar 9. Urban Finance
9.1 Urban Finance Program
9.1.1 Urban Finance Project
9.1.2 Cities’ Credit Worthiness Project
9.1.3 Urban Property Taxation Project
9.2 Addis Ababa Integrated Development Program
Pillar 10 Urban Social Development
10.1 Urban Health Development Program
10.1.1 Urban Education Development Program

The ECSPG consists of 9+1 pillars, 12 Programs, 43projects and Addis Ababa Integrated
Development Program. The 10th Pillar (Urban Social Development pillar) is the responsibility of
Ministry of Health and Ministry of Education. Projects under program 6.2 (Integrated Urban
Infrastructure program) will also be implemented by the responsible federal/regional organizations. As
the implementation of these projects can help to determine the level of achievements of the ECSPG
and cities Performance level, MUDCo will collaborate with respective organizations in order to
develop and implement the cities performance measurement system.

26
ECSPG City Performance Measurement Framework: The Ministry with technical assistance from
UN-Habitat is developing the City Performance Measurement Framework (CPMF) and tool that will
be used to measure all cities’ performance on selected performance indicators related to the 10 pillars
of the ECSPG. It will also eventually measure the City Prosperity Index (CPI) starting with all the 44
cities participating in the ULGD II and expanding in a later phase to cover all the 117 cities
participating in the UIIDP. The CPMF has now been completed and is being piloted in selected cities
prior to its roll out to the 44 cities.
The UIIDP will, through the performance areas and performance indicators defined in the Annual
Performance Assessment Guideline as well as through the annual capacity building plans/budgets,
partially support the implementation of the above Pillars. Those areas and activities to be supported by
UIIDP will be defined in the annual capacity building plans/budgets. The other areas and activities of
the ECSPG will be funded by GOE and other external sources (multilateral and bilateral). The
Ministry is currently in the process of identifying these sources.

2.3.4. Urban Local Government Development Programs (ULGDP I & ULGDP II)

First Urban Local Government Development Program 2008/09-2013/14

The First Urban Local Government Development Program (ULGDP1) was a continuation of urban
reform by the Government of Ethiopia which started in the early 2000s. ULGDP1 was designed to
support the government’s Plan for Accelerated and Sustained Development to End Poverty 2005/06-
2009/10 (PASDEP) and the Ministry’s Urban Development and Urban Good Governance Programs
that were developed to support the PASDEP. The specific development objective of the program was
to support improved performance in the planning, delivery and sustained provision of priority
municipal services and infrastructure by urban local governments (ULGs).
The World Bank contributed to the early stages of establishing these ULGs through the Capacity
Building for Decentralized Service Delivery (CBDSD) Program. The CBDSD also provided a range of
training and other technical assistance activities to establish cities as viable entities able to fulfil their
mandates. CBDSD activities addressed 18 cities—the regional capitals and three of the largest cities in
each of the four major regions, plus Dire Dawa and Harar. Specific assistance was also provided to
Addis Ababa.
ULGs have also received capacity building support from the urban management component of the
Public Sector Capacity Building Program Support Program 2004 to 2012 which aimed to improve the
scale, efficiency, and responsiveness of public service delivery at the federal, regional and local level;
to empower citizens to participate more effectively in shaping their own development and to promote
good governance and accountability.
In 2008, a credit in the amount of USD150 million equivalent was made available to the government
of Ethiopia for the ULGDP1, under which 19 14cities who benefitted from the CBDSD support were
able to receive grant funding for infrastructure and services based on their performance in key areas
related to city management.

14
Bahir Dar, Kombolcha, Gondar and Dessie in Amhara Region; Mekelle, Adigrat, Axum and Shire
Endaselassie in Tigray Region; Adama, Bishoftu, Jimma and Shashemene in Oromia Region; and Hawassa,
Arbaminch, Wolayta Sodo and Dilla in SNNPR, Dire Dawa, Harar and Addis Ababa

27
In 2011 the World Bank approved an additional USD 150 million due to the fact that the program had
performed well, and the funds had been disbursed faster than anticipated. The planned six-year Budget
was disbursed in about three years. The additional bank assistance brought the revised cost of the
program to be USD 416 million including 20% Regional and 20% ULG contributions to the
performance grant.
The additional credit continued financing the costs associated with scaling up the ULGDP1’s activities
to enhance the impact of this well-performing program. Specifically, the additional funds financed
investments to improve the administration of the 19 participating cities and to help address a large
infrastructure backlog. This enabled the administrations of the 19 cities benefiting from the ULGDP1
to further improve their performance in participatory planning, financial management, procurement,
execution of infrastructure programs, and sustainable delivery of services. It also assisted 18 additional
cities15 to build capacities in good governance to prepare them to participate in the ULGDP II that
commenced in 2014/15 (EFY 2007).
Second Urban Local Government Development Program 2014/15-2018/19
The ULGDP II is a follow-up to the successful ULGDP1. In preparation for ULGDP II, 18 additional
ULGs were selected in 2012 to receive capacity building support to enable them to participate in the
ULGDP II’s performance grant. The ULGDP II has scaled up the ULGDP1 support from 19 to 44
cities – excluding Addis Ababa and adding 26 new cities – by providing highly needed investment
funds to promote the cities as growth engines in the GoE’s urban development strategy; build
institutional capacity of all tiers of governance (federal, regional and local) in urban development, and
enhance the incentives of everyone involved. The 44 ULGs participating in the ULGDP II are:
 The 18 cities that participated in the CBDSD and (excluding Addis Ababa) in the ULGDP1 –
as listed on the previous page;
 The 18 cities that participated in the ULGDP1 for CB purposes only 16; i.e., did not receive
Performance Grants – as listed on the previous page; and
 The 8 cities that are receiving investment funds through the KfW funded Urban Development
Fund and capacity building support from GIZ through the Urban Governance and
Decentralization Programme. These cities are: Adwa (Tigray), Debre Markos (Amhara),
Hosaena (SNNPR), Nekemte (Oromia), Gambella (Gambella), Samera (Afar), Assosa
(Benishangul Gumuz), and Jigjiga (Somali). The latter four are located in the Developing
Regional States (DRS) of Ethiopia.
The ULGDP II involves disbursement of funds by the World Bank and allocation of funds to ULGs,
Regional States and MUDCo through a result orientated/performance-based capital investment fiscal
transfer system using the World Bank’s Program for Results (P for R) methodology, clearly linked to
well-defined disbursement-linked indicators (DLIs). The P for R operation fully utilizes and enhances
the key elements of the existing GoE system.
ULGDP II Objectives

15
Assela, Burayu, Sebeta, Ambo, Robe, and Batu in Oromia Region, DebreBirhan, DebreTabor, Woldiya,
Finote Selam, and Mota in Amhara Region; Alamata, Humera and Wukro in Tigray Region; and Mizan,
Hosaena, Areka and Butajira in SNNPR
16
TA to New and Existing ULGDP Cities in Amhara, Tigray, Oromia& SNNP Regional States
28
The ULGDP II Development Objective (PDO) is to enhance the institutional and organizational
performance of participating urban local governments in developing and sustaining urban
infrastructure and services. The key results of the performance improvements will be:
 enhanced participation of citizens in ULG planning and budgeting;
 efficient fiduciary management;
 increased amount of own source revenues at the ULG level;
 improved infrastructure, service delivery and O&M systems; and
 Strengthened accountability and oversight systems.
ULGDP II Description
The ULGDP II is expected to run for a period of five years – from EFY 2007 (2014/15) to EFY 2011
(2018/19) with the first disbursement year EFY 2007 (2014/15). ULGDP II funds performance-based
grants for 44 cities - of the total number of larger cities (85), excluding Addis Ababa, with a total
population of 3,312,107 people (2007 figures) and 4,348,853 (2013 estimates). The ULGDP II covers
all nine regions and Dire Dawa City Administration. The population of the 44 ULGs is about 28% of
the total urban population17.

The total Program Budget envelope is US$556.55 million and the main expenditure items are:

 Performance based grants to 44 ULGs for urban infrastructure and services investments
and capacity building (US$499.55 million);
 Regional governments capacity building and oversight/support to constituent ULGs
(US$30.00 million);
 MUDCo to administer and coordinate the program, and strengthen its capacity to support
and guide the regions and ULGs (US$27.00 million);

As per current practice, ULGDP II determines allocations to ULGs through a simple population
formula and disburse funds on the basis of an Annual Performance Assessment (APA) with clearly
defined performance indicators. In doing so, ULGDP II leverages institutional strengthening,
achievement of planned infrastructure activities, and support local capacity building.
Activities financed under the performance grant are core infrastructure investments in roads, water
supply, sanitation, solid waste, greenery, street lighting, etc. in a well-defined investment menu, which
targets infrastructure investments towards areas under ULG responsibility, and to maximize gains and
minimize the risks. Under ULGDP II the ULGs prepare their Capital Investment Plans in a
participatory manner and use the planning tools developed under ULGDP1: the assets inventory and
management plan system, capital investment plans, annual plans and Budgets. Participatory approach
and proper planning and Budgeting are promoted through the APA. Cities and regions contribute to
the investments through a substantial level of matching funding. New cities are required, at a
minimum, to match 10% of the grants while cities currently part of ULGDP1 and all regions have a
minimum contribution requirement of 20% each (as per current level).
ULGs are able to utilize a maximum of 5% of Performance Grants for capacity building (CB)
activities defined in a menu of eligible CB activities. These activities build on the existing technical

17
Based on data from WBI 2013 indicators and CSA 2013 estimates extrapolated from the 2007 census.
29
assistance provided under the previous government and GIZ programs. As such, the ULGDP II
pursues a two-pronged approach in CB, focusing on the capacity building needs of:
1. The 26 cities that did not participate in the ULGDP1 - which are expected to be fairly high;
2. The 18 cities which participated in the CBDSD and the ULGDP1 – whose CB needs are
expected to be relatively lower, and different in nature, to the 26 new cities.
The main focus of CB support to cities is on the key areas of weaknesses identified through the APAs
and Value for Money (VfM) assessments
The ULGDP II also includes a set of parallel, but related activities, expected to total US$ 35 million
over five years. These activities will include CB activities for:
1. Those agencies in the Regional States that will: a) benefit from CB to support both their own
operational functionality and b) strengthen their ability to support ULGs in ULGDP II
implementation as per the ULGDP II Program Operations Manual (POM). These agencies
include: Office of the Regional Auditor General (ORAG), Regional Environmental
Protection Agencies (REPA), Regional Revenue Authorities, Regional Public Procurement
Agencies (RPPPAA) and Regional Bureaus (or Departments 18) of Urban Development
(RUDBs).
2. The federal Ministry of Urban Development, Housing and Construction (MUDCo).
The formulation of CB plans for ULGs, regions as well as the overall MUDCo support to be provided
is overseen by a small capacity building team at MUDCo. The ULGDP II Implementation Support is
provided by the MUDCo and includes the procurement and funding of Annual Performance
Assessments (APAs), Value for Money (VfM) audits, Procurement Audits and other program
management support, including strengthening of the M&E functions. APAs, VfM and procurement
audits are contracted out to private, neutral and objective companies so as to ensure that results are
willingly accepted, credible, consistent and reliable. Implementation support provides some support
and incentives to ensure timely annual audits and strengthening of the safeguards management by the
regions.
Program for Results (PforR)
The ULGDP II uses the World Bank’s PforR lending instrument. PforR replaces the Specific
Investment Loan (SIL) approach that was used to implement the ULGDP1. The PforR system focuses
on results. All IDA disbursements are linked to the achievement of tangible and verifiable results,
measured against Disbursement Linked Indicators (DLIs). DLIs play a critical role in ULGDP II
operations—they provide the government with incentives to achieve key program milestones and
improve performance. The key features of the P for R approach are that it: finances and supports GoE
programs, disburses upon achievement of results; focuses on strengthening institutional capacity; and
provides assurance that Bank financing is used appropriately, and that the environmental and social
impacts of the program are adequately addressed.
There are nine DLIs in all for ULGDP II. The first set of DLIs (1 through 3) aims to strengthen ULG
institutional roles in the delivery of infrastructure and services. The second set of DLIs (4 through 7)
targets strengthening of Regional State entities so that they can properly fulfil their mandates to
support ULGs. The third set of DLIs (8 and 9) focuses on strengthening the capacity of federal

18
The Regional Bureaus or Departments responsible for Urban Development are contained within
differently named Bureaus in different Regional States.
30
government entities to assist both regions and ULGs. Together, the nine DLIs provide strong
incentives for improved management of urban areas.
DLI1 contains the Minimum Access Conditions (MACs) for ULGs comprising requirements in
planning, program financial management, safeguards and procurement; they must be achieved and
maintained by participating ULGs throughout the ULGDP II. ULG needs to fulfil MACs in order to
qualify for access to the basic grant component of the ULGDP II Performance Grants and to qualify
for funds through performance in DLIs 2 and 3. MACs are assessed as part of the APA every year and
are put in place to ensure minimum capacity of the ULGs to handle and absorb the funds.
DLI 2 and 3, the Performance Measures (PM), are further targeted towards the institutional
performance in core areas such as planning, Budgeting, program financial management, own source
revenues, procurement, assets management and governance as well as infrastructure and service plan
achievement.
The remaining DLIs are linked to performance measurement of those Regional State (DLIs 4, 5 and 6)
and Federal authorities (DLIs 8 and 9) which use ULGDP II funds for capacity building or
implementation support activities as defined in the ULGDP II Program Operational Manual (POM).
The ULGDP II has performed well and has managed in its 3 rd year of implementation to achieve the
end of program (five year) targets set for DLI 2 and DLI 3. The institutional and implementation
arrangements have worked well with a few challenges in some specific areas such as procurement of
APA consultants and staff turnover which the Ministry is now addressing.

2.4. Linkages between the UIIDP and the Ministry’s urban strategies, goals and plans

The Urban Institutional and Infrastructure Development Program (UIIDP) will be linked to, and
support at an operational level, the policies,goals, strategies and plans of the Ministry stated above.
The UIIDPwill build upon the foundation laid by the two previousprograms (ULGDP I and ULGDP
II) and will continue to support thegoals and objectives of government strategies and plans for urban
areas. The overall objectiveis to support improved institutional performance in the planning, delivery,
and sustained provision of urban services and infrastructure by ULGs as well as local economic
development. The implementation timeframe for UIIDP and the envisaged second phaseis also
planned to coincide with the ECSPG, GTP 2 and the country’s goal of achievement of middle income
status by the year 2025. As mentioned previously, it has been estimated that cities’ capital investments
will need to increase by over three-fold during the period from 2015 to 2025 to enable Ethiopia to
attain middle-income status by 2025. It is generally accepted that public funds alone (including those
obtained through development partners) will not be enough to achieve this three-fold increase.
Theintention of the Ministry is therefore to use the improved capacity and systems established by the
ULGDP I, ULGDP II andUIIDPto continue to mobilize funding and resources from development
partners, regions and cities (as matching funds) and at the same time start exploring the possibilities of
private sector financing for revenue generating investments, including public private partnerships for
major or bulky investments.

2.5. Long-term Financial Sustainability of ULGs

31
2.5.1. Data from field assessment conducted as part of the TA for preparation of the UIIDP
show that the 44 cities participating in the ULGDP II have significantly higher per capita
own-source revenue (average 590 Birr per capita) than the new 73 UIIDP ULGs (452
Birr per capita).19 However, the greater difference is between the 18 cities that have
participated in the program since the start of the ULGDP and the 26 cities that entered under
the ULGDP II. The 18 ULGs generate an average of ETB 697 per person (equal to about
US$30), and the 26 generate an average of ETB 364. 20 The 18 ULGs are able to finance and
manage larger projects with higher impact on their urban development.

2.5.2. The MUDCo envisions that all cities will eventually be able to fund their infrastructure
investments from their own source revenue and other funds they mobilize from the
private sector (for example, public-private partnerships and borrowing for those projects that
are income generating). Although the specific timing of this is not yet clear, the ULGDP and
the UIIDP are some of the main instruments for ensuring that cities are on the right path to
achieve this vision. These programs have built-in initiatives to improve own-source revenue,
systems development, capacity building, improved regional support, as well as incentives
(through the performance-based allocations) for improving performance focused on own-
source revenue generation, and rewarding increased matching funds from ULGs.

2.5.3. The UIIDP is designed to ensure a gradual progression towards this goal. The programs
require that cities and regions contribute a larger proportion of matching funds as their revenue
generation capacity and revenues increase. This ensures the sustainability and ownership of
the programs. This co-funding from ULGs and regions is graduated, depending on the timing
of their entrance into the ULGDP or UIIDP, as well as approximately relating to their overall
and revenue generation capacity.

Short to Medium-term Initiatives

2.5.4. There is now a need to update the government’s urban development program—the
ECSPG—and to develop a clearly linked urban financing strategy that articulates how
investment in cities will be financed once the Urban Institutional and Infrastructure
Program (UIIDP) ends. The UIIDP includes actions to prepare for a transition of the current
system to a future longer-term coherent sustainable urban development strategy with related
fiscal architecture for funding of urban infrastructure and delivery of services. To ensure that
the transition is smooth and well-coordinated, the UIIDP is supporting the following
initiatives:

 First, cities and regions contribute matching funds, which increase as their
revenue generation capacity improves and revenues increase. Thus, 16 cities that
have been participating in the Program since it began in 2008 will have to contribute
40 percent of matching funds, and Dire Dawa and Harar will contribute 50 percent due
to their special status as federal cities and regional status respectively. Some of these
cities have established industrial zones that will require large investments in
infrastructure to ensure that they operate effectively with linkages to import and
export markets. Financing these will require new sources and modalities of financing.

19
Based on a sample of 22 ULGDP ULGs and 21 new UIIDP ULGs. Revenue data is from the EFY 2008 final Accounts (FY
2015/16).
20
Based on a sample of 9 original and 12 phase II ULGs. Revenue data from EFY 2008 final accounts (2015/16).
32
  Second, the Ministry of Urban Development and Construction will continuously
monitor the revenue generation capacities and revenues of all cities participating
in the UIIDP. It will support this with the issuance of guidelines and provision of
technical assistance.
 Third, the UIIDP contains specific DLIs that reward ULGs for performance in
generating own-source revenues and that reward regional government entities
for helping to build the capacity of ULGs for revenue generation. The support
provided under the two phases of the ULGDP has clearly helped the participating
cities in improving revenue performance. For example, cities that have been in the
Program for the last nine years generate about US$30 per capita per year compared to
the newly participating UIIDP ULGs, which generate US$20, but with great variations
across the ULGs in each of the groups (EFY 2008 data). 21
 Fourth, the program will strengthen the support to promote longer-term
sustainabilitythrough incentives, capacity building, technical assistance and
guidelines from the regional level on own-source revenue.
 Fifth, the initiatives to create jobs and promote LED, will again contribute to
boosting own-source revenue and longer-term sustainability.
 Finally, the MUDCo, with support from the Ministry of Finance (MoF) and
technical assistance from development partners, will start exploring other
financing modalities for cities. The MUDCo under the UIIDP will undertake a
comprehensive review and update of the Ethiopian Cities Sustainable Prosperity Goals
and develop an integrated and clearly linked urban financing strategy.

Medium to Longer Term

2.5.5. Despite these initiatives under the UIIDP, there is a clear need to think beyond the
coming five years of the UIIDP, both for the currently enrolled ULGs, and those which
are not yet covered. The review and update of the ECSPG and urban fiscal strategy will
consider the following issues (among others):

 Review of the urban development mandates; including divisions between state and
municipal functions and update of major initiatives and programs.
 Costing of the core mandates and estimates of overall funding requirement and gaps.
 Review of urban revenue collected and potential revenues at the ULG level.
 Review of alternative revenue sources, including improved framework for own-source
revenue, options for borrowing, issuing of bonds, and the like.
 Review of the current intergovernmental fiscal transfers system and the location of the
ULGs in this architecture, and review of the linkages between the current UIIDP
performance-based capital grants and the linkages with the government’sgeneral-
purpose grant and the specific purpose grants.
 Review of future options and modalities for a sustainable and comprehensive
intergovernmental fiscal transfer system targeting the urban centers, which fits well
with the legal framework (which may be up-dated in required areas as well). This will
include a review of the balance between own source revenues, intergovernmental
fiscal transfers and other funding modalities such as, for example, borrowing.
21
Based on a sample of 9 original ULGDP ULGs and 16 new UIIDP ULGs. Revenue data is from the EFY 2008 final
accounts (FY 2015/16).
33
  Review and design of the future institutional framework, including grant management,
flow of funds, reporting and accountability systems, and the like.
 Review and design of future incentive structures, capacity enhancement modalities
and support to ULGs performance enhancement. (Further details are presented in
Annex 1.)

2.5.6. The strategy will be coherent and well-phased. The strategy will be developed with due
consideration of the capabilities and experiences from the various ULGs, for example, the
ULGs which first joined the ULGDP in 2008, versus the newly entering ULGs (or ULGs not
yet covered). The strategy will also review international experiences and realism in the
funding system compared with urban mandates and revenue sources and potential.

2.5.7. The relevant authorities (cabinet and parliament) will have to approve the strategy to allow for
the new system to be integrated into Ethiopia’s intergovernmental grant system. It is expected
that such approval will be granted at least two years before the conclusion of the UIIDP to
allow time for the new system to be established, and capacity for its implementation built.

2.5.8. The table below summarizes the envisioned trajectory on the financial support and initiatives
for the various groups of ULGs. The specifics of the initiatives after UIIDP will be determined
1–2 years prior to the end of the UIIDP through the comprehensive review and strategy
development mentioned above.

34
 Table 2. Envisioned Trajectory of Support Varied by ULG Groups

Groups of ULG UIIDP Beyond UIIDP

(Phase 1: 2018/19–2022/23)
18 ULGDP Covered by grant support with a The urban development financing strategy
ULGs joined the higher requirement on co-funding will determine the need for and modalities
first ULGDP22 (40 or 50 percent). of possible grants closely linked with the
Populations government’s intergovernmental fiscal
ranging from Strong support to improve own- framework, targeted and probably with
59,300 to source revenue. some form of performance-based
286,600. allocations, based on the good lessons
learned from Ethiopia and international best
practices. The strategy will also explore the
possibility of mixing grants with borrowing
if the cities are close to credit worthiness by
the end of UIIDP.

26 ULGs newly Covered by grant support, and Will be followed-up by a mix of initiatives,
joined the with an increased requirement on public-private partnerships, special support
ULGDP II co-funding (30 percent), still on larger projects, specific project support,
Populations need strong continued support. support from regions, and the like. The
ranging from urban development financing strategy will
25,200 to Strong support to improve own- determine the need for and modalities of
152,700. source revenue. possible grants closely linked with the
intergovernmental fiscal framework,
targeted and probably with some form of
performance-based allocations.
73 ULGs newly Covered by grants (enrolled Increased co-funding.
joined the gradually); relatively lower
UIIDP requirement on co-funding (10– Will need a stronger support for some years
Populations 20 percent) from regions/central level and take part in
ranging from the overall funding system to be elaborated.
20,300 to 65,200. Strong support to improve own-
source revenue. Strong support to improve own-source
revenue.

The urban development financing strategy

will determine the need for and modalities
of possible grants closely linked with the
intergovernmental fiscal framework,
targeted and probably with some form of
performance-based allocations.
Other cities not Not covered Will require strong fiscal and capacity
covered by building support.
UIIDP
Will be targeted through the city-wide
funding arrangement to be developed under
the updated ECSPG with its urban
22
Excludes Addis Ababa.
35
 financing strategy.

2.5.9. However, even the cities that have participated in the performance grant mechanism the
longest still do not have sufficient own-source revenues or regional block grant transfers
to meet investment financing gaps. Although the program will help those cities to realize
their revenue potential, cities are likely to require fiscal transfers for the foreseeable future if
they are to successfully manage urbanization and deliver on their evolving mandates. For
instance, the national spatial plan envisages that most of the cities that participated in the
ULGDP (Hawassa, Mekelle, Kombolcha, Adama, Bahir Dar, Gondar, Jimma, Dire Dawa, and
Harar) will serve as regional urban clusters and drive economic development and ensure that
development occurs in their rural hinterlands. There is a need for proper planning and
investment in these cities to ensure that they provide a conducive environment for industrial
development and generate strong rural-urban linkages. Thus, these cities will need to provide
adequate connective infrastructure, access to land, solid waste service, and a friendly business
environment for investors and local firms.

36
SECTION 3: PROGRAM OBJECTIVES, KEY RESULTS AND
EXPECTED OUTCOMES

3.1. Program Development Objective

The Program Development Objective (PDO) is to enhance the institutional performance of

participating urban local governments to develop and sustain urban infrastructure, services, and
local economic development.

3.2. Key Results and Expected Outcomes

37
Figure 3. PDO & Key Result Areas

38
 KRA 1. Enhanced
citizen
participation and
engagement in
ULG planning and
budgeting
KRA 7. Strengthened ULG
resilience, improved local KRA 2. Increased
economic development own source
(LED) and enhanced gender revenue at the
equity in the ULG ULG level
operations

PDO
To deepen the
institutional performance
of targeted urban local
governments to develop
KRA 6. and sustain urban
infrastructure and services KRA3. Improved
Strengthened
and to enhance local infrastructure,
accountability
economic development. service delivery,
and oversight
O&M systems
systems

KRA 5. Improved KRA 4. Improved

environmental efficiency and
and social effectiveness in
management
In line with the Ministry’s UIIDPand policy, it is expected fiduciary
that the institutional performance
improvements and the infrastructure delivered
safeguards by cities will result in: -
management
(a) enhanced citizen participation and engagement in ULG planning and budgeting;
39
 (b) increased own source revenue at the ULG level;
(c) improved infrastructure, service delivery, O&M systems;
(d) improved efficiency and effectiveness in fiduciary management;
(e) improved environmental and social management and safeguards;
(f) strengthened accountability and oversight systems; and
(g) strengthened ULG resilience, improved local economic development (LED) and enhanced
gender equity in the ULG operations.

The key results indicators are:

(a) People provided with improved urban living conditions under the UIIDP [corporate indicator].
(b) Cities with improved livability, sustainability, and management [corporate indicator].
(c) Composite institutional performance of participating ULGs, averaged across all cities.23
(d) Composite performance forachievement of urban infrastructure and service targets, maintenance
performance and value for money in investments by ULGs, averaged across all cities.
(e) Composite performance for achievement of LED targets, averaged across all cities
The complete table on the results framework and monitoring is provided in Annex 1.

23
In the core thematic areas of:Planning and budgeting, assets management, public financial management,
procurement, own source revenues, accountability and transparency, environment and social safeguards, land
management, and strategic urban planning.
40
SECTION 4: PROGRAM DESCRIPTION AND KEY FEATURES

4.1. Program Duration

The programwith support from the World Bank and AFD, will be implemented over a period of 5
years and 4 monthsfrom March 2018 to July 2023, with 4 rounds of performance grants in EFY 2012
(2019/20), EFY 2013 (2020/21),EFY 2014 (2021/22) and EFY 2015 (2022/23). The program covers
the remaining year of the GTP2 (2015/16-2019/2020) and part of GTP3 (2020/2021-2024/2025) both
of which are aligned to the country’s goal of achievement of middle income status by the year 2025.
The program will also contribute in the first year FY 2018/19 to cover the fiscal gap due to over-the
target-performance of ULGs in the ULGDP II.

4.2. Program Scope and Coverage of Urban Centres

4.2.1. The UIIDP consists of the provision of performance-based grants to ULGs for eligible
Investments and support to achieve Program results at the regional level on capacity building,
support to ULGs for revenue mobilization and enhancement, financial audit, procurement
audit and environmental and social safeguards audits. The program will have an additional 73
cities to the existing 44 cities making a total of 117 cities that will participate in the program.
This substantial scale-up to 117 cities will bring about greater impact in terms of population
coverage and size of the Program (increasing beneficiaries from 4.36 million under UGLDP II
to an estimated 6.62 million in UIIDP) and result in exponentially larger positive impact for
the country. Ethiopia has a significant number of secondary cities that are spatially distributed
across the country. The government’s current policies of industrial development and
promoting urban-rural linkages present good opportunities for promoting more balanced
regional growth through the creation of a linked system of cities. The scale-up also allows
strengthening of the overall programmatic and performance-based approach to support
sustainable urban development and leverages on economies of scale for program management
and implementation. In addition, the scale-up is built on the solid foundations and tried-and-
tested overall successful experiences of ULGDP I and II. Timely support to improve
institutional performance in the planning, delivery, and sustained provision of urban services
and infrastructure by local governments is critical especially for these rapidly growing cities.
4.2.2. The UIIDP includes several new focus areas in line with government priorities: gender
equality, resilience and disaster risk management, and LED and long-term job
creation.UIIDP contains a new DLI covering these thematic areas with substantial financial
incentives built in to ensure ULGs act to promote gender equality, strengthen capacity to
mitigate and respond to disasters and climate change, and enhance LED and long-term job
creation. The Bank and government teams have undertaken analyses with respect to these
focal areas and designed UIIDP to support them through a three-pronged approach and applied
for each of the focus areas.

41
 Local Economic Development. There are four key challenges and constraints identified: (a)
infrastructure challenges hinder firm success and public private dialogue is not sufficiently
informing capital investment plans; (b) low survival and graduation rates among supported
MSEs; (c) low levels of capacity among city administration staff and offices; and (d) lack of
access to land and electricity are also major binding constraints, delaying new investments but
are more within the remit of the federal government. The UIIDP is designed to alleviate these
challenges. Firstly, the investment menu includes infrastructure important to firm
establishment and growth, as well as poverty reduction (including serviced land for MSEs,
industrial zones and tourism sites, built facilities such as markets for small businesses, MSE
one-stop shops, sales and display centers for MSEs, community centers, youth centers, and
cultural centers). Secondly, new performance measures have been introduced to incentivize
public private dialogue and participation in planning, better targeting of MSEs to identify
genuine entrepreneurs, further provision of support to new as well as graduating MSEs, and
better measurement of long term job creation. Thirdly, the IPF window includes technical
assistance and skills development in LED, including spatial planning of cities with new
industrial parks, tourism expert support, public private dialogue, investment promotion, etc.
 Urban Resilience. The analysis found: (a) with climate change, cities will face growing
impacts from flooding and water scarcity; (b) cities need to enhance disaster preparedness with
dedicated budget and staff to plan, mainstream, and implement disaster and climate risk
management actions; (c) cities lack adequate equipment and resource to respond to fires or
take fire safety measures. To alleviate these challenges, UIIDP will support the most urgent
and critical needs. Firstly, the investment menu includes climate- and disaster-resilient
infrastructure and equipment to enhance resilience, important to both adaptation and
mitigation, including urban drainage and flood control systems, solid waste management
facilities, renewable energy supply, urban green infrastructure, pedestrian walkway, cycle
path, bus terminal and station, as well as firefighting equipment. Secondly, new performance
measures have been introduced to encourage ULGs to assess climate and disaster risk (by
preparing risk map e.g. flood, landslide, drought, earthquake) to guide siting and design of
resilient infrastructure investment, establish disaster management units, complete emergency
response plans, and to start the training and procurement of equipment that will enable the
authorities to respond in the event of a natural disaster. Thirdly, IPF window includes
technical assistance on disaster risk management, including development of national urban
disaster risk management plan, information system, and training programs. Such measures are
expected to increase preparedness, longer-term resilience, and reduced climate and disaster
impacts.

 Gender mainstreaming. Gender analysis identified three key challenges and constraints that
hinder gender mainstreaming in ULGs: (a) lack of awareness of women’s voice and rights; (b)
absence of institutional gender mainstreaming system; and (c) lack of women’s economic
empowerment.To address these challenges, UIIDP willtake gender-sensitive approach. Firstly,
the investment menu includes services and infrastructure both man and women benefit (e.g.
street lighting, pedestrian walkways, sanitation felicities, servicing land with utilities, and
urban parks). Secondly, new performance measures have been introduced to incentivize ULGs
to pay more attention to women’s participation in decision making and women’s rights at
workplace, to establish gender mainstreaming system, both staff and planning, implementing
and monitoring system, and to give more economic opportunity and support to women and
women-headed MSEs. Thirdly, IPF window includes technical assistance on updating gender
mainstreaming guideline for urban development, carrying out gender audit, raising awareness
workshop and trainings for public officers and community members, as well as training for
trainers with the development of training manuals. The Program Action Plan ( PAP) in
42
addition includes development and adaptation of code of conduct in employment and sub-
project contract documents for women’s rights in workplace (including gender-based violence,
sexual harassment, and equal payment for equal work).

43
 Figure 4. Cities Participating in UIIDP

Amhara
32 Cities
BG
Gambella
Oromia
Harari
38 Cities
Dire Dawa
(1 city each)

Total
117
Afar cities SNNPRS
23 cities
4 cities

Tigray
Ethiopian Somali
12 cities
4 cities

44
The 117 cities that are targeted to participate in UIIDP are listed below as well as their expected
allocations from IDA, regional and ULG contributions: -
Figure 5. ULG & Regional Contributions to UIIDP (Matching Funds)

Old 16 ULGDP I
ULGs in Major
regions
40%

New ULGs in
Dire Dawa non - DRS
50% Regional regions
Contributions 20%
4 Major Regions:
30%
DRS: 20%
Harari: 25%

New ULGs in
Harar
DRS
25%
10%

45
 Table 3. List of Participating Cities & Allocations
MINISTRY OF URBAN DEVELOPMENT &CONSTRUCTION
URBAN REVENUE ENHANCEMENT, FUND MOBILIZATION AND FINANCE BUREAU
LIST OF 117 UIIDP CITIES APPROVED BY H. E THE MINISTER ON SEPTEMBER 12, 2017 AS
PER MINISTRY UIIDP POLICY PAPER

ULG Contributions Regional Contributions

Old 16 ULGDP I
ULGs in Major
regions 40% Harari Region 25%
New ULGs in non -
DRS regions 20% Major Regions 30%
New ULGs in DRS 10% DRS 20%
Dire Dawa 50%
Harar 25%

Total estimated
Total estimated
Population ULG Region UIIDP
IDA Allocation
CSA 2013 Contribution in Contribution in contribution to
for 4 financial
Estimates USD USD CIP for 4 years
years in USD
S/N Name of ULG in USD

AMHARA REGION
Previous ULGDP II Cities (10)

1 Bahir Dar 198,909 14,066,844 5,626,738 4,220,053 23,913,636

2 Dessie 153,691 10,869,028 4,347,611 3,260,708 18,477,347
3 Gondar 264,964 18,738,254 7,495,302 5,621,476 31,855,032
4 Kombolcha 75,078 5,309,516 2,123,806 1,592,855 9,026,177
5 Debre Brehan 83,479 5,903,635 1,180,727 1,771,090 8,855,452
6 Debre Markos 79,980 5,656,186 1,131,237 1,696,856 8,484,278
7 Debre Tabor 71,149 5,031,657 1,006,331 1,509,497 7,547,486
8 Finote Selam 33,162 2,345,217 469,043 703,565 3,517,825
9 Mota 33,500 2,369,120 473,824 710,736 3,553,680
10 Woldiya 59,046 4,175,733 835,147 1,252,720 6,263,600
New Cities (22)

1 Adet 24,532 1,451,558 290,312 435,468 2,177,338

2 Adis Zemen 20,620 1,220,085 244,017 366,026 1,830,128
3 Ayikel 21,105 1,248,783 249,757 374,635 1,873,174
4 Bati 21,385 1,265,350 253,070 379,605 1,898,026
5 Bichena 20,739 1,227,127 245,425 368,138 1,840,690
46
 Total estimated
Total estimated
Population ULG Region UIIDP
IDA Allocation
CSA 2013 Contribution in Contribution in contribution to
for 4 financial
Estimates USD USD CIP for 4 years
years in USD
S/N Name of ULG in USD
6 Buri 26,120 1,545,520 309,104 463,656 2,318,281
7 Chagni 29,731 1,759,183 351,837 527,755 2,638,775
8 Dangila 31,773 1,880,008 376,002 564,003 2,820,013
9 Debark 29,068 1,719,954 343,991 515,986 2,579,930
10 Dejen 27,682 1,637,944 327,589 491,383 2,456,916
11 Gendawuha 36,403 2,153,966 430,793 646,190 3,230,948
12 Hayik 49,389 2,922,347 584,469 876,704 4,383,521
13 Injebara 26,958 1,595,105 319,021 478,531 2,392,657
14 Kemise 24,852 1,470,493 294,099 441,148 2,205,739
15 Kobo 31,824 1,883,026 376,605 564,908 2,824,539
16 Lalibela 22,225 1,315,053 263,011 394,516 1,972,580
17 Merawi 23,909 1,414,696 282,939 424,409 2,122,043
18 Mersa 20,632 1,220,795 244,159 366,239 1,831,193
Nefas
25,108 1,485,640 297,128 445,692 2,228,461
19 Mewicha
20 Sekota 28,597 1,692,084 338,417 507,625 2,538,127
21 Shewa Robit 22,491 1,330,792 266,158 399,238 1,996,189
22 Wereta 27,159 1,606,998 321,400 482,099 2,410,497
Total Amhara (32
1,645,260 109,511,699 31,699,068 32,853,510 174,064,277
cities)
OROMIA REGION
Previous ULGDP II Cities (11)

1 Adama 282,974 20,011,921 8,004,769 6,003,576 34,020,266

2 Bishoftu 128,408 9,081,014 3,632,406 2,724,304 15,437,723
3 Jimma 155,434 10,992,292 4,396,917 3,297,688 18,686,897
Shashemane 129,084 9,128,820 3,651,528 2,738,646 15,518,995
4
5 Nekemte 96,657 6,835,583 1,367,117 2,050,675 10,253,375
6 Assela 86,441 6,113,108 1,222,622 1,833,932 9,169,661
7 Sebeta 63,391 4,483,012 896,602 1,344,903 6,724,517
8 Burayu 62,806 4,441,640 888,328 1,332,492 6,662,460
9 Ambo 61,900 4,377,568 875,514 1,313,270 6,566,352
10 Robe 57,031 4,033,232 806,646 1,209,970 6,049,848
11 Ziway/ Batu 56,104 3,967,675 793,535 1,190,302 5,951,512
New Cities (27)

1 Adola 29,475 1,744,036 348,807 523,211 2,616,054

2 Agaro 32,714 1,935,687 387,137 580,706 2,903,531
3 Arsi Negele 60,770 3,595,761 719,152 1,078,728 5,393,641
4 Babile 22,760 1,346,709 269,342 404,013 2,020,064
47
 Total estimated
Total estimated
Population ULG Region UIIDP
IDA Allocation
CSA 2013 Contribution in Contribution in contribution to
for 4 financial
Estimates USD USD CIP for 4 years
years in USD
S/N Name of ULG in USD
5 Bedele 25,080 1,483,984 296,797 445,195 2,225,975
6 Bedesa 23,371 1,382,862 276,572 414,859 2,074,293
7 Bokoji 22,797 1,348,898 269,780 404,670 2,023,348
8 Chiro 43,266 2,560,049 512,010 768,015 3,840,074
9 Dembi Dolo 37,841 2,239,052 447,810 671,716 3,358,578
10 Dodola 26,766 1,583,744 316,749 475,123 2,375,616
11 Fiche 35,329 2,090,417 418,083 627,125 3,135,625
12 Gimbi 39,811 2,355,617 471,123 706,685 3,533,425
13 Ginir 21,976 1,300,320 260,064 390,096 1,950,480
14 Goba 41,152 2,434,964 486,993 730,489 3,652,446
Hagere
15 Mariyam 35,749 2,115,268 423,054 634,580 3,172,902
(Bule Hora)
16 Haromaya 39,486 2,336,387 467,277 700,916 3,504,580
17 Holeta 29,936 1,771,313 354,263 531,394 2,656,970
18 Laga Tafo 20,284 1,200,204 240,041 360,061 1,800,306
19 Metu 36,985 2,188,402 437,680 656,521 3,282,604
20 Mojo 37,968 2,246,567 449,313 673,970 3,369,850
21 Negele 45,314 2,681,229 536,246 804,369 4,021,844
22 Nejo 24,412 1,444,458 288,892 433,337 2,166,687
23 Shakiso 29,466 1,743,503 348,701 523,051 2,615,255
24 Shambu 35,136 2,078,997 415,799 623,699 3,118,496
25 Suluita 37,492 2,218,402 443,680 665,520 3,327,602
26 Weliso 48,674 2,880,041 576,008 864,012 4,320,061
27 Yabelo 22,483 1,330,319 266,064 399,096 1,995,479
Total Oromia (38 cities) 2,086,723 137,103,056 37,263,421 41,130,917 215,497,394
SNNPRS
Previous ULGDP II Cities (9)

1 Hawassa 225,686 15,960,514 6,384,206 4,788,154 27,132,874

2 Arbaminch 107,542 7,605,370 3,042,148 2,281,611 12,929,129
Dilla 84,952 6,007,805 2,403,122 1,802,342 10,213,269
3
4 Sodo 109,225 7,724,392 3,089,757 2,317,318 13,131,466
5 Areka 45,109 3,190,108 638,022 957,033 4,785,163
6 Butajira 47,978 3,393,004 678,601 1,017,901 5,089,506
7 Hosaena 100,528 7,109,340 1,421,868 2,132,802 10,664,010
8 Mizanaman 48,946 3,461,461 692,292 1,038,438 5,192,192
9 Yirga Alem 43,586 3,082,402 616,480 924,721 4,623,603
New Cities (14)

48
 Total estimated
Total estimated
Population ULG Region UIIDP
IDA Allocation
CSA 2013 Contribution in Contribution in contribution to
for 4 financial
Estimates USD USD CIP for 4 years
years in USD
S/N Name of ULG in USD
1 Welkite 41,458 2,453,070 490,614 735,921 3,679,605
2 Durame 35,147 2,079,648 415,930 623,894 3,119,472
3 Aleta Wondo 31,730 1,877,464 375,493 563,239 2,816,196
4 Bodite 34,661 2,050,891 410,178 615,267 3,076,337
5 Jinka 29,108 1,722,320 344,464 516,696 2,583,481
6 Tapi 35,660 2,110,002 422,000 633,001 3,165,003
7 Bonga 29,956 1,772,497 354,499 531,749 2,658,745
8 Sawula 32,608 1,929,415 385,883 578,825 2,894,123
Halaba (Alaba
9 38,587 2,283,193 456,639 684,958 3,424,789
Kulito)
10 Shone 22,428 1,327,065 265,413 398,119 1,990,597
11 ShinShicho 20,517 1,213,991 242,798 364,197 1,820,986
12 Hadero 25,609 1,515,285 303,057 454,585 2,272,927
13 Yirga Chefe 21,713 1,284,758 256,952 385,427 1,927,137
14 Worabe 65,199 3,857,825 771,565 1,157,347 5,786,737
Total SNNPRS (23
1,277,933 85,011,821 24,461,981 25,503,546 134,977,348
cities)
TIGRAY REGION
Previous ULGDP II Cities (8)

1 Mekelle 286,624 20,270,049 8,108,020 6,081,015 34,459,084

2 Adigrat 76,447 5,406,332 2,162,533 1,621,900 9,190,764
3 Axum 59,269 4,191,504 1,676,601 1,257,451 7,125,556
Shire
62,769 4,439,024 1,775,609 1,331,707 7,546,340
4 Endaselassie
5 Adwa 53,763 3,802,119 760,424 1,140,636 5,703,179
6 Alamata 44,092 3,118,186 623,637 935,456 4,677,279
7 Humera 28,744 2,032,776 406,555 609,833 3,049,164
8 Wukro 40,103 2,836,084 567,217 850,825 4,254,126
New Cities (4)

1 Ablyl Adl 21,393 1,265,824 253,165 379,747 1,898,736

2 Korem 22,377 1,324,047 264,809 397,214 1,986,071
3 Maychew 31,088 1,839,477 367,895 551,843 2,759,215
4 Shiraro 23,013 1,361,679 272,336 408,504 2,042,519
Total Tigray (12 cities) 749,682 51,887,101 17,238,802 15,566,130 84,692,033
SOMALI REGION
Previous ULGDP II Cities (1)

Jigjiga
152,674 10,797,105 1,079,711 2,159,421 14,036,237
1 (Somali)

49
 Total estimated
Total estimated
Population ULG Region UIIDP
IDA Allocation
CSA 2013 Contribution in Contribution in contribution to
for 4 financial
Estimates USD USD CIP for 4 years
years in USD
S/N Name of ULG in USD
New Cities (3)

1 Degehabur 36,419 2,154,912 215,491 430,982 2,801,386

2 Kebridehar 35,466 2,098,523 209,852 419,705 2,728,080
3 Gode 52,438 3,102,756 310,276 620,551 4,033,583
Total Somali (4 cities) 276,997 18,153,297 1,815,330 3,630,659 23,599,286
AFAR REGION
Previous ULGDP II Cities (1)

Samera/
1 25,209 1,782,780 178,278 356,556 2,317,615
Logiya (Afar)
New Cities (3)

1 Dubti 22,263 1,317,302 131,730 263,460 1,712,492

2 Asayta 24,286 1,437,003 143,700 287,401 1,868,103
Awash Sebat
3 22,513 1,332,094 133,209 266,419 1,731,722
Kilo
Total Afar (4 cities) 94,271 5,869,179 586,918 1,173,836 7,629,933
Assosa (B.
40,686 2,877,314 287,731 575,463 3,740,508
1 Gumuz)
Gambella
64,499 4,561,369 456,137 912,274 5,929,780
2 (Gambella)
3 Harar (Harari) 112,781 7,975,872 1,993,968 1,993,968 11,963,808
4 Dire Dawa 269,134 19,033,156 9,516,578 28,549,735

Grand Total for 117 6,617,966 441,983,865.92 125,319,933.87 123,340,303.28 690,644,103.06

ULGs

4.3. Key Features and Financing Modalities

4.3.1. The total IDA funding envelope for the UIIDP is US$600 million (of which USS273 million is
from IDA Grant, US$127 million is from IDA Credit and US$200 million is from the IDA
Scale-Up Funding (SUF)). In addition, the French Development Agency (Agence Francaise
de Developpement -AFD) will contribute co-financing of euro 9.8 million (US$10.8million
equivalent). The GoE (from regions and cities) will contribute around US$248.7 million. 24
This brings the total Operation Budget envelope to around US$859.5 million.

Table 4. Program Financing (US$ million)

24
Regions and cities contribute to the performance based transfers in the following manner: Amhara, Oromia, SNNPR,
and Tigray: 30 percent funding in addition to IDA funded grants; DRS regions: 20 percent; original 16 ULGDP I ULGs: 40
percent; new cities under ULGDP II in the DRS regions 10 percent; and other new (ULGDPII) cities: 20 percent; Harar and
Dire Dawa contribute 50 percent in addition to the IDA funded grants. The new 73 ULGs under UIIDP will followthe same
principles as the ULGDPII newcomers.
50
Source Amount Percent of Total
Government 25
US$248.7 29
International Development Association (IDA) Grant US$273.0 32
International Development Association (IDA) Credit US$127.0 15
IDA Scale Up Facility (IDA-SUF) US$200.0 23
Agence Française de Développement (AFD) US$10.8 1
Total Program Financing US$859.5 100

4.3.2. The main expenditure items are:

Window 1 for PforR:

 US$691.11 million (ULG level).Performance-based grants to 117 ULGs for

infrastructure investments as listed under the Program investment menu (US$248.66
million from regions and ULGs; around US$433.65 million from IDA; and estimated
US$8.8 million from AFD).
 US$70.04 million (regional level). Support for regional government to strengthen its
capacity to support and guide the ULGs in core areas such as financial audit,
environmental audit, procurement audit, revenue enhancement, and others (IDA
funding)
 US$63.74 million (prior results).Allocation against prior results on institutional
performance, service delivery, maintenance, and job creation for 44 ULGs as
determined in the APA conducted in FY2017/18 for FY 2018/19 allocations(IDA
funding). This is to fill a financing gap under the ULGDP II that has arisen due to
overachievement of performance results during FY2018/19(IDA funding).

Window 2 for IPF:

 US$34.57 million (federal level).Enable MUDCoto support and guide the regions and
ULGs and also to administer and coordinate the Operation (US$32.57 from IDA; and
about US$2.0 million from AFD).

25
The regional government and ULGs will be making funding contributions at various levels, as detailed in the Technical
Assessment. The contribution from the ULGs constitutes one of the minimum conditions to be met for each ULG to qualify
to receive funding from the Program.
51
 Figure 6. UIIDP Windows & Main Expenditure Items

Window 1. ULG level. Performance

Grants
$691.11m
(IDA $433.65m; AFD $8.8m;
Regions & ULGs $248.66m)

Window 1.
Window 1: Regional
Level. Support for Prior Results
RGs to strengthen (Financing Gap
UIDDP Total under ULGDP II due
capacity to support
ULGs Budget to overachievement
$859.5m of performance
$70.04m results by ULGs)
(IDA) $63.74
(IDA)

Window 2. Federal Level. Investment

Project Financing (IPF)
Support for MUDCo to administer &
coordinate the UIIDP & to strengthen
capacity to guide regions & ULGs
$34.57m
(IDA $32.57m; AFD $2.0m)

52
4.3.3. UIIDP funding to ULGs will be allocated using a simple formula, based on population
size and the performance of the ULGs. An approximate US$16–18 per capita per year (with
phasing in of the new ULGs in the first FY) has been assessed to be the optimal level of
funding.26 As a core principle, the per capita amount would at least maintain the similar level
as at the start of the ULGDP II to ensure minimum level of incentives and meaningful
infrastructure and services investments.The size of this performance grant has been
determined considering various factors such as international good practice (from an expanding
number of countries with performance-based grant allocations), the costs of investments,
expenditure needs and current level of investments, as well as generation of sufficiently strong
incentive to drive the performance. This has been informed by a comprehensive review of
ULG fiscal and revenue positions.

4.3.4. ULGs will use the Program funds to finance urban infrastructure works as well as
capacity building activities, in compliance with the Program’s investment menu and
capacity building manual. Eligible infrastructure investments fall under eight groups
including: (a) urban roads, (b) integrated infrastructure and land services, (c) sanitation (liquid
waste), (d) solid waste management, (e) urban drainage, (f) urban disaster risk management
and urban resilience, (g) built facilities, and (h) urban green infrastructure. Ineligible
investments include any World Bank environment and social impact assessment Category A
projects (see Table 5). Compliance with the investment menu is a minimum condition for
receiving funds. In addition, ULGs will be required to prepare the project in a participatory
manner, and consider: (a) social inclusion requirements, including gender and disability
considerations; (b) climate change and disaster adaptation; and (c) contribution to LED and
long-term job creation.27ULGs can spend up to 5 percent of investment grants and
regional/city contributions on capacity building support.For regional government entities, the
grants will mainly be used for capacity building, operations and management expenses,
subject to the eligible capacity building areas, similar to the ULGs (see Table 19).
4.3.5. The IPF window will be used to fund a range of institutional and capacity development
interventions at or coordinated by MUDCo.The MUDCo will undertake activities in five
areas: (a) developing capacity, systems, and organizations of federal entities28; (b) developing
capacity, systems, and organizations of regional and ULG entities, (c) conducting project
preparation studies, pre-feasibilities and feasibility studies for ULGs with specific needs for
further investments, (d) UIIDP management, monitoring and evaluation (M&E) and
feasibility/preparatory studies for future execution; and (e) procuring and managing APAs and
VfM audits. The capacity building activities, technical assistance and feasibility studies will
focus on core and strategic areas such as revenue enhancement, asset management, CIP

26
In the first year, the simple average per capita for the new 73 ULGs and the ULGDP II 44 ULGs will be US$14.79 and
US$17.68 per capita respectively. From the second year, the per capita allocation usesan average figure similar for the two
groups, which is US$17.68.
27
Details of and procedures for the use of investment project prioritization and selection criteria will be included in the
POM.
28
MoF, MUDCo, Environment Forest and Climate Change Commission (EFCCC), Ministry of Women and Children Affairs
and Ministry of Labor and Social Affairs, OFAG, FEACC, FPPPAA, Ethiopian Revenues and Customs Authority (MOR).
53
 preparation, FM, as well as introducing initiatives on LED, urban resilience, cultural heritage,
and urban planning.
4.3.6. The AFD will provide joint co-financing (around euro 9.8 million) to UIIDP through
both the PforR and the IPF windows.Specifically, around euro 8 million (about US$8.8
million) will be dedicated to supporting the performance-based grants under the PforR while
around euro 1.8 million (about US$2.0 million) will be used for subcomponent 3 under the IPF
window, on conducting project preparation studies, pre-feasibilities and feasibility studies for
further investments for ULGs with specific needs on LED and cultural heritage. The AFD-
supported areas would be seamlessly incorporated as part of the UIIDP design, hence adopting
all WB’s implementation system, guidelines and policies without separate reporting
requirements.

4.4. Disbursement Linked Indicators, Minimum Conditions, Performance Measures and

Verification Protocols
4.4.1. Almost 96 percent (or around US$576 million) of the Operation’s funds will be disbursed
against disbursement linked indicators (DLIs). The DLIs are structured to provide
incentives to participating ULGs and regional governments for improved management and
development of urban areas. (More details on the DLIs, MCs, PMs, performance assessments,
verification protocols and disbursement arrangements are provided in the UIIDP Annual
Performance Assessment Guideline (APAG) which is a part of this POM and is a standalone
Annexof the POM)

4.4.2. DLIs 1 to 4 focus on ULGsto strengthen ULG institutional roles in the delivery of
infrastructure and services and enhance local economic development.Each of these DLIs
is a composite index of definedMCs and PMs.Adjustments to these performance indicators
and scoring may be done throughout Program implementation and particularly following the
midterm review to ensure that the system remains relevant, manageable and robust.These four
DLIs build on ULGDP II performance assessment system and will ensure that:

 Basic fiduciary, project planning and execution, and environmental and social
management conditions are in place such that local governments can absorb the
Program funding;
 ULGs continue to strengthen their institutions of urban management in a social
inclusive manner;
 ULGs use program funds effectively in creating sustainable and resilient infrastructure
and delivering services, achieve the targets in infrastructure delivery, maintenance and
development and to promote the GoE’s strategy on urban development at the city
level.
 ULGs improve on systematic and foundational aspects to promote long term job
creation, urban resilience and gender empowerment.

4.4.3. The funding proportion against DLIs 1 to 4 have been adjusted to align incentives with
emerging priorities. As compared to ULGDPII, fewer rewards are given for achieving the
MCs (DLI1) and instead emphasis is placed on achieving the PMs (DLIs 2 to 4) which have
higher performance criteria. In addition, DLI4 focuses on the new thematic areas of local
governments’ performance in LED, resilience and gender and gives a substantial sum to
incentivize improvements in these areas.

54
4.4.4. The disbursement system for DLI 1, 2, 3, and 4 is scalable based on actual performance
of ULGs. It is particularly important to note that if the ULGs perform better (or poorer) than
expected (as set out in the disbursement related targets in the DLI matrix), disbursements will
be adjusted accordingly. This means that if ULGs perform higher than expected they will
receive higher than expected disbursements. If this continues throughout the Program,
additional financing may be needed.

4.4.5. DLIs 5 to 9 focus on regional government entitiesto enhance their abilities in fulfilling
their mandates to support ULGs.These DLIswill disburse based on results achieved by
regional government entities in providing support to ULGs (DLI 5)as well as focusing on their
performance in conducting essential audits for ULGs such as onfiduciary and environmental
and social management.
4.4.6. DLI 10 is a legacy DLI, disbursing against prior results on institutional performance,
service delivery, maintenance, and job creation for 44 ULGs. Based on the APA conducted
in FY 2017/18 and review of results against 92 average points, DLI 10 will disburse to 44
ULGs in FY 2018/19 to an extent to which the ULGs have (a) strengthened their institutional
performance and (b) have implemented their local infrastructure, maintenance, and job
creation activities (as measured against their Capital Investment Plans and their Annual Action
Plans).Part of the DLI10 (legacy DLI) will also finance consultancies, studies, and related
operating costs managed by MUDCo limited to the legacy activities carried over by ULGDP
2.

4.4.7. Collectively the DLIs address the PDO and key result areas. The DLIs are designed to
address the challenges of ULGs’ and regional governments’ institutional performance and, in
turn, ULGs’ ability to deliver, operate, and manage infrastructure and services, and expand
LED.They provide incentives to address the core issues such as on timely audit, social and
environmental management, own-source revenue generation, and strengthen the system and
procedures for capacity building. In addition, there is enhanced focus to strengthen urban
resilience, promote LED and job creation,and enhance gender equality. The PMs have a direct
link to the key result areas and the GoE’s program intended outcomes.

4.4.8. The expenditure areas are designed to correspond with the structure of the DLIs.These
reflect (a) the performance-based grants to ULGs for urban infrastructure and services
investments and capacity building, and (b) the regional governments’ capacity building and
oversight/support to participating cities. The support to theMUDCo to administer and
coordinate the program and strengthen its capacity to support and guide the regions and ULGs
is covered by the IPF.

4.5. Eligible Investment Areas for Infrastructure and Services for ULGs

The following are the investment areas that ULGs may invest the IDA performance grants:-

55
 Table 5. Investment Menu for ULGs - Eligible Areas in Infrastructure & Services
Infrastructure/Service Type
Roads Expenditure group 1: Cobblestone, gravel, red ash and earthen roads.
(asphalt roads are not eligible)
Expenditure group 2: Rehabilitation of roads (except asphalt), bridges,
fords and culverts, pedestrian walkways or footpath, cycle path, paved
area, roundabout, street lighting, road signs and traffic lights, bus
terminals, bus stop/station.
Note: Note: Road works outside of existing rights-of-way or require
significant resettlement of people (more than 200 people, project-
specific) will not be eligible for funding under the UIIDP.
Integrated multiple infrastructure and land Expenditure group 3: Servicing of land with utilities (water supply,
services (residential, micro and small electricity, telecommunications, roads and drains (within planned right
enterprises, industrial zones, tourism sites) of way, as per the structural plan/local development plan)), solid and
liquid waste collection and disposal.
Sanitation (liquid waste) Expenditure group 4: Sewer reticulation systems (no large canals29),
wastewater treatment ponds/treatment plants, sludge ponds, community
soak away pit and septic tanks, public and communal toilets, ventilated
improved pit, Ecosan, biogas and vacuum trucks, vacuum handcart. (in
planning and implementation cities must follow manual and standard
from Urban Water Supply and Sanitation Project.)
Solid waste management Expenditure group 5: Collection trucks and other collection tools,
collection bins, transfer stations, recycling center/sorting facilities,
collection points; skips and skip loaders, hand push carts, landfills 30 (of
the size of maximum 10 hectares and minimum design criteria as per
the solid waste management manual), biogas and composting plants;
and landfill site equipment including compaction vehicles, garbage
truck, grader, dozer, loader, dump truck and excavator
Urban drainage Expenditure group 6: Drainage systems (follow the guideline developed
by the MUDCo), flood control systems.
Urban disaster risk management and Expenditure group 7: Fire brigade equipment, trucks, facilities, fire
initiatives to enhance resilience31 stations, non-grid renewable energy supply (e.g. solar, wind), landslide
protection structures
Built facilities Expenditure group 8: Markets for small businesses not
exceedingground floor with associated services (water supply, drainage,
access roads, sanitation facilities), upgrading the existing markets, one-
stop shops, slaughter houses (abattoirs)32(not exceeding size of 2 ha and
29
Sewer reticulation systems canals (primary canals) shall not exceed in diameter 1,000 millimeters or 10 kilometers.
30
Landfills: To ensure that all landfills activities to be environment friendly and socially acceptable with no or minimum
impacts to the nearby environment, landfills construction and operation activities should not exceed 10 hectares and with
provisions as stated in MUDCo standard. These include, among others: all landfills should have 1. bottom lining system with
compact clay soil and covered by geo-membrane (synthetic linings) to separate the trash and subsequent leachate from
groundwater; 2. Leachate collection system to collect rain or other water percolated through landfill which possibly contains
contaminating substances (leachate); 3. Oxidation or other treatment ponds for further treatment of leachate; 4. Methane
collection system/gas management to collect methane gas that is formed during the breakdown of trash; 5. Runoff water
drainage system to prevent rain water flash from the nearby area; and 6. Composting yard and other facilities within the
landfill site and upstream collection and transportation area. Cities should comply with the national standard and
classification set by MUDCo. Also, cities must conduct landfill feasibility study, ESIA and RAP for review and clearance.
All landfills are subject to regional environmental and social performance review and annual audits.
31
Only cities who have emergency response unit and emergency plan are eligible
32
Slaughterhouse/abattoir: Slaughterhouse construction should follow the MUDCo standards and classification for
environmentally safe implementation of the investment. Slaughterhouse under the program should not exceed 2ha (level B, C,
56
Infrastructure/Service
Urban green infrastructure
Consultancy services for design, studies and
contract management
Capacity Building Support
Type
the category of level B, C, and D) with by-products and processing
facilities, abattoir trucks, production and premises, sales and display
centers for MSEs, community center, youth center, cultural centers
Expenditure group 9: Urban parks, public spaces and greenery
development projects.
Expenditure group 10: For studies relating to preliminary and detailed
design, contract documentation and supervision relating to the above
infrastructure and services.
Expenditure group 11: Up to 5 percent of investment grants and
regional/city contributions can be utilized on capacity building support.
It also includes some expenditures forconsultancies, studies, and related
operating costs managed by MUDCo limited to the legacy activities
carried over by ULGDP 2.See menu for capacity building support
below.

Notes for investments:

a) Current maintenance and operational costs, including salaries, should not be funded by the UIIDP
grant. Other ULG sources, including OSR should be used for these expenditures. The performance
system will promote planning and actual provision for this to ensure longer-term sustainability.
b) The investment menu above explicitly excludes possible high-risk activities and Category “A”
types of activities. Investments, which according to the WB Operational Manual for Environmental
Assessment (OP 4.01) are classified in Category A are explicitly excluded from the Program. These “…
are projects which are likely to have significant adverse environmental impacts that are sensitive,
diverse, or unprecedented. These impacts may affect and area broader than the sites or facilities subject
to physical works”. Category A projects are not supported by PforR operations and ULGs cannot use
the UIIDP grants for these types investments.
c) While the scope and scale of works under the Program are not expected to cause significant
adverse environment and social impacts, the current EIA procedures in Ethiopia require that all
investments are screened for negative impacts that are sensitive, diverse, or unprecedented on the
environment and/or affected people.
d) Siting, design, construction and implementation of all physical infrastructure must consider risk
map/disaster risk management plan and integrate measures to make them resilient to climate
change and disaster impacts.
 Siting and construction: Steps should be taken screen location of physical infrastructure to
minimize exposure to disasters (flood, earthquake, drought, fire, landslides)
 Design and implementation: Design and operation of infrastructure and services need to consider
climate and disaster impacts. Additionally, sanitation and solid waste management facility to
consider waste segregation, treatment and reduce contamination of water sources in the event of
flooding or other disasters.
e) In addition to screening for significant negative impacts, the following works will be ineligible for
financing under the UIIDP:
 Road works outside of existing rights-of-way;
and D) of the MUDCo classification. The following provisions should be included in the design for construction and
operation phase. These are: 1. liquid waste treatment plant, which is sited at minimum distance of 50 meter from slaughter
house; 2. separate closed drainage line for collection of liquid wastes from slaughterhouse to the septic tank; 3. septic tank
bed level shall be below nearby ground water level; 4. slaughter house at metropolitan cities shall have rendering plant with
smell nuisance control; 5. Runoff water drainage system to prevent rain water flash from the nearby area; and 6. Other
facilities like guardhouse and water points. Cities should comply with the national standard and classification set by
MUDCo. Cities must conduct Slaughterhouse feasibility study, ESIA and RAP for review and clearance. All slaughterhouses
are subject to regional environmental and social performance review and annual audits
57
  Infrastructure works that require significant resettlement of people (more than 200 people, project-
specific)
 Activities that would significantly convert natural habitats or significantly alter potentially
important biodiversity and/or cultural resource areas.

the following works have conditions under the UIIDP:

 Canals (Sewer reticulation systems canals (primary canals)) should not exceed in diameter 1,000
millimetres or 10 kilometres
 All landfills should comply with minimum design criteria as per the solid waste management
manual, not exceeding 10ha. ULGs, in the design of sanitary landfills, will be required to
demonstrate a system of waste segregation, collection, transportation, treatment, and disposal of
leachates, before they start landfill constructions.
 Slaughter houses (abattoirs) should not exceed size of 2 ha, within the category of level B, C, and
D.

4.5.1. The following are the eligible areas in which the ULGs & Regions and MUDCo will be able to use the
IDA performance grants.

Table 6. Eligible Capacity Building Areas for ULGs and NRS

Capacity Building Area Capacity Building activity

Training, seminar, and
conferences
Organizational and System
Development
Technical assistance
1. Short-term local training and related operating expenses
2. Selected short-term training/courses (up to three months’ duration)
3. Peer to peer support across ULGs
4. Study tours as planned by the ULGs, with clearly defined learning objectives and
follow-up action plan
(study tours by ULGs must be coordinated by the region/ MUDCo as part of the
planning process)
5. Seminars/conferences/workshops/meetings expenses
6. Training materials, trainers/resource person fees
7. Hire of venue /hotel accommodation
8. Refreshments
9. Training needs assessment
10. Assessment of IT system needs
11. Organizational culture change – one stop shop, client orientation, contracting out,
etc.
12. Social accountability and behavior change
13. Organizational structure
14. Filing and archive system
15. Land management and administration systems
16. Disaster detection, response and risk reduction systems
17. Financial systems (IBEX, etc.)
18. Management information and decision-making systems
19. Public consultation and engagement platforms
20. Consultancy fees and related operating expenses (for studies related to ULG service
delivery operations, and institutional policies, laws, bye-laws, regulations,
procedures) and organizational development (see above). This includes technical
assistance, consultancies, training and related operating expenses procured by the

58
 federal level (MUDCo) to support old (44) and new (73 )ULGs and regions
21. Printed material and stationery
Equipment Equipment related with the capacity building support (not buildings) including:
22. Motor bikes (up to 1 percent of investment grants and regional/city contributions) 33
23. Office and field equipment including surveying equipment procured by the federal
to support the regions and ULGs

4.5.2. Table 7provides a summary of the Program DLIs, the estimated financing amounts and the linkage to
the results areas.

Table 7. Program DLIs

Approximate Percent of
Amount Total
Results area DLIs (IDA+SUF+A PforR
FD) amount
(US$ million)
Eligible ULGs DLI 1: Eligible ULGs have achieved Program MCs.34 109.33 18.97
deliver
infrastructure DLI 2: Eligible ULGs have strengthened institutional performance. 190.09 32.99
and services
DLI 3: Eligible ULGs have implemented quality infrastructure and 90.09 15.63
maintenance activities and ensured value for money.

DLI 4:Eligible ULGs have strengthened performance on LED, urban 52.94 9.19
resilience and gender mainstreaming.
Regional DLI 5: Regional support teams have delivered effective capacity 27.88 4.84
government building services to Eligible ULGsin urban institutional and
entities support infrastructure development.
Eligible ULGs
to strengthen DLI 6: Regional Government Audit Agencies (ORAGs) have carried
institutions and 14.96 2.60
out timely audits of Eligible ULGs’ financial reports.
enable them to
deliver
DLI 7: Regional Environment Protection, Forest and Climate Change
infrastructure 13.12 2.28
Authorities (REFAs) have completed timely review of Eligible
and services.
ULGs’ environmental and social safeguards compliance.

DLI 8: Regional Revenue Bureaus(RRBs) have supported Eligible

ULG revenue mobilization. 7.04 1.22

DLI 9: Regional Public Procurement & Property Administration

Agencies (RPPPAAs) conduct timely and quality procurement audit 7.04 1.22
of Eligible ULG’s procurement transactions and performance.
Prior results DLI 10: Strengtheninginstitutional performance,infrastructure and 63.74 11.06
service delivery, maintenance, and job creationfor 44 ULGDP II
ULGs.35

33
Regions can procure vehicles only for RMTs (maximum 2 cars per team)
34
Eligible ULGs must comply with the MCs to get access to the allocations from DLIs 2, 3, and 4, as the MCs are the
basic safeguards for handling of larger discretionary funds.
35
Part of the DLI10 also finances finance consultancies, studies, and related operating costs managed by MUDColimited to
the legacy activities carried over by ULGDP 2.
59
 Approximate Percent of
Amount Total
Results area DLIs (IDA+SUF+A PforR
FD) amount
(US$ million)
Total 576.23 100.0

SECTION 5: ANNUAL PERFORMANCE ASSESSMENT & QUALITY

ASSURANCE OF RESULTS

5.1. Annual Performance Assessment & Quality Assurance of Results under PforR

5.1.1. An independent Annual Performance Assessment (APA) will be carried out every year to
review the performance of cities and regions against the set of agreed indicators and
performance measures. This is the main mechanism to measure the performance and
progress of ULGs and regions in UIIDP.The independent verification of results to trigger
disbursement is key to the Program.The UIIDP Annual Performance Assessment Guideline
(APAG) which is a part of this POM provides detailed procedures for carrying out the APA,
including the DLIs, Minimum Conditions, Performance Measures, disbursement arrangements
and verification protocols.The APA results are used to verify the DLIs and form the basis for
disbursements:

 For ULGs. Allocations will be determined by: (a) a set of minimum conditions
(MCs), and (b) a further list of performance measures (PMs). Minimum conditions
determine if the ULG is eligible to participate in that year’s program to receive grant
support, and the performance measures track progress of each city in specific areas
and determine each city’s score. Key result areas include: (a) participation of citizens
in planning and budgeting, (b) fiduciary management, (c) generation of own source
municipal revenues, (d) asset management, (e) delivery as well as operation and
maintenance (O & M) of new infrastructure and services, and direct job creation, (f)
accountability and oversight systems, (g) environmental and social safeguards; and (h)
new areas such as resilience, LED and gender.

 For regional governments.Key result areas include: (a) capacity building (for various
regional bureaus of urban development and housing (BUDHos) and the quality of this,
(b) carrying out timely annual audits of ULGs (for Offices of the Regional Auditor
Generals [ORAGs]) according to standards, (c) performing social and environmental
audits (for Regional Environmental Protection Agencies [REPAs]), (d) supporting
ULGs’ with respect to urban revenue generation (for Regional Revenue
Bureaus[RRBs]) and (e) carrying out the annual procurement audits (for Regional
Public Procurement Agencies [RPPPAAs]) according to defined standards.

5.1.2. The APA design includes measures such as independent assessments, quality assurance,
complaint handling system and approval procedures to ensure its robustness.The
MUDCo will recruit an independent firm to conduct the APA in a timely manner. The draft
assessment results will be shared simultaneously with the World Bank and the government and
the World Bank will conduct a quality a quality assurance review (QAR). Finally, the UIIDP

60
 Federal Technical Committee (FTC)will verify the APA results, and these will be further
endorsed by the UIIDP Federal Steering Committee (FSC). Based on the final APA results,
the GoE will send a Results Achievement Notification summarizing how the Program DLIs
have been met. The World Bank will retain the right to make the final decision on whether a
DLI has been achieved or not.(Table 7 and 8 of this POM and the UIIDP APAG describe the
detailed steps and timing of the process).
5.1.3. The APA for UIIDP will be procured on the basis of a multi-year contract using the IPF
and this will avoid the procurement problems and delays experienced under ULGDP II. The
TOR for the 1st and 2nd APAs has already been drafted and is in Volume 2 of the POM. There
is one TOR for Oromia (38 cities) and SNNPRS cities (23 cities) to make a total of 61 cities
which means a total of 63 entities will be covered in the assessment inclusive of the two
regions.The second TOR covers Amhara (32 cities), Tigray (12 cities), Ethiopian Somali (4
cities), Afar (4 cities), Benishangul Gumuz (1 city), Gambella (1 city), Harari (1 city) & Dire
Dawa City Administration (1 city) to make a total of 56 cities which means a total of 64
entities will be covered in the assessment inclusive of the eight regions.
5.1.4. The first APA will be conducted in October 2018 -December 2018which means that the
new 73 cities will have received seven (7) months of intensive support and capacity building
for them to fulfil the minimum conditions by October 2018. The consultancy contracts for the
TAs for capacity building of 105 cities (inclusive of the targeted 73 new cities) were awarded
at the end of February 2018 and are for 18 months which means that the additional 73 new
cities will, up to end of July 2019, continue to be assisted on the performance measures and
also on the minimum conditions in the unlikely event that some of the cities fail to satisfy the
MCs the first-time round.Cities that fail to satisfy the MCs in the 1 st APA will be re-
assessed in the 2nd APA in August 2019.

Table 8. Schedule for 1st APA of UIIDP: Allocations for DLI 1-9 forEFY 2012 (2019/20)
Date (Gregorian Calendar) Activity
By End of August 2018 Independent APA consultants engaged and onboard
October 1, 2018 APA commences – data collection in the field.
By November 30, 2018 APA consultant completes all field assessments, including minimum conditions
and performance measures (DLIs 1–4), (including value for money audit).
For 73 new cities, only Minimum Conditions will be assessed, and VfM Audit is
waived for this first round. The APA also assesses the result for regions against
DLI 5–9.
By December 31, 2018 APA consultant completes and submits first draft Preliminary APA reports and
draft Preliminary Synthesis Report (excluding the audit results for the ULGs) to
MUDCo as well as to the World Bank.
January 15 – February 28, Conduct Quality Assurance Review (World Bank); Quality Assurance
2019 Reviewcomments and findings to inform APA ready by no later than February
15, 2019 and TC review findings for consistency by February 28, 2019.
By February 28, 2019 MUDCo provides indicative allocations for EFY 2012 (2019/20) to all regions
for all 117 cities to start the capital investment planning process.

By March 15, 2019 APA team incorporates QAR comments and submits second draft Preliminary
APA reports and draft preliminary synthesis report (including audit results for
ULGs) simultaneously to MUDCo and World Bank.

61
Date (Gregorian Calendar) Activity
By March 31, 2019 Review by MUDCo and Bank, and APA team reconcile comments received, into
the third draft Preliminary report produced by the APA team and submitted
simultaneously to World Bank and MUDCo.
By April 1, 2019 MUDCo shares the third draft report with ULGs /Regions which have 14 days
for submitting complaints, if any
By April 15, 2019 ULGs/Regions submit their complaints.
By April 22, 2019 Review by the APA Complaints Resolution Committee (APACRC) of
ULG/Regions’ complaints
Reconciliation between complaints and APA findings (APACRC)
Recommendations from the APACRC on changes to be made by the APA team.
By April 29, 2019 Final draft APA report for each ULG/region and the Final Draft Synthesis
Report as well as report on changes made and not made (with justification) by
APA team, submitted to World Bank and MUDCo
By May 2, 2019 Final Verification of the APA results by the UIIDPFederalTechnical
Committee (FTC)
By May 15, 2019 Formal review and approval of results by the FSC; review and endorsement by
World Bank (for the coming FY’s allocations to ULGs)
By May 22, 2019 Final APA report for each ULG/region and the Final Draft Synthesis Report
incorporating changes and endorsement by the World Bank.
By May 31, 2019 Final Results and Allocations announced and workshop with regions and ULGs
held.
In June 2019 ULG budgeting process for 2019/20 continues based on actual allocations.
By June 30, 2019 Submission of CIPs, REPs and AMPs by ULGs to regionsfor approval
By July 15, 2019 Approval of CIPs, REPs and AMPs by regions
July 15, 2019 Start of implementation of CIPs by ULGs
By June 30, 2019 World Bank disburse to MOF the full amount.
In July 2019 50 percent of the allocations disbursed to Regions and ULGs.
In January 2020 50 percent of annual allocation disbursed to Regions and ULGs.

Table 9. Schedule for subsequent APAs

62
 Date Activity
(Gregorian
Calendar)
By mid-July Independent APA consultants engaged and onboard
Early August APA commences – data collection in the field.
By September 30 Complete all field assessments, including minimum conditions and performance measures
(DLIs 1–4), (including value for money audit). The APA also assesses the result against DLI
5–9.
By October 15 APA consultant completes and submits first draft Preliminary APA reports and draft
Preliminary Synthesis Report (excluding the audit results for the ULGs) to MUDCo as well
as to the World Bank.
October 16- Conduct Quality Assurance Review (World Bank); Quality Assurance Reviewcomments and
November 30 findings to inform APA ready by no later than November 25 and TC review findings for
consistency by November 30.
By December 10 APA team completes and submits second draft Preliminary APA reports and draft
preliminary synthesis report (excluding the audit results) and share with MUDCo and World
Bank.
By December 24 Review by MUDCo and Bank, and APA team reconcile comments received, into the third
draft report produced by the APA team.
By December 25 MUDCo shares the third draft report with ULGs /Regions which have 14 days for submitting
complaints, if any
By January 8 ULGs/Regions submit their complaints
By January 15 APA consultant: Incorporate audit results in the APA.
Review by the APA Complaints Resolution Committee of ULG/Regions’ complaints
Reconciliation between complaints and APA findings (Complaints Committee)
Recommendations from the Complaints Committee on changes to be made.
By January 21 Final draft APA report for each ULG/region and the Final Draft Synthesis Report as well
as report from the Complaints Committee on changes made by APA team, submitted to
World Bank and MUDCo
By February 5 Final Verification of the APA results by the UIIDPFederalTechnical Committee (FTC)
By February 15 Formal review and approval of results by the FSC; review and endorsement by World Bank
(for the coming FY’s allocations to ULGs)
By February22, Final APA report for each ULG/region and the Final Draft Synthesis Report incorporating
2019 changes and endorsement by the World Bank.
By February 28 Allocations announced and workshop with regions and ULGs held.
In March ULG budgeting process for 2019/20 starts, based on actual allocations
By June 30 Submission of CIPs, REPs and AMPs by ULGs to regionsfor approval
By July 15 Approval of CIPs, REPs and AMPs by regions
July 15 Start of implementation of CIPs by ULGs
By June 30 World Bank disburse to MoF the full amount
63
In July 50 percent of the allocations disbursed to Regions and ULGs
In January 50 percent of annual allocation disbursed to Regions and ULGs

Table 10. Schedule for Assessment:Allocations for DLI 10 - Prior Results Achieved in Last Year of
ULGDP II
Date (Gregorian Calendar) Activity
End of April 2018: As above. With final approval of results in April 2018.
Verification of 5th APA under
ULGDPII
May 2018 Calculation of fiscal gap due to overachievement and exchange rates
Review by FTC (verification) and FSC (endorsement)
May 2018 Review and Approval by World Bank
May/June 2018 Disbursement from World Bank to Government for DLI 10.

5.2. Processing of Complaints submitted by ULGs/Regions on the APA

results/findings

In terms of the UIIDP Annual Performance Assessment Guideline (APAG), where a ULG or Region is
not satisfied with the outcome of the assessment, a complaint should be submitted to the UREFMFB,
MUDCo not later than two weeks following receipt of notification of official scores. When submitting
the complaint, the ULG/Region must enclose any relevant documentation in support of the issues in
question. A UIIDP APA Complaints Resolution Committee will review and examine the complaint
and recommend action to be taken on the complaint.

The examination of the complaint will lead to one of the following results:
1. Correction of errors.
2. Re-assessment in case of laxity by the assessment team.
3. Rejection of the complaint.

Composition of Complaints Resolution Committee:

 Representative from MUDCo,
 Representative of MoF,
 Representative of Ethiopian Cities Association,
 Independent Expert in the area of concern, and the

64
  UIIDP Program Coordinator.
Note: The Committee Members (except UIIDP Coordinator) will be paid sitting allowance at the same
rate and conditions as the UIIDP Federal Technical Committee.
Based upon the report from the Complaints Resolution Committee, the APA Consultants will either
incorporate changes which they are convinced are justified and provide reasons on those changes they
do not accept. The APA Consultants will submit simultaneously to MUDCo and World Bank, the
Final Draft Reports incorporating changes which they consider justified and provide a report on
changes made and not made (with justification). The UIIDP Federal Technical Committee (FTC) will
verify the APA results and complaints resolution and submit its recommendations to the UIIDP
Federal Steering Committee (FSC). The APA results will be formally reviewed and approved by the
FSC, reviewed and endorsed by the World Bank. The APA Consultant will incorporate the final
changes and endorsement of the World Bank of the APA results and allocations and produce the Final
ULG and Synthesis APA Reports.MUDCo will distribute the Final ULG and Synthesis APA Reports
to all regions and will also officially notify them of the final allocations approved by the World Bank.

5.3. Quality Assurance of Results under IPF

5.3.1. At the federal level under the IPF window, a robust system for support and quality
assurance of results will be ensured, through a separate mechanism from the APA. This
will mainly consist of verification and endorsement by the UIIDP Federal
TechnicalCommittee (FTC) andFederal Steering Committee (FSC) respectively with review
by the World Bank. The focus areas include: (a) capacity building support from the central
level to regions and ULGs, and (b) the timeliness of the APAs and Value-For-Money (VfM)
audits, system development and support in areas of core importance for the key result areas.
These assessments and the federal capacity building support and system development will be
covered by the IPF, hence not directly linked to DLIs.

65
SECTION 6: PROGRAM ORGANIZATION AND MANAGEMENT

6.1. Federal Level

Figure 7. Organizational Structure for Federal Level

66
 Federal Steering Committee (FSC)
MUDCo Minister (Chair), MUDCo State Minister
(UDS), MoF, MoR, EFCCC, MoLSA, MoTI, MoP,
MOWCY, FEACC, OFAG, MUDCo UREMFB
Bureau Head (Member/Secretary)
(the members from the other Ministries & Agencies are
at the level of minimum State Minister and no
representatives are allowed)

Federal Technical Committee

(FTC)
MUDCo UREMFB Bureau Head (Chair),
MUDCo PR & A Bureau Head, MUDCo UGCBB
Bureau Head, MoF, MoR, EFCCC, MoLSA,
MoTI, MoP, MOWCY, FPPPA, FEACC,
FUJCFSA, OFAG, MUDCo UIIDP Coordinator
(Member/Secretary)
(Members from other Ministries & Agencies are at
the level of minimum Director and no representatives
are allowed)

MUDCo
UREFMFB
Federal Mobile Team (FMT)
Overall management of the UIIDP

MOF OFAG
Fund flow, disbursement,
reporting, and arranging program Carrying out program audits
auditing

6.1.1 The MUDCo will be the lead implementing agency, with a Federal Mobile Team (FMT)
in the Urban Revenue Enhancement, Fund Mobilization and Finance Bureau
(UREFMFB) responsible for daily coordination of the Operation. The FMT consistsofa
67
 Program Coordinator, Deputy Program Coordinator and 30 other staff who also serve as
members of theFederal Mobile Team (FMT). These are all individual consultant positions as
has been agreed and specified in the 18 months UIIDP Procurement Plan that has been agreed
between the World Bank and GOE.They will have expertise in the various Program focus
areas, including newly introduced areas on gender equity, resilience, and LED. The UIIDP
Program Coordinator will report to and act under the direction of the Bureau Head of the
UREFMFB, MUDCo. The main tasks of the FMT are:
 Overall responsibility for day-to-day coordination andmanagement of the
Operation.
 Capacity building, including direct support to regional and urban local
governments, and issuance of guidelines and standard regulations for matters
such as municipal revenue generation, assets management, service delivery
standards, and the like.
 Program management and implementation of activities under the IPF window,
including the procurement and management of the APAs and the value for
money audits and to ensure the timeliness.
 Overall Operation monitoring and evaluation.
 Operation reporting, including the semi-annual progress reports.
 Ensuring that Operation resources are budgeted for and disbursed within the
expenditure framework.
 Accounting for the UIIDP funds to MoF.
 Evaluating the performance of team members as per the agreement made
between UREFMFB and the FMT team members

6.1.2. MoF is responsible for fund flow, disbursement, reporting and arranging program
auditing for the Operation.MoF will also be responsible forcompilation of fiscal reports,
drawdown of funds from IDA, transfers of funds to MUDCo, Regional States (including Dire
Dawa City Administration) and through Regional BoFEDs, to the ULGs as per the request
from MUDCo.
6.1.3. Several other federal entities have guiding and supporting roles in UIIDP.These include
the Office of the Federal Auditor General (OFAG), especially for the annual program audits;
the Federal Public Procurement and Property Administration Agency (FPPPAA) on
procurement procedures; Ministry of Revenues (MOR) on revenue generation, Environment,
Forest and Climate Change Commission (EFCCC) on environmental and social management,
the Federal Urban Job Creation and Food SecurityAgency (FUJCFSA), and the Ministry of
Trade and Industry on job creation and support to MSEs, and the Federal Ethics and Anti-
Corruption Commission (FEACC) on fraud and corruption monitoring and reporting, Ministry
of Women, Children and Youth (MOWCY) on gender issues and gender equity and Ministry
of Peace (MoP) which has special responsibility for Developing Regional States (DRS) and
will work with MUDCo to support participating cities in these regions in regard to UIIDP
activities.
6.1.4. A UIIDP Federal Steering Committee (FSC) will provide Operation oversight, endorse
Program performance and allocations, arbitrate conflicts and strengthen inter-
ministerial coordination. The ULGDP II FSC will transition into the UIIDP FSC as ULGDP
II concludes. The FSC comprises representatives from MUDCo, MoF, EFCCC, FEACC,
OFAG, MOR, MoP and the Ministry of Labor and Social Affairs and Ministry of Trade and
Industry (MoTI) and MOWCY 36(). It will ensure proper coordination of issues on planning,
allocations, flow of funds, compilation of data, and endorsement of the results of the APA and
final yearly allocations. It will meet at least quarterly and as and when required.
36
New additions under the UIIDP
68
6.1.5. A UIIDP Federal Technical Committee (FTC) will support the FSC, providing advice,
conflict resolution at the technical level, and verify Program performance and
compliance. Similar to the FSC, the ULGDP II TSC will transition into the UIIDP FTC. It
will comprise key technical staff of the MUDCo, MoF, MoR, MoP,EFCCC, Ministry of Trade
and Industry, Ministry of Labor and Social Affairs, MOWCY,Federal Urban Job Creation&
Food Security Agency (FUJCFSA), OFAG, FEACC, FPPPAA. It will verify the results of the
APAs and resolve complaints that cannot be resolved at entity level. The FTC is expected to
meet quarterly and to review Program implementation against objectives, bring policy issues
to the SC, and ensure that the Operation is implemented in line with the POM.

6.1.6. The Federal Mobile Team (FMT)/UIIDP Unit will have 32 staff comprising a Program
Coordinator, Deputy Program Coordinator and 30professional staff in various disciplines
supported by a Technical Advisor (long term international consultant). There will also be three
short term advisors on revenue enhancement, asset management and land management. The
Unit will have adequate support staff and facilities in order to fulfil and efficiently discharge
its functions. The Table below provides the staffing of the FMT.

69
 Table 11. Staffing of the Federal Mobile Team
Number of positions
Specialization
Existing UIIDP
Program Coordinator 1 1
Deputy Program Coordinator - 1
Procurement Management Specialist – Regions & ULGs Support 2 2
Environment Management Specialist 2 2
Social Development Specialist 2 2
Project Engineers 7 8
Monitoring and Evaluation Specialist 1 2
Urban Planning Specialist 1 1
Infrastructure Asset Management Specialist 1 2
Land Management Specialist 1 1
Municipal Finance / Revenue Specialist 2 2
Budgeting, Planning and Participation Specialist 1 1
Local Economic Development (LED)& Job Creation Specialist - 1
Urban Resilience/Disaster Risk Management Specialist - 1
Capacity Building Specialist - 1
Gender Specialist - 1
Information Technology (IT) - Specialist - 1
Financial Management Specialist -MUDCo 1 1
Program Accountant - MoF 1 1
Procurement Management Specialist-IPF 0 2
Total 23 34

70
6.2. Regional Level
Figure 8. Organizational Structure for Regional Level

Regional Steering Committee (RSC)

BUDHo (Chair), BOFED, REFCCC, BoLSA, RUJCFSA,
RPPPAA, REACC, ORAG and RRA
(these should be Bureau Heads and not representatives. The
BUDHo Deputy Bureau Head assisted by the UIIDP
Regional Coordinator provide secretarial services )

Regional Technical
Subcommittee (RTSC)
BUDHo Deputy Bureau Head (Chair),UIIDP
Regional Coordinator, BOFED, REFCCC,
BoLSA, RUJCFSA, RPPPAA, REACC,
ORAG and RRA
(Members are the technical focal persons from
the abovementioned Bureaus & Agencies)

BUDHo
Regional Mobile Team (RMT) or
Overall Coordinator in case of
regions with more than one RMT
Overall management of the UIIDP

BOFED
Financial management
and reporting

RMT 1

RMT 2

RMT 3

6.2.1. Regional governments will have a greater role under the UIIDP as compared to ULGDP
II, in providing oversight and in building ULGs’ capacity. Six of the nine regional
71
 governments, each with a large number of participating ULGs, will establish RMTs that will
directly backstop ULGs as well as strengthen the regional BUDHos’ own capacity to guide
and support the ULGs. Those regions with more than one RMT such as Oromia (3 RMTs),
Amhara (2 RMTs) and SNNPRS (2 RMTs) will have an Overall Program Coordinator (with
administrative support staff including an Overall M & E Specialist ) at regional level to whom
the RMT Coordinators will report to. The FMT will directly support the other three regional
governments, which have fewer participating ULGsand relatively modest capacity.

Table 12. Deployment of Regional Mobile Teams (RMTs) under UIIDP

Name of Region / City Number of Participating Cities Number of
Administration Existing New Total regional teams
to be deployed
Amhara National Regional State 10 22 32 2
Oromia National Regional State 11 27 38 3
Tigray National Regional State 8 4 12 1
SNNPRS National Regional State 9 14 23 2
Somali National Regional State 1 3 4 1
Afar National Regional State 1 3 4 1
Benishangul-Gumuz National
1 - - -
Regional State
Gambella National Regional State 1 - - -
Harari National Regional State 1 - - -
Dire Dawa City Administration 1 - - -

6.2.2. The Regional Mobile Teams will have 16 staff headed by a Program Coordinator with 15
professionals in various disciplines. The RMTs and staff should be in place by program
effectiveness (May/June 2018). However, the regions will only have funding for them as from
EFY 2012 after the 1st APA of UIIDP. Accordingly, it has been agreed that for EFY 2011 the
funding for RMTs will be from savings from the ULGDP II Federal Capacity Building
Budget.

72
 Table 13. Staffing of the Regional Mobile Teams (RMTs) under UIIDP
Number of positions
Specialization Existing UIIDP
ULGDP II
Program Coordinator 1 1
Social Development Specialist 1 1
Budgeting, Planning and Participation Specialist 1 1
Procurement Management Specialist 1 1
Infrastructure Asset Management Specialist 1 1
Environmental Management Specialist 1 1
Project Engineer 1 1
M&E Specialist 1 1
Municipal Finance Revenue Specialist 1
Urban Planning and Land Management Specialist 1
LED& Job Creation Specialist 1
Urban Resilience/Disaster Risk Management Specialist 1
Capacity Building Specialist 1
Gender Specialist 1
Financial Management Specialist -BUDHo 1
Accountant - BoFED 1 1
Total 9 16

6.2.3. The respective regional BUDs are responsible for daily coordination of the Operation at
the regional level. Specifically, the BUDs are responsible for:
 Capacity building support of the ULGs in their jurisdiction.
 Preparation of consolidated (ULG and regional government) progress reports
covering all ULGs in their jurisdiction.
 Oversight and backstopping support related to aspects of the Operation.

6.2.4. Other regional entities will play important roles. The (a) ORAGs will conduct external
audits of ULG financial reports; (b) the REFCCCs will oversee the Program’s environmental
and social safeguards agreements; (c) the Bureaus of Finance and Economic Development
(BoFEDs) will manage the regional fund flow and reporting, the regional public procurement
and property administration agencies will guide and support on procurement procedures and
73
 capacity building; (d) the Regional Revenue Bureaus (RRBs) will support ULGs in the areas
of own source revenue generation; (e) the Regional Public Procurement and Property
Administration Agency (RPPPAA)to conduct the annual procurement audits of ULGs;and (f)
the Regional Ethics and Anti-Corruption Commissions (REACCs) will be responsible for
fraud and corruption monitoring and reporting.

6.3. ULG Level

Figure 9. Organizational Structure for ULG Level

Mayor

City Manager

UIIDP Coordination
Team (Focal
Persons)

6.3.1. The mayor and his/her office in each ULG is responsible for overall performance of the
ULG. It ensures compliance with all financial management, procurement, and Operation
environmental and social safeguards and regulations. It also facilitates access to the
information required as part of the APA.
6.3.2. Each city is required to establish a UIIDP Coordination Team (Focal Persons), reporting
to the City Manager. This team will be responsible for day-to-day coordination of the
Operation, working closely with relevant offices of the city. The team should consist full-
time focal persons from the relevant departments for each Operation focus area (as defined in
the minimum conditions). Their key responsibilities would include liaising with respective city
offices to ensure implementation are in accordance with the Operation’s environmental and
social safeguards and fiduciary guidelines; monitoring, reporting and disseminating
information about the Operation (including contract awards, physical and financial progress of
works contracts etc.), contribute to capacity building activities, and act as resource persons for
the Operation.
74
 Table 14. Staffing of the UIIDP Coordination Team (ULG Focal Persons)
Number of positions
Specialization Existing UIIDP
ULGDP II
Program Coordinator 1 1
Social Development Focal Person 1 1
Budgeting, Planning and Participation Focal Person 1 1
Procurement Management Focal Person 1 1
Infrastructure Asset Management Focal Person 1 1
Environmental Management Focal Person 1 1
Project Engineer 1 1
M&E Focal Person 1 1
Municipal Finance/ Revenue Focal Person 1
Urban Planning and Land Management Focal Person 1
LED& Job Creation Focal Person 1
Urban Resilience Focal Person 1
Capacity Building Focal Person 1
Gender Focal Person 1
Financial Management Focal Person 1
Accountant - OFED 1 1
Total 9 16

6.3.3. The various offices of the City Manager will be responsible for implementation of
infrastructure and activities supported through Program Funds. Implementation of
infrastructure, services and activities supported through Program funds are mainstreamed in
each ULG and carried out by the relevant offices in the city administration.
6.3.4. The Offices of Finance and Economic Development(OFEDs)hold overall fiduciary
responsibilities. They will ensure that all Operation funds are included in Integrated Budget
and Expenditure (IBEX) and that financial reports are submitted to ORAG as soon as possible
after the end of the Ethiopian fiscal year.

75
6.3.5. The ethics liaison unit of the ULG is responsible for dealing with fraud and corruption,
handling related complaints and consolidating reporting of complaints on environment and
social aspect as well as procurement.37
6.3.6. City councils are responsible for reviewing and approving cities’ capital investment plans,
revenue enhancement plans, asset management plans and capacity building plans.
6.3.7. Each ULG will also establish a capacity building unit. This will coordinate the planning
and implementation of capacity building activities and reporting of these activities.
6.3.8. Federal Urban Job Creation and Food Security Agency is responsible for leading
initiatives relating to supporting micro, small and medium size enterprises.
6.3.9. The Women and Children Affairs Office (WCO) is responsible for leading and
coordinating initiatives identified in the gender action plan and champion gender
mainstreaming in planning, M&E, reporting and management.
6.3.10. A disaster risk management (DRM) unit is proposed to be established in each ULG. This
will lead efforts in risk assessment, develop emergency response plans and related capacity
building activities.

37
Note that units with the same mandates have different names in different places.
76
SECTION 7: PLANNING AND BUDGETING

7.1. Budgeting Cycle

The UIIDP will follow the GOE budgeting cycle and calendar.

77
 Table 15. Budget Calendar - Integrated Planning and Budgeting Cycle

July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June July

Federal By 30th September. By 31st Nov By By 24th: By 8th: By 8th April: public By 2nd: budget By 8th:
31stMEF annual fiscal bodies submit completed:thus
MEFF and 3 F, plan budget call to requested budget , including budget approved
year subsidy include public bodies ARISIP (a) and
MoFconsultation on: estimates, By 31st: By 15th:
3 year (b) plus (c)
complete subsidy next year’s
a. GTP annual Individual notification of
implications estimate proposals approved budget to
ARISIP (b)
b. MEFF, including s to public bodies
this year’s
subsidy regions
progress
estimates By 31st: make
Individual ARISIP available to
organisation’sARISIP the public
(a) last year’s
performance

Regional 1. Integrated GTP (i.e. regional development plan By 31st: By 8th: By 8th April: By 15th: By 8th:
– new or update); including:
a. Sector planning Individual budget call final ceilings and budget budget approved
b. MEFF ARISIP (b) and pre- budget call to sector completed:thus
c. Fiscal plan this year’s ceilings to bureaux , including By 15th:
d. Budget strategy paper progress regional ARISIP (a) and
notification of
e. Grant formula update sector (b) plus (c)
2. Individual organisation’s ARISIP (a) last year’s approved budget to
bureaux next year’s
performance– by 31st October. public bodies
proposals
By 31st: make
ARISIP available to
the public

Local 1. Integrated GTP (i.e. local development plan – By 31st: By 8th: By 8th April: By 30th: By 15th:
new or update); including:
a. Community consultations within initial Individual budget call final ceilings and budget budget approved
expenditure ceilings (based on current ARISIP (b) and pre- budget call to sector completed:thus
 year’s budget) this year’s ceilings to offices , including By 21st:
b. Sector planning progress sector offices ARISIP (a) and
c. Fiscal plan (b) plus (c) notification of
d. Budget strategy paper next year’s approved budget to
2. Individual organisation’s ARISIP (a) last year’s proposals. public bodies
performance– by 31st October.
By 31st: make
ARISIP available to
the public.

79
The Program budget will be included in the national budget and will be proclaimed at the federal level
at the MUDCo as a special purpose grant classified by regions, ULGs, and the MUDCo. Program
budgeting is structured as an upstream process starting at the ULGs and moving upwards to the
regional and the federal levels, where it is consolidated and approved.Each Regional bureau will
collect all the budget requests from each ULG, consolidate them based on the performance assessment
and approved Capital investment plan and submit to the MUDCo. Each ULGs is required to prepare a
CIP, along with a related budget for each budget year, and send it to the next higher-level for review,
approval and consolidation. MUDCo will prepare a consolidated budget and submit this to the
concerned body for approval. Fund transfers by MoF will be based on approved budgets submitted by
MUDCo.
To ensure reporting of the Program expenditures is integrated in the national public financial system
and codes, the established charts of account (codes) under the ULGDP II will be continued under the
UIIDP, taking into consideration the new features of the UIIDP. Budget control is exercised at all
levels at the transaction level, using the IBEX or other systems, and at the report level. For the
Program, the semi-annual interim financial reports will document and compare the Program budget
with actual expenditures and report on variances.
The budget for UIIDP shall be proclaimed under the name of Ministry of Urban Development and
Construction, Urban Institutional and Infrastructure Development Program. Once identified and used,
the budget code for UIIDP shall remain unchanged throughout the UIIDP life. The matching fund
contributed at regional level should be declared through the regional budget proclamation and at ULG
level the matching fund by cities will be approved by the councils as part of the city budget approval.
The MUDCo will allocate the UIIDP Budget to regions and ULGs based on the performance result in
collaboration with World Bank as per the Bank Disbursement Table in the APAG. The AFD
contribution will be fixed at approximately Euro 2 million per each of the 4 years and will be based on
the total disbursement that is determined by the World Bank with AFD contributing approximately
Euro 2 million each year and the World Bank the balance. This amount AFD contribution will be
spread on all the DLIs 1-4 that AFD have agreed to contribute financing. The AFD amount will be
disbursed upon request by MoF once the World Bank has approved the APA results and issued the
disbursement letter for the year.
Finance for the program will be allocated through the Program budget line included in the
Government's budget.
The region expects to declare their matching fund for the ULGs. The ULGs Offices will submit its
capital investment plan and resources to the ULGs Plan and Economic Office, and finally approved
by the ULGs Council.
Budget Components
Budgeting consists of the following components:
Infrastructure/Service Type

Roads Expenditure group 1: Cobblestone, gravel, red ash and earthen roads.
(asphalt roads are not eligible)

Expenditure group 2: Rehabilitation of roads (except asphalt), bridges,

fords and culverts, pedestrian walkways or footpath, cycle path, paved
area, roundabout, street lighting, road signs and traffic lights, bus
terminals, bus stop/station.

Note:Road works outside of existing rights-of-way or requiring

significant resettlement of people (more than 200 people, project-
 Infrastructure/Service
Integrated multiple infrastructure and
land services (residential, MSEs,
industrial zones, tourism sites)
Sanitation (liquid waste)
Solid waste management
Urban drainage
Urban DRM and initiatives to enhance
resilience
Built facilities
Urban green infrastructure
Consultancy services for design, studies
and contract management
Capacity Building Support
Type
specific) will not be eligible for funding under the UIIDP.
Expenditure group 3: Servicing of land with utilities (water supply,
electricity, telecommunications, roads and drains (within planned right of
way, as per the structural plan/local development plan)), solid and liquid
waste collection and disposal.
Expenditure group 4: Sewer reticulation systems, wastewater treatment
ponds/treatment plants, sludge ponds, community soak away pit and
septic tanks, public and communal toilets, ventilated improved pit,
Ecosan, biogas and vacuum trucks, vacuum handcart. (in planning and
implementation cities must follow manual and standard from Urban
Water Supply and Sanitation Project.)
Expenditure group 5: Collection trucks and other collection tools,
collection bins, transfer stations, recycling center/sorting facilities,
collection points; skips and skip loaders, hand push carts, landfills (of the
size of maximum 10ha and minimum design criteria as per the solid waste
management manual), biogas and composting plants; and landfill site
equipment including compaction vehicles, garbage truck, grader, dozer,
loader, dump truck and excavator
Expenditure group 6: Drainage systems (follow the guideline developed
by the MUDCo), flood control systems.
Expenditure group 7: Fire brigade equipment, trucks, facilities, fire
stations, non-grid renewable energy supply (for example, solar, wind),
landslide protection structures
Expenditure group 8: Markets for small businesses not exceedingground
floor with associated services (water supply, drainage, access roads,
sanitation facilities), upgrading the existing markets, one-stop shops,
slaughter houses (abattoirs) (not exceeding size of 2 ha and the category
of level B, C, and D) with by-products and processing facilities, abattoir
trucks, production and premises, sales and display centers for MSEs,
community center, youth center, cultural centers
Expenditure group 9: Urban parks, public spaces and greenery
development projects.
Expenditure group 10: For studies relating to preliminary and detailed
design, contract documentation and supervision relating to the above
infrastructure and services.
Expenditure group 11: Up to 5 percent of investment grants and
regional/city contributions can be utilized on capacity building support. It
also includes some expenditures for consultancies, studies, and related
operating costs managed by MUDCo limited to the legacy activities
carried over by ULGDP 2.See menu for capacity building support below.
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MoF will incorporate the above 11 UIIDP urban investment components in the standalone
IBEXsystem which will provide full information of and financial performance of each infrastructure
item in the investment menu; the information appears on the system at different level (federal,
regional and ULGs.). However, at the moment the system is not integrated for the three levels and is
standalone and UIIDP will be providing finance and has incorporated in the UIIDP procurement plan
improvements to the accounting system including integration. Physical performance of infrastructure
is not captured under IBEX and will be reported on separately by MUDCo through the quarterly,
semi-annual and annual progress reports.

7.2. Federal Level

7.2.1. Once the UIIDP APA Results Notification and allocations are approved by IDA in February,
MUDCo will send to all regions a notification of the allocation and budget for each ULG and
the region.
7.2.2. MUDCo will prepare the budget for the IPF window including the Federal Capacity Building
Plan and submit it for review by the TSC and approval by the FTC.
7.2.3. MUDCo will have the annual workplan and budget for the IPF approved by the World Bank

7.3. Regional Level

7.3.1. The regions will receive indicative UIIDP allocations from MUDCo by end of February. The
regions will in turn immediately advise their respective ULGs.
7.3.2. The region will prepare a Regional Capacity Building Plan &Budget following the procedures
stated in the Capacity Building Manual which is standalone annex to this POM.
7.3.3. The plan and budget will be reviewed by the UIIDP Regional Technical Subcommittee and
submitted for approval by the UIIDP Regional Steering Committee. Once approved by the
RSC, it is submitted for approval of MUDCo UREFMFB. The approved activities will be
incorporated in the region’s Annual Procurement Plan.

7.4. ULG Level

7.4.1. The planning and budgeting at ULG level follows two process which go in parallel i.e. the
Government Process and the Participatory Process.
7.4.2. Government Process: The starting point for preparation of the Capital Investment Plan is the
preparation of the Asset Management Plan and Revenue Enhancement Plan which should be
started on Tahsas 15 (December 25) and first draft completed on Tirr 30 (February 8).The
UIIDP final allocations are provided to regions/ULGs by end of February. The budget call is
made on Megabit 1 (March 10) and the budget defence is held between Megabit 1-15 (March
10-24).The CIP is submitted to Council and has to be approved by not later than July 15.
Once approved it is submitted to the region for review and approval.
7.4.3. Participatory Process: The initial consultations with all stakeholders/communities and the
identification of projects by the community at kebele level (each kebele will have its own
meeting) are held from December to February. The stakeholders/community comprise of
various groups including women, youth, elders, persons with disabilities, religious persons,
business community, business organizations, teachers, students, various associations, kebele
officials, NGOs. In addition to the groups, the kebele leaders also try to ensure that every
locality (area) of the kebele is represented.
7.4.4. According to the gender mainstreaming process agreed to under UIIDP, the women and men
will meet separately and then come together in one meeting. From a practical point of view
and time allowing, these two separate meetings can be done the same day and same venue or
alternatively on different days and different venues. This will provide more opportunities for
women’s voice to be heard and considered.
7.4.5. The stakeholders will also have an opportunity at this meeting to be briefed on performance
of the current CIP, to raise issues affecting their kebele, areas of concern or needs that could

P a g e 82 | 326
 be addressed through the coming CIP including proposing solutions and projects (prioritised
wish list).
7.4.6. The second consultations and prioritization of projects is done at city level (chaired by City
Mayor or City Manager) in April – June at which the kebele representatives (comprising the
kebele leader and one representative from each of the community groups that attended the 1 st
meeting) attend.
7.4.7. It should be noted that the updating of the Asset Management Plan is an ongoing exercise for
Step 1-Step 6 i.e. updating of the Asset Inventory, condition assessment, calculation of
maintenance budget and deficit, valuation of assets including. This is done during the period
from July to February.

7.5. Capital Investment Planning by ULGs& PublicParticipation

The Capital Investment Planning Manual (standalone Annex of the POM) provides detailed
procedures on capital investment planning by ULGs. The CIP Manual provides guidelines and
procedures on the consultation and participation process to be followed by ULGs during the CIP
process.
The Ministry of Urban Development &Construction has decentralized to the regions the review and
approval of CIPs to take into account the increase in the number of cities participating in the Urban
Institutional and Infrastructure Development Program (UIIDP) from 44 to 117 cities as it may not be
possible or practical to manage the review and approval of CIPs, AMPs and REPs for 117 cities using
the system practiced under ULGDP II where everything came to the federal level. This
decentralization option will also improve quality of CIPs and give more responsibility to regions and
it will also mean that federal support is concentrated more before/during the preparation of the CIPs
than at the end at the review/approval stage.
The decentralised system for review and approval of CIPs by regions will work as follows:-

 Review and approval of CIP, AMP, REP has been decentralised to regions and RMTs to be
strengthened, capacitated and given the tools by the federal team to be able to do this.
 MUDCo to sign Participation Agreement with regions and regions in turn to sign subsidiary
participation agreements with cities.
 MUDCohas put in POM and CIP Manual system and formats to be used by regions in
reviewing and approving CIPS, AMPs, REPs and CBPs. (see Annex 9)
 MUDCo teams to provide support to regions and cities in the preparation and review of CIPs,
AMPs and REPs by holding workshops (training, preparation and review of CIPs) at the
regional capitals where all cities will be brought in.
 MUDCO to carry out post review of all approved CIPs, AMPs and REPs and if anything
violates the legal agreements or POM then the city will be asked to immediately revise the
documents.
 Revisions of CIP for issues other than those violating FA and POM provisions to be done and
approved not later than end of February each year (GC). However, for APA the original plans
will be used.
 The above new system will be trialled in parallel to the existing system during the EFY 2011
CIP preparation by the 44 ULGs participating in ULGDP II.
 The new system will be used for the additional 73 new cities selected to participate in UIIDP
and the 32 cities selected for Capacity Building TA as these 105 cities are required to prepare
CIP for EFY 2011.

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7.6. Revenue Enhancement Plans
The Revenue Enhancement Plan Guideline (standalone Annex of the POM) provides detailed
guidelines and procedures on how to develop strategies for revenue enhancement and how to prepare
a Revenue Enhancement Plan (REP).

7.7. Asset Management Plans

The Asset Management Plan Manual (standalone Annex of the POM) provides the system to be used
by ULGs in managing their infrastructure assets as well as the procedures and templates for
preparation of Asset Management Plans In addition, ULGs have also been provided a
Model(standalone Annex of the POM) for preparation of the AMP.

7.8. Planning and Budgeting under the IPF Window

7.8.1. IPF window will enhance overall Operation management, effectiveness and impact. The
IPF will be used to fund a range of institutional and capacity development interventions at or
coordinated by MUDCo. The rationale for adopting an IPF window arises from the lessons
learned from the ULGDP II and other PforR operations. An IPF allows greater operational
certainty, budget predictability and reduced risks for undertaking federal level actions that are
critical for the success of the Operation in particular, for conducting the ULG annual
performance assessments (APAs) and value for money (VfM) audits. The IPF implementation
modality also allows targeted interventions where tailoring to specific needs or sub-groups of
cities/regional agencies are required in terms of technical assistance, capacity building, and
institutional support activities. A close working relationship between the federal government
and the World Bank through the IPF modality would also allow the Bank to provide better
and just-in-time support when required.
7.8.2. The IPF window will be used to fund a range of institutional and capacity development
interventions at or coordinated by MUDCo. The MUDCo will undertake activities in five
areas: (a) developing capacity, systems, and organizations of federal entities; (b) developing
capacity, systems, and organizations of regional and ULG entities, (c) conducting project
preparation studies, pre-feasibilities and feasibility studies for ULGs with specific needs for
further investments; (d) UIIDP management and monitoring and evaluation, and (e) procuring
and managing APAs and VfM audits. The capacity building activities, technical assistance
and feasibility studies will focus on core and strategic areas such as revenue enhancement,
asset management, CIP preparation, financial management, procurement and contract
management, and procurement auditing, as well as introducing initiatives on local economic
development, urban resilience, cultural heritage, and urban planning.
7.8.3. This IPF window has a total funding of US$34.57 million. It will support MUDCo to
administer and coordinate the Operation, and to strengthen its capacity to support and guide
the regions and ULGs (US$32.57 from IDA; and about US$2.0 million (approx. Euro 1.8
million) from AFD).
7.8.4. The AFD will provide joint co-financing to UIIDP IPF windows. Around Euro 1.8 million
will be used for Sub-component 3 on project-preparation studies, aimed at allowing local
authorities with specific needs to benefit from technical assistance on the preparation of large-
scale projects, focusing on cities oriented towards local economic development and cultural
heritage. This technical assistance could prepare further investment-oriented packages that
could be implemented with the support of MUDCo and donors. More specifically, this sub-
component is envisioned as one single international consultancy (fully funded by AFD) which
covers six main tasks:
(a) Task 1: Diagnosis, opportunities, challenges of Heritage and Industrial Park Cities

P a g e 84 | 326
 (b) Task 2: Participatory needs assessment and collaborative workshop on cultural
heritage and tourism, and local economic development, to identify possible categories
of actions and investments to promote an integrated urban development (shared
vision, strategy workshops, etc);
(c) Task 3: Support to MUDCo for the selection of a first set of cities (5-6) with potential
(criteria matrix, maturity index, etc);
(d) Task 4: Pre-feasibility studies for specific targeted cities (among all sectors listed);
(e) Task 5: Preparation of a new program (preparation of implementation, financial
sustainability, E&S safeguards, etc);
(f) Task 6: Global Program management

7.8.5. The AFD-supported areas would be seamlessly incorporated as part of the UIIDP design,
hence adopting all Bank’s implementation system, guidelines and policies without separate
reporting requirements.
7.8.6. The IPF budget will be included in the national budget and will be proclaimed at the federal
level as a special purpose grant under the name of Ministry of Urban Development and
Construction, Urban Institutional and Infrastructure Development Program -IPF Window.
Once identified and used, the budget code for UIIDP-IPFWindow shall remain unchanged
throughout the UIIDP life.

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Table 16. IPF Supported Areas

P a g e 86 | 326
 Components Activities Key result Estimated Categories
targeted* Costs for
Entire
Operation
(US$,
million)
Component 1:Capacity building and system or organizational developmentof 7.5
federal institutional entities
- Urban - Study on future funding modalities - 1 to 7 Consultancy
development and and options for urban development,
financing strategy including integrating performance
grant into intergovernmental fiscal
transfer system, balancing of grants,
improved own-source revenue, and
other mixed funding modalities such
as borrowing, and so on.
- Rural-urban - A study to understand how cities are - 1,7 Consultancy
migration and managing migration and inclusion
inclusion study issue, especially how the rural poor
who move into cities are being
integrated and provided for.
- Public financial - Support to MoF for project accounting - 4 Systems
management and training Consultancy
support - Support to ULGs, FPPPA, RPPPAAs, - 4 Training
OFAG and ORAGs
- Procurement - Support to FPPPA and RPPPAAs - 4
management
- Fraud and - Provide capacity building support for - 6 Training and
Corruption FEACC for an effective fraud and workshop
corruption and complaint handling
system improvement
- ESSA support - Training for Ministry of Construction, - 5 Training
MUDCo, EFCCC, Ministry of
Women and Children Affairs and
Ministry of Labor and Social Affairs
- Strategic technical - Urban Planning: spatial and land use - 1 Training and
assistance or planning for priority city regions/ consultancy
studies or training regional clusters, in line with the studies
National Spatial Plan.
- 7
- LED: Technical assistance, training
and development of - 7
guidelines/manuals in areas such as
public private partnership, cultural
heritage and tourism, investment
promotion, and so on. - 7
- Urban resilience: Technical assistance
such as for multi-hazards risk and
vulnerability assessment for each city,
urbanearly warning systems (building
on national meteorological/DRM
coordination capacity and linking it - 7
with regional/local DRM centers)
- Gender: Technical assistance such as
for ULG’s gender audit/assessment
and gender mainstreaming guideline
(strategy)
- Training and - Training, seminars, study trips 1 to 7 Training and
capacity building workshop
for MUDCo
- Manual - Update of the POM 1 to 7 Consulting
preparation - Fit-for-purpose procurement and services
contract management, and auditing
manuals
Component 2:Capacity building and system development coordinated by 8.67
MUDCo tosupport Regions and ULGs

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 - Familiarization/ - Focus on UIIDP implementation and 1 to 7 Training and
orientation/refresh thematic areas workshop
er training for
FMT and RMTs
- FMT - Staff in FMT 1 to 7 Consultant/
- International consulting firm(s) contract staff
- Work scope: Backstop support to 10
RMTs and direct support to
Benishangul-Gumuz, Gambella,
Harari, Dire Dawa
- Support for - Training and capacity building on FM - 4 Training and
BOFED workshop
Consulting
services
- Supply-side All thematic areas for example, Training and
capacity building - Urban planning & management - 1 workshop
courses/training - Revenue enhancement - 2
for Regions and - Asset management - 3, 4
ULGs - CIP preparation
- 1
(by ECSU, - Fraud and Corruption - Provide
- 6
Federal/Regional capacity building support for REACC
Institutions or and ULGs for an effective fraud and
private corruption and complaint handling
institutions) system improvement - 4
- public financial management - 5
- Environment and social management - 7
- LED - 7
- Urban Resilience
Component 3:Project-preparation studies for selected ULGs 2.0
(fully
financed by
AFD)
- Project- Preparation studies38 (prefeasibility or - 3, 7 Consultancies
preparation studies
feasibility studies) for investment projects
that are likely to contribute to sustainable
urban development and LED, and
targeting cities with specific needs for
further investments (targets: ULGs with
associated industrial parks; ULGs with a
cultural heritage or tourism potential)
Component 4:UIIDP Operation Management and Future Outlook 8.5
- Function of FMT - FMT staff/consultant/advisor 1 to 7 -Consultant/
under UREFMFB o Long-term consultant(s) contract staff
of MUDCo - Support TC and SC (task force from -Goods
MUDCo will be part of TC)
- Equipment
- MoF - Two accountants in MoF dedicated to 4 Consultant/
UIIDP (paid through MUDCo) and contract staff
accountants in MUDCo
- M&E system - IT system for monitoring,and so on. 6 System
including support to MoF on development
accounting,and so on. Equipment and
- Impact evaluation consultancy
- MTR, end of Operation
Implementation Completion Report
and workshop
- Preparation of - Relevant studies/consultancies 1 to 7 Consulting
future projects services
- Operating costs - Incremental operating costs:39the 1 to 7 Operating cost
reasonable incremental expenses
incurred, based on annual work plan

38
Studies could include: Liquid/solid waste management, promotion of sustainable transport system (for example bus rapid
transit), expanding access to water and sanitation services, integration of green and public spaces, heritage restoration and
tourism promotion, serviced land for industry, MSEs, tourist sites and housing, premises and markets for MSEs, housing,
and upgrading of city centers.
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 and budget (AWBP) approved by the
Association, incurred by the Recipient
on account of Project implementation,
management, and monitoring,
including expenditures for vehicle
O&M, office supplies and
consumables, utilities,
communication, translation and
interpretation, bank charges,
Operation-related national and
international travel, as well as per
diem and accommodations (but
excluding salaries of the Recipient’s
civil servants), and other
miscellaneous costs directly associated
with the Operation implementation.
Component 5: Annual performance Assessment and Value for Money Audits 7.4 Consultancies
for UIIDP
IDA SUF fee 0.5
TOTAL for IPF 34.5740
Note:*Key Results
(a) Enhanced citizen participation and engagement in ULG planning and budgeting;
(b) Increased OSR at the ULG level;
(c) Improved infrastructure, service delivery, O&M systems and job creation;
(d) Improved efficiency and effectiveness in fiduciary management;
(e) Improved environmental and social management and safeguards;
(f) Strengthened accountability and oversight systems;
(g) Strengthened ULG resilience, improved LED and enhanced gender equity in the ULG operations.

39
Incremental operating cost: these are operating costs that are not already covered by the government (or are additional
costs) included in the annual work plan and budget and to be approved by the Bank.
40
This total amount includes IDA’s Grant contribution amount of US$32.57 million and AFD’s contribution of US$2.0
million.
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SECTION 8: PROCUREMENT MANAGEMENT

8.1. Policy, Legal, Institutional& Operational Framework

In Ethiopia, for federal level budgetary bodies, public procurement is regulated by the Public
Procurement and Property Administration Proclamation No. 649/2009 and the Federal Public
Procurement Directive dated June 2010.

The Proclamation established the Federal Public Procurement and Property Administration
Agency(FPPPAA) as a body responsible for regulation and monitoring of federal bodies’ public
procurement activities. The FPPPAA has also developed and issued the Public Procurement Manual
dated December 2011, Public Procurement Audit Manual dated May 2011 and the Manual on
Procurement Complaint Procedure dated April 2011.
The nine regional states and two federal city administrations, Addis Ababa and Dire Dawa, have their
own procurement proclamations and directives, which are based on the federal prototype. The ULGs
are required to abide by their respective regional procurement laws. At the federal level, directives,
manuals, and standard bidding documents and standard requests for proposals templates have been
issued. Most of the regional states have also issued these. However, some of the standard bidding
documents and standard requests for proposals templates are not comprehensive, and some of the
procuring entities lack knowledge and understanding of the proper implementations of the
procurement legal framework. As a general assessment, the procurement legal framework of the nine
regional states and two city administrations are found to be sufficient, with some shortcomings with
respect to content and much weakness in implementation.

The major issues with all the implementing agencies are the weakness of implementation of the
applicable public procurement rules and procedures including complaints handling and
oversight mechanisms. Both the regional government entities and the ULGs have limited capacity to
follow the rules and procedures, so there is a risk of the agencies under performance in implementing
the applicable procedures under the program. The overall performance of procuring entities in
complying with the established system and therefore ensure transparency, efficiency, and economy is
found to be deficient.

Several risks were identified for Program procurement and contracts administration. These are:
(a) non-compliance with national and regional directives;
(b) Weak procurement capacity at the ULGs;
(c) Transparency and fairness issues related to procurement process, as the result of not implementing
the legal procedures available;
(d) Competitiveness issues as the result of involvement of state-owned enterprises in tenders and
application of different preferential treatment and reservation schemes to MSEs;
(e) Weak accountability, integrity and oversight arrangements;
(f) Weak contracts administration, complaints handling mechanism, and the inefficient resolution of
contractual disputes;
(g) Poor procurement recording;
(h) Skill and knowledge gap in the procurement staffs of ULGs as well as the Tender Award
Committee members; and
(i) Some of ULGs Procurement Plan is not SMART especially in not procuring as per the planned
time.

Four types of risk mitigation measures should be implemented. First, ULGs will have to comply
with the MCs to participate in the Program. These include having the minimum institutional and staff
capacity in place. This will be checked annually through APA. Second, implementation of activities
P a g e 90 | 326
specified in the PAP will be closely monitored. This includes measures to build capacity of ULGs and
other entities for procurement. Third, an annual procurement performance audit will be carried out
through the RPPPAAs. This will also be supported by DLI 8 providing an incentive for the RPPPAAs
to perform. Fourth, the MUDCo through the OFAG or an independent consultant will carry out VfM
audits of ULGs’ investments in infrastructure. The APAs will include assessment and scoring of the
timeliness and quality of the audits (DLI 8 and the IPF), and the performance of the ULGs (based on
the findings of the procurement and VfM audits, DLI 2 and DLI 3).

All the above risks and mitigation measures have been captured in the Program Risks Logical
Framework in Section 22 and will be closely followed up, monitored and reported on by MUDCo.

All ICB contracts, whether using PforR or IPF, should also be published in the international media
such as UNDB online

All UIIDP implementing agencies (federal, regional &ULGs) should state in the bidding documents
to exclude award to Bank debarred and suspended firms. The list may be found on the World Bank
website: http://web.worldbank.org › Projects › Procurement;

8.2. Federal Level Responsibilities

FPPPAA will be responsible for all training of federal, regional and ULG officials on procurement
laws, procedures and procurement audits.
MUDCo in conjunction with the regions will provide advice to the cities in the preparation of their
procurement plans and in monitoring their implementation. MUDCo will be responsible for all
procurement for the federal level under the IPF window and it will follow World Bank procurement
guidelines.
MUDCo will provide support and monitor through FMT and also directly evaluate through system of
APA and indirectly through systems of Procurement Audit (regional responsibility) and VfM audit
(federal responsibility) the procurement activities of ULGs.
Inventory of Procurement Laws and Notification of Changes:
MUDCo shall at all the times hold inventory/database of all procurement laws including procurement
proclamation, directives, regulations, manuals, standard bidding documents, circulars, templates, etc.,
which are enacted or issued by the Federal and all Regional Governments included in the
Program/Project. MUDCo shall immediately notify the Bank on any changes in the law and circulars
or directives issued by the Federal and Regional Governments.
Use of SOEs and MSEs
A procedure of use of SOEs and MSEs, prepared by MUDCo and agreed with the Bank, including
MSE registration, incentive mechanisms, monitoring and graduation procedures without affecting the
participation of other non-SOE and non-MSE actors is annexed as part of this POM. Non-MSE actors
will not be excluded from bidding with MSEs of similar capacity.

8.3. Regional Level Responsibilities

RPPPAAs will be responsible for all training of regional and ULG officials on procurement laws,
procedures and procurement audits. Each Regional Public Procurement and Property Administration
agencies will monitor the proper applications of their respective procurement legal procedures
including availing the legal documents to the ULGs. The compliance with the legal procedures and

P a g e 91 | 326
use of appropriate procedures will be monitored through annual procurement audits carried out by the
RPPPAAs.
BUDHo will be responsible for reviewing as part of the CIP documents the procurement plans of the
ULGs and for monitoring its implementation. BUDHo will be responsible for all procurement for the
regional level for activities in the Regional Capacity Building Plan.
BUDHo will provide guidance, within the limits of the regional proclamations, to ULGs on policies
on support to MSEs and the level of preferences that would be acceptable across board to ensure
uniformity and minimize abuse.

8.4. ULG LevelResponsibilities

Each ULG will be responsible for its own procurement as per the regional proclamations using
existing Government structures, systems and procedures.

8.5. Procurement under the IPF Window for the Federal Level
8.5.1. Procurement under the IPF Windowfor the federal level will be carried out in accordance with
the World Bank’s Procurement Regulations for IPF Borrowers, “Procurement in
Investment Project Financing, Goods, Works, Non-Consulting, and Consulting
Services,” dated July 2016, revised August 2018 and “Guidelines on Preventing and
Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and
Grants,” revised as of July 1, 2016; and the provisions stipulated in the Financing Agreement.
8.5.2. As per the requirement of the regulations, a Project Procurement Strategy Document (PPSD)
(standalone Annex of the POM) and 18-month Procurement Plan has been prepared by
MUDCo for the federal level and reviewed by the World Bank. The next revisions or updates
of the Annual Procurement Plan after the 18-month period will be submitted to Ministry
Tender Award Committee (TAC) for review/comments.
8.5.3. The Project Procurement Management Directorate in the Urban Revenue Enhancement, Fund
Mobilization and Finance Bureau (UREFMFB) in MUDCo will handle procurements under
the IPF for MUDCO activities. The respective federal Ministries and Agencies will handle
their own procurements in respect of activities in their capacity building plans as per the
budget approved by the Federal Steering Committee and transferred to them by MUDCo.
8.5.4. The Ministry Tender Award Committee (TAC) will be responsible for reviewing and
approving TORs, specifications, technical and financial evaluations. Contracts which are
below the TAC approval threshold will continue to be handled by the Bureau as per normal
practice.
8.5.5. The Bureau Head of Urban Revenue Enhancement, Fund Mobilization and Finance Bureau
will be responsible for approving evaluations of expressions of interest (shortlisting) and for
contract negotiations and signing of all contracts under the program once TAC approval for
contract award and World Bank no objection (in respect of prior review contracts) has been
granted.
8.5.6. Post Review Contracts: The TAC will review TORs, specifications, technical and financial
evaluations on submission by PPMD. Note: All TORs including for post review contracts will
be reviewed by the Bank.
8.5.7. Prior Review Contracts: The PPMD/UREFMFB will submit TORs, specifications, technical
and financial evaluations to TAC for approval and then through STEP 41, to World Bank for
no objection42. Should the World Bank no objection conflict with the initial TAC approval,
41
STEP stands for Systematic Tracking of Exchanges in Procurement and is an on online World Bank system
that helps World Bank and Borrowers to plan and track procurements under World Bank financed programs.
42
In regard ro prior review contracts, besides the documents that go through TAC, PPMD/UREFMFB are
required to submit directly through STEP to World Bank for no objection all other procurement documents such
P a g e 92 | 326
 then the revised report will be resubmitted to TAC for further review. If necessary, the
additional comments of TAC, after the further review, shall be brought to the attention of
World Bank for consideration and final decision.
8.5.8. On all procurement matters on the UIIDP IPF, the World Bank final decisions will prevail.
This is as per the IDA Financing Agreement and the GOE Procurement Proclamation which
states in Article 6(1) that “To the extent that this Proclamation conflicts with an obligation of
the Federal Government under or arising out of an agreement with one or more other states or
with an international organization, the provisions of that agreement shall prevail.”
8.5.9. Documents for Prior Review. For procurement that has been determined to be subject to
prior review, the following documents shall be submitted by the Borrower for Bank’s prior
review and no objection:

(a) The GPN and SPN, as appropriate;

(b) If Prequalification/Initial Selection is used, the invitation to prequalify/be initially
selected, the prequalification/initial selection document, (including any amendment(s)
to them) and the prequalification/initial selection evaluation report. For Consulting
Services, the REoI, including the complete TOR, and the Shortlist assessment report;
(c) The request for bids/ request for proposals documents, including any amendment to
them;
(d) The first request by the Borrower to Bidders/Proposers/Consultants to extend the
Bid/Proposal validity period, if it is longer than four (4) weeks, and all subsequent
requests for extension, irrespective of the period;
(e) The Bid/Proposal evaluation report and recommendations for contract award, including
documents demonstrating that any procurement complaints have been addressed to the
satisfaction of the Bank. In two-envelope or multistage selection processes, the
Borrower submits the Bid/Proposal evaluation report for each envelope/stage for the
Bank’s prior review and no-objection before proceeding to the next stage of the
procurement process;
(f) All requests for cancellation of a procurement process and/or rebidding/re-invitation of
Proposals;
(g) The Borrower shall not proceed with the next stage/phase of the procurement process,
including with awarding a contract without receiving from the Bank confirmation of
satisfactory resolution of Complaint. If, after the Bank’s prior review and no-objection,
analysis of a complaint leads the Borrower to change its contract award
recommendation, it submits for the Bank’s no-objection the reasons for that decision
and a revised evaluation report;
(h) If the procurement process involves negotiations between the Borrower and
Bidder/Proposer/Consultant, the minutes of negotiations and the draft contract initialed
by both parties. If probity audit was required, the minutes of negotiations should be
submitted with the probity audit report;
(i) If BAFO is used the evaluation report prior to requesting BAFO and the final
evaluation report prior to award of contract; and
(j) If requested by the Bank, the Contract Management Plan, including the Key
Performance Indicators (KPIs); also, if requested by the Bank, ongoing reports of
progress based on the agreed KPIs.

One conformed copy of the contract, and of the advance payment security and the
performance security if they were requested, shall be furnished to the Bank promptly after its
signing and prior to the making of the first payment.

as Request for Expressions of Interest, bid documents, negotiated contract etc. The full list of such documents is
in the WB Procurement Regulation and also in Section 8.5.9 below.
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The terms and conditions of a contract shall not, without the Bank’s prior review and no
objection, materially differ from those on which Bids/ Proposals were requested or
Prequalification/Initial Selection, if any, was invited.

Modifications of the Signed Contract: For contracts subject to prior review, the Borrower
shall seek the Bank’s no objection before agreeing to:
(a) an extension of the stipulated time for execution of a contract that has an impact on the
planned completion of the project;
(b) any material modification of the scope of the Works, Goods, Non-consulting services
or Consulting Services, or other significant changes to the terms and conditions of the
contract;
(c) any variation order or contract amendment (except in cases of extreme urgency),
including due to extension of time, that singly or combined with all previous variation
orders or amendments, increases the original contract amount by more than 15%
(fifteen percent); or
(d) the proposed termination of the contract.

If the Bank determines that the Borrower’s request for any such modification would be
inconsistent with the provisions of the Legal Agreement and/or Procurement Plan, it
informs the Borrower and states the reasons for its determination. The Borrower shall
provide a copy of all amendments to the contract to the Bank for its records.

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Figure 10. Process for Review and Approval of IPF Procurements

H. E. the Minister
H. E The State Minister (Utban
Development Sector)
IDA
Review and "no objection" of all TORs
& prior review procurements (through
STEP)

Tender Award Committee

Review and approval of all
TORs, specifications, technical
and financial evlautions

UREFMFB
Submission of approval requests to TAC &
no objection requests to IDA (through
STEP)
Contract negotiations, & signing of all
contracts

PPMD
Responsible for all IPF procurements for
MUDCo

UIIDP Unit (Federal Mobile Team)

Preparation of TORs
Support to PPMD as required on
procurements

8.5.10. Procurement Planning.

MUDCo shall update their procurement plan and use it as progress monitoring tool, as well as
for proper utilizations of the project/ program budget for the intended purpose. Furthermore,
procurements shall not be conducted outside the procurement plan.

8.5.11. Staffing.

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 Generally, it’s noted that the qualification of staff deployed for procurement activities in
Project Procurement Management units of MUDCo is seen to be reasonable. However, the
vacant positions shall be filled in order to handle the workload under the project and relevant
basic and refresher trainings shall be given for the staff.

8.5.12. Bid Evaluation and Award. Procurement staff shall be given refreshment trainings on bid
preparation, evaluation, award of contract and contract management. Evaluation of technical
and financial proposals shall be done with same ad-hoc evaluation committee as well as
Virtual Committee to facilitate the bid evaluation process and improve quality of bid
evaluation. MUDCo shall also secure space for bid evaluation and for safe keeping of bids
and proposals until the evaluation process is over.

8.5.13. Compliant Handling mechanisms.

MUDCo shall create awareness on complaint handling and ensure independent complaint
handling mechanism. Complains shall be properly recorded and reported to the public.
Furthermore, Complaints shall be handled by the Ministry not the Bureau to ensure
independence of the complaint handling process.

8.5.14. Contract Management.

MUDCo shall improve the current contract management and administration system through
appointing experienced contract administrator in project procurement management directorate
office.

8.5.15. Procurement Audit.MUDCo shall strengthen internal audit system to ensure that
procurements are examined under the internal control system appropriately on timely manner.
8.5.16. Post Review of Contracts by the World Bank. The Bank carries out post reviews of
Procurement Processes undertaken by the Borrower to determine whether they comply with
the requirements of the Legal Agreement. The Bank may use a third party such as a supreme
audit institution, acceptable to the Bank, to carry out post reviews. Any such third party shall
carry out the reviews in accordance with the TOR provided to it by the Bank. The purposes of
procurement post reviews include the following:
 verifying that the procurement procedures followed by the Borrower comply with the
Legal Agreement;
 confirming that the Borrower continues to be in compliance with the agreed procurement
arrangements, including timely and effective implementation of the agreed risk
mitigation/management plan;
 verifying continued adherence to the contract, including technical compliance;
 noting Fraud and Corruption red flags and reporting any evidence to Bank’s Institutional
Integrity, Integrity Vice presidency (INT); and
 identifying mitigating measures or actions to correct procurement deficiencies and
recommending them to the Borrower.

8.5.17. Independent Procurement Reviews.Independent procurement reviews, performed

by independent third parties appointed by the Bank, are carried out when the Bank
determines the need for such a review through its assessment of risk. This applies to
contracts subject to prior and post review.

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P a g e 97 | 326
SECTION 9: FINANCIAL MANAGEMENT AND AUDIT

9.1. Financial Management Arrangements under the P4R Window

9.1.1. Planning and budgeting

The overall planning and budgeting including budget calendar are detailed under the Budgeting and
Planning section above. Program will continue to follow Government planning and budgeting
arrangements, this POM and the FM Manual. As stated in the Budgeting and Planning section
abovethe Program budget will be included in the national budget and will be proclaimed at the
Federal level at the Federal MUDCo as a special purpose Grant classified by Regions ULGs/Cities
and MUDCo. Budget control is exercised at all levels at transaction level, using the IBEX or other
systems and at report level. For the Program the semi-annual Interim Financial Reports will document
and compare program budget with actual expenditure and report on variances. Trainings will be
provided so that challenges noted in the budget area are addressed.

9.1.2. Fiscal Transparency

There is need for focusing on this area under the next phase as none of the new citiesvisited has
started disclosing external audit reports. All financial reports including budgets and financial
statements as well as external audit reports will be disclosed to the public by ULGs, MoF, MUDCo.

9.1.3. Treasury management and flow of funds

Disbursements under the Program are subject to PforR procedures and disbursed against DLIs. The
PforR funds will be disbursed from the World Bank and AFD to MoF once a year upon achievement
of the DLIs (around May/June each year). Fund transfers from MoF to regions and ULGs and regional
implementing entities will be made on the basis of achieved results and will be made semi-annually.
IDA and AFD funds will be deposited to a separate foreign currency account (as per the request of the
Government). Local currency accounts also will be opened.

Upon achievement of the indicators, MUDCo will work with MoF to inform the World Bank and
provide evidence as per the verification protocols, as justification that results for the DLI have been
met. In case of a scalable DLI, the task team will determine the amount to be disbursed based on the
programs progress report and DLI verification protocol. A notification will be made to the borrower
to advise the amount to be disbursed against progress achieved towards the results of the scalable
DLI. Disbursement requests will be submitted to the Bank using the Bank’s standard disbursement
forms signed by an authorized signatory. Although PforR operations do not link disbursements to
individual expenditure transactions, the aggregate disbursements under such operations should not
exceed the total program expenditures framework under the Program over its implementation period.
If, by Program completion, Bank financing disbursed exceeds the total amount of Program
expenditures, the borrower will be required to refund the difference to the Bank. Once IDA resources
reach the separate foreign currency account, the funds can be used to finance Program expenditures or
can be transferred to a local currency account. Funds from the local currency account can be
transferred to regions’ BoFEDs. At the regional level, BoFED will as per consultation with the
BUDHo, disburse resources to ULGs and regional entities.

The annual disbursement amount will be predictable as determined in the APAs. UIIDP funding will
be predictable and in full sync with local government budgeting cycle. To ensure predictability,
UIIDP indicative planning figures will be shared with ULGs and regional governments for the entire

P a g e 98 | 326
period, although actual annual disbursements will be based on APA results and compliance with the
DLIs. As for the current ULGDP II, the UIIDP funds will be protected from any budget cuts. Cities
will be informed about their actual disbursement for the following fiscal year in Hedar/Tahsas
(November/December) (with final confirmation in Yekatit (February) of each year, immediately after
the assessment exercise, so as to give the ULGs ample time for their planning and budgeting process
which is completed in Genbot (May) of each year prior to the financial year where disbursements take
place.

Figure 11. Funds Flow & Reporting Chart for the PforR

IDA Credit Account(SDR) AFD Account (Euro)

Foreign Account
in US$ at MoF at NBE Foreign Account
PforR in Euro at MoF at NBE
PforR

Birr account at MoF at NBE

PforR

Birr account at Regions

(BoFEDs)
PforR

Birr account at Birr account at

Regional Implementing 117 ULGs (OFEDs)
Bureaus/Agencies PforR
PforR  
   
 

Funds flow
Reporting

P a g e 99 | 326
9.1.4. Accounting

Government rules/regulations and directives as well as this POM will be in use for the Program in
respect to accounting policies and procedures. Chart of accounts will take on board the program
accounting and reporting needs, the structure of which is dealt in the Budget and planning section
above.Double entry accounting system would be implemented at all participating cities and IBEX
would be rolled out either on a standalone or integrated manner which will be used by all participating
cities to record transactions and to produce reports at all levels. Adequate capacity building will be
provided to new participating cities to enable them to utilize the IBEX effectively for the Program. It
is envisaged that the Program activities will be audited by the ULG internal auditor and therefore
access to IBEX system shall be provided to internal auditors. ULGDP II allocated adequate financial
management staff at MoF and MUDCo to perform program financial management duties. This will
continue in the UIIDP as well. Adequate financial management staff at MoF and the MUDCo will be
in place.

During preparation of this program, weaknesses were identified in manpower and staffing including
provision of inadequate trainings. Therefore, during implementation of the new Program, there is need
to address these weaknesses including filling the existingvacant positions especially at cities
(providing only municipal function). Continuous training will be provided to the existing staff
(accountants and internal auditors) to enable them to discharge their functions using the resources
availed by the IPF window.

9.1.5. Financial Reporting

A semi-annualfinancial report named Interim Financial Report, which is being used by the existing
Program to report on the use of Program resources, will continue to be used in this next phase. These
reports will be submitted to the World Bank by MoF within 60 days at the end of the half year (semi-
annual end date). The Program financial reports will be produced from the existing system and their
production will be the responsibility of each implementing entity, which will be consolidated at the
higher level and at the end by MoF. (Reports of the ULG’s and other regional implementing entities
will be consolidated by BoFED, which will be submitted to MoF). The BoFED and MUDCo’s
reports will be consolidated by MoF. The format of the semi-annual financial report was agreed
during negotiation and are documented under the Minutes of Negotiation. MoF will also prepare
annual Program financial statements in accordance with acceptable standards within three months of
the end of fiscal year and provide them to the auditors to enable them to carry out and complete the
financial audit on time.

9.1.6. Internal controls

Government rules/regulations and directives as well as this and FM manual on internal control
procedures will apply to the Program. Despite a mainly robust internal control framework, in some
cities, weaknesses were noted on segregation of duties (bank reconciliation and stock handling
system); cash control; and property management control. The control on segregation of duties, cash
and property management will be improved at all participating cities during implementation of the
new Program. Continuous training and support to all ULGs will be provided to enhance the control
over these areas.

All cities will have internal audit units staffed as per their structure. Thus, the audit coverage of cities
will be strengthened. Internal auditors will be required to copy their quarterly reports to the Mayors.
Continuous training will be provided to internal auditors to build their capacity through the IPF
window. For the program, it is envisaged that the program activities will be audited by the ULG
internal auditor and will report on weaknesses to the Mayors.

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9.1.7. External audit

Like the existing program, the new program will be subject to both financial and value for money
audits. Office of the Federal Auditor General (OFAG) or an assigned acceptable auditor to the World
Bank will conduct the annual financial audit and the annual value for money audit. The audit will be
conducted in accordance with terms of reference agreed during program negotiation which is annexed
to the minutes of negotiation. It is also annexed to the POM Volume 2. Additional Annexes.

The resultant audit report and management letter will be submitted to the World Bank within six
months after the end of the Government’s fiscal year. The Bank requires that the Borrower disclose
the audited financial statements in a manner acceptable to the Bank; following the Bank’s formal
receipt of these statements from the borrower, the Bank makes them available to the public in
accordance with the World Bank Policy on Access to Information.

Annual financial statements of all new participating cities will need to be audited by ORAGs or other
external auditors endorsed by ORAGs. ORAGs will issue both the short form report (with attached
audited financial statements) and long form report (management letter) within the agreed deadline. All
participating entities will prepare action plan to rectify external audit findings and status reports,
which will show the level of improvement.

In addition, Value for Money audit will be conducted by an auditor or consultant acceptable to the
Bank and with close cooperation with OFAG. The audit report will be submitted to the Bank and it
will be part of the APA

Each ULG will also have their financial statements audited by the ORAGs as part of the MC. The
quality of city level audit reports conducted by ORAG will need to be improved. OFAG will
intensively intervene in capacity building of the regional auditors to apply uniform reporting format
across the regions and improve the quality and reliability of the audit. The IPF window will avail
resources to build capacity of auditors so that the quality of audit is improved.

9.2. Financial Managementunder the IPF Window

9.2.1. Budgeting

Both MoF and MUDCo follow the Federal GoE's budgeting procedure and calendar. Budget
procedures are documented in the Federal GoE Budget manual. MUDCo will prepare an annual work
plan and budget for the Project (IPF window), considering the project’s objectives and resources. The
work plan and budgets will identify the activities to be undertaken by each of the implementing
entities at Federal level. This budget preparation should be prudent, realistic, and made with
professional estimates to avoid unrealistic budgets. Then the annual work plan and budget will be
forwarded to the project Steering Committee and the World Bank for approval. The World Bank no
objection is also required. Finally, the budget will be submitted to MoF for final endorsement and
proclamation. The project budget will be proclaimed under MUDCo budget.

In regard to budget monitoring and control, before payments are made, verification of availability of
budget is made at both MoF and MUDCo. Accounting systems 43 at both MoF and MUDCo will
provide a comparison of budget with actual expenditures reports for monitoring. The Project will use
the existing budget controlling and monitoring systems. To monitor the budget utilization, the project
budget will use quarterly Interim Financial Reports. The budget variances will be adequately
explained and justified through these quarterly IFRs.

9.2.2. Accounting
43
Integrated Financial Management Information System (IFMIS) and IBEX
P a g e 101 | 326
The Government’s accounting policies and procedures 44 will be largely used for the accounting of the
project. Further, the project will use the FM manual of the ULGDP II which is under preparation
which will be updated for the peculiarities of the UIIDP. The FM manual will largely follow the
Government accounting manual and will incorporate budgeting, accounting policies, procedures, chart
of account, internal control issues, financial reporting, fund flow arrangements, and external audit.
The project FM manual will be submitted to the bank for review and comment. Training will be
conducted on the FM manual after the FM manual is approved by the Bank.

MoF uses IFMIS while MUDCo uses IBEX system to record transactions and producing reports. The
proposed project will use the respective system at the two entities. Chart of accounts: the chart of
account for the project will be developed using the government’s chart of account to properly capture
the components, sub components and categories. The chart of account should enable the budget codes
to be identified and the IBEX system to be used easily. The developed chart of accounts shall form
part of the FM Manual that is under preparation.

The Accounting centre for the project will be MUDCo and MoF. Currently no fund is expected to
flow to other Federal implementing entities from MOF. MUDCO will provide and transfer from its
UIIDP IPF budget a yearly allocation to the federal implementing agencies that are members of the
Federal Technical Committee and they will prepare their own capacity building action plans. MUDCo
will transfer the budget twice a year and the second transfer will be dependent on submission of
financial report for the first transfer. The federal agencies will be required to provide a physical and
financial report at the end of the year showing how they have used the funds. Both MUDCo and MoF
will maintain accounting books and records and prepare financial reports in line with the system
outlined in the FM Manual. The two are responsible for maintaining the project’s records and
documents of the project transactions which will be made available to the Bank’s regular supervision
missions and to the external auditors. Detail procedures for maintaining and retaining documents are
discussed in the FM Manual.

Adequate financial management staff at MoF and the MUDCo will be in place. Vacant posts at
MUDCo will be filled. Focused and continued training on FM is essential for the success of the
project. Once the project becomes effective, the accountants at both entities will be trained on the
basics of the project including FM manual, Bank policies and procedures, preparation of IFRs, among
others.

9.2.3. Internal controls

This comprises the whole system of control, financial or otherwise, established by management in
order to: (a) carry out the project activities in an orderly and efficient manner; (b) ensure adherence to
policies and procedures; (c) ensure maintenance of complete and accurate accounting records; and (d)
safeguard the assets of the project. Regular government systems and procedures will be followed,
including those relating to authorization, recording and custody controls. The project’s internal
controls, including segregation of duties on payments, cash management control, and safeguarding of
assets, will be documented in the project’s FM manual which is under preparation.

There is an internal audit directorate and department at MoF and MUDCo respectively. At MoF all
project funds are properly reviewed by the Directorate. During the preparation of this project, it was
observed that the internal audit department at MUDCo is understaffed with currently only 6 auditors
(including the head) in office out of the structure for 15. These vacant posts will be filled. Capacity
building trainings will be provided by resources availed in this project (IPF window). The internal
auditors will review the transactions and financial performance of this IPF window and report to the
management on weaknesses observed. They will follow up on resolution of the findings. The reports
44
The Ethiopian Government follows a double entry bookkeeping system and modified cash basis of accounting. This is
documented in the Government’s Accounting Manual. This has been implemented at the federal level and in many regions.
The Government’s Accounting Manual provides detailed information on the major accounting procedures.
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and the progress of rectification of findings will be availed to the World Bank during supervision
missions.

9.2.4. Fund flow and disbursement arrangement

The IPF will follow the existing government rules and regulations under channel 1 fund flow
mechanisms. Funds will be disbursed from IDA and AFD to MoF and then to MUDCo. The donor
resources of the IPF window will be deposited to separate bank accounts maintained at NBE managed
by MoF.

Therefore, the IPF window’s IDA & AFD funds will be deposited in the separate designated account
to be opened for IDA and AFD at the NBE to be managed by MoF. The authorized ceiling of the
Designated Account would be two quarters forecasted expenditure based on the approved annual
work plan and budget. MoF will also open a local currency account in the name of the project.
MUDCO will open a USD Account for IDA, Euro Account for AFD and Birr account at NBE in the
name of the project. For both IDA and AFD report-based disbursements will be made quarterly and
cover cash requirements for the next six months, based on the forecasts contained in the IFRs.
Provision would also be made in the Disbursement letter for the other disbursement methods, that is,
direct payments, special commitments and reimbursements.

Figure 12. Funds Flow & Reporting Chart for the IPF Window

IDA Credit Account(SDR) AFD Account(Euro)

Designated Account Designated Account

in US$ at MOF in Euro at MOF
IPF Window IPF Window

Birr account at MOF

IPF Window

Euro account at
MUDCo
Birr account at MUDCo IPF Window
IPF Window  
 

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 Funds flow
Reporting

9.2.5. Financial reporting

For the project (IPF window), MUDCo will prepare quarterly IFRs and submit to MoF within 30 days
after the end of the quarter. MoF in turn will prepare quarterly consolidated Interim Unaudited
Financial Reports (IFR) and submits it to the World Bank and AFD within 45 days of the end of the
quarter. The format and the content, consistent with the World Bank’s standards, are agreed with MoF
during project negotiation and are attached to Minutes of Negotiation. The format and timing of these
reports will be specified in the AFD Disbursement Letter to be attached to the AFD Financing
Agreement and will be incorporated in the Financial Management Manual being prepared by MoF for
the project. In addition, in compliance with the government’s financial rules and regulations as well
as IDA requirements, MoF will produce annual financial statements for the IPF. This annual financial
statement will be submitted for audit at the end of each year.

9.2.6. External audit

For the project (IPF window), Annual audited financial statements and audit reports (including
Management Letter) will be submitted to IDA and AFD within 6 months from the end of the fiscal
year. The annual financial statements will be prepared in accordance with the standards indicated in
the audit TOR agreed during negotiation. The audit will be carried out by the OFAG, or a qualified
auditor nominated by OFAG and acceptable to IDA. The audit will be carried out in accordance with
the International Standards of Auditing issued by the International Federation of Accountants. The
auditor will prepare a work plan to ensure adequate coverage of both entities (MoF&MUDCo) and
cover all the major risk areas. Once the audit report is issued, the audit report findings should be
rectified within a maximum of two months’ time from the receipt of the audit report. In accordance
with the Bank’s policies, the Bank requires that the Borrower disclose the audited financial statements
in a manner acceptable to the Bank; following the Bank’s formal receipt of these statements from the
Borrower, the Bank makes them available to the public in accordance with the World Bank Policy on
Access to Information.

9.3. FM roles and responsibilities

9.3.1. Federal Level

The MUDCo will be responsible for the overall coordination and implementation of the Operation.
MoF will be responsible for accounting for the funds under the PforR. For the IPF Window, MUDCo
will be responsible for payments to third parties and for accounting for the funds used through IBEX.
MUDCo will have the responsibility to prepare the budget of the Operation and to have it proclaimed
in consultation with MoF. MUDCo will also be responsible to have the VFM audit conducted with
close collaboration of OFAG or assigned auditor and MoF.
The MoF will be responsible for the overall financial management aspect of the Operation,
UIIDP.MoF will open US$ special accounts at the National Bank of Ethiopia for receipt of

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disbursements from the World Bank and AFD. In addition, it will open Birr accounts into which funds
from the World Bank and AFD special accounts will be converted and deposited. MoF will transfer
funds to the MUDCo and BoFEC bank accounts based on approved budget. MoF collects reports
from the beneficiaries and consolidate and report on the use of funds to donors, government and other
stakeholders. MoF shall ensure that adequate internal controls are put in place and that the controls are
adhered to consistently. The internal control system will ensure that all transactions are recorded on
IBEX. MoF will collect and aggregate all financial data and financial information from the MUDCo
and regions including the UIIDP disbursement. MoF will also be responsible for financial audit of the
operation.
9.3.2. Regional Level
The BoFEDs will be responsible for ensuring that a suitable accounting system is in place covering
both regional and ULGs level. The BoFEDs will collect and aggregate all financial data and
information from the Regional BUDs and ULGs on the application (expenditure) of disbursements
received. The BoFEDs will review the effective use of accounting procedures by the ULGs and
provide technical support and assistance to ULGs financial personnel to help them to develop the
skills needed and competences to carry out their functions. Each BoFEC will prepare semi-annual
reports which will be sent to the MoF using the current IBEX.
The Regional UIIDP implementing agencies that receive UIIDP funds will open and operate separate
bank accounts for the UIIDP as required.
BoFEDs will open accounts and transfer the funds to the Regional UIIDP implementing agencies
(BUDs, ORAGs, REPAs and RRBs) and ULGs – to the bank accounts designated by the
agencies/ULGs finance offices - based on approved UIIDP budget.

9.3.3. ULG Level

Each ULG will open a UIIDP bank account, which will be operated by joint signatures of officials
authorized by the ULG’s Council.
An accounting system is established for the UIIDP, as described in this section of the UIIDP POM for
the disbursement of funds for activities financed by the UIIDP. The records of funds utilized will be
maintained in accordance with sound accounting practices, and which are capable of generating
accurate and timely information for verification. ULGs accounting personnel will be trained to
maintain accurate accounts for the funds utilized. This will take place before or during the first 6
months of the UIIDP implementation. If the ULGs face difficulties in accounting or handling financial
records, the BoFEC will provide timely assistance and training to help and solve such difficulties.

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SECTION 10: ENVIRONMENTAL AND SOCIAL MANAGEMENT,
HEALTH & SAFETY

10.1. Policy, Legal, Institutional& Operational Framework

An Environment and Social Systems Assessment (ESSA) has been carried out to review the
systems and procedures followed by federal, regional and ULGlevels of government to address
social and environmental issues related to the UIIDP. The ESSA provides an assessment and a
summary of the key environment and social risks associated with the program and existing institutions
and system of the GoE to manage and mitigate associated risks and ensure effective and successful
implementation of the Program.

Infrastructure works to be financed under the UIIDP will be similar to those being financed
under the ULGDP II. These include roads, street lights, sanitation services, solid waste management,
urban drainage, and public parks and greenery. The infrastructure investments are likely to deliver
significant social benefits, provided that they are planned in an inclusive manner, and are designed to
ensure a distribution of benefits to vulnerable groups including the elderly, youth, women, and the
poorest. However, in some cases there may be risks related to the physical or economic displacement
of people, which will require careful planning and timely implementation of Resettlement Action
Plans (RAPs). The potential environmental risks are likely to be limited in scale and site specific.
Potential adverse impacts during construction include air pollution from dust and exhaust; nuisances
such as noise, traffic interruptions, and blocking of access paths; water and soil pollution from the
accidental spillage of fuels or other materials, solid and liquid wastes from construction sites, and
occupational health and safety issues.

The ESSA shows that Ethiopia has an adequate legal framework, including environment and
social regulations, which are basically in line with PforR financing core principles. Under the
ULGDP II guidelines on environment and social management system and resettlement management
have been put into place. Safeguard specialists have been assigned to strengthen the system.
Moreover, annual environmental and social audits have been conducted. Many of the ULGs
participating in the ULGDP II have made significant improvements in integrating the environmental
and social management system requirements into their development planning and creating the basic
capacity to implement them, as shown by the screening carried for all CIP sub-projects and the
opening of permanent positions for safeguard specialists within the infrastructure offices. These
achievements represent the growing institutionalization and strengthening of the environmental and
social management systems within the ULGs.

The experience of the ULGDP II shows mixed implementation of the Environmental and Social
Management Guideline (ESMSG) and the Resettlement System Guideline (RSG). While some of
the ULGs are able to use the prepared safeguards instruments properly, others are not. There are also
staffing (for instance social experts) and training gaps in some ULGs. The capacity of some of the
ULGs that will newly participate in the UIIDP is low, with some ULGs having no system at all.

The design of the UIIDP addresses environmental and social challenges and gaps. Key action
areas have been identified to strengthen environmental and social management capacity and
performance at all levels of government. They are: (a) establishing and strengthening the
environmental and social management system at ULG level; (b) providing technical guidance and
capacity building; (c) addressing resource constraints; (d) undertaking performance review and audit
each year; (e) increasing community awareness on social and environmental impacts of UIIDP sub-
projects; and (f) strengthening consultation and stakeholders’ collaboration. In addition, MCs ensure
that participating ULGs have some capacity in place at the start of the Program. PMs provide

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incentives for ULGs to perform better over time. Further, a series of actions are included in the PAP
in Section 23to improve the proposed program environmental and social management and to
strengthen country systems. Finally, to maximize gains and minimize risks, the investment menu
excludes World Bank environmental assessment category A projects from the Program.

The ULGs will follow the existing laws of the country on environmental and social management. In
addition, MUDCo has developed and issued to all regions which in turn have issued to all ULGs the
following Guidelines which are to be adopted and used by ULGs on the UIIDP: -

 Environmental and Social Management Systems Guidelines – See standalone Annex of this
POM.
 Resettlement Systems Guidelines – See standalone Annexof this POM.

10.2. Environmental and Social Management System& Resettlement System

All UIIDP investment projects require environmental and social screening as per the Environmental
and Social Management Systems Guidelines, following the same procedures as were put in place for
the ULGDP II.

1. Defining an environmental and social management system – as described in the ESMSG

& RSG - at city level. The UIIDP approach will be adopted as a ULG system by GoE. Under
the UIIDP, as a minimum condition, ULGs must demonstrate that they have established this
as a functional system for environmental and social management that outlines specific roles
and responsibilities for environmental and social risk screening, due diligence and regulatory
requirements, consultation and coordination with other local and regional agencies, technical
tools for implementation and monitoring, a staffing and capacity building plan, and the like.
After the first year, ULGs will be required to demonstrate that all projects are screened for
impacts and mitigation measures defined, and that all projects have environmental approvals
from the REPAs prior to initiating works. Taking as a starting point the UIIDP ESMSG &
RSG documents, additional procedures and guidelines to be taken into account include:
a) Technical guidance and capacity building. The MUDCohas compiled additional
sector specific guidelines for ULGs that integrate environmental and social requirements
for activities such as road construction, waste management, management of slaughter
houses, provision of water supply, and others areas.
b) Addressing resource constraints. Measures will be introduced to overcome constraints
with respect to human and financial resources, through the UIIDP incentive structure
(performance measures/targets), as well as capacity building and training.
c) Pre-requisite for environmentally and socially sensitive investments. Investments in
sanitary landfills could cause significant environmental and social concerns if not
planned, screened or managed properly. Experience from ULGDP II, which financed few
landfill sites in selected cities, indicates that a preventive approach in planning landfill
has significantly minimized the environmental and social risks. This preventive approach
follows the guideline and procedures for planning solid waste management, including for
final disposal of solid waste using scientifically designed landfills. The guideline include
requirements for identification of location which is away from habitation; has a geology
that causes least environmental harm to the ground water and soil of the area; requires
the landfill to have a high density polyethylene liner to prevent any leaching of polluting
overflow into ground water; requires leachate collection and treatment system; requires
monitoring of ground water and surface water during the operation of landfill. The
Ethiopian environmental regulations require an environmental and social impact
assessment to be undertaken for each site in consultation with the neighbouring
community, including appropriate review and clearance by the regional EPAs. In
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 addition to this, under UIIDP II, ULGs will demonstrate a sound and efficient system of
waste segregation, recycling, collection, transportation, and treatment before they
proceed with the investment to further minimize environmental and social risks for any
landfill, regardless of size. The screening procedures and implementation of
environmental management planning for each site and city will be verified through an
independent audit to be undertaken annually by the REPA, and an assessment done by
the APA before disbursement.
d) Evidence of implementation. See DLI 2.7 inthe APAG. The ULGs will be required to
generate evidence (for independent verification) that all capital projects in the previous
fiscal year were screened against the set of environment and social criteria in the
planning stage, including preparation and approval by REPAs of the environmental
management plans and resettlement action plans.
e) Institutional capacity and system. See DLI 1 in the APAG. Key positions, including
environment and social development specialists, will be in place at MUDCo, regional
governments, and ULGs. This will ensure that there is a mechanism and capacity to
screen environmental and social risks of the CIP projects prior to implementation. The
city level Environmental and Social Management System (ESMS) will include
procedures for due diligence; institutional procedures for complaints and environmental
management, managing resettlement/land-take processes and environmental social
mitigation and monitoring plan.
f) Complaints handling (or grievance redress system). See Section 18. A ULG
complaints handling Mediation Committee will be in place, with members who represent
the interest of potentially affected people. The committee will receive, review, and
address complaints related to environmental degradation, environmental health impacts
on people, and loss of livelihood, income, or assets.
g) Resettlement Action Plans. Any resettlement i.e. physical and economic displacement
of persons, identified in environmental and social screening will require a full
Resettlement Action Plan (RAP). The UIIDP does not allow the use of Abbreviated
RAPs.
h) Category A projects: Each city’s capital investment plan (CIP) will exclude all
activities that are category “A” type of activities, as part of a well-defined investment
menu under ULG responsibility to maximize gains and minimize the risks. A proposed
project is classified as Category A if, as a result of the initial environmental and social
screening, it is likely to have significant adverse environmental impacts that are
sensitive, diverse, or unprecedented. These impacts may affect an area broader than the
sites or facilities subject to physical works. Environmental Impact Assessment for a
Category A project examines the project's potential negative and positive environmental
impacts, compares them with those of feasible alternatives (including the 'without
project' situation), and recommends any measures needed to prevent, minimize, mitigate,
or compensate for adverse impacts and improve environmental performance.

10.3. Environmental, Occupational and Community Health & Safety

EnvironmentalHealth and Safety

Noise and Vibration

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During construction and decommissioning activities, noise and vibration may be caused by
the operation of pile drivers, earth moving and excavation equipment, concrete mixers, cranes
and the transportation of equipment, materials and people. Some recommended noise
reduction and control strategies to consider in areas close to community areas include:
 Planning activities in consultation with local communities so that activities with the
greatest potential to generate noise are planned during periods of the day that will
result in least disturbance
 Using noise control devices, such as temporary noise barriers and deflectors for
impact and blasting activities, and exhaust muffling devices for combustion engines.
 Avoiding or minimizing project transportation through community areas.

Soil Erosion

Soil erosion may be caused by exposure of soil surfaces to rain and wind during site clearing,
earth moving, and excavation activities. The mobilization and transport of soil particles may,
in turn, result in sedimentation of surface drainage networks, which may result in impacts to
the quality of natural water systems and ultimately the biological systems that use these
waters.Recommended soil erosion and water system management approaches include:

 Sediment mobilization and transport will reduce or preventing erosion by:

 Scheduling to avoid heavy rainfall periods (i.e., during the dry season) to the
extent practical.
 Contouring and minimizing length and steepness of slopes
 Mulching to stabilize exposed areas
 Re-vegetating areas promptly
 Designing channels and ditches for post-construction flows
 Lining steep channel and slopes (e.g. use jute matting)
 Reducing or preventing off-site sediment transport through use of settlement ponds,
silt fences, and water treatment, and modifying or suspending activities during
extreme rainfall and high winds to the extent practical.
 Providing effective short-term measures for slope stabilization, sediment control and
subsidence control until long term measures for the operational phase can be
implemented
 Providing adequate drainage systems to minimize and control infiltration

Air Quality

Construction and decommissioning activities may generate emission of fugitive dust caused
by a combination of on-site excavation and movement of earth materials, contact of
construction machinery with bare soil, and exposure of bare soil and soil piles to wind. A
secondary source of emissions may include exhaust from diesel engines of earth moving
equipment, as well as from open burning of solid waste on-site. Techniques to consider for
the reduction and control of air emissions from construction and decommissioning sites
include:
 Minimizing dust from material handling sources, such as conveyors and bins, by
using covers and/or control equipment (water suppression, bag house, or cyclone)
 Minimizing dust from open area sources, including storage piles, by using control
measures such as installing enclosures and covers, and increasing the MoTIsture
content
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  Dust suppression techniques should be implemented, such as applying water or non-
toxic chemicals to minimize dust from vehicle movements.

Solid Waste

Non-hazardous solid waste generated at construction and decommissioning sites includes

excess fill materials from grading and excavation activities, scrap wood and metals, and small
concrete spills. Other non-hazardous solid wastes include office, kitchen, and dormitory
wastes when these types of operations are part of construction project activities. Hazardous
solid waste includes contaminated soils, which could potentially be encountered on-site due
to previous land use activities, or small amounts of machinery maintenance materials, such as
oily rags,used oil filters, and used oil, as well as spill clean up materials fromoil and fuel
spills. Techniques for preventing and controlling nonhazardousand hazardous construction
site solid waste includethose already discussed in Section 1.6.
 Establishing waste management priorities at the outset of activities based on an
understanding of potential Environmental, Health, and Safety (EHS) risks and impacts
and considering waste generation and its consequences.
 Establish and enforce daily site clean-up procedures, including maintenance of
adequate disposal facilities for construction debris.
 Establishing a waste management hierarchy that considers prevention, reduction,
reuse, recovery, recycling, removal and finally disposal of wastes.

Hazardous Materials

Construction and decommissioning activities may pose the potential for release of petroleum-
based products, such as lubricants, hydraulic fluids, or fuels during their storage, transfer, or
use in equipment. These materials may also be encountered during decommissioning
activities in building components or industrial process equipment. Techniques for prevention,
minimization, and control of these impacts include:
 Providing adequate secondary containment for fuel storage tanks and for the
temporary storage of other fluids such as lubricating oils and hydraulic fluids,
 Using impervious surfaces for refuelling areas and other fluid transfer areas
 Training workers on the correct transfer and handling of fuels and chemicals and the
response to spills
 Providing portable spill containment and clean-up equipment on site and training in
the equipment deployment
 Assessing the contents of hazardous materials and petroleum-based products in
building systems (e.g. PCB containing electrical equipment, asbestos-containing
building materials) and process equipment and removing them prior to initiation of
decommissioning activities and managing their treatment and disposal.
 Assessing the presence of hazardous substances in or on building materials (e.g.,
asbestos containing flooring or insulation) and decontaminating or properly managing
contaminated building materials.

Wastewater Discharges

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Construction and decommissioning activities may include the generation of sanitary
wastewater discharges in varying quantities depending on the number of workers involved.
Adequate portable or permanent sanitation facilities serving all workers should be provided at
all construction sites.
Discharge process of wastewater, sanitary wastewater, wastewater from utility operations or
storm water to surface water should not result in contaminant concentrations in excess of
local ambient water quality criteria or, other sources of ambient water quality.
Receiving water use and assimilative capacity, taking other sources of discharges to the
receiving water into consideration, should also influence the acceptable pollution loadings
and effluent discharge quality.

 Process wastewater treatment standards consistent with applicable operational Sector

EHS Guidelines. Projects for which there are no operational-specific guidelines
should reference the effluent quality guidelines of sector with suitably analogous
processes and effluents;
 Compliance with national or local standards for sanitary wastewater discharges
 Temperature of wastewater prior to discharge does not result in an increase greater
than 3°C of ambient temperature at the edge of a scientifically established mixing
zone which takes into account ambient water quality, receiving water use and
assimilative capacity among other considerations.

Contaminated Land

Land contamination may be encountered in sites under construction or decommissioning due

to known or unknown historical releases of hazardous materials or oil or due to the presence
of abandoned infrastructure formerly used to store orhandles these materials, including
underground storage tanks.
Actions necessary to manage the risk from contaminated land will depend on factors such as
the level and location of contamination, the type and risks of the contaminated media, and the
intended land use. However, a basic management strategy should include:
 Managing contaminated media with the objective of protecting the safety and health
of occupants of the site, the surrounding community, and the environment post
construction or post decommissioning
 Understanding the historical use of the land with regard to the potential presence of
hazardous materials or oil prior to initiation of construction or decommissioning
activities
 Preparing plans and procedures to respond to the discovery of contaminated media to
minimize or reduce the risk to health, safety, and the environment consistent with the
approach for Contaminated Land.
 Preparation of a management plan to manage obsolete, abandoned, hazardous
materials or oil consistent with the approach to hazardous waste management
described in
 Successful implementation of any management strategy may require identification
and cooperation with whoever is responsible and liable for the contamination.

Occupational Health and Safety

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Physical Hazards

Physical hazards represent potential for accident or injury or illness due to repetitive exposure
to mechanical action or work activity. Single exposure to physical hazards may result in a
wide range of injuries, from minor and medical aid only, to disabling, catastrophic, and/or
fatal. Multiple exposures over prolonged periods can result in disabling injuries of
comparable significance and consequence.
Therefore,Employers and supervisors are obliged to implement all reasonable precautions to
protect the health and safety of workers. This section provides guidance for reasonable
precautions to implement in managing principal risks to occupational health and safety.
Although the focus is placed on the operational phase of projects, much of the guidance also
applies to construction and decommissioning activities. Companies should hire contractors
that have the technical capability to manage the occupational health and safety issues of their
employees, extending the application of the hazard management activities through formal
procurement agreements.
The application of prevention and control measures to occupational hazards should be based
on comprehensive job safety or job hazard analyses. The results of these analysesshould be
prioritized as part of an action plan based on thelikelihood and severity of the consequence of
exposure to theidentified hazards. Among Occupational Health and Safetywhich create risk
of physical hazards are:-
 Slips and falls on the same elevation associated with poor housekeeping, such as
excessive waste debris, loose construction materials, liquid spills, and uncontrolled
use of electrical cords and ropes on the ground, are also among the most frequent
cause of lost time accidents at construction and decommissioning sites.
 Work in Heights:-Falls from elevation associated with working with ladders,
scaffolding, and partially built or demolished structures are among the most common
cause of fatal or permanent disabling injury at construction or decommissioning sites.
If fall hazards exist, a fall protection plan should be in place which includes one or
more of the following aspects, depending on the nature of the fall hazard:
 Struck by Objects:-Construction and demolition activities may pose significant
hazards related to the potential fall of materials or tools, as well as ejection of solid
particles from abrasive or other types of power tools which can result in injury to the
head, eyes, and extremities. Techniques for the prevention and control of these
hazards include:
Preventive and protective measures should be introduced according to the following order of
priority:
 Minimizing the hazard through design of safe work systems and administrative or
institutional control measures. Examples include job rotation, training safe work
procedures, workplace monitoring, limiting exposure or work duration, etc.
 Providing appropriate Personal protective equipment (PPE) refers to protective
clothing, helmets, goggles, or other garment or equipment designed to protect the
wearer's body from injury by blunt impacts, electrical hazards, heat, chemicals, and
infection, for job-related occupational health and safety purposes.
 Health and Safety Warning Signs: Safety Signs and Signals are one of the main
means of communicating health and safety information. This includes the use of
illuminated signs, hand and acoustic signals (e.g. fire alarms), spoken communication
and the marking of pipe work containing dangerous substances.
 Safety Policy: Site managers should have a written safety policy for their enterprise
setting out the safety and health standards which it is their objective to achieve. The
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 manager should assign the senior executive who is responsible for seeing that the
standards are achieved, and who has authority to allocate responsibilities to
management and supervisors at all levels and to see they are carried out.
 First aid Kits and Accident Reporting: Construction sites are dangerous places, and
first aid and rescue equipment should always be available. What is needed depends on
the size of the site and the numbers employed, but there should be a blanket and a
stretcher.

Chemical Hazards

Chemical hazards in construction, operations, and maintenance activities may be principally

associated with exposures to dust during construction and paving activities; exhaust
emissions from heavy equipment and motor vehicles during all construction and maintenance
activities.Potentialchemical hazardous generate during construction is painting of the wall,
paint removal, and diesel fuel used as a release and cleaning agent for paving equipment.
Chemical hazards represent potential for illness or injury due to single acute exposure or
chronic repetitive exposure to toxic, corrosive, sensitizing or oxidative substances. They also
represent a risk of uncontrolled reaction, including the risk of fire and explosion, if
incompatible chemicals are inadvertently mixed. Chemical hazards can most effectively be
prevented through a hierarchical approach that includes:
 Replacement of the hazardous substance with a less hazardous substitute
 Implementation of engineering and administrative control measures to avoid or
minimize the release of hazardous substances into the work environment keeping the
level of exposure below national established or recognized limits
 Communicating chemical hazards to workers through labelling and marking
according to national and internationally recognized requirements and standards. Any
means of written communication should be in an easily understood language and be
readily available to exposed workers and first-aid personnel.

Biological Hazards
Biological agents represent potential for illness or injury due to single acute exposure or
chronic repetitive exposure. Biological hazards can be prevented most effectively by
implementing the following measures:
 If the nature of the activity permits, use of any harmful biological agents should be
avoided and replaced with an agent that, under normal conditions of use, is not
dangerous or less dangerous to workers. If use of harmful agents cannot be avoided,
precautions should be taken to keep the risk of exposure as low as possible and
maintained below national established and recognized exposure limits.
 Work processes, engineering, and administrative controls should be designed,
maintained, and operated to avoid or minimize release of biological agents into the
working environment. The number of employees exposed or likely to become
exposed should be kept at a minimum.
 The employer should review and assess known and suspected presence of biological
agents at the place of work and implement appropriate safety measures, monitoring,
training, and training verification programs.
 Measures to eliminate and control hazards from known and suspected biological
agents at the place of work should be designed, implemented and maintained in close

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 co-operation with the local health authorities and according to recognized
international standards.

Personal Protective Equipment (PPE)

Personal Protective Equipment (PPE) provides additional protection to workers exposed to

workplace hazards in conjunction with other facility controls and safety systems. PPE is
considered to be a last resort that is above and beyond the other facility controls and provides
the worker with an extra level of personal protection. Recommended measures for use of PPE
in the workplace include:
 Active use of PPE if alternative technologies, work plans or procedures cannot
eliminate, or sufficiently reduce, a hazard or exposure
 Identification and provision of appropriate PPE that offers adequate protection to the
worker, co-workers, and occasional visitors, without incurring unnecessary
inconvenience to the individual
 Proper maintenance of PPE, including cleaning when dirty and replacement when
damaged or worn out. Proper use of PPE should be part of the recurrent training
programs for employees.
 Selection of PPE should be based on the hazard and risk ranking described and
selectin accordance to criteria on performance and testing established by recognized
organizations.

Community Health and Safety

This section complements the guidance provided in the preceding occupational health and
safety sections, specifically addressing some aspects of project activities taking place outside
of the traditional project boundaries, but nonetheless related to the project operations, as may
be applicable on a project basis. These issues may arise at any stage of a project life cycle and
can have an impact beyond the life of the project.

Water Quality and Availability

Water Quality: -Drinking water sources, whether public or private, should at all times be
protected so that they meet or exceed applicable national acceptability standards. Air
emissions, wastewater effluents, oil and hazardous materials, and wastes should be managed
according to the guidance provided in the respective General EHS Guidelines with the
objective of protecting soil and water resources.
Projects deliver water to the community or to users of facility infrastructure (such as
hotel,household and hospital and others), water used for drinking, cooking, washing, and
bathing, water quality should comply with national acceptability standards. Water quality is
more sensitive well-being-related demands such as water used in health care facilities or food
production may require more stringent.

Water Availability: -The potential effect of groundwater or surface water concept for project
activities should be properly assessed through a combination of field testing and modelling

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techniques, accounting for seasonal variability and projected changes in demand in the
project area.
Project activities should not compromise the availability of water for personal hygiene needs
and should take account of potential future increases in demand. The overall target should be
the availability of 100 liters per person per day although lower levels may be used to meet
basic health requirements. Water volume requirements for well-being-related demands such
as water use in health care facilities may need to be higher.

Structural Safety of Project and Infrastructure

Hazards posed to the public while accessing project facilities may includePhysical
disturbance associated with failure of building structures, Burns and smoke inhalation from
fires, Injuries suffered as a consequence of falls or contact with heavy equipment, Respiratory
distress from dust, fumes, or noxious odours and Exposure to hazardous materials.
Reduction of potential hazards is best accomplished during the design phase when the
structural design, layout and site modifications can be adapted more easily. The following
issues should be considered and incorporated as appropriate into the planning, sitting, and
design phases of a project:
 Inclusion of buffer strips or other methods of physical separation around project sites
to protect the public from major hazards associated with hazardous materials incidents
or process failure, as well as nuisance issues related to noise, odours, or other
emissions
 Incorporation of sitting and safety engineering criteria to prevent failures due to
natural risks posed by earthquakes, tsunamis, wind, flooding, landslides and fire. To
this end, all project structures should be designed in accordance with engineering and
design criteria mandated by site-specific risks, including but not limited to seismic
activity, slope stability, wind loading, and other dynamic loads.
 Application of locally regulated or national recognized building codes to ensure
structures are designed and constructed in accordance with sound architectural and
engineering practice, including aspects of fire prevention and response
 Engineers and architects responsible for designing and constructing facilities,
building, plants and other structures should certify the applicability and
appropriateness of the structural criteria employed.

Life and Fire Safety

All new buildings accessible to the public should be designed, constructed, and operated in
full compliance with local building codes, local fire department regulations, local
legal/insurancerequirements, and in accordance with an internationally acceptedlife and fire
safety (L&FS) standard. The Life Safety Code, whichprovides extensive documentation on
life and fire safetyprovisions, is one example of an internationally accepted standardand may
be used to document compliance with the Life and FireSafety objectives outlined in these
guidelines. With regard tothese objectives:
 Project sponsors’ architects and professional consulting engineers should demonstrate
that affected buildings meet these life and fire safety objectives.
 Life and fire safety systems and equipment should be designed and installed using
appropriate prescriptive standards and/or performance based design, and sound
engineering practices.
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  Life and fire safety design criteria for all existing buildings should incorporate all
local building codes and fire department regulations.

Traffic Safety

Traffic accidents have become one of the most significant causes of injuries and fatalities
among members of the public nation and worldwide. Traffic safety should be promoted by all
project personnel during displacement to and from the workplace, and during operation of
project equipment on private or public construction. Prevention and control of traffic related
injuries and fatalities should include the adoption of safety measures that are protective of
project workers and of community, including those who are most vulnerable to road traffic
accidents.
Construction activities may result in a significant increase in movement of heavy vehicles for
the transport of construction materials and equipment increasing the risk of traffic-related
accidents and injuries to workers and local communities. The incidence of road accidents
involving project vehicles during construction should be minimized through a combination of
education and awareness-raising.

Adoption of best transport safety practices across all aspects of project operations with the
goal of preventing traffic accidents and minimizing injuries suffered by project personnel and
the public. Measures should include:
 Emphasizing safety aspects among drivers
 Improving driving skills and requiring licensing of drivers
 Adopting limits for trip duration and arranging driver rosters to avoid
overtiredness.
 Avoiding dangerous routes and times of day to reduce the risk of accidents
 Use of speed control devices (governors) on trucks, and remote monitoring of
driver actions
 Minimizing pedestrian interaction with construction vehicles.
 Regular maintenance of vehicles and use of manufacturer approved parts to
minimize potentially serious accidents caused by equipment malfunction or
premature failure. Where the project may contribute to a significant increase in
traffic along existing roads, or where road transport is a significant component
of a project, recommended measures include.
 Collaboration with local communities and responsible authorities to improve
signage, visibility and overall safety of roads, particularly along stretches
located near schools or other locations where children may be present.
Collaborating with local communities on education about traffic and
pedestrian safety (e.g. school education campaigns)
 Coordination with emergency responders to ensure that appropriate first aid is
provided in the event of accidents
 Using locally sourced materials, whenever possible, to minimize transport
distances. Locating associated facilities such as worker camps close to project
sites and arranging worker bus transport to minimizing external traffic.

Communicable Disease Prevention

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Communicable diseases pose a significant public health threat to the local communities.
Health hazards typically associated with large development projects are those relating to poor
sanitation and living conditions, sexual transmission and vector-borne infections.
Communicable diseases of most concern during the construction phase due to labor mobility
are sexually-transmitted diseases (STDs), such as HIV/AIDS. Recognizing that no single
measure is likely to be effective in the long term, successful initiatives typically involve a
combination of behavioural and environmental modifications.Recommended interventions at
the project level include:Providing surveillance and active screening and treatment of
workers and preventing illness among workers in local communities by:
 Undertaking health awareness and education initiatives, for example, by
implementing an information strategy to reinforce person-to-person counseling
addressing systemic factors that can influence individual behavior as well as
promoting individual protection, and protecting others from infection, by encouraging
condom use.
 Training health workers in disease treatment
 Conducting immunization programs for workers in local communities to improve
health and guard against infection and providing health services.
 Providing treatment through standard case management in on-site or community
health care facilities. Ensuring ready access to medical treatment, confidentiality and
appropriate care, particularly with respect to migrant workers.
 Promoting collaboration with local authorities to enhance access of workers families
and the community to public health services and promote immunization.

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SECTION 11: ACCOUNTABILITY AND TRANSPARENCY IN CITY
OPERATIONS & SERVICE DELIVERY

11.1. Policy, Legal, Institutional& Operational Framework

The Ministry of Urban Development &Construction has issued the following seven (7) service
delivery standards which in turn have been issued by the regions and adopted by their respective
ULGs.
1. Solid Waste Management
2. Land Management
3. Building Permits
4. Communal and Public Toilets
5. Abattoir
6. Fire Prevention
7. Municipal Cemetery
The first three which have been fully implemented by the ULGs and for which the Ministry/regions
have provided adequate training to all cities are the subject of the Annual Performance Assessments
under UIIDP. Cities will therefore keep adequate records on how services are being delivered
according to the standards and will produce quarterly, semi-annual and annual reports.
In addition, to cities being accountable to their citizens for service delivery, they are also expected to
demonstrate the same accountability and transparency in regard to the cities’ other operations.
Accordingly, cities are therefore expected at a minimum to disseminate to the public (in city offices &
other public places or web-pages, newspapers) information on annual budgets, approved projects,
expenditures (both capital and recurrent), audited accounts and procurement decisions. All the above
will be assessed during the APAs.
The ULGs will also produce a quarterly, semi-annual and annual reports on UIIDP which should be
submitted timely to the region as per the UIIDP M & E Guidelines. The timeliness of report
submission by the cities to the regions will also be subject to assessment during the APAs.

11.2. Procedures, Outputs &Responsibilities

S/ Procedures/Actions Outputs Responsibility

N
1 Preparation, updating of Service Delivery Approved service MUDCo UGCBB
Standards and issuing to regions delivery standards & Dept. of Municipal
Official Letter to Standardization
regions
2 Issuing of Service Delivery Standards and Approved service Regions, BUDHo
issuing to ULGs delivery standards &
Official Letter to
ULGs
3 Adoption of Service Delivery Standards Adopted service ULG City Council
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 and issuing to ULGs delivery standards
&Official Letter to
ULGs
4 Implementation of Service Delivery Implementation ULG
Standards Report
5 Prepare and submit quarterly, semi-annual quarterly, semi-annual ULGs
and annual reports on UIIDP and annual reports on Regions
UIIDP MUDCo

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SECTION 12: URBAN PLANNING

12.1. Policy, Legal, Institutional & Operational Framework

The urban planning system in Ethiopia is regulated by the Urban Planning Proclamation No. 574/2008
published in the Federal Negarita Gazeta on 16th May 2008.
The proclamation applies to all urban centres in Ethiopia and its principal objectives are (a) to
establish a legal framework in order to promote planned and well developed urban centres; and (b) to
regulate and facilitate development activities in urban centres and thereby enhance economic
development of the country.
Some of the major provisions of the proclamation that are of particular relevance to UIIDP are in
regard to the initiation and preparation of urban plans It establishes the following hierarchy of plans:-
1. national urban development scheme; 2. Regional urban development plan 3. Urban plans. There are
two types of urban plans which are recognized by the proclamation and these are 1. City wide
structure plan; and 2. Local development plan.

Various studies have been undergoing since the enactment of the proclamation to redevelop the urban
development strategy which includes the revision of the existing proclamation and implementation
tools that includes manuals and standards. The strategy frames the urban planning context in
hierarchical manner.

Figure 13. Hierarchy of Urban Plans

National Urban
Development
Spatial Plan

Regional Urban
Development
Spatial Plan

Structure Plan Basic Plan

Local Local
Development Development
Plan Plan

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National Urban Development Scheme and Regional Urban Development Plan
As per the proclamation, the Ministry has prepared and approved a national urban development
scheme called the National Urban Development Spatial Plan (NUDSP) which is currently under
implementation and provides the framework for the development of urban systems in Ethiopia for the
next 30 to 35 years.
Most regions already had regional urban development plans and are now in the process of revising or
updating them as per the NUDSP.
Structure Plan
A structure plan is a legally binding plan along with its explanatory texts formulated and drawn at the
level of an entire urban boundary that sets out the basic requirements regarding physical development
the fulfilment of which could produce a coherent urban development in social, economic and spatial
spheres.
The validity period of a structure plan is 10 years from the date of approval of the plan. There is no
provision for extension of the plan in the proclamation.
The following are the major contents of a structure plan :- magnitude and direction of growth of the
urban centre; principal land use classes; housing development; layout and organization of the major
physical and social infrastructure; urban redevelopment intervention areas; environmental aspects;
industry zone and implementation scheme (institutional setup, resource and legal framework.
All the major urban centres have structure plans in place although a few have expired or are about to
expire. Necessary actions are being taken to prepare new structure plans for those cities that have
expired ones or ones about to expire.
Local Development Plan
A local development plan is a legally bindingplan depicting medium term, phased and integrated
urban upgrading, renewal and expansion activities of an urban area with the view to facilitating the
implementation of the structure plan by focusing on strategic areas. It prescribes the functions,
development objective, implementation strategies, role of implementing bodies, required institutions,
local economic dynamism, urban design principles, concrete standards, spatial framework, budget and
time of the implementation of a structure plan. It states the zoning of use type, building height and
density; local streets and layout of basic infrastructure; organization of transport system; housing
typology and neighbourhood organization; urban renewal, upgrading and reallocation intervention
areas; green areas, open spaces, water bodies, and places that might be utilized for common benefits
and any other relevant planning issues.
A local development plan shall be implemented within the validity period of the structure plan.
The powers and responsibilities for implementation of the local development plan are with city. The
city should therefore have clear strategy, regulations, directives and organised executive organs to
support its implementation.
Implementation Manuals

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The Ministry has in the past prepared the following manuals for implementation of the proclamation: -
a) Urban Upgrading Manual (b) Urban Renewal Manual (c) Structure Planning Manual (d) Local
Development Planning Manual (e) Urban Transport Planning Manual (f) Local Economy
Development Planning Manual. However, all these manuals were not officially approved by the
regions and ULGs. Hence the use of the manuals by regions and ULGs was not mandatory.
Currently, a number of manuals are prepared as implementation tools of the proposed new
proclamation. These manuals in particular include (1)revised Structure Plan Manual,
(2)Neighbourhood Planning NHP Manual,(3) Basic Plan Manual, (4) Sketch Plan Manual, (5) Plan
Preparation Follow up Manual, (6) Street Design Standard.

UIIDP Assessment
The UIIDP Annual Performance Assessment will evaluate all ULGs in regard to the existence of a
citywide plan45 approved by the City Council. The assessors will check whether the plan is still valid
and has not expired. It is therefore very important that cities start the preparation of a new structure
plan well before the expiry of an existing one to ensure that a valid one is in place at the time of
expiry of the old plan. The city’s Capital Investment Plan (CIP) should also be in accordance with the
citywide plan and this is one of the areas that will be evaluated by the APA.

12.2. Procedures, Outputs &Responsibilities

S/ Procedures/Actions Outputs Responsibility

N
1 Preparation, updating and implementation Approved National MUDCoUrban
of National Urban Development Scheme Urban Development Planning Bureau, Mini
Scheme or Spatial Cabinet & Council of
Plan Ministers
Implementation
reports
2 Preparation, updating and implementation Approved Regional Regions, Regional
of Regional Urban Development Plans Urban Development Urban Planning
Plans Institute/Bureau,
Implementation Regional Cabinet &
Reports Council
3 Preparation and implementation of Approved Structure City Planning office,
Structure Plans Plan Mayor’s Cabinet &
Implementation City Council
reports
4 Preparation and implementation of Local Approved Regional City Planning office,
Urban Development Plans Urban Development Mayor’s Cabinet &
Plans City Council
Strategies,
regulations,
directives,
implementation
reports

45
The terminology of “citywide plan” will cover structure plan and basic plan for some cities which do not
prepare structure plan but because of their size/capacity prepare basic plan instead.

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SECTION 13: LAND DEVELOPMENT,
MANAGEMENT&INVENTORY SYSTEM

13.1. Policy, Legal& InstitutionalFramework

Proclamation of the Constitution of the Federal Democratic Republic of Ethiopia No. 1/1995 clearly
stated regarding Right to Property in Article 40 of No. 3. The statement says, “The right to ownership
of rural and urban land, as well as of all natural resources, is exclusively vested in the State and in the
peoples of Ethiopia. Land is a common property of the Nations, Nationalities and Peoples of Ethiopia
and shall not be subject to sale or to other means of exchange”.

The Federal Democratic Republic of Ethiopia has already designed and planned the Second Growth
and Transformation Plan (GTP II) starting from 2015/16. Based on this, the Ministry of Urban
Development and Construction (MUDCo) is by now implementing the Government of Ethiopia’s
Second Growth and Transformation Plan (GTP II). To achieve its goal stated in GTP II, the Ministry
has issued different law enforcements for different thematic areas and one part from those is urban
land development and management.

Moreover, the Ministry has enacted other legal frameworks like Urban Land Lease Proclamation No.
721/2011 supported by Model Regulation and Directive. The Proclamation applies to all urban centres
with in Ethiopia with regard to urban land and encompasses the following fundamental principles of
lease:
 The right to use of urban land by lease shall be permitted in order to realize the common
interest and development of the people;
 The offer of lease tender and land delivery system shall adhere to the principles of
transparency and accountability and thereby preventing corrupt practices and abuses to ensure
impartiality in the process;
 Tender shall reflect the prevailing transaction value of land;
 The urban land delivery system shall give priority to the interests of the public and urban
centres to ensure rapid urban development and equitable benefits of citizens and thereby
ensure the sustainabilityof the country's development.

Respective Regional Governments have also issued their own Regulation and Directive following the
Federal Land Lease Proclamation model regulation and directive based on their context. All Regional

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Government law enforcements regarding the subject matter are issued within the umbrella of Federal
Laws.

In this connection, the critical provisions of the proclamation that are of special significance to UIIDP
are stated in Article eight in particular of providing basic infrastructure facilities i.e. Road, Water and
Electricity as well as usable land inventory system linked to spatial data base in different land use
categories i.e. residence, commerce, administration, industry, social services and the like at parcel
level which covers the boundary of the city.

13.2. Implementation Manuals

The Ministry has prepared the following manuals, guidelines and standards so far for implementation
of the proclamation:-
1. Lease Administration Operational Manual;
2. Lease Benchmark Price Preparation and Revision Guideline;
3. Land Administration Service Delivery Standards;
4. Land development and Banking Manual;
5. Urban Renewal Manual;
6. Industry Zone Manual;
7. Urban Land Inventory Operational Manual, 2005E.C;
8. Urban Boundary Demarcation and Land Inventory Model Regulation, 2004E.C;

UIIDP Assessment
The UIIDP Annual Performance Assessment will evaluate all ULGs in regard to the land released for
different uses are as per the laws of land management and have access to basic infrastructure facilities
i.e. Road, Water and Electricity. It is therefore very important that cities should obey and fully
implement the Federal and Regional Land Lease Proclamation, regulation, directive, manuals, and the
like to satisfy the needs of their residents and score the maximum point stated in the APA guideline.
In addition to this, existence of up to date, usable urban land inventory of different land use categories
which is linked to a spatial database supported by GIS at parcel level is also one of the areas that will
be evaluated by the APA. In this regard, cities should conduct detail land inventory activities either by
own force (if resources are mobilized) or commission well experienced private and public enterprises.
This is a very critical issue of the land management scenario.
Important Note: As per recent discussion between the ULGDP II Urban Land Administration
Specialist and Bureau Head of Urban Land development and Management, the existing Federal
Land Lease Proclamation No. 721/2011is under revision and which is now at an advanced stage.
The draft Federal Land Lease Proclamation has been discussed with different stakeholders at
large with delegates of respective residents of city administrations across the country, at the
Council Of Ministers and passed to the pertinent standing committee of the House of
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Representatives. The enactment is expected within three months’ time (it depends on
situations). In this regard, a number of manuals, guidelines and strategies will be expected to be
endorsed by the mini cabinet of MUDCo that are prepared in line with the new approved
proclamation.

13.3. Institutional set up

13.3.1. Urban Land Lease

Within the Ministry of Urban Development and Construction, there is a Bureau called Urban Land
Development and Management. The Bureau has been divided or structured into three Directorates.
Based on this, for the sector of urban land lease:

1. At Federal level
 Land Provision, Marketing and Tenure Administration Directorate is in place;
2. At Regional level
 Land Development and Management Bureau/Agency and Core Processes. The naming
differs from Region to Region. However, an expert is in place or assigned to follow-up
the activities of urban land lease by rendering support, capacity building, and the like to
respective ULGs within the Region;;
3. At ULG levels
 Similar to their respective regional level naming, here also an expert is in place to
undertake urban land lease activities.
Current status
The Federal Land Lease Proclamation No. 721/2011 shall be applicable to all urban centres within
Ethiopia with regard to urban land. In this regard, the proclamation is applicable within the ULGDP II
participating cities too. The law says city administration should release lands for different purposes
through land lease each quarter furnished by basic infrastructure utilities. Because of different
reasons, all cities across the country do not implement this rule fully. Most city administrations
release lands in two rounds maximum three rounds per year with unfulfilled infrastructure utilities in
particular of electricity which is beyond the capacity of cities and Regions as well. Apart from this, in
general, cities across the country by now transfer lands to different beneficiaries only through lease
system.

13.3.1 Servicing of Urban Land

Current status
The Federal Land Lease Proclamation No. 721/2011 shall be applicable to all urban centres within
Ethiopia with regard to urban land. In this regard, the proclamation is applicable within the UIIDP
participating cities too. The law says city administration should release lands for different purposes
through land lease each quarter furnished by basic infrastructure utilities. Because of different
reasons, all cities across the country do not implement this rule fully. Most city administrations
release lands in two rounds maximum three rounds per year with unfulfilled infrastructure utilities in

P a g e 125 | 326
particular of electricity which is beyond the capacity of cities and Regions as well. This is a big
challenge to be considered by the Ministry and needs immediate discussion with different
stakeholders.
Servicing of released lands
1. At Federal level
 Urban Land Development and Renewal Directorate is in place;
2. At Regional level
 Land Development and Management Bureau/Agency and Core Processes. The naming
differs from Region to Region. However, an expert is in place or assigned to follow-up
the activities of servicing of land by rendering support, capacity building, and the like
to respective ULGs with in the Region; ;
3. At ULG levels
 Similar to their respective regional level naming, here also an expert is in place to
undertake servicing of lands in collaboration with other stakeholders in the city;
13.3.2 Urban Land Inventory

Current status
Irrespective of the capacity of cities, all ULGDP II participating cities have been preparing urban land
inventory by own force as well as commissioned private consultants. Beside to this, some Regions
like Oromia have established Micro and Small Enterprises (MSE) made up of graduates from
different universities to conduct urban land inventory based on GIS. This is an excellent experience
for all ULGDP II participating cities. In general, across the country, even though the start regarding
the issue is good, still the result is not as required. In this connection, the Ministry has to give a
direction to Regional Governments to conduct detailed land inventory as mandatory as their duty.

Urban land inventory

1. At Federal level
 Urban Land Information Administration and Arrangement Directorate is in place;
2. At Regional level
 Land Development and Management Bureau/Agency and Core Processes. The naming
differs from Region to Region. However, an expert is in place or assigned to follow-up
the activities of urban land inventory by rendering support, capacity building, and the
like to respective ULGs with in the Region;
3. At ULG levels
 Similar to their respective regional level naming, here also an expert is in place to
undertake land inventory activities;

13.4. Procedures, Outputs & Responsibilities

S/ Procedures/Actions Outputs Responsibility

N
1. Revision, Preparation, updating and Approved Land Lease MUDCo Urban Land
implementation of Land Lease Proclamation, Model Development and
Proclamation, Model Regulation and Regulation and Management Bureau,
Directive and issuing to Regions Directive Documents Mini Cabinet &
as well as Official Council of Ministers
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 Letter to Regions
2. Revision, Preparation, updating and Approved Manuals, MUDCo Urban Land
implementation of Federal Manuals, Guidelines, Strategies Development and
Guidelines, Strategies and issuing to Documents as well as Management Bureau,
Regions Official Letter to Mini Cabinet &
Regions Council of Ministers
3. Preparation, adoption and follow up the Approved real MUDCo Urban Land
implementation of national standards of property & Land Related
real properties data base and issuing to Proclamation, Model Property Registry &
Regions Regulation and Information Agency,
Directive, Manuals, Mini Cabinet &
Guidelines, Strategies Council of Ministers
Documents as well as
Official Letter to
Regions
4. Revision, preparation, updating and Approved Regional Regions, Regional
implementation of Regional Land Lease Land Lease Urban Development
Regulation and Directive and issuing to Regulation and Bureau/Agency,
City Administrations Directive Documents Regional Cabinet &
as well as Official Council
Letter to City
Administrations
5. Revision, preparation, updating and Approved Regional Regions, Regional
implementation of Regional Manuals, Manuals, Guidelines, Urban Development
Guidelines, Strategies and issuing Federal Strategies Documents Bureau/Agency,
and Regional Manuals, Guidelines, as well as Official Regional Cabinet &
Strategies to City Administrations Letter to City Council
Administrations
6. Preparation, implementation and Furnished basic City land management
supervision of urban lands for tender infrastructure core processes,
facilities, site plans, Mayor’s Cabinet &
parcelled with unique City Council
code, reports
7. Preparation, conducting and supervision of Spatially linked GIS City land management
detail urban land inventory based land inventory, core processes,
reports Mayor’s Cabinet &
City Council

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SECTION 14: LOCAL ECONOMIC DEVELOPMENT

14.1. Background

Legislatively,cities are mandated to lead and coordinate LED activities, including creating conducive
conditions for industrial development, effective land management, increasing attractiveness of the city
for dwellers and investors, coordinating with other government organs for the provision of
infrastructure (for example, electricity and water), and facilitating job creation through MSE
development
A Rapid LED Analysis carried out by the World Bank and Government team revealed three
key challenges and constraints. These are: (a) infrastructure challenges hinder firm success and
public private dialogue is not sufficiently informing capital investment plans; (b) low survival and
graduation rates among supported MSEs; and (c) low levels of capacity among city administration
staff and offices. Lack of access to land and electricity are also major binding constraints, delaying
new investments but are more within the remit of the federal government.

While firms appreciated investments in MSE shades and clusters, serviced land for industry
zones, and the like, many of them reported a problem with lack of proper access roads to their
sites. This substantially raises their costs for getting inputs and transporting goods to market. Firms
also mentioned that strategic infrastructure investments could promote the development of high
potential sectors.
Lack of access to land and electricity are also major issues delaying new investment. Electric
power shortages were also reported as a severe impediment to industrializations in all cities. These
issues, however, need Federal level action, urban land policy reform and increasing electricity
provision capacity.

City administrations should use public private dialogue to identify such key infrastructure
bottlenecks as well as the potential to unlock economic opportunities
Private sector representatives consulted recommended that this dialogue should be institutionalized
and held on a quarterly basis. This should include a wide variety of private sector representatives,
including Chambers of commerce, MSEs and women traders’ associations, professional associations,
and the like. This type of dialogue could also open the door to public private partnerships.

A common issue that tends to be raised by MSE offices is the low survival and graduation rates
of supported MSEs and their dependency on government support. Studies on the GoE’s MSE
program have pointed out that this might be the case because the support is more akin to social
welfare, where youth are grouped together and often provided with a business idea by the
Government staff, rather than supporting true entrepreneurs to establish and succeed 46. Given that
MSE support is a core responsibility for all city administrations, UIIDP should build their capacity to
improve this support. In particular, cities should be encouraged to identify at least a proportion of
firms to be supported through open business plan competitions for entrepreneurs to present their own
ideas. The MSE office could then work with a local university or micro-finance institution to assess
these ideas for viability. The other challenge is the lack of strategic direction, ad hoc nature and
46
E.g. Gebre Egziahber, T. and M. Ayenew (2010). Micro and Small Enterprises as Vehicles for Poverty Reduction,
Employment Creation and Business Development: The Ethiopian Experience. FSS Research Report No. 6.
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variation of MSE policies across regions. The policies and strategies lack comprehensiveness and
harmonization in terms of clear registration, incentive mechanisms, monitoring and follow up, and
graduation procedures. The ad hoc incentive mechanisms and reservation schemes prepared to
respond to short-term needs may have serious impacts on other non-MSE actors and reduce
competitiveness.

Weak backward linkages to access quality raw materials and forward linkages to buyers and
markets were mentioned as a key binding constraint by MSEs in all cities consulted. MSE
offices do try to foster some of these linkages but lack capacity to do so beyond government
contracting. For example, MSEs involved in cobblestone production were able to grow and succeed as
a result of being given preference in government construction contracts. The capacity of MSE offices
could be further strengthened to encourage MSEs to aggregate (into voluntary associations for
example) that could engage in bulk input purchase and bulk marketing, among other services.
Assistance will be provided to prepare harmonized and comprehensive registration, incentive
mechanisms, monitoringand follow up, and graduation procedures for MSEs.

There are low levels of capacity among city administration staff and offices.Given that all cities,
outside of Emerging Regions, undertake investment promotion, they should also be trained in
promotion tools as well as in how to undertake aftMoRre services for investors.

14.2. Policy, Legal, Institutional and Operational Framework

LED is carried out within the framework of the regional proclamations, local laws, regulations,
directives.
The Ministry has also produced for UIIDP a Guideline on Local Economic Development (See Annex
… which is manual developed by MUDCo from two manuals/guidelines developed under ULGDP I
in 2014by SUDCA Development Consultants47and Safege Consulting Engineers in association with
Dar Al Omran48as part of the technical assistance to new cities joining ULGDP II . The UIIDP
guideline incorporates new concepts, requirements and procedures specific to UIIDP which were not
in the previous two manuals

14.3. Definition of Local Economic Development

Local Economic Development (LED) is the process by which public, business and non-governmental
sector partners work collectively to create better conditions for economic growth and employment
generation.(World Bank)

According to GTZ (2004),LED is a territorial concept and part of local development or regional
management, specifically aiming to stimulate the local economy to grow, compete and create more
jobs, in particular by making better use of locally available resources.

It is a participatory process in which local peoplefrom all sectorswork together to stimulate local
development, resulting in a resilient and sustainable economy.

Local Economic Development (LED) has emerged as an innovative approach to the challenges of
overcoming territorial marginalization. It provides a non-traditional, inter-disciplinary mix of
interpretations and approaches which can shed new light on how to overcome multiple interrelated

Training Manual on Local Economic Development,SUDCA Development Consultants, April 2014

47

Operations Guide for Local Economic Development for Urban Local Governments, Safege Consulting
48

Engineers in association with Dar Al Omran, November 2014

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obstacles, such as low skills levels, lack of entrepreneurial culture, inappropriate or weak support
mechanisms, disabling regulatory environments or a lack of access to financial and business
development services.

The crafting of Local economic development strategies, by considering the regional and national
policy framework, while sticking to a comprehensive and specific situation of a locality is very
important as basic guide line of action and as a tool to focus on what a locality needs to improve.

The Foundation of LED is the unique condition of a locality. Each community has a unique set of
local conditions that either enhance or reduce the potential for local economic development. The
conditions determine the relative and comparative advantage of an area in its ability to harness the
potential in a way that provides for job creation, enterprise promotion and, attraction and retention of
investment.Thus, a locality’s economic, social and physical attributes will guide the design of, and
approach to, the implementation of a local economic development strategy.
14.4. Who does LED?

The government- as mover and shaker plays pivotal and leading role in creating an enabling
environment for business development and success through myriad of intervention like:
 Increased public investment on infrastructures,
Barriers to entry are long
 Investing in “soft infrastructure” in Human resource and bureaucratic process to get
skills development license, credit, accreditation
of products and services,
 Reduce barriers to entry for local enterprises inefficient service delivery,
irresponsiveness of support
E The private sector plays important role in creating jobs, staff.
transferring technologies, and discharging corporate social
responsibilities.

E The community and civil society are important actors in

facilitating participation, identifying main needs of the disadvantaged groups in the community,
engaging in resource mobilization.

14.5. LED Process

This section will only be implemented on pilot basis in two cities that have potential, then there will
be a gradual roll out to the regional capital cities first, before any further roll out beyond that to the 44
cities. All the cities are at this stage not expected to develop local economic development strategies
using the process stated in this section and instead should focus on the initiatives stated in the other
sections of this POM/ LED Guideline which are central to the design of the UIIDP.
As part of the TA for capacity building and their assigned task of reviewing/revising the LED
Guideline, the three consulting firms that have been engaged by MUDCo in March 2018 are each
expected to apply this section to a carefully selected one or two pilot cities that have potential. These
cities will be selected by the Consultants based on a set of criteria developed by the firms and agreed
with MUDCo.
The LED Guideline provides more details on the steps and procedures to be followed in the LED
process.

P a g e 130 | 326
Figure 14. Steps in the LED Process

Step 2. Situation
Step 1. Stakeholder Step 3. Factor
Assessment of the
Analysis Analysis
City

Step 4. Identifying Step 6. Developing

Broad Strategic
Step 5. Crafting an an LED
Options for LED LED Strategy Implementation
Strategy

Step 7. LED
Monitoring &
Evaluation

14.6. Procedures for conducting public private dialogue that informs CIP preparation

Two of the four key challenges and constraints identified during the rapid assessment are that :
(a) infrastructure challenges hinder firm success and public private dialogue is not sufficiently
informing capital investment plans; and (b) lack of access to land and electricity are also major
binding constraints, delaying new investments but are more within the remit of the federal
government.
The steps to be followed by cities in conducting public private dialogueare as follows: -
Step 1: Prepare list of public and private stakeholders that will participate in the dialogue

The ULG LED focal person in consultation with the City Manager ad City mayor compiles a list of all
the private sector organizations, local chamber of commerce, key local private sector businesses,
MSEs, foreign and domestic investors from industrial parks (if any), relevant city and regional
government institutions/offices and utilities (electricity, water, telephone) representatives.
The ULG LED focal person in consultation with the above organizations compiles contact details of
all nominated representatives of these organizations that are proposed to attend the public private
dialogue as per the table format below.
Example
CONTACT DETAILS FOR PARTICIPANTS IN PUBLIC PRIVATE DIALOGUE

P a g e 131 | 326
 S/N Organisation Name of Designation Email Address Telephone
Name representative Numbers

Step 2: Prepare Schedule of meetings to be held during the financial year

The ULG LED focal person prepares the schedule of meetings to be held during the financial year.
The suggested cycle of meetings could be as follows: -
August: The main agenda items will be to inform the representatives of the final approved CIP and
city annual budget and get their reaction. To agree on a plan of action for the major LED activities to
be done during the financial year. Any other business
November: To review the quarterly performance of the CIP and city annual budget and the
achievement of plan of action for LED activities in regard to those activities that were planned for the
preceding quarter
February: Representatives to present/review and suggest improvements to the regulations and
processes that hinder existing businesses, new entrants and potential investors. To present constraints
and economic potentials that could inform the next year CIP and annual city budget. To provide
inputs into the next year CIP and city annual budget whose planning cycle starts in February each
year.To review the quarterly performance of the current year CIP and city budget and the achievement
of plan of action for LED activities in regard to those activities that were planned for the preceding
quarter.
May: To get feedback on the projects and items that are likely to be incorporated in the next year CIP
and city budget whose planning cycle starts in February each year.To review the quarterly
performance of the current year CIP and city budget and the achievement of plan of action for LED
activities in regard to those activities that were planned for the preceding quarter.
Note: In addition to the scheduled meetings, ad hoc meetings, if absolutely necessary and critical, will
be held at the suggestion of either the public or private sector representatives to deal with important
and urgent issues that cannot wait until the scheduled meetings.
Example
SCHEDULE OF MEETINGS ON PUBLIC PRIVATE DIALOGUE FOR EFY 2011 (2018/19)
Month July August Sept October Nov Dec Jan Feb (etc)
Week 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Public
private
dialogue
meeting

Meeting Date Meeting Date Meeting Date Meeting Date

No. No. No. No.
Public private dialogue 1 21/8/18 2 23/11/18 3 20/2/19 4 19/5/19
meeting

P a g e 132 | 326
Step 3: Prepare the Agenda for each public private dialogue meeting

The ULG LED focal person in consultation with the City Manager and City Mayor prepares the draft
Meeting Agenda for the public private dialogue and distributes it to the meeting representatives for
their review and addition of any other agenda items within 7 calendar days. This should be done at
least three weeks before the scheduled meeting.
Based on the response, the ULG LED focal person will finalize the Agenda and circulate it to all
meeting representatives at least two weeks before the meeting.

Step 4: Conduct of the meeting

(a) The meeting will be held at a venue determined by the Chairman as per the Agenda.
(b) The meeting shall be chaired by the City Mayor.
(c) Decisions of the meetingand agreed actions shall be agreed, to the extent possible, by
consensus of all representatives present at the meeting. In the event of consensus not being
reached, the matter shall be put to the vote and shall be decided by simple majority or show of
hands. In the event of a hung vote on any matter, the Chair’s vote shall carry
(d) In the event that representatives are not present at a meeting at which a decision is to be made,
they may send in advance of the meeting, their views on any matter on the agenda, and their
vote should it come to a vote, to the meeting by letter, fax or email, which shall be received
by and read out to the meeting by the Secretary..
(e) In the event that a representative does not receive adequate notice of a meeting and/or
Minutes of the previous meeting, the matter shall be raised at the next meeting so that the
matter can be rectified.
(f) The meeting may establish such other committees, task forces and working groups as are
required to facilitate its work or follow up on issues raised at the meeting.
(g) The ULG LED focal person shall be the Secretary of the meeting and shall be responsible for
keeping the minutes of all meetings in accordance with generally accepted standard of
minutes.The minutes shall include all the decisions and agreed actions of the meeting.
The draft minutes shall be circulated immediately to all representatives after the meeting and
corrections sought, from those present at the meeting in question and these may be
incorporated into the revised draft minutes. The revised draft minutes shall be presented at the
next scheduled or ad hoc meeting of the representatives where they will be formally
corrected, adopted and signed.The Secretary will be responsible for ensuring that the Agenda
of the meeting and the signed minutes are properly secured and stored.

14.7. Procedure for conducting open business plan competition for MSEs

Studies on the GoE’s MSE program have pointed out that there are low graduation rates and high
dependency on Government support because the support is more akin to social welfare, where
unemployed youth are grouped together and often assigned a business idea by the Government staff,
rather than supporting motivated, growth-oriented entrepreneurs to establish and succeed. Given that
MSE support is a core responsibility for all city administrations, UIIDP should build their capacity
and remodel the approach of MSE support. ULGs should be encouraged to identify at least a
P a g e 133 | 326
proportion of autonomously formed firms to be supported through open business plan competitions
for entrepreneurs to present their own ideas. The MSE office could then work with a local university
or micro-finance institution to assess these ideas for viability.
Steps for Conducting Open Business Plan Competition
Step 1. Prepare requirements and format of the business plan
(a) Prepare business plan requirements and format.
(b) Prepare evaluation criteria and point system to be used in the evaluation of business plans
(c) Prepare MOU on support (MSE setting up, working premises, financing/loan or training)to be
provided by MSE office or OSS and obligations of the winners
Step 2. Advertisement
(a) Prepare Request for Business Plan Advertisement Notice (to include evaluation criteria) as
per format in Annex …
(b) Advertise the Request for Business Plan Notice in local and regional newspapers with wide
circulation and on the usual town notice boards
Step 3. Preparation and submission of business plans
(a) Arrange for public opening of the business plans
(b) Prepare attendance register and minutes of opening of business plans
Step 4. Evaluation of business plans and announcement of winners
(a) Appoint a Business Plan Evaluation Committee consisting of the head of the MSE office,
LED focal person, representative from local university, representative of micro finance
institution in the town, representative of local chamber of commerce (if available) or MSE
Association or other local private sector organization
(b) Evaluation Committee evaluates the business plans and submits recommendations through the
City Manager to City Mayor for approval
(c) Announce the winners of the business plan competition by official letter to the winning
firms/MSEs and on the usual town notice boards
(d) Send letters to the unsuccessful firms/MSEs
Step 5. Sign MOUs on support by MSE office or OSC and obligations of the winners
(a) The City Mayor and the winning firms/MSEs sign MOUs which provides for obligations of
the firms/MSEs in implementation of the business plans and of the city on the support to be
provided to the firms/MSEs.
Step 6. Implementation and Support
(a) Winning firms/MSEs implement the business plan
(b) City provides the support as stated in the MOUs
Step 7. Monitoring & Evaluation by MSE office or OSC
The city (MSE office or OSS) establishes a monitoring and evaluation system to record and monitor
the following
(a) Selection process including evidence of advertisement of public call for submission of
business plans
(b) Establishment of businesses
(c) Provision of support by the city and MSE office/OSS as per the MOUs

P a g e 134 | 326
 (d) Performance of businesses compared to the business plan performance indicators
(e) Employment generation statistics
(f) Income generation statistics

14.8. Capacity Building Program & Requirements for a Functional MSE One Stop
Centre

14.8.1. The situation analysis revealed that there are low levels of capacity among city
administration staff and offices. While city administrations had a lot of LED mandates, the
relevant staff and offices lack the capacities to execute them effectively. Some firms even
indicated that they felt they had higher capacities and knowledge than the officials in the MSE office
meant to support them. Respondents also highlighted the broader issues of low public-sector salaries
as well as wage inequalities across different departments, which is demoralizing staff. Given that all
cities, outside of Emerging Regions, undertake investment promotion, they should also be trained in
promotion tools as well as in how to undertake aftMoRre services for investors.
14.8.2. Harmonization of MSE policies:One of the challenges identified in the situation analysis was
the lack of strategic direction, ad hoc nature and variation of MSE policies across regions. The
policies and strategies lack comprehensiveness and harmonization in terms of clear registration,
incentive mechanisms, monitoring and follow up, and graduation procedures. The ad hoc incentive
mechanisms and reservation schemes prepared to respond to short-term needs may have serious
impacts on other non-MSE actors and reduce competitiveness.The MUDCo is planning to obtain
technical assistance for the study and development of harmonized MSE policies on registration,
incentive mechanisms, monitoring and follow up and graduation procedures. Once the study is
completed, these harmonized policies and procedures will be incorporated in this Guideline.
14.8.3. Areas of support to be provided by ULGs/MSE office/OSC
 Provision of information
 Preparation of business plans
 Provision of serviced land with good proximity to customer base
o Land should be serviced with access road, water and electricity
o Land should be where applicable be close to the customers of the potential firm/MSE
 Provision of business premises/MSE shades/market centres
 Provision of regulatory services, business and tax registration, licensing (one stop,
streamlined with procedure and documents clearly spelt out on notice board outside and
inside the centre)
 Facilitate aggregation or clustering of MSEs/firms where applicable and advantageous to the
MSEs/firms. Clustering approach should give emphasis to the development of existing
natural clusters as well as to new start up clusters consisting of MSE cooperatives or
individual private firms. The development of MSE clustering, in addition to promoting the
growth of individual firms, needs to aim at the sustainable development of the whole cluster
through overcoming weaknesses associated with small size; attaining economies of scale the
purchase of inputs; facilitate sharing of functions such as training, market intelligence,
logistics etc.; overcoming hindrances for internal division of labour; and presenting
possibilities of innovative improvements to products and processes. 49 Clustering could be
one of the strategies to overcome the identified low survival rates of MSEs and their failure
to graduate to the next levels.
 Provision of market integration between operators that have backward and forward linkages

49
Ethiopia Ministry of Works and Urban Development, Improving the operations of urban Micro and Small
Enterprises (MSEs), One Stop Services and for Clustering of MSEs, Final Main Report, ABD-Consult, March
2009,
P a g e 135 | 326
  Facilitate access to finance by linking MSEs/firms with micro finance institutions (whose
representatives are in some cases housed at the centre and by providing reference letters.
This also include negotiating with MFIs in improving the terms of terms and conditions of
the loans related to collaterals, loan period, interest rate etc. 50
 Provision of technical, technology, managerial, marketing and business training.
 Facilitate investment forums and the attendance of MSEs/firms to such local and
international forums.
 Provision of training on preparation of business plans and loan applications,
 Provision of extension/support services (market development, market promotion,
operational and administrative systems)
 Facilitate access to production machinery and improved technology
 Improving the investment climate (city wide infrastructure development; business friendly
strategies, actions and pronouncements)
14.8.4. Requirements for Fully Functional MSE OSC
As per the definition and performance indicator in the Annual Performance Assessment Guideline
(APAG) a fully functional MSE OSC is one that: -
(a) caters for 15,000 individuals or maximum of 500 MSEs;
(b) has at least 5 key positions filled from the following as stated in the OSC Service Provision
Standard 2017: -
 OSC coordinator;
 Office Administrator/Secretary/Information Desk;
 Job Seekers Registration, Trade Registration, Trade License, and TIN preparation Expert;
 Saving and Loan Facilitation Officer;
 Accounts and Audit Officer;
 Production and Sells Site Facilitation, Training Industry Extension and Market Linkage Expert;
 Graduation/Transfer facilitation expert
(c) is equipped with equipment and furniture;
(d) provides fundamental training to staffs, at least 2 areas in the OSC Service Provision Standard
2017;
(e) documents consultation notes as an evidence of operationality.
14.8.5. Capacity Building Program for MSE Office & One Stop Centre
(a) Staffing
(i) Appointment of UIIDP Federal LED Specialist, Regional LED Specialist and ULG LED
Focal persons by not later than May 31, 2017 as per the TORs in the UIIDP POM.
(ii) Develop/Confirm the organizational structure and TORs for staff of the MSE office and MSE
One Stop Centre in each of the 117 cities.
(iii) Appointment of staff of the MSE office and One Stop Centrein each of the 117 cities.
(b) Office facilities, equipment and materials
(i) Confirmation/provision of proper and adequate offices
(ii) Provision of equipment and furniture (generator, computers, computer software and
applications, printers, photocopiers, binding machines, desks and chairs, filing cabinets, book
shelfs, notice boards
(iii) Provision of materials, documentation, stationery
(iv) Provision of telephone/fax facilities, internet connection, website

(c) Capacity building plan for MSE office & One Stop Centre
50
Ibid p. 64
P a g e 136 | 326
(i) Carry out annual capacity self-assessment as per the procedure and format provided in the
Capacity Building Manual. This will be done by each ULG LED Focal Person and the ULG
Capacity Building Focal Person in the 117 cities assisted by the Regional LED Specialist, the
LED Specialist from the TA Consultants and the Regional Capacity Building Specialist. The
Federal LED Specialist and Federal Capacity Building specialist will provide general
guidance and support to the regions in this process.
(ii) Prepare draft LED Annual Capacity Building Plan covering the requirements for the ULG,
MSE office& OSC. This will be prepared as per the CBP format in the CB Manual covering
the four capacity building modalities. The LED Capacity Building Plan will feed into or be
incorporated into the Overall ULG Annual Capacity Building Plan.

14.9. LED Monitoring & Evaluation

The Performance Indicators in Results Framework are as follows:

PDO Level Results Indicator

 Composite performance for achievement of LED targets by ULGs, averaged across all cities.

Intermediate Result Area 3: Local Economic Development

 People employed51 in firms provided with serviced land and in MSE sheds under UIIDP, of which female.
 ULGs for which citizen fora (public consultations between government, residents and the private sector including
plan and budget consultations) have been held at least twice a year, with at least 50 percent women participation

The APAG also has a number of performance indicators on Local Economic Development which will
be assessed by the APA Consultant.

The UIIDP Monitoring, Evaluation and Reporting System & Guidelines for the three levels (federal,
regional and ULG) captures all the above performance indicators and provides more details on how
the above will be monitored, evaluated and reported on quarterly, semi-annual and annual basis
through the M & E progress reports. The ULG LED focal persons in each of the 117 cities
participating in the UIIDP will be responsible for compiling the above information and providing it to
the M & E focal person at city level then the information once captured will flow through the system
to the other two levels (regional and federal)
In addition, the TORs for LED specialists and focal person at federal level, regional level and at the
ULG incorporate the performance indicators to be achieved under the UIIDP and the responsibilities
of persons at these three levels for their achievement including monitoring and evaluation aspects.

14.10. One Stop Centre Establishment and Operation

The FUJSCA at the federal level and RUJSCA at regional have the responsibility for providing
support to cities in establishing and equipping one stop centers that support MSE operations.
The LED ULG Focal Person has responsibility in his/her TOR for leading this effort at city level. The
UIIDP LED Guideline specifies the requirements for a functional one stop center and the support that
it should provide.
In addition, the LED Specialist at the federal level, as part of his/her TOR and in conjunction with
FUJSCA, will prepare an overall capacity building program for MSE offices and MSE one stop

51
Including employees and business owners, excluding people employed by companies constructing the facilities.
P a g e 137 | 326
centres to equip them with the necessary facilities, equipment, materials and technical competence to
support MSEs. As mentioned above, they will also work with the Regional LED Specialist to assist
each city to develop an annual CBP covering the requirements for the ULG, MSE office& OSC.

14.11. Major Actions, Outputs &Responsibilities for LED

Output Action Responsible body Instrument

Improved public - Institute quarterly dialogue with private sector reps
private dialogue to to inform CIPs. ULGs, Mayors
inform CIPs.
- Target growth-oriented entrepreneurs and conduct
selection through open business plan competition.
PforR
- Aggregate MSEs into cooperatives to enable bulk
Improved impact of
marketing and input supply. ULGs, MSE offices
MSE support.
- Facilitate access to MFI loans through the
provision of reference letters, expedited provision
of work premise, and expedited business licensing.
Understand impacts - Commission survey-based impact assessment at IPF
of job creation and midterm and end of program to capture its wider
other LED impacts on cities compared to control group.
MUDCo
interventions under - Systematically track the survival of city-supported
the UIIDP. MSEs to gain better understanding of successes
and challenges of current system.
- Commission technical assistance and training to
increase capacity of federal, regional and ULG
Capacity building. staff on LED planning, investment promotion, MUDCo IPF
public private partnerships, private sector support
and tourism investments.

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SECTION 15: JOB CREATION

15.1. Background

Ethiopia’s GTP 2 has put a major emphasis on urban development and job creation, on the one hand,
and industrialization, on the other. Yet city administrations have to date not received sufficient
support and capacity development to enable them to put in place an environment that is conducive for
investment and job creation.

For the next stage of the program, the GoE has a higher level of ambition and the need for initiatives
that “transform urban centers to centers of innovation and local employment generation in the
country and to improve the socio- economic status of the citizens.” 52 This means a potentially more
expanded focus on sustainable job creation, beyond participation in public works, to better enable
cities to alleviate some of the bottlenecks facing private sector firms from establishing and growing.
There is also a need for better impact assessment of the program to capture its effects on wider
sustainable job creation as well as increasing incomes within targeted cities.

15.2. Policy, Legal, Institutional & Operational Framework

The national labours law (Labour Proclamation No. 377/2003 dated February 26, 2004 andnational
policies of the country and the regional proclamations/policies guide the job creation activities under
the program.
At the national level, the Federal Ministry of Labour and Social Affairs (MOLSA) is responsible for
administering the labour law and has also issued the following labour policies and strategies which
can be found on their website : http://www.molsa.gov.et/
National Employment Policy & Strategy of Ethiopia
National Social Protection Policy
National Social Protection Strategy
The Ministry of Urban Development &Construction has also prepared a Job Creation and
Measurement Guideline (to be prepared by Consultants after Financing Agreement is signed) to be
used by ULGs participating in the UIIDP.
The jobs to be planned and monitored under the UIIDP are those jobs: -
(a) directly created by construction projects under the CIP disaggregated into UIIDP and non-
UIIDP supported
(b) created by MSEs and individuals graduating from the CIP supported projects.
(c) Created by MSEs in general as reported by the MSE office in cities.

15.3. Definitions of Permanent & Temporary Job

Permanent Job: (to be inserted from the updated Job Creation Guideline)

52
Excerpt from the GoE’s request to the World Bank for additional financing.
P a g e 139 | 326
Temporary Job:(to be inserted from the updated Job Creation Guideline)

15.4. Preparation of a Job Creation Plan

(to be inserted from the updated Job Creation Guideline)

15.5. Job Measurement Methodologies & Procedures

1. Cobblestone Road Construction

(to be inserted from the updated Job Creation Guideline)

2. Other Construction projects
(to be inserted from the updated Job Creation Guideline)
3. MSEs
(to be inserted from the updated Job Creation Guideline)

P a g e 140 | 326
SECTION 16: GENDER EQUITY AND DEVELOPMENT

16.1. Background, Policy, Legal & Institutional Framework

1. Ethiopia has its own Constitution and its National Policy on Women (1993), which guarantee
women’s equality and the protection of women’s human rights. This has been enhanced by the Family
Law (revised 2000) and the Penal Code (revised 2005). The Ministry of Women and Children Affairs
(MoWCA) has led on provision of support to vulnerable women, children and youth and on gender
mainstreaming. While domestic laws and policies fundamentally supports for the advancement of
gender equality and empowerment, enforcement and implementation at different levels needs more
attention.
2. While urban women in Ethiopia enjoy some advantages over rural counterparts, a
range of gender inequalities remain in urban areas and hinder women’s development. These
include unequal access to urban infrastructure and basic services, decent works, financial services and
knowledge, financial and physical assets, and representation in formal structures of urban governance.
Women’s development and change package highlighted that further actions are required to enhance
women’s access to the services, at the same time, to ensure socioeconomic and political benefits. 53

3. In terms of urban development sector, Gender and Youth Mainstreaming Directorate is in

place under the MUDCo to ensure gender-responsiveness in urban policies, strategies,
programs and projects at federal level. The Directorate is composed of one director, two senior
experts and one junior expert, while at regional level, most regions have one designated focal person
for monitoring and managing ULGs 54. ULGs do not have urban specific gender focal person,
however, women and child office is in place to promote gender mainstreaming in general term. The
Directorate recently started gender audit for four of regional capitals and envisioned to expand the
scope across other cities, this will be reflected in gender support activities in UIIDP.

16.2. Key gender challenges and the role of UIIDP

1. The results of the assessment and the lessons learned from ULGDPII showed that ULGs
play a limited role in gender equality and empowerment with low levels of capacity.
Legislatively, cities are mandated to lead and coordinate gender mainstreaming activities including
equal access to urban infrastructure and social services, employment opportunities, financial services,
and participation in decision-making. In practice, the cities visited had three key challenges and
constraints that hinder gender mainstreaming in ULGs: (a) women’s voice and rights; (b) absence of
institutional gender mainstreaming system; and (c) lack of women’s economic empowerment.

(a) Women’s voice and rights

2. ULGDP II has made contributions to women’s participation in community decision-
making structures, which can be further strengthened to achieve more impact. In planning and
budgeting of capital projects, women representatives from women association at kebele level express
their needs and these are discussed during the participatory consultations. Disaggregated information
is available on the number of women and men engaged in annual plan and budget consultation
meetings. According to mid-term evaluation of ULGDPII, in 14 sample cities, there was an increase

53
Ministry of Women Affairs (2005) Ethiopian Women’s Development and Change Package. (English translated version).
54
Only Tigray and SSNPR have more than two gender focal persons in regional urban development bureau.
P a g e 141 | 326
in female participation in decision making process, from 44.9 percent in EFY2007 (1,653 out of 3,681
persons) to 47.1 percent in EFY2009 (3,250 out of 6,901 persons).

3. For the next stage of the program, UIIDP will raise the bar to 50 percent participation
of women in consultation meetings to enable women to actively engage in socio-economic and
political activities. Focus group interview and field visits found out that some women could not attend
the meetings or raise their voice due to cultural barriers, UIIDP will incentivize ULGs to have at least
two consultation meetings; (i) an initial consultation meeting separately organized for women and
men; and (ii) the meeting for final decision of investment with both women and men having more
than 50% women participation.

4. There is also a need for enforcing code of conduct in employment and sub-project
contract documents for women’s rights in workplace including gender-based violence, sexual
harassment, and equal payment for equal work. This will be guided through government policy
and Program Operation Manual (POM) and related training/workshop on women’s rights in
workplace will be provided by ULGs and contractors. At community level, attitude towards women’s
roles has been changing but still need more efforts. Some women indicated that they have limitations
on economic activities due to cultural reasons, pregnancy, as well as lack of childcare and training and
support from the government.

(b) Absence of an institutional gender mainstreaming system in ULGs

5. Low levels of capacity and gender awareness in ULGs are identified as challenges.
Staffing level of women public professionals in city municipal service administration is improving,
amounting to 37% in average of sampled 10 ULGs 55.However, leadership positions (e.g. head of
office and above) in the city administration requires more balanced approach, since the proportion of
women was only 27%. Lack of awareness of gender equality and women empowerment among ULG
officials need more attention. In general, ULG officials regard gender mainstreaming as works only
for the WCO, not having working knowledge of the issues. In terms of systematic training for
officials, there are meetings organized by WCO an irregular basis, and no regular trainings for the
officials.

6. ULGs need to institutionalize annual gender development planning and budgeting and
UIIDP will incentivize gender mainstreaming system. It is encouraging the women’s participation
is increasing in ULG decision-making process and officers in Women and Children Office (WCO)
participate in consultation meetings and monitor the progress quarterly. However, there are still
challenges in systematic planning, budgeting, monitoring and reporting on how WCO works with
other sector offices and regional bureaus. Some ULGs reported they do not have their own policy and
strategy to mainstream gender addressing their own circumstances. There are some attempts to align
works in different Offices to develop strategic gender plan and plan activities, however, it is rarely
done by system nor policy, but depending on personal leadership and capacity. Hardly gender action
plan and annual gender development plan and budget has been prepared at ULG level in an integrated
manner. Some ULGs have women empowerment activities (e.g. loans and training), and yet in
piecemeal approach, often without strategy, plans and adequate budget allocation due to ULG’s
budget and capacity constraints.

7. To address these challenges, UIIDP will take gender-sensitive approach and develop a
system to improve planning, budgeting, and monitoring. Through performance measures in annual
performance assessment, UIIDP will encourage and incentivize the ULGs that have annual gender

55
8-10 sector offices’ staffing level (municipal function) in Michew, Kemissie, Godey, Mojjo, Worabe, Injebara, Korem,
Hosanna, Mekelle, and Burayu.
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development plan and implement 80 percent of the budget presented in the plan. Templates for
planning, budgeting and progress report as well as manual will be included in POM and RMTs and
FMT will support ULGs. In terms of monitoring, collection of data, reporting and documenting will
be tracked through annual progress report. This progress report will track what has been implemented
and what the remaining gaps are.

8. UIIDP will ensure gender specialists in place at ULG, regions, and federal level and
develop training manuals to support awareness and capacity building for both city officers and
community members. It will incentivize ULGs that have at least one gender focal person in WCO,
and gender specialist will be included in each of RMT and FMT to support ULGs. Hiring a gender
expert at federal is also suggested to support Gender and Youth Mainstreaming Directorate on
building technical competencies. UIIDP will raise awareness of the issues through trainings for
government officials and community members to make them more sensitive to gender equality and
women empowerment. Concerning sustainability of gender mainstreaming, training manuals and
training for trainer will also be included in gender capacity building sub-component in IPF.

(c) Lack of women’s economic empowerment

9. Women are less likely to engage in the labor market, and receive adequate support for
own businesses. Female labor force participation rates in urban Ethiopia are 13 percentage points
lower than male participation rates, female youth unemployment is particularly high (25 percent
compared to 15 percent for men), and women are much more likely to be in informal employment
than men. In terms of MSEs, opportunities for women entrepreneurs in Ethiopia lag far behind those
of men. Microfinance Institutions (MFIs) primarily cater to micro-firms with group lending schemes
that provide very small loans and tend to have low outreach to women (30%). Growth-oriented
women-owned enterprises are therefore starved of the investment they need to thrive.

10. Given that the MSE support is a core responsibility for ULGs, in accordance with LED
analysis, UIIDP will incentivize support for women-headed MSEs and women labor force
through performance measures in annual performance assessment. Women’s participation in labor
intensive public works will be encouraged, incentivizing ULGs to hire over 40 percent female labor.
While temporary job itself is not sustainable, it is observed that the saving from the payment of works
became a seed money for starting MSEs or is used for skill training or higher education. Furthermore,
to close the gaps in support for female-headed MSEs, the Program will offer incentives to cities to
provide working premises/sheds and serviced land to those MSEs, empowering women’s economic
activities.
11. In addition to planning and budgeting, monitoring system needs more attention. While
data disaggregated by gender exists, monitoring and evaluation system is limited in terms of
reviewing the impacts of activities. Collection of data, reporting and documenting is limited and it is
hard to track what has been implemented and what the remaining gaps are. Monitoring furthermore
needs to shift focus to quality and depth, rather than on process and quantitative tracking alone.
12. The UIIDP will have sex-disaggregated indicators so that potential differential outcomes can
be tracked. The following table shows action and selected indicators in results framework linked to
intermediate outcomes and in performance measures in DLI 4.

M&E
Category Key challenges Actions
(Gender Indicators in RF/PM)
Institutional Lack of gender ULGs to have annual gender Number of ULGs that implement 80
capacity planning and development plan and percent of the budget presented in the
budgeting in ULGs. budget allocation and annual gender development plan
implement the plan.
Voice/ Ensure women’s ULGs to promote above 50 Number of ULGs for which citizen fora

P a g e 143 | 326
Participation participation in percent women participation
decision-making in citizen for a.
process.
Awareness Enhance awareness ULGs to promote awareness
building on gender issues. raising workshop/ training
on women’s right at
workplace
Economic Women’s equal ULGs to promote above 40
empowerment opportunity to percent women participation
employment in labor intensive sub-
projects
Lack of economic ULGs to support women-
empowerment for headed MSEs with working
women-headed premises, sheds and
MSEs. serviced land.
ULGs to support women-
headed MSEs to take
contracts of UIIDP sub-
projects
(public consultations between
government and residents, including
plan and budget consultations) have
been held at least twice a year, with
above 50 percent women participation
Number of workshop/training on
gender issues in workplace: gender-
based violence, sexual harassment, and
equal payment for equal work;
Of which female percentage (40
percent) in number of jobs created
through UIIDP labor intensive
infrastructure works.
% of women-headed MSEs supported
with working premises, sheds and
serviced land under UIIDP.
% of women-headed MSEs awarded
with contracts under UIIDP

16.3. Specific gender-mainstreaming aspects supported under UIIDP

The Gender Action Plan outlines a set of responses to address bottlenecks to gender
mainstreaming and implementation of UIIDP. The action plan builds on lessons from ULGDP II
and findings from the analysis. It identifies concrete strategies to ensure gender equality and women
empowerment in UIIDP ULGs and guides the gender mainstreaming system to better perform in
planning, M&E, reporting and management.

Table 17. UIIDP Gender Action Plan

UIIDP Gender Action Plan

Responsible
Program component Action Instrument
body
- Ensure gender specialist in place at ULGs (both P for R
MUDCo,
WCO and UIIDP focal group)
Staffing Regions,
- Ensure gender specialist in place at federal and
ULG
regional level (FMT and RMTs)
Awareness - Held quarterly meetings with focal persons, assigned WCYO and
Develop
building in each sector office ULG
an
- Strengthen annual gender development planning and
integrate Planning
budgeting template (annexed into POM) to better MUDCo
d gender and
capture gender activities across all sectors
mainstre budgeting
- Plan and budget annual gender development using WCYO and
aming
the template in POM ULG
system
- Develop Indicators and update regularly
- Monitor Implementation rate
WCYO and
M&E - Produce annual progress report
ULG
- FMT and RMTs to conduct supervision visits
regularly
Enhance women’s voice - Promote women’s participation in decision making WCYO and
and rights process, through strengthening of the performance ULG
measures

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 - Incentivize ULGs to provide awareness raising
program/ workshop/ training on gender issues (i) in
MUDCo and
workplace: gender-based violence, sexual
ULG
harassment, and equal payment for equal work; (ii)
gender equality and economic empowerment
 Enforcing code of conduct in employment and sub-
MUDCo,
project contract documents for gender based
WCYO and PAP
violence, sexual harassment, and equal payment for
ULG
equal work.
 Incentivize ULGs to support (i) women employment
in labor intensive public works and firms; (ii)
Promote women’s MSE offices
women-headed MSEs with working premises, sheds P for R
economic empowerment and ULGs
and serviced land; (iii) women-headed MSEs to take
the contract
 Hire gender specialist/consultant at Gender and
Staffing at Youth Mainstreaming Directorate to provide
Federal level technical support (including update of urban
development sector guideline)
TA for
gender
mainstreami
 Update gender mainstreaming guideline for urban
ng guideline
development
for urban
development
sector
Conduct gender audit for cities (expanded the scope
TA for
of cities, from the recent audits initiated and
gender audit
conducted by the Directorate)
Capacity
Training for - training in gender audit for gender specialist in MUDCo IPF
building
gender audit ULGs and regions
Training for
- Training for FMT and RMTs
gender
- Training for ULG officers, focal persons in different
equality and
sector offices
women
- Training for trainer (for officer trainings)
empowerme
- Training for trainer (for community members)
nt
- Gender mainstreaming
 Training materials/manual for officers in ULGs
Training
 Training materials/manual for community
material/ma
members
nual
- Gender audit
development
 Training materials/manual for officers in ULGs
and regions

16.4. Gender Analysis & Gender Audit

Gender analysis attempts to systematically identify issues that are contributing to gender inequality
and which may be contributing to poor development outcomes. Gender analysis examines gender and
social roles and relations from an interpersonal, household, community, local and national
perspective. It attempts to understand how gendered power relations contribute to discrimination,
subordination and exclusion through the study of public and private social roles adopted by men,
women, girls and boys. It also considers other social factors that may contribute to discrimination,
P a g e 145 | 326
such as age, ethnicity, class or caste, etc. In addressing Gender Analysis, the following questions are
basic requiring response.

 Who has access/power/control over resources: how, why and is it fair?

 Who has decision-making ability: how, why and is it fair?

 Who is benefitting: how, why and is it fair?

 Who is included: how, why and is it fair?

 Who is most vulnerable: How, why and is it fair?

Gender analysis shows how program effectiveness might be improved by:

 getting an in depth understanding of how gender influences adaptation and
mitigation outcomes,
 assessing the potential positive and negative impact of adaptation and mitigation
project/ interventions on women and men,
 understanding the capacity of institutions to address gender issues in
Development or in general
 revealing obstacles and constraints faced by women and men in accessing related
benefits and opportunities.
 Gender analysis should precede all activities including policy formulation. This is because;
gender analysis collects data that informs all other activities. It should therefore be applied at
the earliest possible stage of development of a policy, programme or project. The tools to do
this are provided in the Gender Development Manual which is a standalone Annex of this
POM.

16.5. Gender Mainstreaming

Gender mainstreaming is the process of assessing the implications for women and men of any
planned action, including legislation, policies and programmes in all areas and at all levels. It is a
strategy for making women's as well as men's concerns and experiences an integral dimension of the
design, implementation, monitoring and evaluation of policies and programmes in all political,
economic and societal spheres, so that women and men gain equality by transforming the mainstream
Mainstreaming is not an end in itself, but rather an approach or means to achieve the ultimate goal of
equality. More details on gender mainstreaming are in the Gender Development Manual.

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16.6. Steps in Gender and Development Planning and Budgeting

16.6.1. The steps and format/template for preparation of the Annual Gender Development Plan and
Budget are provided in the Gender Development Manual.
16.6.2. The plan and budget will be prepared by the Gender Focal Persons in each of the 117 ULGs.
They will be assisted by the Federal and Regional Gender Specialists in the FMT &RMTs.
For the 73 new cities, they will also be assisted by the Social Development Specialists from
the three TA for Capacity Building Consulting firms that were engaged/deployed in early
March 2018.
16.6.3. The Annual Gender Development Plan and Budgetshould be consistent with the gender issues
identified and with the annual ULG plan and budget.
16.6.4. The Annual Gender Development Plan and Budget will be approved by the City Council

16.7. Capacity Building for Gender Equity & Development

A Gender Vulnerability and Capacity Assessment (GVCA) within UIIDP is a complement Gender
Impact Assessment to gauge whether men or women are particularly vulnerable within the context of
the action being taken, as well as the capacity for change. A GVCA is often a compulsory process for
local-level implementations and can be useful for mapping vulnerability and identifying groups as
vulnerable or socially excluded.

A GVCA can also help to prioritize action, build political support, provide insight into boundaries and
open dialogue with stakeholders. It is largely reliant on the collection and analysis of the following
questions contextually:

 Is the Urban Development currently integrated into sectoral policies?

 Is the government providing Urban Development information relative to the livelihoods

of men and women?

 Which society groups and economic sectors are most vulnerable to the effects of
urbanization?

 Is the envisaged UIIDP currently integrated into sectoral policies?

 Are policymakers working on UIIDP demonstrating gender sensitivity?

 How has the program been translated into policymaking and implementation?

 Have beneficiaries/women and focal persons been involved?

Capacity and vulnerability assessments can involve discussion with stakeholders, a desk review,
qualitative data collection and evaluation. This can ultimately result in the formulation of new policies
and strategies to approach gender in the process of UIIDP.

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16.8. Monitoring & Evaluation of Gender Equity & Development

Good reporting will be built on accurate gender and social analysis, which will enable information to
be interpreted correctly. The report needs to focus on who is being affected by the UIIDP and the
differences being experienced by different social groups. Furthermore, the barriers in existence that
are preventing disadvantaged groups from participating in a meaningful way and differences within
the targeted groups with possibilities of intervention should be addressed.

On the whole, reporting should be specific, clear, and detailed enough to give insight into the unique
social landscape of the program. If the participation of women in committees or training has
improved, this is positive but it would be made more meaningful by including substantiating
information regarding the benefits women are receiving in their lived realities.

Evaluation is important for measuring the impact of Gender based policies, programs and projects, for
identifying and recording good practices and lessons learned for improving future initiatives, and for
accountability of resources used.

To ensure that evaluations accurately capture the impact on the entire group of
stakeholders/beneficiaries, it is essential that they be designed in a gender-sensitive manner.

The following questions provide useful prompts for the design of gender-sensitive evaluations:

Evaluation Criteria

 Who determines the evaluation criteria (women, men, beneficiaries,

implementers etc.)
 What level of importance or priority is given to gender equality
considerations in determining these criteria?
Evaluation Actors

 Do evaluators’ Terms of Reference specify the need for gender expertise?

 Are all stakeholders involved in the evaluation process?
 Who will provide inputs for evaluation data?
 Will the opinions of both men and women be sought and considered?
 Who will be responsible for consolidating inputs and determining the
validity and priority of differing opinions or observations?
Evaluation Process

 What will the makeup of the evaluation team be?

 Will participatory methods be used?
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  How and to whom will results of the evaluation be disseminated?
 Will both men and women stakeholders be given the opportunity to formally
comment on or state their reservations about the evaluation results?
Evaluation Report

 Does the report structure and content ensure that gender issues are integrated and
highlighted?
 Does the summary of findings, conclusions and recommendations include specific
points regarding gender issues? Performance Indicators in Results Framework

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SECTION 17: URBAN RESILIENCE& DISASTER RISK
MANAGEMENT

17.1. Background, Policy, Legal & Institutional Framework

Ethiopia has one of the fastest growing urban populations in the world.Population is projected to
nearly triple from 15 million in 2012 to 42 million in 2034, an average annual growth rate of 5.4
percent.56 With rapid growth comes a significant amount of new construction, much of which will
occur in cities with limited capacity to ensure the structures in which people live, work and gather are
safely built. During this time of transition to an emerging economy, when significant investments in
infrastructure are made and resources are committed for years to come, it is critical for Ethiopia to
steer settlement growth and construction toward safe areas and ensure the construction of safe
buildings and infrastructure. Ethiopian cities are already struggling with access to jobs, infrastructure,
services, and housing.57Rapid urbanization will lead to greater concentrations of people, assets, and
infrastructure, thus increasing exposure to shocks and stresses. Limited capacity for land use planning,
coordination of services, and mobilization of financing for infrastructure pose major constraints to
healthy urbanization and will compound Ethiopia’s continued exposure to shocks and stresses.

Together, these risks increase cities’ vulnerability to disasters such as floods, fire, and
earthquakes, with potentially devastating effects on Ethiopia’s economic performance and its
poverty-alleviation agenda. Without systems and services for resilience, disasters can push
vulnerable people into — or further into — poverty. Recurrent shocks can undermine past gains and
hamper future economic growth, leading to a pernicious “poverty trap” for many of the urban poor. 58
If managed proactively, urban population growth presents an enormous opportunity to foster
economic growth and support the Government of Ethiopia’s vision to reach middle-income status by
2025.59Timely and effective interventions now to promote resilience can have significant positive
impacts on the long-term safety, productivity, and smooth functioning of the urban built environment.
These interventions can reduce the impact of floods, fire, and landslides — which disrupt a city’s
fabric and the lives and livelihoods of the people who live there. Socio-economic stresses — such as
unemployment, air and water pollution, lack of housing, or lack of public services — can have the
same impacts unless actions are taken to improve urban resilience.

Resilience is the capacity of a city to provide services, adapt and grow, despite chronic stresses
and acute shocks that may threaten its collective viability.60 Strengthening urban resilience in
Ethiopian cities will require better understanding of risks, and incorporating resilience into land use
planning and development, undertaking measures to mitigate risk through disaster and climate risk
management, and improving regulatory decisions and emergency preparedness. Box 1 presents the
participatory technical assistance employed to identify key priorities for urban resilience in Ethiopia.

Increasing investment in resilience supports the strategic and long-term national priorities of
the Government of Ethiopia.The government’s GTP 2 (2014/15–2020) emphasizes the fundamental
importance of building green, resilient, and well-governed cities to achieving its vision of reaching
middle-income country status. The Ethiopian Cities Prosperity Initiative, which builds on the GTP 2,
focuses on inclusive and safer cities development as a key strategic pillar. Complementing Ethiopia’s
56
World Bank Group and Cities Alliance, 2015. “Ethiopia Urbanization Review: Urban Institutions for a
Middle-Income Ethiopia.” Washington, DC.
57
Ibid.
58
Hallegatte, et al, 2017. “Shock waves: managing the impacts of climate change on poverty.”
59
World Bank, 2013. “Ethiopia Economic Update II.”
60
World Bank, 2015. “City Strength Diagnostic Methodological Guidebook.” Washington, DC.
P a g e 150 | 326
urban development policies, the government has developed policies to systematically manage its
disaster risks, thereby also enhancing urban resilience. These include the 2013 National Policy and
Strategy on Disaster Risk Management, recognizing the need to strengthen urban resilience, in light of
the growing risks of fire and other hazards associated with rapid urbanization, and the Disaster Risk
Management Strategic Program and Investment Framework. Ethiopia’s Climate Change National
Adaptation Program of Action further contributes to the enhancement of urban resilience. Climate and
disaster resilient development is also a focus of the World Bank’s CPFfor Ethiopia, given its
importance to achieve the World Bank’s twin goals of reducing poverty and increasing shared
prosperity.

To assess the key challenges in improving urban resilience, a technical assistance program was
supported by the World Bank to identify actions to foster resilience in nine regional capitals and
one city administration. These are Adama, Assosa, Bahir Dar, Gambella, Harar, Hawassa, Jigjiga,
Mekelle, and Semera-Logia, and Dire Dawa City Administration. The program was led by the
MUDCo along with the Ministry of Construction, National Disaster Risk Management Commission
(NDRMC), Ministry of Finance, Ministry of Water Resources, Irrigation and Electricity, and Ministry
of Labor and Social Affairs as well as numerous national, regional, and local government entities,
local universities, civil society organizations, development partners, residents, and the private sector.
The program was conducted between 2015 and 2017, primarily using City Strength diagnostic
methodology to facilitate dialogue among stakeholders.

17.2. Key Challenges in Urban Resilience and Disaster Risk Management

The TA found (a) impacts from disaster and climate shocks and stresses will increase in
business as usual scenario, and (b) there are tangible social and economic benefits of
strengthening urban resilience.
No Key Challenge Details
1 Managing The ten regional capitals face growing impacts from flooding, even as a majority
flooding and also face severe water scarcity. With climate change, the frequency and intensity of
water scarcity flooding and water scarcity will increase if long-term preventive actions are not
taken. The current piecemeal approach of relying on structural measures (primarily
retention walls or drainage channels) and/or relocating at-risk populations does not
provide effective and long-term flood-mitigation solutions.

2 Disaster The regional capitals do not have any dedicated budget or staff to plan, mainstream,
preparedness. and implement disaster and climate risk management actions; neither is there
contingency financing. The cities do not provide flood warnings or earthquake,
landslide, or volcano alerts, and no contingency plans are in place to prepare
communities for disasters. Cities also lack adequate equipment and resources to
respond to fires or take fire safety measures, especially in tall buildings and
informal markets. With growth in city populations, higher fire-related mortality is
expected, which is already close to 20 times the rate in middle- and high-income
countries.61Improvements are needed not only for overall safety, but also to
enhance each city’s competitiveness and its potential to attract and retain new
investments.
3 Building a The regional capitals are witnessing rapid growth in new construction but have
regulatory limited capacity to ensure that the new and existing structures are safely built to
framework withstand earthquake, flooding, and fire, and avoid spontaneous collapse and other
harmful conditions. Building regulatory review assessments found four key
challenges that hamper the resilience of the built environment: (a) limited human

61
Based on the World Bank’s 2016 building regulatory review, Ethiopia is spending roughly 1.5 percent less
on fire protection features in buildings than middle and high-income countries (as a fraction of total building
cost) and suffering close to 20 times the mortality, which currently totals close to 12,000 deaths per year.
P a g e 151 | 326
 and technical capacity as regional and municipal building agencies are increasingly
overwhelmed by the influx of building permit applications and the growing
complexity of building projects; (b) limited effectiveness of quality assurance
mechanisms and information on hazard risks; (c) lack of implementation of new
building standards; and (d) larger institutional and structural factors such as
improving safety in informal construction. Improvements in planning, building
inspection, and regulations can have significant impacts on the long-term safety,
productivity, and resilience of the urban built environment.

17.3. Specific Urban Resilience Components Supported Under UIIDP

While a larger program of investment is needed to support all the recommendations from the situation
and technical analysis, UIIDP is supporting the most urgent and critical need of investing in disaster
preparedness to set the ground for a large operation later. The key areas are:

No Key Area Details

1 Establish Following the new national DRM policy, extend the existing national and
urban DRM regional DRM structure to the cities with dedicated staff and budget within
institutional city administrations. The urban DRM unit will be in charge of developing a
framework DRM strategy, including: (a) securing early warning on flooding, drought,
and high winds, and alerts for earthquakes and landslides; (b) ensuring
community disaster preparedness; (c) developing contingency planning and
budgeting; and (d) exploring risk financing and insurance options.
2 Improve urban Understanding what and where potential risks from urban disasters are, it’s
disaster data necessary to allocate resources rationally. This requires the generation and
collection, risk analysis of hazard and risk information, building on woreda risk profiles
assessment, and improving seismic and flood hazard monitoring instruments and
and stations. At the national level, this information system can be housed in the
information MUDCo, linked to the National DRM Commission and other relevant
sharing ministries such as Ministry of Construction. The same information system
will need to be extended at regional and local government levels. A joint
task force between the MUDCo and the National DRM Commission can
identify next steps to improve risk information collection and sharing, and
coordination on DRM actions
3 Improve fire Cities need to undertake an assessment of the fire support services to
and rescue identify the specific training and equipment needed to improve response
response capacity for densely populated buildings and neighborhoods. Based on the
capacity by assessment, a local plan can be developed to assist in providing mobile
providing firefighting units and search and rescue equipment appropriate for city
financial and responses to fire incidents under the UIIDP.
technical
support to fire
services

17.4. Key Actions, Outputs& Responsibilities

P a g e 152 | 326
 Responsible
No Action Outputs Instrument
body
Carry out detailed risk assessment to develop Develop
national urban DRM plan; establish national urban
information and warning system; and DRM plan,
MUDCo,
1 develop training program and guidelines. information IPF
NDRMC
system, and
training
programs.
Cities to establish local DRM unit. as per 1.Organizational
national DRM policy and in consultation structure for
with NDRMC. City DRM Unit ULGs,
2 2.TORs for Mayors,
positions NDRMC
3.Appointment
of staff
PforR
Carry out quick risk assessment, identify 1. Risk & Needs
needs and develop local DRM and Assessment for
emergency plan (building on woreda risk the city
ULGs,
3 profile). 2. City DRM
NDRMC
and emergency
plan to inform
CIPs.
4 Commission TA and training to increase Build capacity.
capacity of federal, regional and ULG staff
MUDCo,
on urban resilience planning, investment and IPF
NDRMC
setting up of urban disaster information
system, and local DRM units.

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SECTION 18: COMPLAINT HANDLING SYSTEM

18.1. Procedures for General Complaints, Environment and Resettlement Complaints

Complaints Handling mechanisms provide a formal avenue for affected groups or stakeholders to
engage with the project implementers or owners on issues of concern or unaddressed impacts.
Complaints may take the form of specific complaints for damages/injury, concerns about routine
project activities, or perceived incidents or impacts. Identifying and responding to grievances supports
the development of positive relationships between projects and affected groups/communities, and
other stakeholders.
The Ethiopian Government outline standard requirement for grievance mechanisms for projects.
Complaints handling mechanisms should receive and facilitate resolution of the affected
communities’ concerns and grievances. The concerns should be addressed promptly using an
understandable and transparent process that is culturally appropriate and readily acceptable to all
segments of affected communities, at no cost and without retribution. Mechanisms should be
appropriate to the scale of impacts and risks presented by a project.
Grievances can be an indication of growing stakeholder concerns (real and perceived) and can
escalate if not identified and resolved. The management of grievances is therefore a vital component
of stakeholder management and an important aspect of risk management for a project. While this
Project may have limited potential adverse impacts to people and the environment in general,
identifying grievances and ensuring timely resolution is still very necessary. As such the ESMS has
developed a complaint handling process to serve as a guide during project implementation.
Complaint handling mechanisms are in place at all level of governments as per the requirement of the
National Proclamations (Proclamation 433/2005 and 434/2005) and institutional level operational
guidelines. These proclamations clearly define the procedures to follow under corruption offences as
well as for administrative complaints related to the ULG investment projects. There are a number of
ways for participation and engagement of citizens in complaint handling, transparency and social
accountability. At the grassroots, citizens have shown experience in forming community groups,
committee or representative to liaison with constituency and seek solutions. ULGs have started to
create a forum for receiving requests and information and responsiveness by local authorities. Such
mechanisms include facilitating face-to-face meetings and joint discussion between citizens and
providers of services; joint monitoring and assessment performances.
The first priority is to settle grievances (or complaints) amicably wherever possible. At the beginning
of the process – first receipt of a grievance or complaint – positive discussions should take place to
convince the project affected person (PAP), in the presence of elders, local administration (city
administration, woreda and kebele) representatives or any influential and respected person in the
locality.
The recommended processes for handling grievances and complaints, in general, are illustrated in the
following figure. ESMSG and RSG related complaints and grievance can be differentiated initially as
to whether they involve a fraud or corruption allegation or an administrative and system related issue.

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Figure 15. Complaint Handling Flow Chart for ULGs

Proposed ESMSG/RSG Complaints Handling Management Mechanism

According to Proclamation No. 455/2005, Article 11, sub-article 1:
“In rural areas and urban centers where an administrative organ to hear
grievances related to urban landholding is not yet established, a complaint
relating to the amount of compensation shall be submitted within thirty days
from the date of the decision.”
In urban area, a PAP who is dissatisfied with the amount of compensation may complain to an
administrative organ, and if the PAP is still not satisfied, may appeal to the regular appellate court or
municipal appellate court within thirty days from the date of that decision.
Registration of Complaints
As long as one of the ULG’s investment projects (construction works) entails resettlement and/or
compensation, the ULG will establish a register of resettlement/compensation related grievances and

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disputes. The existence and conditions of access to this register (where, when, how) shall be widely
disseminated within the interested area of the town as part of the consultation undertaken for the
investment projects (construction works).
Any grievance that may arise from the resettlement action plan (RAP) will be filed in the first instance
at the ULG responsible for the investment project (construction works), and will be registered by the
ULG for further action using the above mentioned register.
First Instance – Amicable Settlement
While there are courts of law for handling grievances, local communities may often be reluctant to
expose family members to courts of law, which could trigger the separation of families or worsen
conflicts between neighbours. Also, courts of law may be viewed as slow and involving somewhat
complicated procedures. People may prefer such matters to be handled by a “first instance”
mechanism, on the model of traditional dispute-resolution mechanisms.
In such compensation and resettlement operations, it usually appears that many grievances have roots
in misunderstandings, or result from conflicts with neighbours, which can usually be solved through
adequate mediation using customary rules. Most grievances can be settled with additional explanation
efforts and some mediation. This is why the first instance of dispute handling will be set up with the
aim of settling disputes amicably, in the form of a locally selected Mediation Committee. (see
proposed process in the figure on the next page).
The Mediation Committee will consist of the following members:

 ULG (agency implementing the investment project (construction works),

 Local NGO (chairperson),
 Local representatives of PAP (2 to 5) – these should be selected in the affected locality.
When a grievance/dispute is recorded as per above-mentioned registration procedures, mediation
meetings will be organized with interested parties. Minutes of meetings will be recorded. Solutions to
grievances related to compensation amounts, delays in compensation payments or provision of
different types of resettlement assistance should be pursued directly by the designated RAP team
through liaison with the relevant actors. The investment project RAP team will ensure community
members, and in particular PAPs are informed about the avenues for grievance redress, and will
maintain a record of grievances received, and the attempts to resolve these. All PAPs will be informed
about how to register grievances and complaints, including specific concerns about compensation and
relocation. The existence and procedural details related with this first instance mechanism will be
widely disseminated to the city residents as part of the consultation undertaken for the preparation of
the investment project or construction works.
Appeal to Court
Whenever misunderstandings and disputes arise between the principle parties (e.g. ULGs and PAPs)
involved in the resettlement and compensation process, the preferred means of settling disputes is
through arbitration (see Proclamation No. 455/2005). The number and composition of the arbitration
tribunal may be determined by the concerned parties.
Although Proclamation No. 455/2005 provides for appeals from the valuation decision, such action
will not delay the transfer of possession of land to the intended recipient.
Courts of law shall be considered as a last resort option, which in principle should only be used where
first instance amicable mechanisms have failed to settle the grievance/dispute. However, the
Constitution allows any aggrieved person the right of access to a court of law.

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Figure 16. ESMSG/RSG Complaints Handling & Dispute Management Mechanism

Registration of the grievance or dispute by the ULG

Internal assessment of the nature of the grievance or dispute

Decision as to method of addressing the grievance or dispute

Complaint resolved amicably

Yes No

Resort to Mediation Committee

Final closure

Grievance processed by Mediation Committee

Result of Mediation Committee

One or both parties resort to Courts of Law No Complaint resolved

Final closure

Yes

Final closure

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18.2. Procedures for Procurement Complaints

18.2.1. Legal & Institutional Framework

The Ethiopian Federal Government Procurement and Property Administration Proclamation no

649/2009 issued on September 9, 2009 governs the handling of procurement complaints at the federal
level.The Regional Procurement Proclamations which are adapted from the federal proclamation
govern the handling of procurement complaints at the regional and ULG levels.

Article 73 (5) of the Federal Procurement Proclamation states that the procedure to be followed in
resolving complaints brought in regard to public procurement and property disposal shall be
determined in accordance with the directive to be issued by the Ministerof Finance and Economic
Cooperation (the Minister).Accordingly, the Minister has in terms of Article 78 of the Proclamation
issued the Federal Public Procurement Directive dated June 2010. The Federal Public Procurement
and Property Administration Agency (FPPPAA) has also developed and issued a Manual on Public
Procurement Complaint Procedure dated April 2011.

Article 70 of the Procurement Proclamation provides for the establishment of a Board which reviews
and decides on complaintslodged by suppliers and candidates in regard to public procurement and
property disposal proceedings. The Board is appointed by and is accountable to the Minister. The
Board is drawn from personsrepresenting the private business sector, the relevant public bodies and
public enterprises. The Federal Public Procurement and Property Administration Agency serves as the
secretariat ofthe Board.

Upon deliberation on a complaint submitted to it, the Board may give one of the following decisions,
which it deems to be appropriate, with the details to be prescribed in the directive to be issued by the
Minister:

a) that the procurement proceeding in respect of which a complaint was lodged be rectified or
terminated;
b) to dismiss the case where in its judgment the complaint is unfounded

Article 73 (1) of the Proclamation provides that, without prejudice to the provisions of this Chapter
(14),a candidate shall be entitled to submit a complaintto the head of the public body or to the
Boardagainst an act or omission of the public body inregard to a public procurement or
propertydisposal proceeding where he believes that suchan act or omission violates the Proclamation
orthe directives.

Article 73 (2) provides that no complaint may be lodged in accordancewith sub- article (1) of this
Article in respectof the following matters:
a) the selection of procurement methodpursuant to this Proclamation;
b) the rejection of bids, proposals orquotations pursuant to Article 30 of this
Proclamation;
c) the selection of method of propertydisposal;
d) the handling and usage of publicproperty.

Complaints against an act or omission of apublic body pertaining to a proceedingleading to an award

may not be broughtbefore the head of that public body or theBoard after the contract has been signed
withthe successful bidder. This will only apply where the following conditions are satisfied:

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 a) where the contract has been signed without a complaint being filed with the public body within the
time limitprescribed in the directive;
b) where the public body responds to the complaint lodged and a contract is signed because of the
expiration of the time limit for the signing of contract after the award without the candidate pursuing
its complaint further.

18.2.2. Procedures

(a). A complaint against an act or omission bythe public body shall in the first instance, be submitted
to the head of the public body.
(b). A candidate shall have to submit the complaint within five working days from the date he knew
or should have known the circumstances giving rise to the complaint.
(c) Unless the complaint is resolved by mutual agreement, the head of the public body shall suspend
the procurement or property disposal proceedings and shall, within 10 days after submission of the
complaint, issue a written decision, stating the reasons, and, if the complaint is upheld, indicating the
corrective measures to be taken.
(d) If the head of the public body does not issue a decision within 10 days after submission of the
complaint, or if the candidate is not satisfied with the decision of the head of the public body the
candidate is entitled to submit a complaint to the Board within five working days from the date on
which the decision has been or should have been communicated to the candidate by the public
body.
(e) Upon receipt of a complaint, the Board shall promptly give notice of the complaint to the public
body concerned. Such action automatically suspends further action by the public body until the Board
has settled the
matter.
(f) The Board, unless it dismisses the complaint, may:
i) prohibit the public body from acting or deciding unlawfully;
ii) order the public body to proceed in a manner conforming to the Proclamation other than a decision
to award or conclude a contract;
iii) annul in whole or in part, an unlawful act or decision by the public body.

(g) The Board shall, before taking any decision regarding a complaint, notify relevant bodies of the
complaint and shall take into account information and arguments received from such bodies and from
the public body.

(h) The Board shall issue its decision within 15 working days of receiving the complaint, stating the
reasons for its decision and remedies granted, if any.

The overall complaint procedure shall have the following timing:

Table 18. Procurement Complaint Procedure Timeframe

ACTION TIME FRAME PRECONDITION

Submission of complaint to
the public body
5 working days  From the date when
candidate became aware of or
should have been aware of
the reason giving rise to the
(Proclamation, Sub-article 2 complaint.
of Article 74)  From the date when public
body disclosed the result of a
bid evaluation

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ACTION
The public body's written
decision on the complaint
Submission of complaint to
the Board
The Board's written decision
on the complaint
TIME FRAME PRECONDITION
10 working days From the date of submission
of the complaint by the
(Proclamation, Sub-article 3 complainant.
of Article 74)
5 working days From the date of notification
in writing of the decision of
the head of the Public Body
on that complaint if the
(Proclamation, Sub-article 4 complainant is not satisfied
of Article 74) by the decision.
15 working days From the date of receiving
complaint by the
(Proclamation, Sub-article 4 complainant.
of Article 74)

Conciliation and Mutual Agreement

One of the provisions provided by the Proclamation is that the complainant and the public body shall
endeavour to resolve the dispute amicably (conciliation) by mutual agreement
Parties of the complaint procedure may reach mutual agreement during the complaint procedure
conducted in the first instance, before review by the Board. In that case, settlement shall be approved
by the head of the public body and provided that it is not contrary to the provisions of the
Proclamation and the rules of public morality or legal interests of third parties (settlement).

18.2.3. Notification of Results Procedure

It is important that the notification of results is done properly as per the Proclamation, Directives
and Procurement Manual as failure to do so or to do it properly can give rise to a complaint. In
addition, proper notification of results gives the bidders a chance to submit their complaints
timely as per the proclamation.

Paragraph 5.3.8 of Procurement Manual states that: -

Following the approval of the Expressions of Interest's Evaluation Report by the headof a public
body or an officer authorized by him/her, all consultants participating inthe Request for
Expressions of Interest shall be informed whether or not they havebeen short-listed by the public
body.

Article 16.24.1 of the Directive states that:-

Public Bodies shall announce the result of a bid evaluation to all bidders alike at the same
time. The information to be disclosed to the unsuccessful bidders shall be the reason
why they did not succeed in their bid and the identity of the successful bidder.

Article 46 of the Procurement Proclamation states that:-

Notification of Award and Signing of Contract

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1) Prior to the expiry of the period of bid validity, thepublic body shall notify the successful
bidder thatits bid has been accepted. The notification of award shall specify the time within
which the contract must be signed. The unsuccessful bidders shall also be informed as to
who the successful bidder is and why they have lost the bid.
2) The existence of a contract shall be confirmed through the signature of a contract
document incorporating all agreementsbetween the parties.
3) The contract shall not be signed by the public body prior to the receipt of the notice by the
unsuccessful bidder and before the period specified in the directive issued by the Minister has
lapsed.

Article 45 (2) of the Procurement Directive and the Procurement Complaint

Manualprovides for the following in regard to: -

Procedure with Bids Submitted in Two Envelopes

When bidders are required to submit technical and financial proposals in two separate envelopes the
following procedure will be applied:
(a). The public body shall communicate the result of the technical evaluation in writing to all bidders
at the same time.
(b). The public body shall indicate in the letter in which it discloses the result of the technical
evaluation to each bidder that any bidder claiming that the technical evaluation has not been
conducted in conformity with the Proclamation, Directive or the bidding document has the right to
present his complaint to the head of the public body within five (5) working days of being notified of
the result.
(c). A bidder who can prove that the decision given by the head of the public body on the complaint
lodged by him concerning the conduct of the technical evaluation is not in conformity with the
Proclamation, Directive or the bidding document may present his complaint to the Board within five
(5) working days of being notified of the decision.

(d). A public body may open the envelopes containing the financial proposals after five (5) working
days from the date of notification of the result of the technical evaluation to the bidders if there is no
complaint lodged.
(e). A public body, in its written letter of notification to the unsuccessful bidders, must advise
unsuccessful bidders on their right to submit the complaint to the public body against the result of the
evaluation within five working days from the date or receipt of notification.
However, if a complaint is presented to the Board in due time against the decision of the head of the
public body on the complaint previously lodged by a bidder concerning the technical evaluation, the
public body shall keep the envelopes containing the financial proposals unopened until the Board
gives its final decision on the case.

18.2.4. Consequences of Submission of Complaint

The most significant consequence of lodging a complaint is the suspension of the procurement
proceedings
In accordance with Article 16.27.7 of the Directive public bodies are prohibited from signing a
contract before the expiry of a period of seven working days from the date bidders are notified of the
result of their bid or of any complaint against the bid proceeding. This term is counted from the date
of the receipt of a notification of award. Complaints submitted against an award decision prevent
signing of a contract for all groups or lots of the subject-matter of procurement.
A public body's procurement unit shall suspend a bid proceeding if it ascertains that a complaint is
presented to the head of the public body in regard to a bid proceeding within five (5) working days
from the date bidder or candidate became aware of or should have been aware of the reason giving
rise to the grievance until the head of the public body gives decision on the complaint.
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Any decision made by a public body in regard to a procurement proceeding and the reasons on which
the decision was based shall be kept as part of the record of that procurement proceeding.
It should be pointed out that the time period before which it is not possible to sign and perform
contract does not start at the date of lodging a complaint but earlier, at the day of the receipt of an
individual notification concerning the award of contract. Suspension lasts until the expiry of the
standstill period discussed above or until the end of the complaint procedure if a complaint has been
lodged. Such provisions allow bidders or candidates concerned to lodge a complaint and defend their
rights at the stage when irregularities could still be rectified or removed. It prevents situations when
candidate would lose the possibility to be awarded the contract.

Complainants should take into account that if they fail to lodge a complaint due to previous
conditions, they lose the right to apply for a review to the Board in a later phase of the procedure.

18.2.5. What can be Subject to the Complaint Procedure?

Subject of the complaint procedure may be all decisions, actions or failure to take an
action by the public body which was obliged to take the action according to theProclamation or
Directive, provided that it constitutes infringement of the publicprocurement procedures required
by Proclamation or Directive or infringement ofrights of bidders or candidates.
It means in practice that subject to the review procedure may be not only incorrectdecision or
action of the public body, but also the lack of action when the public bodyis obliged to take
this action. It means also that the review procedure may concern theactions and decisions taken
during the contract award procedure as well as beforelaunching the procedure, provided that they
violate rights of bidders or candidates as aresult of breaching of any of the rules determined in the
Proclamation or Directive.The subject of the complaint procedure should be understood as
broadly as possible inorder to prevent any possible violation of rights of interested parties and
violation of
basic principles of public procurement such as transparency, equal treatment, non-discrimination,
and competition rules.
Examples of actions which could be subject to the complaint procedure are the
following:
Division of the contract into lots after publication of Invitation to Bid in order toavoid the
obligation to apply the proper public procurement procedure;
Incorrect or discriminatory description of the subject- matter of the procurementprocedure;
Discriminatory requirements concerning candidates interested in participation inthe procedure;
Decisions concerning exclusion from the procedure or rejection of the bid; and
Contract award decisions.

18.2.6. Establishment of a procurement complaint handling register

Together with the complaint handling file, each ULG, Regional and Federal implementing agency of
the program, shall establish a procurement complaint register, which serially tabulates, at least, the
date of the complaint, the name of the complainant, the description of the complaint, the date and
details of response given to the complaint or action taken on the complaint, the level the complaint
was resolved(amicably, the head of public entity or Board), whether the complaint was resolved
against the entity or the bidder. Every procurement complaint received, resolved or under process,
shall be recorded and included in the complaints/ grievance report prepared at ULG and entity level
and reported to the relevant Federal and Regional Ethics and Anti-Corruption Commissions.

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18.3. World Bank Grievance Redress Service (GRS)

Communities and individuals who believe that they are adversely affected as a result of a Bank
supported PforR operation, as defined by the applicable policy and procedures, may submit
complaints to the existing program grievance redress mechanism or the WB’s Grievance Redress
Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address
pertinent concerns. Affected communities and individuals may submit their complaint to the WB’s
independent Inspection Panel which determines whether harm occurred, or could occur, as a result of
WB non-compliance with its policies and procedures. Complaints may be submitted at any time after
concerns have been brought directly to the World Bank's attention, and Bank Management has been
given an opportunity to respond. For information on how to submit complaints to the World Bank’s
corporate Grievance Redress Service (GRS), please visithttp://www.worldbank.org/GRS. For
information on how to submit complaints to the World Bank Inspection Panel, please visit
www.inspectionpanel.org

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SECTION 19: FRAUD, ETHICS AND CORRUPTION HANDLING
SYSTEM

19.1. Background,Policy, Legal & Operational Framework

The Government has established the Federal Ethics and Anti-Corruption Commission (FEACC) with
a mandate to expand and promote ethics and anti-corruption education, prevent corruption and to
investigate and prosecute alleged corruption offences. 62 Since 2007, all the nine Regional
Governments have established their own Regional Ethics and Anti-Corruption institutions (REACC)
as per the regional laws. FEACC is responsible for coordinating efforts of Anti-corruption across
regions including ULGs and preparing a national report on anti-corruption efforts across the country.
Complaint handling mechanisms are in place at all level of governments as per the requirement of
the national proclamations (Proclamation 433/2005 and 434/2005) and operational guidelines. These
proclamations clearly define the procedures to follow where corruption offences are suspected or
identified, as well as for administrative complaints related to the UIIDP. For the UIIDP the MUDCo
and the regional and local governments will take full responsibility to ensure that the UIIDP
beneficiaries are regularly informed about the complaint system. Complaints regarding the UIIDP
activities can be received from internal or external clients through various channels such as suggestion
boxes, verbal, written and in person. At the ULGs level:
 Complaints are submitted to the City Complaint Handling Body or unit consisting of Ethics
Liaison Unit officers, to the police, to other delegated bodies or directly to REACC.
 The City Complaint Handling Body identifies whether the complaint is a fraud and corruption
related complaint or other complaint (such as administrative /system, service provision related
complaints) and classifies it as petty and grand corruption. It also identifies whether the
jurisdictions in which a complaint could be treated is with either FEACC or REACC or
delegated to the Police for investigations.
 If the complaint is found to be related to an allegation of corruption and fraud or related to
wrong doing as per the screening, the Complaint - Handling body /liaison unit officer
forwards the issue with the necessary data to the registrar of REACC.
 The REACC Registrar sorts out the complaint in terms of its jurisdictional responsibility,
whether it is petty or grand corruption, and submits to the Deputy Commissioner of REACC.
 The Deputy Commissioner verifies the complaint and then refers it to the investigation and
prosecution team.
 The investigation team investigates the case and submits its findings back to the Deputy
Commissioner.
 Then the Deputy Commissioner checks the information collected from the investigations,
endorses and then forwards to the REACC Commissioner.
 The Commissioner refers the case to the court /prosecutor for the next action.
Sometimes complainers will approach the police directly. The police, with their mandate as a
delegated body, investigate the cases and forward the results to FEACC or REACC depending on the
mandate given and the process moves forward as described above after the information is received by
the Registrar. In terms of sharing information with the World Bank on Complaints regarding the
UIIDP, the planning and evaluation section of REACCs will compile reports related to complaints
from the Ethics Infrastructure Coordination Case Team,(consolidated reports coming from all ULGs),
Investigation and prosecution department in REACC, Registrar, and from the Ethics Officers of the
62
Proclamation No. 433/2005 and Regulation No. 144/2008 provides for the role, powers, duties, and
responsibilities of the FEACC.
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Regional BUD and submit on quarterly basis to FEACC who will then submit a consolidated report
to the World Bank bi-annually. The World Bank will provide copies of FEACC reports received to
MUDCo.

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Figure 17. Complaint Handling System for Fraud & Corruption Cases

Complaint or Tipp off

Ethics Liaison Unit / Complaint Handling Body

Sorting & selection of complaints by type of issues

Administrative and system related complaint Fraud and corruption related complaint

Refer to concerned ULGs body Forward to FEACC Registrar

Administrative action / improvement or reform Submit to Commissioner or Deputy Commissioner

Response to complaint Investigation and prosecution team investigates

If not wrong doing If wrong do

Response to complaint REACC case F

Investigation and prosecution report to FEACC deputy commissioner

Deputy Commissioner forwards to Commissioner with recommenda

Commissioner makes decision whether to prosecute or not

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19.2. Alignment with the WB’s Anti-Corruption Guidelines
The GoE has agreed to implement the UIIDP in accordance with the World Bank’s Anti-Corruption
Guidelines applicable to Program-for-Results operations (see Annex 10). Specific actions that will be
taken include:
Sharing of debarment list of firms and individuals
The World Bank maintains a debarment list to ensure that persons or entities debarred or suspended
by the World Bank are not awarded a contract under the UIIDP (or other World Bank programs and
projects funded) during the period of such debarment or suspension. The information on the list of
debarred and suspended firms is public information in “Clients Connections”, and on the WB’s
website [Home> Projects > Procurement >Shortcuts > List of Debarred Firms >World Bank Listing
of Ineligible Firms]. Companies and individuals debarred by the WB and the FPPPAA will be
identified on MUDCo’s website (www.mwud.gov.et) and advertised publicly by ULGs. MUDCo will
ensure that the website is updated regularly (at least once every 6 months) with information on the list
of debarred firms and individuals and share this information with all ULGs in the UIIDP, instructing
them to comply by appending the debarment list to the annual notifications of allocation, and of
transfer, of Performance Grants - which will be made public – disseminated to all UIIDP ULGs and
regional BUDs. This list will also be used by Procurement Officers and ULG council members to
monitor ULGs compliance. ULG compliance with the debarment list will also be monitored through
the UIIDP annual assessment. In addition, all bidding documents involving UIIDP funding will
include some disclosure measures in bidding documents for works, goods and services to be financed
under the program, including the requirement that the firms and/or individuals declare they have not
been debarred or suspended by the World Bank and/or have any links with a debarred entity or
individual.
Sharing information on fraud and corruption allegations
FEACC will share with the WB all information on fraud and corruption allegations, investigations and
actions arising in connection with the UIIDP, including those involving procurement. Consequently,
information on fraud and corruption and complaints regarding the UIIDP activities will be collected
by the REACCs and be shared with the FEACC which will in turn share with the WB. The FEACC
gets monthly reports from the REACC on fraud and corruption and other relevant activities, but in the
case of the UIIDP, the FEACC will compile and share information on fraud and corruption with the
WB every 6 months. The details of this reporting would include the types of allegations and the status
of actions taken. A template for recording and sharing the information with the World Bank has been
provided to the FEACC.
The World Bank has signed a memorandum of understanding with FEACC on October 3, 2011. The
memorandum of understanding provides a framework for cooperation and sharing of information,
where appropriate, taking into consideration the legal and policy framework and mandate of each
organization. The memorandum of understanding’s terms of the cooperation provides for FEACC
and the World Bank:

a) To provide one another (spontaneously or upon request) with information of relevance for
detection, substantiation and prevention of fraud and corruption in connection with conduct
which may constitute a serious crime under national legislation or a sanctionable offence
under World Bank Group and Policies;
b) To undertake joint activities and collaborate when appropriate in each Party’s efforts to detect,
substantiate and prevent fraud and corruption;
c) To engage one another on relevant activities which they organize and undertake, and which
may be of common interest in the execution of their mandates;

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d) To provide a mechanism for the reciprocal referral of inquiries and recommendations
pertaining to investigations and actions residing within the mandate and jurisdiction of the
respective parties;
e) To designate contact points to facilitate and expedite the effective and confidential
transmission of information exchanged, and
f) To meet periodically to identify possible priority areas for cooperation that present common
strategic or operational objectives.

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SECTION 20: CAPACITY BUILDING

20.1. Challenges & Lessons Learned from ULGDP II

Despite the great achievements in the CB windows of the ULGDP, there are areas in
need of further attention moving forward with the expansion of the support.

At the ULG level the CB activities were generally restricted among the focal
persons, thereby giving a perception among other staff members that only the focal
persons belonged to and hence relevant for ULGDPII. Similarly, there were no
repeated sensitization and awareness building programs for the Mayors and
Council Members. Due to high turnover of the elected representatives, the required
strategic leadership and enabling environment suffered in many contexts. There was also
high staff turnover, often resulting in shortages of qualified and trained man power.
There were several instances of focal persons whose capacities have been built at the
beginning of the year but left or were replaced creating voids in required skills and
experience. Such individualized support, with lack of sufficient linkage between the
focal points and departments, at the ULG level is contributing to constraints in
improving the quality of CB plans, CIPs, AMP and REP. It was reported during the
assessment that the investment menu for CB does not have transport facilities (motor
cycle /motorized three wheelers), computers and software like GIS. Cities that have
accessed 2 to 3 rounds of funds are not paying adequate attention in prioritizing and
allocating the stipulated 5 percent of the investment grant in subsequent CB plan. This
neglect is despite demands for improving implementation quality and need for capacity
enhancement. An area of capacity support yet not addressed is relating to data security of
information and data backup systems. Mission critical data like financial data are also
prone to unauthorized access and virus attacks.
There were pronounced capacity gaps in computerizing financial management using
IBEX. Only limited personnel were trained and out of which only a few actually worked
on the system. There were also practical problems of connectivity. The overall CB of the
internal auditors remained inadequate affecting the quality of financial transactions. Yet
another area which lacked adequate capacity relates to revenue management system.
Programs to build awareness among tax payers to motivate them were not given proper

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attention. Also, the tax assessment, demand and collection continued to be done manually
without computerization or using ICT tools. Though city staff was adequately trained to
design, plan and manage small and medium projects, their competence and capacities
need to be built to manage complex and large projects. A related area for which capacity
gaps still exist relates to special assets information or setting up GIS based asset database.
Though the required availability of regional team members was maintained, there were
issues of staff turnover. The main reasons for the staff turnover were attributed to the
‘not so attractive’ incentive structure. In spite of being expected to spend ¾ of their
time in the field supporting ULGs, the regional team’s availability in the field was
less than targeted. The level of daily allowance was reported to dissuade the staff from
undertaking extended field visits and needs attention in the future UIIDP.
The level of coordination by the regional team within and among various regional
government entities also needed improvement. The quality of technical assistance
facilitated by the regional team through the regional entities needed substantial
improvement. Many limitations such as the quality of the CIP, issues in putting in place a
fully operational complaint handling system, maintenance of tabular and special data
base of infra-structure, failure to carryout detailed analysis of own source revenue and
developing strategies and carrying out actions for improving collection, persuading ULGs
to comply with service delivery standards etc., were all affected by insufficient
coordination and facilitation. Centralization of the procurement of basic facilities like
computers, office equipment and furniture by the regional procurement bureau has
delayed the full establishment and pro-active functioning of the regional teams.
There is also need to improve the coordination and synergies of working together
between the federal and regional teams. The regional teams and federal teams reach
out to ULGs separately through disjointed efforts. This has led to duplication of efforts
and conflicting messages given to ULGs by the two teams. Such communication gaps
and not working together have adversely affected the effectiveness of CB supports to
cities, a fact which is also impacted by the lack of computerized M&E system, (ToR of
which is currently under preparation).
While the Regional Governments put in efforts to field the regional teams, provide the
office set up and transportation arrangement, their capacity to timely recruit staff for the
regional team, retain their motivation levels and establish reasonable payment and daily
allowances need to be ensured to avoid implementation delays. As the teams are mobile,

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delays in providing transport facilities and disbursing travel allowances would deny the
ULGs the required capacity support.
CB efforts mostly focused on class room type training programs. Though ULGs have
demanded limited on the job technical assistance, a systematic delivery mechanism for
the same has not yet been evolved. There is a need to identify and build up a pool of TA
providers and where quality assurance mechanisms are in place to ensure they have
relevant accreditation and sufficient experience. Similarly, ULGs in the initial phase of
the program have organized exposure visits to other cities. However, systematic
knowledge sharing approaches were missing and follow up action plan post these visits
were lacking.
There was an obvious lack of organic linkage with the CB plans prepared by ULGs
with the ones prepared by the regions and federal teams. Such disconnect contributed
to situations in which the knowledge acquired through the training programs not getting
translated in to implementation thereby affecting the effectiveness of the trainings given.
An important component of the institutional development aspect, human resource
management was conspicuously absent. A human resources policy encompassing person
description, job descriptions, human resources planning, performance assessment, and
performance-based incentive mechanism would have resolved many staff related issues
and mitigated human resources related risks. The HR policy could also address the
promotion mechanism urban region career path for competent and experienced ULG
staff. As most of the responsible agencies are government, the government staff rules and
bureaucratic procedures would be applicable to the project. Government staffs’ skills
need to be supplemented to bridge the skill gaps from outside and this added to the risk
levels of human resource performance.
The approval of the CIP, AMP and REP are held at regional and federal levels. This is
leading to avoidable delays that are impacting on the project implementation. If required
capacity is created at regional level, the ULGs need not go to the higher federal level
seeking such approvals. The authority of Federal mobile team shall be advisory and TA
roles to support regions and ULGs. Such an approach would help not only institutionalize
systems and procedures but streamline operation as well.
Several lessons have been drawn from the implementation of ULGDP II relating to urban
governance planning and management. The main lessons and experiences that have been
identified, which will be incorporated in the design of UIIDP are summarized in Table1

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Table 19. Lessons Learnt and Reflected in UIIDP
Area Lessons learned
CB Establishment of Federal and reginal
implementation mobile teams for providing CB and
arrangement technical back stopping support aligned
with the federal structure of the country
turned out to be a successful strategy in
supporting regional government entities
and ULGs.
Committing Strong linkages of CB efforts
resources for performance results proved to be a better
capacity mechanism to incentivize channelling of
building resources for CB especially at the ULG
level.
Thematic The CB followed a thematic approach
Focus on focusing on the key priorities of ULGs
Capacity relating to urban planning and
Building management. The identification of focal
persons conformed to these focal areas and
the skill mix at the regional mobile team
also followed such a thematic focus. There
was an expanded skill set available at the
federal mobile team level
Bottom up Following a fully bottom up approach
process driven based on needs assessment and review of
approach to CB results from the APA would have helped to
systematically capture CB demands of the
ULGs while the CB plans at the regional
and federal level would have balanced
demands with supply side interventions.
How reflected in UIIDP
The program will strengthen
and build on such an
institutional arrangement for
capacity delivery. Number
of teams will be allocated
based on the size of the
regional and improved
conditions to address high
turn-over will be installed.
to ULG, regional governments
with support from federal
team will sensitize and
increase awareness on the
areas in need of
strengthening and support
The approach along with
strengthening of the
composition will be
continued and the number of
mobile teams expanded to
reflect the larger number of
ULGs to be enrolled. Key
target areas have identified.
In future, a closer link
amongst APA results needs
assessment and the planning
of CB support will be further
established. A CB manual
will guide the future process.
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 Area Lessons learned How reflected in UIIDP
Absence of such an approach led to random
efforts at the three levels reflecting ad-hoc
activities and piecemeal efforts at regional
and federal level on some of the thematic
areas. Yet another bonus from such an
approach would be that the CB plans at all
levels will never be under or over
ambitious.

Coordinated The federal level MUDCo and counter -part The coordination and
and institutions for revenue enhancement and working together of different
Orchestrated finance bureau need to work together. institutions at the regional
CB efforts Similarly, at the regional level, the Bureau and federal level will be
of Urban Development have to work further strengthened.
together with BoFEDs, Asset Management See Annex 11 for further
Agencies, Regional Revenue Authorities, details on the future CB
Regional Procurement Agencies, Regional architecture.
Ethics and Anti-Corruption Agencies as
well as Regional Auditor General to help
ULGs achieve a coordinated vision for CB.

20.2. Intuitional and Operational Framework

The Ministry of Urban Development &Construction has developed a Capacity Building Manual
(standalone Annex of this POM) which will guide the planning, implementation and monitoring of all
capacity building activities under the UIIDP at all three levels of government (federal, regional and
ULG).

The structured and systematic approach in CB followed during ULGDP II will be further strengthened
in UIIDP by adopting a coherent, systematic and organized vision and approach. The key
challenges identified during ULGDP II and the emerging lessons will form critical inputs in further
sharpening and focusing the approach. Building on ULGDP II a coherent institutional frame work and
CB delivery channels will be setup. The implementation process will be systematized to start with the

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preparation of the demand-driven CB plans, of which the APA results will be an important input, fully
capturing the demands and needs of the ULGs and ensuring that there is a balance of demand driven
and supply driven programs in the CB plans prepared at the regional and federal level. The calibration
of the regional performance on the DLI will be strengthened in the future UIIDP DLI tables.

The CB activities will continue to focus on all three levels of governments.

 ULGs: will be supported to develop their own CB plans fully reflecting the demands on the
ground. In addition, they will be targeted to provide an entire range of CB modalities by both
the regional and federal entities aimed and raising their overall capacity to successfully
perform mandated roles and responsibilities. The 5% of the grants for CB support will
continue with little refinements of the eligible investments except that ULGs will be allowed
to buy motorbikes.
 Regional Level: Bureau of Urban Development will take the lead in providing CB support to
ULGs. The BUDHo will work closely with other regional counter-part entities to deliver
coordinated CB services. The technical facilitation of CB will be done by the RMTs in
regions with many ULGs and directly by the federal teams in other regions (Gambella,
Benishangul Gumuz and Harare as well as Dire Dawa). In addition, Construction Bureau,
Land Development and Management Agency, Urban Planning Institute, Urban Safety Net and
Job Creation Bureau, Women Affairs Bureau, Investment Commission will also join in
regional CB activities. CB will aim at strengthening their urban governance and management
roles.
 Federal Level: MUDCo continue to lead the federal level CB in addition to coordinating the
federal level entities. The technical back stopping and facilitation will continue to be the
responsibility of the federal mobile teams. The CB is aimed at strengthening their
coordination, oversight and back stopping functions in support of the regional and urban local
governments.

20.3. Capacity Building Objectives & Key Principles

Objectives
Capacity building will be a core and integral element in the Urban Institutional and Infrastructural
Development Program (UIIDP). The primary objectives are to:
i. Enhance overall urban management and service delivery capacity of cities;
ii. Address challenges observed in the ULGDP II;
iii. Allow smooth transition and scale-up of 117 ULGs in to the performance-based grant
program;

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 iv. Strengthen new focus areas such as Local Economic Development (LED), resilience and
gender equality.
v. To accelerate implementation of the UIIDP by supporting the national, regional and local
governments to roll out new modalities of strengthening institutions. And
vi. Help newly joining ULGs prepare for the requirements of the first APA under UIIDP.

Key Principles
The CB support is designed to enhance the institutional performance of participating Urban Local
Governments (ULGs) to develop and sustain urban infrastructure and services. Strategic principles to
be followed this program objective and other specific CB objectives of the program include:

 Inclusive approach of involving regions and ULGs more in CB planning and implementation:
This approach will help deliver more tailor-made ULG-based support to meet their unique
needs. A bottom up planning process originating from ULGs will ensure that the capacity
building activities are in response to their needs and demands. A more regular and systematic
annual assessment of ULG capacity will help identify the weaker areas and gaps. This will
also make the capacity building efforts more realistic and help bridge the identified capacity
gaps. In addition, there will be increased focus on building the in-house capacities within
ULGs and provision for direct technical assistance and handholding for ULGs.
 Decentralized but well-coordinated implementation mechanism. Decentralization helps to
ensure demand-driven and need-based capacity building and support while the coordinated
implementation mechanism is important to maximize the result, save time and money and to
provide standardized support across regions and ULGs which is one of the objectives of this
capacity building manual. As a program owner MUDCo takes the responsibility for
coordinating capacity building activities by all stakeholders. Each of the agencies responsible
for managing and providing the CB support in their respective thematic areas will prepare
annual work plans to target prioritized critical capacity gaps.
 Realistic feedback and systematic monitoring. The relevance, timing and contents of CB
delivery will be continuously evaluated to make it flexible to the evolving needs of regions
and ULGs over time. Proper follow up and monitoring of the capacity building process along
with annual assessments also helps to determine whether to revise the whole or part of
capacity building architecture. There are provisions to document and disseminate good and
bad practices in addition to establishing platforms for experience sharing and knowledge
exchange. One important feature of the CB delivery is the continuous monitoring of the
performance of accredited ToTs and TA agencies for ensuring quality.

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20.4. Thematic Focus Areas of Capacity Building under UIIDP
The CB efforts including the technical assistance provided under ULGDP II will be further
broadened in UIIDP to help identify thematic focus areas of CB and to prioritize support. The CB
efforts will be dovetailed with the prioritized thematic focus areas of performance. The thematic
focus areas of CB would include: (i) participatory planning; (ii) budgeting; (iii) revenue
generation; (iv) financial management ;(v) procurement; (vi) infra-structure asset management;
(vii) contract management and execution;(viii) urban planning, environmental and social
management;(ix) auditing;(x) ethics, fraud and corruption; (xi) urban resilience; (xii) local
economic development; and(xiii) gender mainstreaming. The thematic focus areas present a
comprehensive approach integrating all CB requirements aimed at enabling ULGs and regional
governments to deliver quality services to their citizens. Such a focused approach would help
build capacities of ULGs through a coherent and coordinated capacity support across multiple
ministries, line departments, agencies and entities ultimately converging efforts at the ULG level.

The following are the eligible areas in which the ULGs & Regions will be able to use the IDA
performance grants.
Table 20. Eligible Capacity Building Areas for ULGs and NRS

Capacity Building Area Capacity Building activity

Training, seminar, and 1. Short-term local training and related operating expenses
conferences 2. Selected short-term training/courses (up to three months’ duration)
3. Peer to peer support across ULGs
4. Study tours as planned by the ULGs, with clearly defined learning objectives and
follow-up action plan
(study tours by ULGs must be coordinated by the region/ MUDCo as part of the
planning process)
5. Seminars/conferences/workshops/meetings expenses
6. Training materials, trainers/resource person fees
7. Hire of venue /hotel accommodation
8. Refreshments
Organizational and System 9. Training needs assessment
Development 10. Assessment of IT system needs
11. Organizational culture change – one stop shop, client orientation, contracting out,
etc.
12. Social accountability and behavior change
13. Organizational structure
14. Filing and archive system
15. Land management and administration systems
16. Disaster detection, response and risk reduction systems
17. Financial systems (IBEX, etc.)
18. Management information and decision-making systems
19. Public consultation and engagement platforms
Technical assistance 20. Consultancy fees and related operating expenses (for studies related to ULG service
delivery operations, and institutional policies, laws, bye-laws, regulations,
procedures) and organizational development (see above). This includes technical

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Capacity Building Area Capacity Building activity
assistance, consultancies, training and related operating expenses procured by the
federal level to support old (44) and new (73 )ULGs and regions
21. Printed material and stationery
Equipment Equipment related with the capacity building support (not buildings) including:
22. Motor bikes (up to 1 percent of investment grants and regional/city contributions) 63
23. Office and field equipment including surveying equipment procured by the federal
to support the regions and ULGs

20.5. Capacity Building Modalities

The capacity building under UIIDP will be done through four modalities as follows: -
Capacity Building Modalities
Table 21. Capacity Building Modalities

No Modality Details
1 Structured This being the most common and classic CB modalities will be used in all
learning through
situations. In addition to the current system of both the regional and federal teams
class room
trainings directly training ULG level officers drawn from all over, the focus would be also
on developing Training of Trainers (ToTs) at regional and federal level. The
ULGs will be able to draw resource persons from such a trained pool of ToTs.
ToTs will be developed for each of the thematic focus areas. The need also covers
further development and refinement of training curricula and modules. Identifying
thematic champions from the ULGDP II ULGs, preparing them as ToTs and
making available the ToTs lists to ULGs will be attempted.

2 Technical The technical assistance is about providing on site and on the job short term hand
assistance and on
holding support, backstopping support and troubleshooting to ULGs on
the job training
specialized implementation of systems and practices. This modality was applied
under ULGDP II and will be further strengthened in UIIDP. The modality is
aimed at transferring on the job skills and handholding support to ULGs. Staff
who have been trained and have sufficient on-the-job skills including fixing of
issues and troubleshooting will be identified to provide TA at the ULGs, regional
entities and federal counter-part agencies.

3 Learning and Knowledge exchange platforms will be organized among ULGs as well as
knowledge employees and practitioners within the thematic focus areas. ULGs and
exchange practitioners will be provided with structured opportunities through peer-to-peer,
platforms face-to-face, learning and knowledge exchange for better adoption and practice of
the new knowledge. These are powerful tools aimed at transferring tacit and
explicit knowledge. The specific tools which will be introduced include thematic

63
Regions can procure vehicles only for RMTs (maximum 2 cars per team)
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 working groups, periodic interface meetings with ULG representatives and
regional / federal teams, mentoring by successful ULGs etc.
The main knowledge exchange platforms to be considered under UIIDP and off
course implemented partly under ULGDP II are: - (a) Sectoral thematic working
groups; (b)Regional workshops on TA and follow up reports; (c) APA result
validation workshop; (d) Experience sharing among ULGs within and across
regions; (e) Experience sharing among regions

4 Guidelines and Guidelines and operational rules are issued in bits and pieces during at different
systems rollout
times to ULGs. A compendium of the latest and updated reference guidelines will
be developed on important thematic areas. An electronic repository of all such
rules regulations and guidelines will be made available by federal (MUDCo) and
region to ULGs with appropriate indexing and easy access relating to all aspects
of urban governance, planning and management. This will be an important CB
modality to be rolled out by the federal team. Regions are especially responsible
in disseminating regional proclamations, directives, manuals that are relevant to
the program. Innovations to improve processes like filing and retrieval of
information for participatory planning and budgeting, citizen monitoring (report
cards), revenue enhancement, asset management and maintenance require system
development for improving ULG performance.

20.6. Capacity Building Support Systems under UIIDP

Federal Level
All federal government executed institutional development and CB activities for supporting
urban planning and management in the country will be packaged through the IPF window. The
IPF window will be used to fund a range of institutional and capacity development interventions at or
coordinated by the federal government level. The implementing agency will be the MUDCo. All
CB activities currently carried out at the federal level will be expanded in scope and broadened on
scale to enhance and reach out to all the newly added ULGs. The IPF will be divided in to four main
components which focus on various elements of institutional strengthen, M&E, assessments, system
development and more detailed studies and consultancies to ensure future sustainability of the ULG
finance and infrastructure/service delivery systems. The components of the IPF will be:
 Component 1: CB and system or organizational development of Federal institutional entities
 Component 2: CB and system development coordinated by MUDCo to support Regions and
ULGs
 Component 3: UIIDP Operation Management
 Component 4: Annual performance assessment and Value for Money Audits for UIIDP
Please refer to Section 7.8 for more details on planning and budgeting procedures under the
IPF.
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Regional & ULG levels

Capacity building at ULG and regional level will be supported through the PforR instrument
while the federal level initiatives will be supported through an IPF. Therefore, the CB efforts at
ULG and regional government level will be consistent with the PforR instrument and disbursements
are directly linked to the achievement of pre-defined verifiable results, the disbursement linked
indicators (DLI).

The CB to regional governments will focus on building the capacities of Regional Government
Entities. The Regional Government Entities include Bureaus of Urban Development (BUDHo),
Regional Auditor Generals, Regional Environment Forest and Climate Change Agencies (REFCCCs),
Regional Revenue Authorities (RRAs), Regional Construction Bureau, Food Security and Job
Creation Agency, Investment Commission, Women Affairs, Regional Land Information Agency,
Land Development Agency, Urban Planning Institute and Regional Procurement Agencies (RPAs).
The activities are aimed at helping them achieve DLIs 4 to 7. The regional entities together will also
facilitate achievement of development results at the ULG level. The current system of one focal
person for each of the regional entity will be strengthened to institutionalize CB at the regional
government level.

The capacity building planning at the regional level will be transformed to fully reflect the
needs of the ULGs while at the same time incorporating the needs and requirements of the
regional entities. The CB plan need to incorporate the mandatory and other required programs to be
delivered by each of the regional entities to ULGs. A brainstorming and visioning workshop will be
organized at the regional level involving all key functionaries of the regional entities to prepare a
three-year plan and CB vision for each of the entities. The CB plan at the regional level has to
incorporate programs covering all the 4 CB modalities. The plan format need to be revised to
incorporate tasks breakdown for each program, expected mile stones to be achieved and the intended
deliverables / results. The regional government needs to convene a consultation workshop with the
ULGs before finalizing the CB plan, to ensure that there is common understanding among all the
players. This will ensure that the regional level CB plans will be created jointly, designed and
implemented by involving downstream ULGs and lateral regional government entities.

As part of the CB plan, the regional government entities will engage in specialized technical
assistance. The technical assistance will be aimed at: (i) organizational development; (ii)
consolidating and streamlining rules and guidelines relating to the mandated thematic area; (iii)
business process re-engineering; (iv)Experience sharing and knowledge exchange in the thematic
area; and (v) outreach support to ULGs requiring specialized support. Each of the regional entities
will setup a CB cell to design and oversee these activities. Since the regional teams and federal teams

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are also planning and carrying out CB, TA support for the ULGs will be published in advance in the
form of a specialized TA schedule to avoid duplication. The technical assistance package will be an
allowable item in the CB plan which will be in addition to the four modalities of the CB.

The focus of self-planned and self- implemented CB activities by the ULGs (with the support of
streamlined ToT and TA) will be subjected to the fulfillment of minimum conditions and
performance measures relating to DLIs 1,2 and 3and linked to the APA guidelines. Each ULG
will be able to plan for and spend up to 5% of the performance-based grants on CB activities planned
following the process and according to the formats included in the CB manual. UIIDP aims to bring
about a reform in the formulation of CB strategies which will be transformative and accelerate
capacity development of ULGs. As in ULGDP II, the ULG executed CB activities have to adhere
to a CB investment menu.

20.7. Preparatory Capacity Building of new 73 cities

Supply side intervention to build long term capacity of ULG staff on urban governance,
(component 1 above) planning and management will be ensured through a partnership program
with a consortium of universities. Building upon the previous experience of Ethiopian Civil Service
University (ECSU) providing structured courses on urban management, UIIDP will roll out a better
designed and regionally delivered CB program. High quality training will be provided to 792
facilitators (TOT participants) drawn from 73 new UIIDP cities for a duration of 5-10 days  in 12
training modules. The consortium of Universities together with the federal and regional mobile teams
will draw up courses from the thematic areas of priority and deliver the program through university
campuses. As witnessed by the WB capacity building technical assessment team most trainers from
the universities, lacked practical skills on project implementation and trainees in ULGDP II were not
exposed to practical examples and best practices. To fill this gap CB to be delivered by universities
for trainees from cities included in UIIDP will focus on providing theoretical knowledge on different
thematic areas while the CB on practical skills and best experiences will be delivered by the federal
and regional mobile teams.The federal mobile team will also be responsible for drawing up the
curricula, training schedule and follow up of the action plan and implementation of key take away
from the courses. Two/Four international experts will be recruited to provide TA for the design and
delivery of high quality training program for UIIDP cities.

The first APA will be conducted in October 2018 -December 2018 which means that the new 73
cities will have received seven (7) months of intensive support and capacity building for them to fulfil
the minimum conditions by October 2018. The consultancy contracts for the TAs for capacity
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building of 105 cities (inclusive of the targeted 73 new cities) are due to be awarded at the middle of
February 2018 and are for 18 months which means that the additional 73 new cities will, up to July
2019, continue to be assisted on the performance measures and also on the minimum conditions in the
unlikely event that some of the cities fail to satisfy the MCs the first-time round. Cities that fail to
satisfy the MCs in the 1st APA will be re-assessed in the 2nd APA in August 2019.

The full annual assessment covering both MCs and PMs will commence from the second APA
onwards (that is starting in September 2019). Such a transitional arrangement will help the new batch
of comparatively smaller cities acquire sufficient capacities to graduate and qualify themselves for the
full assessment. Such an arrangement would also provide additional emphasis for CB in strategically
important thematic areas like urban resilience and local economic development being rendered
important by GoE. This is also based on the successful up scaling experience from ULGDP I to
ULGDP II which followed similar principles.
20.8. Capacity Building Planning for Federal, Regional & ULG levels
The federal UIIDP Annual Capacity Building Plan (CBPs) will be prepared by the Urban Revenue
Enhancement Fund mobilization and Finance Bureauof MUDCo each year before 21 Megabit (end
March) for implementation in the following Ethiopian Financial Year.

The Annual Capacity Building Plan development process will be led by the Revenue Enhancement
Fund Mobilization and Finance Bureau in close consultation with:

1. The Office of the Federal Auditor General,

2. The Environment Forest and Climate Change Commission

3. The Ministry of Labor and Social affairs

4.

5. The Ministry of Trade and Industry

6. The Federal Public Procurement and Property Administration Agency, and

7. The Federal Ethics and Anti-Corruption Commission.

8. The Ethiopian Customs and Revenue Authority

The Federal Capacity Building Plan is a requirement for the disbursement of funds (biannually) by the
UIIDP to the Ministry of Urban Development and Construction and the abovementioned
Ministries/Agencies.

Annual Capacity Building Plan of Regions

UIIDP Annual Capacity Building Plan (CBPs) for Regions will be prepared by the Regional Bureaus
of Urban Development and Housing (BUDHos) each year before 21 Megabit (end March) for
implementation in the following Ethiopian Financial Year.

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The Annual Capacity Building Plan development process will be led by the Regional Bureaus of
Urban Development and Housing (BUDHo) in close consultation with:

1. The Office of the Regional Auditor General,

2. The Regional Revenue Authorities,
3. The Regional Environmental Protection Authority,
4. The Regional Labor and Social affairs
5. The Regional Gender Bureau
6. The Regional Public Procurement and Property Administration Agency, and
7. The Regional Ethics and Anti-Corruption Commission.

The Regional Capacity Building Plan is a requirement for the disbursement of funds (biannually) by
the UIIDP to:

1. The Regional Bureau of Urban Development and Housing - – or the Regional equivalents,
2. The Office of the Regional Auditor General,
3. The Regional Revenue Authorities,
4. The Regional Environmental Protection Authority,
5. The Regional Public Procurement and Property Adminstration Agency

The funds will be disbursed each year to the five agencies described above, dependent on the
satisfactory performance of each agency which will be measured by independent experts each year
based on the prior year’s performance.

Annual Capacity Building Plan of ULGs

UIIDP Annual Capacity Building Plan (CBPs) for ULGs will be prepared by the Mayor’s Office
and/or City Managers each year before 21 Megabit (end March) for implementation in the following
Ethiopian Financial Year

The first Annual Capacity Building Plan will be prepared a bit later, by 23 Genbot 2010 (end May
2018) because the allocation of funds will be announced only in Genbot 2010 (May 2018).

For later Annual CBPs announcement of UIIDP fund allocations will be made by end Tir (7 February)
following completion of the Annual Performance Assessment (APA) of the 9 Regions carried out
each year.

The Annual Capacity Building Plan development process will be led by the ULG in close
consultation with all relevant offices of the ULG, especially those concerned with UIIDP
implementation, and the Regional Bureau of Urban Development and Housing or its Regional
equivalent. The ULG’s Annual Capacity Building Plan will take as its starting point the

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 comments and recommendations arising from the previous Annual Performance Assessment in so
far as capacity building gaps were identified as well as the Capacity Self-Assessment reports of
ULGs .
The ULG Capacity Building Plan is a requirement for the disbursement of funds (biannually) by
the UIIDP for Capacity Building purposes – a maximum of 5% of Performance Grant funds
allocated for use.

20.9. Capacity Self-Assessment

The purpose of the self-assessment: is to identify the current status of ULGs with regards to
institutional capacity as per requirements in the UIIDP POM and other guidelines as well as the status
of their performance as per the UIIDP APA guideline and also against regional and national average
results of previous assessments. This will help them identify the critical capacity gaps in achieving
program objectives as well as gaps in city-level urban development and service delivery objectives.
Besides this self-assessment will form the basis for capacity building plans for the coming year. At
the end of self-assessment ULGs will be able to develop a vision and road map for sustainably
improving the infrastructural and institutional development performance and service delivery to the
citizens. The results of the self-assessment should inform all capacity building activities in the areas
covered by the CBP of ULGs as well as by the Regional and Federal CBPs.
Responsibility for self-assessment: The city Capacity building cell composed of focal persons led by
the Capacity building focal person will be responsible to conduct the self- assessment
Ownership of the Assessment:
It is important that the leadership, the UIIDP staff and the sector offices/departments in the ULG are
aware of the need for the capacity assessment and are supportive of the process and the outcomes.
Focus of assessments: The self-assessment will cover both institutional and personal capacity gaps in
all thematic areas on both minimum conditions and institutional performances that are to be
summarized in the overall gap analysis.
Objectives of self-assessment include: It helps the ULG CB team acknowledge its achievements,
diagnose the areas of improvement, highlight key challenges and constraints, and identify
opportunities to realize their potential.

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SECTION 21: RESULTS MONITORING, EVALUATION &
REPORTING SYSTEM

21.1. Program Results Framework

The five (5) key results indicators that will be used to monitor progress towards the achievement of
the Program Development Objective are as follows:
(a) People provided with improved urban living conditions under the UIIDP [corporate indicator].
(b) Cities with improved livability, sustainability, and management [corporate indicator].
(c) Composite institutional performance of participating ULGs, averaged across all cities.64
(d) Composite performance forachievement urban infrastructure and service targets, maintenance
performance and value for money in investments by ULGs, averaged across all cities.
(e) Composite performance for achievement of LED targets, averaged across all cities

The complete table on the results framework and monitoring is provided in Annex 1

21.2. Objectives of the Monitoring, Evaluation & Reporting System

The objective of the monitoring and evaluation (M&E) system is to generate timely and relevant
feedback on the UIIDP’s implementation progress and achievement of expected outcomes to enable
the implementing agencies to address issues as quickly as possible once they arise.

21.3. System Design & Guidelines

Monitoring and reporting will take place at all three levels of government. As under ULGDP II, the
monitoring and evaluation specialist based at each ULG, BUDHo and MUDCo will be the key person
in the system, collecting and reporting primary data related to the indicators of the ULGDP II’s key
results areas. The M&E specialist will be responsible for the M&E system at the city level and
prepare comprehensive quarterly progress reports containing agreed data and transmit it to the
regional government.

 Urban Local Governments: The ULGs will compile UIIDP monthly, quarterly, semi-annual
and annual progress and financial reports, as described in UIIDP Monitoring, Evaluation and
Reporting System and Guidelines for cities, Regions and MUDCo and submit these to
Regional BUDs and BoFEDs respectively.
 Federal & Regional: The M&E specialists at the federal and regional level (in the federal or
RMCBM teams) will assist in establishing and maintaining the computerized M&E system,
provide training and back-stopping support to staff at the regional level, and in turn, local
level to ensure that the city-specific reports are timely, comprehensive, and accurate.
 Regional: The regional M&E specialists will compile each city’s progress report into a
regional progress report and submit it to MUDCo.
 Federal: The federal M&E specialists will, depending on need, assist in compiling the
regional progress reports into a national report and submitting it to the World Bank for
review.

64

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21.4. Data Generation and Collection

The data to track many of the key performance indicators will come primarily from the government’s
own systems. The table below summarizes the various inter-linked tools which will be used to
monitor and report on the UIIDP.
Table 22. Data Generation & Collection

Type of information Means Frequency

Progress on UIIDP development ULGs, regional governments, and Bi-annually and
objectives and technical aspects MUDCo. Annually

APA. Annually
Institutional performance APA. Annually

Achievements of infrastructure APA. Annually

plans and targets.

Value for Money. VfM audits, results to feed into the APA. Every year starting the
second year

Physical progress and outputs ULGs’ regular progress reports to regions Quarterly &Bi-annually
and then to MUDCo

Financial reporting (use of funds, Annual financial statements, semi-annual Bi-annually and
expenditure composition, and the financial reports, internal audit reports, annually
like). annual external audit reports.

Mid-term review: Midterm review. Once in the Program

Detailed review of implementation (2020)
experience, achievement of the key
performance indicators, and
progress towards the PDOs.

21.5. Reporting

The MUDCo will be responsible for overall UIIDP reporting. It will consolidate and analyse the field
data submitted by regions and ULGs and update the UIIDP’s results framework bi-annually. It will
also produce and submit to the World Bank a mid-year and an annual UIIDP report.

21.6. UIIDP Performance Review & Evaluation

Quarterly Performance Review. As part of the Ministry’s Plan Preparation, Monitoring and
Evaluation System, the Ministry holds quarterlyperformance review and evaluation meetings for all
its programs.
These meetings with BUDHOs, City Mayors and Managers will also be used by the Ministry and
UREFMFB to review and evaluate the UIIDP.

P a g e 185 | 326
The review and evaluation of UIIDP at these meetings will be based on the reports submitted by
ULGs to BUDHOs and by BUDHOs to UREFMFB. These will be consolidated/summarized by
UREFMFB for the meetings.
Monthly Progress Reports (soft copies by email or through computerized system)are submitted
by ULGs to BUDHOsby not later than 7 calendar days of the end of Ethiopian calendar
monthand by BUDHOs to UREFMFB bynot later than the 14 calendar days of end of the
Ethiopian calendar month. Monthly Progress Reports are for internal use by MUDCo to monitor
progress and take timely action on issues arising and are not required to be formally submitted to
IDA. They may be submitted to IDA for information upon request. UREFMFB will submit the
Monthly Progress Reports to the Ministers and relevant Bureau Heads in MUDCo.
Quarterly Progress Reports(soft copies by email or through computerized system)are submitted
by ULGs to BUDHOsby not later than the end of calendar month in which the quarter ends (i.e.
October 31 for 1st quarter and April 30 for 3rd quarter. Note: QPRs are not submitted for 2nd quarter
and 4th quarter respectively as they are replaced by semi-annual and annual reports respectively ) and
by BUDHOs to UREFMFB bynot later than the 7 th of the calendar month that follows the
calendar month in which the quarter ends (i.e. by November 7 for 1st quarter and May 7 for 3rd
quarter). Quarterly Progress Reports are for internal use by MUDCo to monitor progress and take
timely action on issues arising and are not required to be formally submitted to IDA. They may be
submitted to IDA for information upon request. UREFMFB will submit the Quarterly Progress
Reports to the Steering Committee Members, Ministers and relevant Bureau Heads in MUDCo.
Semi-Annual Program Report for UIIDP (July-January) (soft and hard copies): Mid-year review
of implementation experience, institutional performance, physical progress and outputs, technical
aspects of the Program, and achievement of some of the Disbursement Linked Indicators.
The mid-year report covers, among other things, the following issues: -
Summary of aggregate Program expenditures and Program infrastructure delivered by ULGs.
Summary of aggregate procurement and contract management progress, challenges and
recommendations.
Summary of aggregate capacity building activities undertaken by ULGs and regional governments.
Summary of aggregate environmental and social performance reports from each ULG, including
information on grievances.
Semi-Annual Program Reports are submitted by ULGs to BUDHOs by not later thanJanuary 31
each year and by BUDHOs to UREFMFB not later thanFebruary 7 each year). UREFMFB
submits the consolidated Semi-Annual Program Report for UIIDP to IDA, Steering Committee and
relevant Ministry officials by not later than 45 days after the end of the half year as per the deadline
in the Financing Agreement (i.e. by not later than February 22 each year).
Annual Program Report (July-July (soft and hard copies):Annual review of implementation
experience, institutional performance, physical progress and outputs, technical aspects of the Program,
and achievement of some of the Disbursement Linked Indicators.
The annual report covers, among other things, all the above mentioned issues covered in the mid-year
report as well as the following issues:-
Summary of aggregate information on procurement grievances.
Summary of aggregate information on fraud and corruption issues.

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Annual Program Reports are submitted by ULGs to BUDHOs by not later than July 31 each year
and by BUDHOs to UREFMFB not later than August 7 each year. UREFMFB submits the
consolidated Annual Program Report for UIIDPto IDA, Steering Committee and relevant Ministry
officials by not later than 45 days after the end of the financial year as per the deadline in the
Financing Agreement (i.e. by not later than August 22 each year).
Mid Term Review and Evaluation, 2020: Detailed review of implementation experience,
achievement of the Disbursement Linked Indicators, and progress towards the PDOs
A Mid Term Review (MTR) and evaluation of the project will be carried out in 2020.
MUDCo will prepare and furnish to the Bank, at a date to be agreed with the Bank, a midterm report
incorporating: (a) progress made in meeting the Project’s objective during the period preceding the
report; (b) overall Project performance against Project performance indicators; and (c) measures
recommended to ensure the efficient carrying out of the Project and the achievement of the objectives
thereof during the period following such date.
Final Evaluation and Implementation Completion and Results Report (ICR).The World Bank
will prepare an Implementation Completion and Results Report (ICR) for the UIIDP as is the case
with all lending operations that the World Bank finances.
The ICR will be prepared at the time of project completion in 2023. It will assess (a) the degree to
which the UIIDP achieved its development objective and outputs as set out in the project documents;
(b) other significant outcomes and impacts; (c) prospects for the project’s sustainability; and (d) Bank
and borrower performance, including compliance with relevant Bank safeguard and business policies.
The ICR also provides the data and analysis to substantiate these assessments, and it identifies the
lessons learned from implementation.
MUDCo, with inputs from regions and cities (as well as inputs from independent evaluators), will
prepare its own evaluation report on the UIIDP’s execution and initial operation, its costs and
benefits, the bank’s and borrower’s performance of their obligations under the Financing Agreement
and the extent to which the purposes of the credit were achieved. The MUDCo’s summary of this
report (or the full report, if it is 10 pages or less) is attached unedited to the ICR. The MUDCo will
also assist IDA in the preparation of the ICR.
ECSPG City Performance Measurement Framework:The Ministry with technical assistance from
UN-Habitat is developing the City Performance Measurement Framework (CPMF) and tool that will
be used to measure all cities’ performance on selected performance indicators related to the 10 pillars
of the ECSPG. It will also eventually measure the City Prosperity Index (CPI) starting with all the 44
cities participating in the ULGD II and expanding in a later phase to cover all the 117 cities.

21.7. Capacity Building for M & E.

The UIIDP provides support for two M&E specialists at the federal level. Moreover, each RMCBM
team will include at least one M&E specialist. Cities are required to appoint an M&E specialist to
their UIIDP team as a minimum access condition. The UIIDP will finance regular training of M&E
specialists, technical assistance, and other capacity support required to establish and operate an
effective M&E system.

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SECTION 22: RISKS MITIGATION AND MONITORING SYSTEM&
PROGRAM RISK LOGICAL FRAMEWORK

22.1. Introduction

The Ministry of Urban Development &Construction has established and installed a Risk Mitigation
and Monitoring System which comprises a Program Risk Logical Framework that will be monitored
and updated continuously and reported on every quarter.

22.2. Purpose of the Program Risk Logical Framework

The purpose of this risk logical framework is to:

1. Assess the probability and impact of risks to the program development objective, key result
areas and program deliverables (outputs)
2. Determine mitigating actions which may be taken to address the risk before the risk
materialises and impedes delivery of key program outputs
3. Monitor the progress of actions taken to address risks
4. Inform the Ministry, Steering Committee, Technical Committee and World Bank of risks and
actions taken or to be taken to address risks. As such the risk framework in conjunction with
an updated results framework provides a snapshot of the UIIDP status at a given time.

22.3. Users of the Risk Logical Framework

The project risk framework will be used by the UIIDP Unit and UREFMFB to manage risks and share
information with Ministry, Steering Committee, Technical Committee and World Bank. As such the
risk framework is a key program management tool. The risk framework will be updated and
distributed on a quarterly basis and will form part of UIIDP Progress Reports. The UIIDP Unit
Coordinator, with assistance from all members of the Unit, will manage and update the Program Risk
Logical Framework.

22.4. Format of the Risk Logical Framework

The format of the risk framework has been modified from that contained within the Project Appraisal
Document where risk was not assessed in terms of probability of occurrence and impact to the project
if it does occur. An overall risk rating is then derived from the combination of the ranking of
probability and impact.

A Red, Amber, Green colour coding has been added to the risk framework. This will allow critical
risks to be immediately identified by the reader. High risks highlighted in red are those issues, which
require immediate action in order for the risk not to negatively impact on the program delivery. This
will assist executive level staff in assessing key issues immediately.

P a g e 188 | 326
Risks not previously identified and assessed prior to the initiation of program implementation may be
added to the framework during implementation. Accordingly, as project implementation continues
new risks will be added to the framework and risks which were previously identified will be simply
coded green when / if the risk dissipates.

Risks which have been added since the last update will be identified through the text “not previously
registered”

Table 23. Overall Program Risk Rating

World Bank MUDCo MUDCo

Assessment Assessment Assessment
Risk
Project Current
Appraisal Stage
Effectiveness

1. Political and Governance S

2. Macroeconomic M

3. Sector Strategies and M

Policies
4. Technical Design of S
Project or Program
5. Institutional Capacity for
Implementation and S
Sustainability
6. Fiduciary S

7. Environment and Social M

8. Stakeholders M

9. Other

OVERALL S

H = High; S = Substantial; M = Moderate; L = Low

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PROGRAM RISKS LOGICAL FRAMEWORK

Red=High Risk; Amber=Substantial Risk; Green=Moderate Risk;

Table 24. Program Risks Logical Framework

No Risk Risk Risk Rating Current Risk Analysis & Mitigation Measures As at Program
rating at at Program Risk Appraisal
Program effectiveness Rating Risk Risk Impact
Appraisal Likeli-
hood

A To Program Development Objective

1 APA will not be To ensure that the independent APA is completed on time, MUDCo will High High
conducted on time initiate the procurement process for selection and assignment of independent
consultants for the APA through multi-year contract. TORs for the 1 st and 2nd
APA have already been prepared
2 Technical Assistance for Evaluation completed for all three TA consultancy services and awaiting High High
Capacity Building of contract award. The procurement process was stalled due to complaint raised
additional 73 cities will and Ministry worked with FPPPAA to quickly resolve the baseless
not start on time complaint. Close follow up and monitoring of the procurement process
should be continued to ensure contracts are awarded by January 2018.
3 Some of the 73 new Robust monitoring and evaluation system for the technical assistance on Low High
cities will not achieve capacity building of new cities to be developed and implemented to get the
the Minimum Access status of each city, identify problem areas at any early stage so that the
Conditions consultants and the federal/regional teams can take corrective action before
the APA commences.
4 The 73 new cities are As above. Low High
not provided adequate
support to achieve
expected performance
levels on the
performance measures
and indicators
5 Delays in preparation, Ensure the APAs start on time and that ULGs start the planning and High High
No Risk Risk Risk Rating Current Risk Analysis & Mitigation Measures As at Program
rating at at Program Risk Appraisal
Program effectiveness Rating Risk Risk Impact
Appraisal Likeli-
hood
review and approval of budgetary process by February as be the budgeting calendar. Decentralise
Capital Investment the approval of CIPs to regions and federal level responsibility will be for
Plans, Asset post review. Provide intensive training and support, especially to the new 73
Management Plans and cities, on preparation of CIP, AMP and REP. FMT to provide support to
Revenue Enhancement RMTs on review of CIPs at regional level.
Plans for all 117 cities

B To ProgramKey Result Areas

1 Enhanced citizen participation and engagement in ULG planning and budgeting

Nil

2 Increased own source revenue at the ULG level

2.1 Regions continue to MUDCo has prepared Urban Finance Strategy and its implementation and High High
have authority over roll out to regions and ULGs will resolve this and other issues. However,
municipal tariff MOF and MUDCo have agreed that it is be redone.
adjustments and Incentives for increased own source revenue generation that have been put
unwilling to approve in the Performance Measures will also put some pressure on regions to
increases in tariffs revise the tariffs.

3 Improved infrastructure, service delivery, O&M systems

3.1 Not enough Incentives related to maintenance deficit reduction to be put in the DLI3 for High High
maintenance budget ULGs to set aside more funds for maintenance.
allocated to significantly Monitoring, follow up and reporting of maintenance budget and utilization
reduce the maintenance indicators such as maintenance budget as percentage of total maintenance
deficits in all ULGs deficit.

4 Improved efficiency and effectiveness in fiduciary management

4.1 Lack of internal process ULGs must comply with the MCs to participate in the Program. High Low
committed to primary Minimum institutional and staff capacity should be in place. This will be
complaint checked annually through APA. Second, implementation of activities

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No Risk Risk Risk Rating Current Risk Analysis & Mitigation Measures As at Program
rating at at Program Risk Appraisal
Program effectiveness Rating Risk Risk Impact
Appraisal Likeli-
hood
receiving/hearing. Low specified in the PAP will be closely monitored. This includes measures to
responsiveness to public build capacity of ULGs and other entities for procurement. Third, an annual
grievances of land and procurement performance audit will be carried out through the RPPPAAs.
closely related program This will also be supported by DLI 8 providing an incentive for the
activities RPPPAAs to perform. Fourth, the MUDCo through the OFAG or an
4.2 Non-compliance with independent consultant will carry out VfM audits of ULGs’ investments in High High
national and regional infrastructure. The APAs will include assessment and scoring of the
proclamations and timeliness and quality of the audits (DLI 8 and the IPF), and the
directives on performance of the ULGs (based on the findings of the procurement and
procurement VfM audits, DLI 2 and DLI 3).
4.3 Weak contracts High High
administration,
complaints handling
mechanism, and the
inefficient resolution of
contractual disputes
4.4 transparency and
fairness issues related to
procurement process, as
the result of not
implementing the legal
procedures available
4.5 Competitiveness issues Harmonised procedure to be prepared and issued by MUDCo on High Low
as the result of registration, provision of incentive mechanisms (without compromising
involvement of state- fairness to non-MSEs), follow-up and graduation procedures for MSEs
owned enterprises in
tenders and application
of different preferential
treatment and
reservation schemes to
MSEs
4.6 Fraud and corruption A; (b) streamline the fraud and corruption function, recording and High High
and grievance in urban reporting arrangements in ULG (c) assign coordinating mobile team
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No Risk Risk Risk Rating Current Risk Analysis & Mitigation Measures As at Program
rating at at Program Risk Appraisal
Program effectiveness Rating Risk Risk Impact
Appraisal Likeli-
hood
land administration and members and ethics and anticorruption officer in theMUDCo for
provision of municipal supporting/building accountability and monitoring fiduciary
services and low rate of personnel at ULGs; (d) start introducing systematic measures to
responsiveness to cases record, respond to public grievances effectively, monitor response
rate, enforcement of actions and disclose to public grievances in
regards to public grievances/complaints on program activities in
sample ULGs; (e) provide cascaded training on the functional roles,
process of tracking, recording, and data organization and reporting to
ULGs; (f) supervise/check sample participating ULGs for effective
recording of fraud and corruption cases/tip-offs as per the format (to
be verified by report of REACCs/FEACC); (g) use public media for
disclosure and information sharing related to program activities,
procurements and providing awareness to the public and enhances
transparency of the procedures of the fraud and corruption and
grievance/complaint handling system

5 Improved environmental and social management and safeguards

5.1 Noncompliance by To provide guidance and ensure compliance on social and environmental Low High
some ULGs, especially management, MUDCo working with relevant ULGs will update and adopt
the new ones, on ESMSG and RSGs in all ULGs by end January 2018.
safeguards instruments
and procedures
5.2 Failure by some ULGs Intensive and continuous training (both classroom based and on the job) to High High
to properly assess, be given to al ULG focal persons by the RMTs and FMT.
categorize and monitor REPAs, which are responsible for review and approval of screening reports
environmental impacts, to be strengthened.
resettlement issues Incorporate environmental and social impact and risk criteria in the site
aswell as putting in selection screening forms for all city level investment in physical works
place sufficient through the UIIDP window. Appropriate mitigation measures to address
mitigating measures and induced impacts should also be identified during the site screening process
providing adequate for all new construction activities proposed through the UIIDP.
compensation Environment and social staff in national, regional and city levels must have
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No Risk Risk Risk Rating Current Risk Analysis & Mitigation Measures As at Program
rating at at Program Risk Appraisal
Program effectiveness Rating Risk Risk Impact
Appraisal Likeli-
hood
the required knowledge and skill sets to implement based on the
environment and Social management and resettlement systematic guidelines.

6 Strengthened accountability and oversight systems

6.1 Lack of capacity in MUDCO and regions to provide format and reporting templates to ULGs Low High
ULGs to properly Incentives also put in the Performance Measures for ULGs to properly
record and report to record and report on services delivered as per service delivery standards
higher levels and
citizens on services
delivered as per service
standards
7 Strengthened ULG resilience, improved local economic development (LED)
Lack of knowledge and Manuals and guidelines with templates developed and implemented. High High
capacity by ULGs to Intensive and comprehensive training provided.
implement the new
activities

8 Enhanced gender equity in the ULG operations

C Other Key Program Areas & Activities

1 Staffing at all three levels of government (federal, regional & ULG)

1.1 Lack of sufficient To ensure sufficient capacity in federal and regional governments to High High
capacity in FMT & support the up-scaled UIIDP, the federal and regional governments
RMTs to support the will fill staffing gaps and procure and deploy FMT &RMTsby UIIDP
enlarged effectiveness.
Additional positions and numbers proposed for FMT & RMT to
support increased number of ULGs and also additional thematic areas
that were not covered in ULGDP II.
A new and improved remuneration package for FMT and RMT to be

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No Risk Risk Risk Rating Current Risk Analysis & Mitigation Measures As at Program
rating at at Program Risk Appraisal
Program effectiveness Rating Risk Risk Impact
Appraisal Likeli-
hood
put in place by UIIDP effectiveness.

1.2 Inadequate ULG focal To ensure sufficient capacity in ULGs to implement the program High High
persons and other key activities, the ULGs will fill staffing gaps and positions of focal
staff persons by UIIDP effectiveness.
A new and improved remuneration package for ULG focal persons to
be put in place by UIIDP effectiveness.

2 Capacity Building
2.1 Capacity building To enable the supply-side capacity building activities for ULGs, High High
activities are not MUDCo will sign agreement(s) (memorandum of understanding)
properly formulated, with relevant federal, and regional training institutions for course
implemented and design and administration for new ULGsby UIIDP effectiveness.
monitored
Capacity Building Manual developed by MUDCo, implemented and
monitored.

3 Monitoring & Evaluation System

3.1 ULGs, especially the M & E Guidelines developed and implemented Low High
new ones, lack capacity M & E System put in place in all ULGs and training provided.
to implement an Computerization of the system to be undertaken which will simplify the
effective M & E System system and reduce the workload

Red=High Risk; Amber=Substantial Risk; Green=Moderate Risk;

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SECTION 23: PROGRAM ACTION PLAN (PAP)
To address the risks faced and the actions to be taken by MUDCo, the regional government and the
ULGs, a PAP has been prepared with the agreed actions. The key ones are highlighted as below. The
full PAP is presented in the Table below.

 To ensure sufficient capacity in MUDCo to manage the UIIDP, the UIIDP Unit will be
further enhanced to 32 staff. MUDCo will fill its vacant positions and engage additional
staff by UIIDP effectiveness.

 To ensure that the independent APA is completed on time, MUDCo will initiate the
procurement process for selection and assignment of independent consultants for the
APA through multi-year contract, and ready to deploy for the 1 st UIIDP APA due to start
in October 2018 (APA Consultants to be engaged and onboard by August 2018).
Completion of all APAs as per the verification protocol, enclosed.

 To enable the supply-side capacity building activities for ULGs, MUDCo will sign
agreement(s) (memorandum of understanding) with relevant federal, and regional
training institutions for course design and administration for new ULGsby UIIDP
effectiveness.

 To ensure sufficient capacity in regional governments to support the up-scaled UIIDP,

the regional governments will fill staffing gaps and procure and deploy RMTsby UIIDP
effectiveness.

 To provide guidance and ensure compliance on social and environmental management,

MUDCo working with relevant ULGs will update and adopt ESMSG and RSGs in all
ULGs by end February 2018.

 To provide clearer guidelines to ULGs on strengthening impact on short and long-term

job creation, MUDCo will revise the UIIDP Job Creation Guidelines and provide these
to ULGs by end May 2018.

 The technical assistance to be engaged under the IPF component will provide a
multifaceted procurement and contract management, and procurement audit trainings.
The technical assistance will also prepare guidelines and manuals to the ULGs, and
federal and regional support institutions to streamline their activities.
Table 25. Program Action Plan

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 Responsible
Action Description DLI IPF Covenant Due Date Completion Measurement
Party
General
The UIIDP Unit in REFMFB will be further enhanced to 32 staff. Program effectiveness MUDCo
MUDCo filled its vacant positions and engage additional staff to fulfil
the 32 staff positions.
To ensure that the independent APA is completed on time, MUDCo will To be engaged and MUDCo
initiate the procurement process for selection and assignment of onboard by August 2018
independent consultants for the APA through multi-year contract. for the first UIIDP APA
which commences in
October 2018
To enable the supply-side capacity building activities for ULGs, Program effectiveness MUDCo
MUDCo will sign agreement(s) (memorandum of understanding) with
relevant federal, and regional training institutions for course design and
administration for new ULGs.
To ensure sufficient capacity in regional governments to support the up- Program effectiveness regional
scaled UIIDP, the regional governments will fill staffing gaps and governments
procure and deploy RMTs.
Annual Performance review and audit on Environment and social Prior to the launch of first MUDCo
management: Produce the Performance Assessment Manual, as part of APA.
the Program Operation Manual and share with 117 ULGs
Establish Program technical subcommittee comprising key technical Program effectiveness MUDCo  Briefing note on
staff of MUDCo and MoF including environmental and social established Program
management. technical subcommittee
Local Economic Development
Revision of the program’s Employment / Job Creation Guideline to By end of Year 1 of MUDCo
better clarify the two ways in which the program contributes to job UIIDP implementation
creation, (a) direct employment in public works and (b) indirect
employment creation through providing serviced land, MSE sheds and
other built facilities benefiting local firms. The guidelines also need to
be clearer on the standards that need to be followed by ULGs under
these two types of employment creating activities. Clear guidelines need
to be established on what should be considered temporary versus
permanent employment. Guidelines also need to be given regarding
what other types of follow up and support ULGs need to give MSEs to
increase their chances of survival and success.
Resilience
Identify needs and develop local DRM and emergency plan (building on By end of Year 2 of MUDCo,
woreda risk profile) UIIDP implementation NDRMC
With NDRMC, carry out detailed risk assessment to develop national By end of Year 2 of
MUDCo,
urban DRM plan; establish information and warning system; and UIIDP implementation
NDRMC
develop training program and guidance notes
 Responsible
Action Description DLI IPF Covenant Due Date Completion Measurement
Party
Gender
Development and adaptation of (a) code of conduct in employment and  UIIDP Code of conduct
sub-project contract documents for women’s rights in workplace document and
MUDCo,
including gender-based violence, sexual harassment, and equal payment protocol/procedure
By end of Year 1 of regional
for equal work and (b) potential procedures for addressing complaints document
UIIDP implementation governments,
about women’s rights in workplace (including complaint addressing
ULGs
system, accountability measures, M&E, awareness-raising strategy,
response protocol, sanctions)
Financial Management
Conduct FM Trainings to cities on the following 6 areas to build  Trainings conducted
capacities and reduce risks:
1. Budgeting-Budget preparation (including both expenditure
and revenue) and Budget monitoring
2. IBEX system (on its full functionalities)
3. Accounting processes and procedures Annually MUDCo
4. Internal control procedures with a focus on cash management,
bank reconciliations, stock and fixed asset controls
5. Internal audit
6. External audit- on audit preparation planning, on conducting,
and most importantly on audit report preparation
Prepare detailed annual training report and submit to the WB on the By August 30 of each  Training report submitted
conduct of the FM trainings noted above year for the past year MUDCo
trainings
Program funds need to be transferred in the agreed time to cities  Funds transfer data
Annually MoF and BoFED
reported on IFRs
Ensure correct recording of budget figures in accounts/IBEX. Close MoF and  Reported on APA and IFRs
Annually
follow up is required by stakeholders on low budget utilization MUDCo
Transparency -MUDCo should disclose on its website the program  APA
annual budget, in year budget executions, and program financial and MUDCo and
Annually
VfM external audit reports. Cities should also disclose annual budget, in ULGs
year budget executions, and external audit reports.
For VFM audit findings -Prepare time bounded action plan for  Reports submitted by
rectifying audit findings, follow up with Cities. Prepare regular follow Annually MUDCo MUDCo
up status report on rectified audit findings
Procurement
Provide intensive procurement and contracts management training to Within six months of MUDCo  Training Reports and
staff of the ULGs. The IPF component of the Program will deploy a TA Program effectiveness contract management
consultant who will provide technical support and training to the ULGs; and continuous guidelines/manuals
prepare step-by step contract management guidelines/manuals, which
should include dispute handling mechanisms; and prepare customized

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 Responsible
Action Description DLI IPF Covenant Due Date Completion Measurement
Party
procurement and VfM/performance audit guidelines/manuals. The
training shall include ULGs Procurement staff, and staff involved in the
implementation of procurement activities such as procurement
committee members, user department staff and tender/procurement
endorsing committee members.
The ToRs of RPPPAAs and APA should include adequate provisions to Each annual audit MUDCo  Approved ToRs
closely examine any potential loopholes in the procurement process /assessment and
which might be source of complaints. Continuous
The POM to state that ICB contracts should also be published in the By program effectiveness MUDCo  POM
international media such as UNDB online. and continuous
As part of the Project Operations Manual (POM), MUDCo to prepare By Program effectiveness MUDCo  POM
and agree with the WB on the procedures of use of SOEs and MSEs
including their registration, incentive mechanisms, monitoring and
graduation procedures without affecting the participation of other non-
SOE and non-MSE actors. Non-MSE actors will not be excluded from
bidding with MSEs of similar capacity.
Include a provision in the Project Operations Manual (POM) for the By Program effectiveness MUDCo  POM
ULGs to state in the bidding documents to exclude award to WB
debarred and suspended firms
Provide Regional Public Procurement and Property Administration Within four months of MUDCo  Training Reports
Agencies and Internal Audit units of ULGs with Procurement Audit Program effectiveness
Training and Continuous

Fraud and Corruption & Compliant Handling Mechanism

FEACC will share the data with the WB Semi-annually on FEACC/ Semi-annual Report
Semi-annual Report
Fraud and Corruption, public grievances, procurement REACCs,
for the whole
complaints in regard to program activities at the ULG ULGs
Program Period
level.
Assign complaint handling focal person for recording By end of Year 1 of
ULGs/
processing and reporting F&C, grievances and procumbent UIIDP
MUDCo
complaints at ULGs implementation
Allocate sufficient TA resource and assign coordinating
mobile team focal person/ Ethics and Anticorruption By end of Year 1 of MUDCo/
officer in MUDCo and RMT for supporting/ building UIIDP BUD
accountability and monitoring fiduciary personnel at ULGs implementation
Develop a prototype template and provide cascaded By end of Year 1 of FEACC/
training to streamline the F & C, public grievance and UIIDP REACCs,
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 Responsible
Action Description DLI IPF Covenant Due Date Completion Measurement
Party
procurement function, recording and reporting
arrangements in those ULGs where public grievance office implementation MUDCo
also follow up F & C cases.
Provide cascaded training on the functional roles, process FEACC/
of tracking, recording, data organization, reporting and Year 1, 2 REACCs,
related methods, approaches. MUDCo
Use public media for disclosure and information sharing
FEACC/
related to program activities, providing awareness to the
Year 1,2,3 REACCs,
public and enhancing the transparency of the procedures of
MUDCo
grievance/complaint handling system.
Environment and Social risk management
Establishing the Environmental and Social Management Program Established and
System at new 73 UIIDP cities and strengthen at MUDCo, effectiveness strengthened ESMS
BoU and previous ULGDP II 44 cities; Updated ESMG and
Update and endorse ULGDP II environment and social RSG
risk management guidelines mainly on Health and Safety Staffs in place
MUDCo and
(ESMSG, RSG) Screening reports
BUDs
Staffing (Environmentalist, Social development specialist, Safeguards instruments
gender specialist) in place are prepared, as
Screening for Environment and Social Risks of all Before commencing required
proposed investments and preparation of safeguards of construction
instruments (ESMP, RAP, WMP, SMP) activities
Ensure that the federal and RMTs are adequately staffed The mentioned staffing
Program MUDCo and
with environment gender and social management in place, Program
effectiveness BUDs
specialists having appropriate skills Reports
Technical Guidance and Capacity Building: Develop Prepared Capacity
capacity building and training plans, Procure and ensure building and Training
implementation of standard ULG environment and social MUDCo, plans
Program
management training program from University and/or BUDs and Training reports
implementation
other designated centres of excellence on urban ULGs Procurement reports on
Environment and Social Management System (ESMS) and resources and facilities
Addressing Resource Constraints through availing the
required facilities for environmental and social

P a g e 201 | 326
 Responsible
Action Description DLI IPF Covenant Due Date Completion Measurement
Party
management activities at all level
Increase stakeholders’ awareness on social and Developed service
environmental impacts of UIIDP sub-projects by delivery standards, and
developing a guideline for setting service delivery citizen charters
standards, and citizen charters including vulnerable groups MUDCo, Briefing note on
and organize awareness raising session for city BUDHo and conducted awareness
administrators and other experts and community members Throughout program local level and sensitization
as applicable on environment and social risk management implementation UGs, program
MoEFCC and Environment and Social
REFA Management
Implementation
Reports
Training reports
Broaden stakeholders’ involvement by including and MUDCo Briefing note on
working closely with the offices in charge of BUD, ULGs, coordination
environmental protection, Labour and Social Affairs and MoEFCC, mechanism of the
WCOs to improve planning and implementation of REFA, various relevant parties
environment and social management instruments, health, During Annual Ministry of Annual Plans, and
safety and gender equality issues and access to service by Planning, program Labor and progress reports
vulnerable group (specially the elderly and people with implementation and Social Affairs, Joint monitoring reports
disabilities). Monitoring MoWCA
BoLSA,
BoWCA
City LSA and
WAs offices
Develop a harmonized and standardized Environment and Developed TOR
Quarterly
Social Audit ToRs; and ensure quarterly performance Quarterly performance
REFA
review and annual environmental and social audit. review report
At the end of every MUDCo
Annual audit report
year
Ensure management of community and worker’s health Program MUDCo, Developed SMP
and safety risk and develop effectiveness BUDHo and Included EHS code of
SMP as required, include Health and Safety ULGs practice on contract

P a g e 202 | 326
 Responsible
Action Description DLI IPF Covenant Due Date Completion Measurement
Party
considerations/articles in the program design, make Program document
available safety protection materials, tools and Personal implementation Progress report and
Protective Equipment over the program implementation incident notification
period Prior to validating checklist
civil works contracts

Conduct adequate consultations where land (communal or Minutes of

private) is acquired and/or vulnerable person is involved Throughout the MUDCo, Consultations
and ensure proper documentation of the same program BUD, ULGs Implementation
Reports

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SECTION 24: KEY ANNEXES

Annexes attached to the POM

1. Results Framework and Monitoring

The Program Development Objective (PDO) is to enhance the institutional performance of participating urban local governments to develop and sustain urban infrastructure,
services, and local economic development.

PDO Level Results Unit of Base- Target Values Fre- Data Responsibility for
Indicators Measure line quency Source/ Data Collection
Core

DLI
FY1965 FY20 FY21 FY22 Method-
FY18 ology

1. People provided with √ 3 Number 0 4.4 million 6.6 million 6.6 million 6.6 million Annually M&E MUDCo
improved urban living
conditions under the
UIIDP66.

a.Of which female √ Percent 0 50 percent 50 percent 50 percent 50 percent Annually M&E MUDCo

2. Cities with improved √ 1-4 Number 0 117 117 117 117 Annually M&E MUDCo
livability, sustainability,
and management.67

3. Composite institutional 2 Number 0 70 75 80 85 Annually APA Measured by the

performance score in the APA,
ofparticipatingULGs, averaged across all
averaged across all cities.68 cities.The APA firm
collects the basic
data on

65
FY2019 is year zero.
66
The indicator measures hard infrastructure only.
67
This indicator measures the cumulative number of ULGs that have benefited under the UIIDP from investments in infrastructure or from investments in areas such institutional reform,
municipal finance and the like: (a) living conditions for residents; (b) financial, economic, environmental, and/or social sustainability of the city; and/or (c) city planning, systems, and
governance.
68
In the areas of planning and budgeting, assets management, public FM, procurement, own source revenue, accountability and transparency, environment and social safeguards, land
management, and urban planning.The performance of ULGs ranges between 0–100.The percentage reflects the score.
The Program Development Objective (PDO) is to enhance the institutional performance of participating urban local governments to develop and sustain urban infrastructure,
services, and local economic development.

PDO Level Results Unit of Base- Target Values Fre- Data Responsibility for
Indicators Measure line quency Source/ Data Collection

Core

DLI
FY19 FY20 FY21 FY22 Method-
FY18 ology
performance.The
PTC and MUDCo
verify the index.

4. Composite performance 3 Number 0 70 75 80 85 Annually APA See above.

for achievement of urban
infrastructure and service
targets, maintenance
performance and VfM in
investments by ULGs,
averaged across all cities.

5. Composite performance 4 Number 0 0 60 65 70 Annually APA See above.

for achievement of LED,
urban resilience andgender
targets by ULGs, averaged
across all cities.

Intermediate Results Area 1: Institutional Performance

1. ULGs that achieve an 2 Number 0 34 45 60 80 Annually APA Firm collects the

increase of own source data and MUDCo
municipal revenue of at and the WB review
least 10 percent over the and confirm.
previous year under
UIIDP.69

2. ULGs with timely 9 Number 44 60 117 117 117 Annually APA Same as above.
audits.70

69
The increase is measured in nominal figures (excluding land lease).
70
All 44 cities participating in the ULGDP II have received audits on time for the most recent two fiscal years (by January 7) 2015/16 and 2016/17 (Ethiopian fiscal years 2008 and 2009).
P a g e 206 | 326
The Program Development Objective (PDO) is to enhance the institutional performance of participating urban local governments to develop and sustain urban infrastructure,
services, and local economic development.

PDO Level Results Unit of Base- Target Values Fre- Data Responsibility for
Indicators Measure line quency Source/ Data Collection

Core

DLI
FY19 FY20 FY21 FY22 Method-
FY18 ology

3. ULGs with clean 2 Number 13 18 22 26 35 Annually APA Same as above.

(unqualified) audit.

Intermediate Results Area 2: Infrastructure and Maintenance

4. Urbancobblestoneroads √ 3 Kilo-meters 0 400 800 1,200 2,000 Annually M&E Firm collects the
built or rehabilitated under data and MUDCo
UIIDP. and the WB review
and confirm.

5. Urbangravel roads built 3 Kilo-meters 0 300 500 700 900 Annually M&E Same as above.
or rehabilitated under
UIIDP.

6. Serviced land for 3 Hectares 0 5,000 8,500 12,000 15,500 Annually M&E Same as above.
industry, MSE sheds, and
housing under UIIDP

7. Drains71 built or 3 Kilo-meters 0 0 800 1,200 2,000 Annually M&E Same as above.
rehabilitated under UIIDP.

8. Public parks and 3 Hectares 0 100 200 300 400 Annually M&E Same as above.
greenery built or
rehabilitated under UIIDP.

9. ULGs that execute at 3 Number 0 45 60 80 100 Annually M&E Same as above.

least 80 percent of their
O&M budget under UIIDP.

Intermediate Results Area 3: Urban Resilience, Local Economic Development, Job Creation, and Gender Mainstreaming

71
Drains may be roadside drains or stand-alone drains.
P a g e 207 | 326
The Program Development Objective (PDO) is to enhance the institutional performance of participating urban local governments to develop and sustain urban infrastructure,
services, and local economic development.

PDO Level Results Unit of Base- Target Values Fre- Data Responsibility for
Indicators Measure line quency Source/ Data Collection

Core

DLI
FY19 FY20 FY21 FY22 Method-
FY18 ology

10. Temporary jobs created 4 Number 0 150,000 300,000 450,000 600,000 Annually M&E Same as above.
under UIIDP-supported
infrastructure works.

a. Of which female 4 Percent 0 40 percent 40 percent 40 percent 40 percent Annually M&E Same as above.

11.People employed72 in 4 Number 0 45,000 67,500 101,250 151,875 Annually M&E Same as above.
firms provided with
serviced land and in MSE
sheds under UIIDP.

Of which female 4 Percent 0 40 percent 40 percent 40 percent 40 percent Annually M&E Same as above.

12.ULGs that have 4 Number 0 0 44 80 100 Annually APA Same as above.

established emergency
response unit, and prepared
emergency response plan.
13. ULGs for which citizen 2,4 Number 0 44 117 117 117 Annually APA Same as above.
fora (public consultations
between government,
residents and the private
sector including plan and
budget consultations) have
been held at least twice a
year, with at least 50
percent women
participation

14. ULGs that implement 4 Number 0 35 45 65 90 Annually APA Same as above.

80 percent of the budget
presented in the annual

72
Including employees and business owners, excluding people employed by companies constructing the facilities.
P a g e 208 | 326
The Program Development Objective (PDO) is to enhance the institutional performance of participating urban local governments to develop and sustain urban infrastructure,
services, and local economic development.

PDO Level Results Unit of Base- Target Values Fre- Data Responsibility for
Indicators Measure line quency Source/ Data Collection

Core

DLI
FY19 FY20 FY21 FY22 Method-
FY18 ology

gender development plans.

Intermediate Results Area 4: Capacity Building

15.ULGs that implement at 2 Number 0 35 45 65 90 Annually M&E Same as above.

least 80 percent of the
budget presented in the
annual capacity building
plans.

16.Regions that implement 5-9 Number 0 4 5 6 8 Annually M&E/APA Same as above.

at least 80 percent of the
budget presented in the
annual capacity building
plans.

17.Urban development Yes/No No No Yes Yes Yes Annually UREFMFB MUDCo

program updated and
financing strategy
a. developed

b. approved Yes/No No No No Yes Yes Annually UREFMFB MUDCo

18. MUDCo procures and Yes/No Yes Yes Yes Yes Yes Annually UREFMFB MUDCo
conducts APA in a timely
fashion.

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2. Program Participation &Performance Agreement between MUDCo, Region & ULG

URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM

(UIIDP)

PARTICIPATION AND PERFORMANCE AGREEMENT

BETWEEN
MINISTRY OF URBAN DEVELOPMENT AND CONSTRUCTION
(MUDCo)
AND
__________..............................................................NATIONAL REGIONAL STATE
(Regional Government or RG)
1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through MUDCo to the Regional Government to enhance the institutional
and organizational performance of urban local government(s) in developing and sustaining urban
infrastructure and services, in the RG.
2. Now therefore MUDCoand the Regional Governmentagree as follows:
a) That MUDCo shall make available to the RG the funding for the period coveringEthiopian
Fiscal Years EFY 2012 through to EFY 2015 inclusive for its respective ULGs and to also
carry out its activities agreed with MUDCo as per the UIIDP Financing Agreement and
procedures set out in the Program Operations Manual (POM) for the UIIDP. The POM
provides details of allowable Performance Grant Activities in the UIIDP Investment Menus
for capacity building activities.The Performance Grant shall be provided in the form of two
semi-annual cash transfers as per the procedures set out in the POM;
b) That the RG shall carry out UIIDP Activities in accordance with UIIDP’s manuals and
guidelines described in the POM and in the Capacity Building Plan prepared by the RG with
due diligence and efficiency and in accordance with sound technical, economic, financial,
managerial, environmental and social standards and practices;
c) That the RG shall maintain adequate records to reflect, in accordance with sound accounting
practices, the operations, resources and expenditures in respect of the Performance Grant
Activities;
d) That the goods and services to be financed from the proceeds of the UIIDP Performance Grant
shall be procured in accordance with Government of Ethiopia procedures as set forth in the
POM and the Procurement Plan; and such goods, works and services shall be used exclusively
in carrying out the Performance Grant Activities;
e) That MoF and MUDCo shall have the right to inspect by itself, or jointly with WB, if WB
shall so request, the goods, works, sites or plans included in the Performance Grant Activities,
the operations thereof and any relevant records and documents;
f) That MoF and MUDCo shall have the right to obtain all information as they or WB shall
reasonably request regarding the administration, operation and financial management of the
Performance Grant Activities;
g) That MUDCo shall have the right to suspend or terminate the right of the RG to use or benefit
from the use of the proceeds of the Performance Grant upon failure by the RG to perform its
obligations under this Agreement;
 h) That the RG shall make their financial contribution to the Performance Grant as per the POM
(in the amount of …….%of the Performance Grant amount allocated in advance of each EFY
by MUDCo to the participating Urban Local Governments (ULGs) in the RG) and that in each
EFY throughout the execution of the UIIDP, they shall take all necessary measures to budget
and timely contribute the expected level of counterpart contribution as provided for in the
POM;
i) That the RG shall not carry out any Performance Grant Activity which is likely to have a
detrimental environmental or social impact, or expropriation of property or physical cultural
resources, in accordance with the appropriate action plans prepared pursuant to the provisions
of the Environmental and Social Management System;
j) That the RG’s Regional Ethics and Anti-Corruption Institution will submit any complaints or
evidence of fraud involving UIIDP Performance Grant expenditures to the Regional Ethics
and Anti-Corruption Institution for investigation. Note: The World Bank has the independent
right to investigate allegations of fraud or corruption involving UIIDP expenditures;
k) That the MUDCo will circulate to all participating RGs a list of firms and individuals that are
ineligible for invitation or award of contract for Performance Grant Activities. The list may be
found on the World Bank website: http://web.worldbank.org › Projects › Procurement;
l) That the MUDCo will provide guidance, through Federal and Regional Public Procurement
and Property Administration Agencies on domestic preferences to be applied in procurement
of works, goods and services; and each Regional Public Procurement and Property
Administration Agency will monitor the proper applications of their respective procurement
legal procedures including availing the legal documents to the ULGs. The compliance with
the legal procedures and use of appropriate procedures will be monitored through annual
procurement audits; and
m) MUDCo will provide capacity building support, where necessary and as requested, to the RG
through its UIIDP Management Unit, Urban Revenue Enhancement, Fund Mobilization and
Finance Bureau for UIIDP implementation and achievement of performance measures;
however, full responsibility for UIIDP implementation and for achievement of or inability to
achieve, performance measures lies with the RG.
3. The RG further agrees to achieve fully, to the best of its ability, the following entry level
condition, disbursement linked indicators and performance measures as are described more fully,
including methodology for measurement of indicators, weightings and points attributable, in the
UIIDP Program Operations Manual and in the UIIDP Annual Performance Assessment
Guideline (APAG).
4. The RG will enter into a Participatory Performance Agreement (PPA) with MUDCo as an
entry level condition and prior to the release of funds for the year.
5. Pursuant to this Agreement, the RG shall enter into an agreement with each of its ULGs that
are eligible to participate in the UIIDP. The Agreement with the respective ULGs shall be entered into
as an entry level condition for each of the ULG and prior to the release of funds for the year.
6. The MUDCo and the RG agree that they shall not assign, amend, abrogate or waive any
provision of this Agreement, which may materially and adversely affect the terms of the Performance
Grants and the implementation of Performance Grant Activities.
In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.

ON BEHALF OF THE MINISTRY OF URBAN DEVELOPMENT AND CONSTRUCTION

P a g e 211 | 326
Name :………………………………………………………………………………………..

Title: ………………………………………………………………………………………..

Signature: ………………………………………………..

Date: ………………………………………

Witness 1 /MUDCo/ Witness 1 /MUDCo/

Name________________________________ Name____________________________

Title: ________________________________ Title: ____________________________

Signature: ____________________________ Signature: ________________________

Date: ________________________________ Date:_____________________________

ON BEHALF OF THE NATIONAL REGIONAL STATE
Name :………………………………………………………………………………………..

Title: ……………………………………………………………………………………..

Signature: ………………………………………………..

Date: ………………………………………

Witness 1 /RG/ Witness 1 /RG/

Name________________________________ Name_____________________________

Title: _______________________________ Title: ______________________________

Signature: ____________________________ Signature: __________________________

Date: ______________________________ Date: _____________________________

P a g e 212 | 326
 URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM
(UIIDP)

PARTICIPATION AND PERFORMANCE AGREEMENT

BETWEEN

__________________________________NATIONAL REGIONAL STATE

(Regional Government or RG)

AND

____________________________________________________________
(Urban Local Government or ULG)
1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through MUDCo and the Regional Government, to the Urban Local
Government to enhance its institutional and organizational performance in developing and sustaining
urban infrastructure and services.
2. Whereas the Ministry of Urban Development and Construction has entered into and signed an
Agreement with the Regional Government pursuant to the above
2. Now therefore the Regional Government and the Urban Local Government agree as
follows:
a) That the Regional Government, make available to the ULG the funding (Performance Grant)
for the period coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusive to
carry out activities agreed with MUDCo and the RG as per the UIIDP Financing Agreement
and procedures set out in the Program Operations Manual (POM) for the UIIDP. The POM
provides details of allowable Performance Grant Activities in the UIIDP Investment Menus
for capital investment and capacity building activities.The Performance Grant shall be
provided in the form of two semi-annual cash transfers as per the procedures set out in the
POM;
b) That the ULG shall carry out Performance Grant Activities in accordance with UIIDP’s
manuals and guidelines described in the POM, the Procurement Plan (including where
capacity building activities are to be funded, a Capacity Building Plan), and the
Environmental and Social Management System, with due diligence and efficiency and in
accordance with sound technical, economic, financial, managerial, environmental and social
standards and practices;
c) That the ULG shall maintain adequate records to reflect, in accordance with sound accounting
practices, the operations, resources and expenditures in respect of the Performance Grant
Activities;
d) That the goods, works and services to be financed from the proceeds of the UIIDP
Performance Grant shall be procured in accordance with Government of Ethiopia procedures
as set forth in the POM and the Procurement Plan; and such goods, works and services shall
be used exclusively in carrying out the Performance Grant Activities;

P a g e 213 | 326
 e) That MoF, MUDCo and/or the RG shall have the right to inspect by itself, or jointly with WB,
if WB shall so request, the goods, works, sites or plans included in the Performance Grant
Activities, the operations thereof and any relevant records and documents;
f) That MoF, MUDCo and/or the RG shall have the right to obtain all information as they or WB
shall reasonably request regarding the administration, operation and financial management of
the Performance Grant Activities;
g) That MUDCo and/or the RG shall have the right to suspend or terminate the right of the ULG
to use or benefit from the use of the proceeds of the Performance Grant upon failure by the
ULG to perform its obligations under this Agreement;
h) That the ULG shall budget their financial contribution to the Performance Grant as per the
POM (in the amount of …….% of the Performance Grant amount allocated in advance of
each EFY by MUDCo and the RG) and in each EFY throughout the execution of the UIIDP,
they shall take all necessary measures to timely contribute the expected level of counterpart
contribution as provided for in the POM during the EFY; The RG shall also provide
counterpart funding in the amount of ….% of the Performance Grant amount allocated by
MUDCo and the RG to the ULG in advance of each EFY.
i) That the ULG shall not carry out any Performance Grant Activity which is likely to have a
detrimental environmental or social impact, or expropriation of property or physical cultural
resources, in accordance with the appropriate action plans prepared pursuant to the provisions
of the Environmental and Social Management System;
j) That the ULG’sUrban Liaison Committee will submit any complaints or evidence of fraud
involving UIIDP Performance Grant expenditures to the Regional Ethics and Anti-Corruption
Commission for investigation. Note: The World Bank has the independent right to investigate
allegations of fraud or corruption involving UIIDP expenditures;
k) That the RG will circulate to all participating ULGs a list of firms and individuals that are
ineligible for invitation or award of contract for Performance Grant Activities. The list may be
found on the World Bank website: http://web.worldbank.org › Projects › Procurement;
l) That the RG will provide guidance, through the Regional Public Procurement and Property
Administration Agency on domestic preferences and procurement of government owned
enterprises to be applied in procurement of works, goods and services:
 Each Regional Public Procurement and Property Administration Agency will monitor the
proper applications of their respective procurement legal procedures including availing
the legal documents to the ULGs. The compliance with the legal procedures and use of
appropriate procedures will be monitored through annual procurement audits;
 Each City mayor will issue instructions to their program implementation units to strictly
comply with the government’s public procurement procedures;
 Each ULG will justify to the BoFEDs the use of government owned enterprises where
private sector suppliers exist in advance of contracting; and exclude award to World
Bank debarred firms through providing regular information; and
m) That the RG, through its Regional Bureau of Urban Development & Housingin conjunction
with the MUDCo, through its Urban Revenue Enhancement, Fund Mobilization and Finance
Bureau, will provide capacity building support to the ULGfor UIIDP implementation and
achievement of performance measures; however, full responsibility for UIIDP implementation
and for achievement of or inability to achieve, performance measures lies with the ULG.
3. The ULG further agrees to achieve fully, to the best of its ability, the entry level condition,
minimum conditions, disbursement linked indicators and performance measures as are described more
fully, including methodology for measurement of indicators, weightings and points attributable, in the

P a g e 214 | 326
UIIDP Program Operations Manual and in the UIIDP Annual Performance Assessment
Guideline (APAG):
4. The ULG will enter into a Participatory Performance Agreement (PPA) with the Regional
State as an entry level condition and prior to the release of funds for the year.
5. The RG and the ULG agree that they shall not assign, amend, abrogate or waive any
provision of this Agreement, which may materially and adversely affect the terms of the Performance
Grants and the implementation of Performance Grant Activities.
In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Participation and PerformanceAgreement to be signed in their respective
names as of the day and year first below written.

ON BEHALF OF THE NATIONAL REGIONAL STATE

Name :…………………………………………………………………………………..
Title: …………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /RG/ Witness 2 /RG/
Name________________________________ Name_____________________________
Title: _______________________________ Title: ____________________________
Signature: ____________________________ Signature: ____________________________
Date: ______________________________ Date: ____________________________
ON BEHALF OF THE URBAN LOCAL GOVERNMENT
Name :…………………………………………………………………………………..
Title: …………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /ULG/ Witness 2 /ULG/
Name________________________________ Name____________________________
Title: ______________________________ Title: ___________________________
Signature: ____________________________ Signature: ________________________
Date: ______________________________ Date: ______________________________

P a g e 215 | 326
 3. Memorandum of Understanding between MUDCo and Federal Ministries/Agencies

URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM

(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
MINISTRY OF URBAN DEVELOPMENT &CONSTRUCTION (MUDCo)
AND
FEDERAL ETHICS AND ANTI-CORRUPTION COMMISSION
(FEACC)
1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through MUDCo, to the Federal Ethics and Anti-Corruption
Commission (FEACC)to enhance the institutional and organizational performance of urban local
government(s) (ULGs) in developing and sustaining urban infrastructure and services.
2. Now therefore MUDCoand the FEACC agree as follows:
a) That MUDCo shall make available to the FEACC the funding for the period
coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out
activities agreed with MUDCoas per the UIIDP Financing Agreement and procedures set out
in the Program Operations Manual (POM) for the UIIDP. The POM provides details of
allowable activities in the UIIDP Investment Menu for capacity building activities.The
funding shall be provided in the form of two semi-annual cash transfers as per the procedures
set out in the POM;
b) That FEACC shall:
i) build their own capacity to monitor and support the UIIDP participating ULGs
effectively as required by relevant ethics and anti-corruption legislation, regulation and
procedures; and
ii) Assist and support UIIDP participating ULGs to carry out UIIDP activities as required
by relevant ethics and anti-corruption legislation, regulation and procedures;
iii) FEACC shall have responsibility to submit financial and physical reports quarterly and
annually to MUDCo.

c) That FEACC shall follow on fraud andcorruption activities by monitoring and submitting
semi-annual and annual reports to the World Bank.
d) That FEACCshall be geared towards the effective prevention of corruption through the
enhancement and expanding of ethics and anti-corruption education, helping to create an
ethical society that does not condone corruption therebycontributing to the achievement of the
UIIDP and of the country in general.
e) That FEACCwill provide guidance, to MUDCo, Regional Governments and UIIDP
participating ULGs regarding relevant ethics and anti-corruption legislation, regulation and
procedures;

P a g e 216 | 326
 f) That FEACC will be supported by a team of experts that will mentor and provide support to
the MUDCo for efficient and effective program preparation and implementation activities in
general and for satisfactory compliance with ethics and anti-corruption legislation, regulation
and procedures;
g) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by FEACC in accordance with Government of Ethiopia legislation and the UIIDP POM; and
such goods, works and services shall be used exclusively in carrying out government
activities
h) That FEACC shall maintain adequate records to reflect, in accordance with sound accounting
practices, the operations, resources and expenditures in respect of the Activities funded from
UIIDP; and
i) That MUDCo shall have the right to suspend or terminate the right of FEACC to use or
benefit from the use of the proceeds of the UIIDP funding upon failure by the FEACC to
perform its obligations under this Agreement.
In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.

ON BEHALF OF THE MINISTRY OF URBAN DEVELOPMENT AND CONSTRUCTION

Name :………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /MUDCo/ Witness 1 /MUDCo/
Name________________________________ Name____________________________
Title: ________________________________ Title: ____________________________
Signature: ____________________________ Signature: ________________________
Date: ________________________________ Date:_____________________________
ON BEHALF OF FEDERAL ETHICS AND ANTI-CORRUPTION COMMISSION
(FEACC)
Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 / FEACC / Witness 1 / FEACC /
Name________________________________ Name______________________________
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

P a g e 217 | 326
 URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM
(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
MINISTRY OF URBAN DEVELOPMENT &CONSTRUCTION(MUDCo)
AND
FEDERAL PUBLIC PROCUREMENT AND PROPERTY ADMINISTRATION AGENCY
(FPPPAA)
1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through MUDCo, to the Federal Public Procurement and Property
Administration Agency (FPPPAA)to enhance the institutional and organizational performance of
urban local government(s) (ULGs) in developing and sustaining urban infrastructure and services.
2. Now therefore MUDCoand the FPPPAA agree as follows:
a) That MUDCo shall make available to the FPPPAAthe UIIDP funding for the period
coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out
activities agreed with MUDCo as per the UIIDP Financing Agreement and procedures set out
in the Program Operations Manual (POM) for the UIIDP. The POM provides details of
allowable activities in the UIIDP Investment Menu for capacity building activities. The
support shall be provided in the form of two semi-annual transfers as per the procedures set
out in the POM;
b) That the FPPPAA shall:
i) build their own capacity and that of Regional Public Procurement and Property
Administration Agencies (RPPPAAs) to carry out annual procurement audits of the
UIIDP participating ULGs effectively as required by relevant legislation and the UIIDP
POM governing the procurement activities of ULGs;
ii) assist and support UIIDP participating ULGs to carry out procurement of
UIIDPfinanced and other goods, works and services efficiently and effectively as
required by relevant legislation governing the procurement activities of ULGs;
iii) have responsibility to submit financial and physical report quarterly and annually to
MUDCo;

c) That FPPPAA advise the MUDCo on all public procurement and property administration
policies, principles and implementation and provide technical assistance to the regional
governments and UIIDP participating ULGS regarding the domestic preferences to be applied
in procurement of works, goods and services;
d) That FPPPAA in collaboration with MUDCo ensure the setting of training standards,
competence levels, certification requirements and professional development paths of public
procurement and property administration;
e) That FPPPAA prepare, update and issue authorized versions of the standard bidding
documents, procedural forms and any other attendant documents pertaining to procurement
and property administration;
f) That FPPPAA conduct audit to ensure that procurement and property administration
activities of public bodies are in accordance with the Procurement Proclamation and other
documents governing public procurement and property administration;

P a g e 218 | 326
 g) That the FPPPAA will be supported by a team of experts that will mentor and provide support
to the RPPPAAs for efficient and effective program preparation and implementation activities
in general and for satisfactory achievement of procurement audit and procurement support to
UIIDP participating ULGs.
h) That the MUDCo will circulate to all participating regions a list of firms and individuals that
are ineligible for invitation or award of contract for Performance Grant Activities. The list
may be found on the World Bank website: http://web.worldbank.org › Projects › Procurement
i) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by FPPPAAin accordance with Government of Ethiopia legislation and the UIIDP POM; and
such goods, works and services shall be used exclusively in carrying out government
activities.
j) That FPPPAA shall maintain adequate records to reflect, in accordance with sound
accounting practices, the operations, resources and expenditures in respect of the Activities
funded from UIIDP
k) That MUDCo shall have the right to suspend or terminate the right of the FPPPAA to use or
benefit from the use of the proceeds of the UIIDP support upon failure by the FPPPAA to
perform its obligations under this Agreement;
In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.
On Behalf of the Ministry of Urban Development and Construction
Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /MUDCo/ Witness 1 /MUDCo/
Name________________________________ Name____________________________
Title: ________________________________ Title: ____________________________
Signature: ____________________________ Signature: ________________________
Date: ________________________________ Date:_____________________________

On Behalf of the Federal Public Procurement & Property Administration Agency(FPPPAA)

Name :………………………………………………………………………………………..
Title: …………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /FPPPAA/ Witness 1 /FPPPAA/
Name________________________________ Name______________________________
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

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 URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM
(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
MINISTRY OF URBAN DEVELOPMENT & CONSTRUCTION (MUDCo)
AND
FEDERAL URBAN JOB CREATION AND FOOD SECURITY AGENCY
(FUJCFSA)
1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through MUDCo, to the Federal Urban Job Creation and Food
Security Agency (FUJCFSA)to enhance the institutional and organizational performance of urban
local government(s) (ULGs) in developing and sustaining urban infrastructure and services.
2. Now therefore MUDCoand the FUJCFSA agree as follows:
a) That MUDCo shall make available to the FUJCFSA the funding for the period
coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out
activities agreed with MUDCo as per the UIIDP Financing Agreement and procedures set out
in the Program Operations Manual (POM) for the UIIDP. The POM provides details of
allowable activities in the UIIDP Investment Menu for capacity building activities.The
funding shall be provided in the form of two semi-annual cash transfers as per the procedures
set out in the POM;
b) That FUJCFSA shall:
i) build their own capacity to monitor and support the regions and UIIDP participating
ULGsin job creation and support to MSEs as required by the relevant legislation,
regulation, procedures and UIIDP POM; and
ii) Assist and support regions and UIIDP participating ULGs to carry out activities related
to job creation and support to MSEs;
iii) FUJCFSA shall have responsibility to submit financial and physical reports quarterly
and annually to MUDCo.

j) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by FUJCFSAin accordance with Government of Ethiopia legislation and the UIIDP POM;
and such goods, works and services shall be used exclusively in carrying out government
activities
k) That FUJCFSA shall maintain adequate records to reflect, in accordance with sound
accounting practices, the operations, resources and expenditures in respect of the Activities
funded from UIIDP; and
l) That MUDCo shall have the right to suspend or terminate the right of FUJCFSA to use or
benefit from the use of the proceeds of the UIIDP funding upon failure by the FUJCFSA to
perform its obligations under this Agreement.
In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.

ON BEHALF OF THE MINISTRY OF URBAN DEVELOPMENT AND CONSTRUCTION

P a g e 220 | 326
Name :………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /MUDCo/ Witness 1 /MUDCo/
Name________________________________ Name____________________________
Title: ________________________________ Title: ____________________________
Signature: ____________________________ Signature: ________________________
Date: ________________________________ Date:_____________________________
ON BEHALF OF FEDERAL URBAN JOB CREATION AND FOOD SECURITY AGENCY
(FUJCFSA)
Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /FUJCFSA / Witness 1 /FUJCFSA /
Name________________________________ Name______________________________
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

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 URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM
(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
MINISTRY OF URBAN DEVELOPMENT & CONSTRUCTION(MUDCo)
AND
OFFICE OF FEDERAL AUDITOR GENERAL
(OFAG)
1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through MUDCo, to the Office of Federal Auditor General (OFAG)to
enhance the institutional and organizational performance of urban local government(s) (ULGs) in
developing and sustaining urban infrastructure and services.
2. Now therefore MUDCoand the OFAG, agree as follows:
a) That MUDCo shall make available to OFAG the UIIDP funding for the period
coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out
activities agreed with MUDCo as per the UIIDP Financing Agreement and procedures set out
in the Program Operations Manual (POM) for the UIIDP. The POM provides details of
allowable activities in the UIIDP Investment Menu for capacity building activities. The
support shall be provided in the form of two semi-annual transfers as per the procedures set
out in the POM;
b) That OFAG shall:
i) build their own capacity to carry out annual financial auditsof the UIIDP participating
entities at the federal leveland Value for Money Audits of participating ULGs as
required by relevant legislation and the UIIDP POM; and
ii) build the capacity of Offices of Regional Auditor General (ORAGs) and provide them
support to carry out annual financial auditsof the UIIDP participating ULGs effectively
as required by relevant legislation governing the finance activities of ULGs; and
iii) have responsibility to submit financial and physical report quarterly and annually to
MUDCo
c) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by OFAG in accordance with Government of Ethiopia legislation and the UIIDP POM; and
such goods, works and services shall be used exclusively in carrying out government
activities.
d) That OFAG shall maintain adequate records to reflect, in accordance with sound accounting
practices, the operations, resources and expenditures in respect of the UIIDP Activities;
e) That MUDCo shall have the right to suspend or terminate the right of the OFAG to use or
benefit from the use of the proceeds of the UIIDP support upon failure by the OFAG to
perform its obligations under this Agreement;

In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.
P a g e 222 | 326
 On Behalf of the Ministry of Urban Development and Construction
Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /MUDCo/ Witness 1 /MUDCo/
Name________________________________ Name____________________________
Title: ________________________________ Title: ____________________________
Signature: ____________________________ Signature: ________________________
Date: ________________________________ Date:_____________________________

On Behalf of the Office of Federal Auditor General

(OFAG)
Name :………………………………………………………………………………………..
Title: …………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /OFAG/ Witness 1 /OFAG/
Name________________________________ Name______________________________
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM

(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
MINISTRY OF URBAN DEVELOPMENT & CONSTRUCTION(MUDCo)
AND
ENVIRONMENT, FOREST AND CLIMATE CHANGE COMMISSION
(EFCCC)
1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through MUDCo, to the Environment, Forest and Climate Change
Commission (EFCCC)to enhance the institutional and organizational performance of urban local
government(s) (ULGs) in developing and sustaining urban infrastructure and services.
2. Now therefore MUDCoand the EFCCC, agree as follows:
a) That MUDCo shall make available to the EFCCC the UIIDP funding for the period
coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out
activities agreed with MUDCo as per the UIIDP Financing Agreement and procedures set out
in the Program Operations Manual (POM) for the UIIDP. The POM provides details of
allowable activities in the UIIDP Investment Menu for capacity building activities. The
support shall be provided in the form of two semi-annual transfers as per the procedures set
out in the POM;

P a g e 223 | 326
 b) That EFCCC shall:
i) build its own capacity to monitor and to provide support to the Regional Environmental
Protection Agencies in undertaking all the duties mandated to them by legislation and
other activities stated in the UIIDP POM.
ii) build the capacity of Regional Environmental Protection Agencies to review and
approve the screening of projects for environmental and social impacts as well as to
carry out annual Environmental and Social Management Audits of the UIIDP
participating ULGs effectively as required by relevant legislation and the UIIDP POM;
and
iii) have responsibility to submit financial and physical report quarterly and annually to
MUDCo
b) That EFCCCshall establish a system for environmental impact assessment of public and
private projects, as well as social and economic development policies, strategies, laws and
programmes;
c) That EFCCC shall prepare a mechanism that promotes social, economic and environmental
justice and channel the major part of any benefit derived thereof to the affected communities
to reduce emissions of greenhouse gases that would otherwise have resulted from
deforestation and forest degradation;
d) That EFCCC shall establish a system for the evaluation of the environmental impact
assessment of investment projects submitted by their respective proponents by the concerned
sectoral licensing organ or the concerned regional organ prior to granting permission for their
implementation in accordance with the Environmental Impact Assessment Proclamation;
e) That EFCCC shall prepare programmes and directives for the synergistic implementation and
follow up of environmental agreements ratified by Ethiopia pertaining to the natural resources
base, desertification, forests, hazardous chemicals, industrial wastes and anthropogenic
environmental hazards with the objective of avoiding overlaps, wastage of resources and gaps
during their implementation in all sectors and at all governance levels;
f) That EFCCC shall promote and provide non-formal environmental education programs, and
cooperate with the competent organs with a view to integrating environmental concerns in the
regular educational curricula;
g) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by EFCCC in accordance with Government of Ethiopia legislation and the UIIDP POM; and
such goods, works and services shall be used exclusively in carrying out government activities.
h) That EFCCC shall maintain adequate records to reflect, in accordance with sound accounting
practices, the operations, resources and expenditures in respect of the UIIDP Activities
i) That MUDCo shall have the right to suspend or terminate the right of the EFCCC to use or
benefit from the use of the proceeds of the UIIDP support upon failure by the EFCCC to
perform its obligations under this Agreement;

In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.
On Behalf of the Ministry of Urban Development and Construction
Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………

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 Witness 1 /MUDCo/
Name________________________________
Title: ________________________________
Signature: ____________________________
Date: ________________________________
Witness 1 /MUDCo/
Name____________________________
Title: ____________________________
Signature: ________________________
Date:_____________________________

On Behalf of the Environment, Forest and Climate Change Commission

(EFCCC)
Name :………………………………………………………………………………………..
Title: …………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /EFCCC/ Witness 1 /EFCCC/
Name________________________________ Name______________________________
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM

(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
MINISTRY OF URBAN DEVELOPMENT & CONSTRUCTION(MUDCo)
AND
THE MINISTRY OF REVENUES (MOR)

1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through MUDCo, to the Ministry of Revenues (MOR)to enhance the
institutional and organizational performance of urban local government(s) (ULGs) in developing and
sustaining urban infrastructure and services.
2. Now therefore MUDCoand the Ministry of Revenues (MOR) agree as follows:
a) That MUDCo shall make available to the MOR the UIIDP funding for the period
coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out
activities agreed with MUDCo as per the UIIDP Financing Agreement and procedures set out
in the Program Operations Manual (POM) for the UIIDP. The POM provides details of
allowable activities in the UIIDP Investment Menu for capacity building activities. The
support shall be provided in the form of two semi-annual transfers as per the procedures set
out in the POM;
b) That MOR shall:
i) build their own capacity to support regions and ULGs in revenue mobilization;
ii) build the capacity of Regional Revenue Authorities (RRAs) to support ULGs to
mobilize revenue as required by relevant legislation governing the finance activities of
ULGs

P a g e 225 | 326
 iii) submit financial and physical reports quarterly and annually to MUDCo
c) That MORshall provide guidance to MUDCo, Regional Governments and UIIDP
participating ULGs regarding own sources revenue to be applied in revenue generation;
d) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by MOR in accordance with Government of Ethiopia legislation and the UIIDP POM; and
such goods, works and services shall be used exclusively in carrying out government
activities.
e) That MOR shall maintain adequate records to reflect, in accordance with sound accounting
practices, the operations, resources and expenditures in respect of the UIIDP Activities
f) That MUDCo shall have the right to suspend or terminate the right of the MOR to use or
benefit from the use of the proceeds of the UIIDP support upon failure by the MOR to
perform its obligations under this Agreement;
In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.
On Behalf of the Ministry of Urban Development and Construction
Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /MUDCo/ Witness 1 /MUDCo/
Name________________________________ Name____________________________
Title: ________________________________ Title: ____________________________
Signature: ____________________________ Signature: ________________________
Date: ________________________________ Date:_____________________________

On Behalf of the Ministry of Revenues (MOR)

Name :………………………………………………………………………………………..
Title: …………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /MOR / Witness 1 /MOR/
Name________________________________ Name______________________________
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

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 URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM
(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
MINISTRY OF URBAN DEVELOPMENT & CONSTRUCTION(MUDCo)
AND
MINISTRY OF FINANCE(MoF)
1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through MUDCo, to the Ministry of Finance (MoF)to enhance the
institutional and organizational performance of urban local government(s) (ULGs) in developing and
sustaining urban infrastructure and services.
2. Now therefore MUDCoand MoF agree as follows:
a) That MUDCo shall make available to MoF the UIIDP funding for the period
coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out
activities agreed with MUDCo as per the UIIDP Financing Agreement and procedures set out
in the Program Operations Manual (POM) for the UIIDP. The POM provides details of
allowable activities in the UIIDP Investment Menu for capacity building activities. The
support shall be provided in the form of two semi-annual transfers as per the procedures set
out in the POM;
b) ThatMoFshall:
i) build their own capacity to carry out funds flow, disbursement of funds, financial
reporting of the UIIDP as per the financing agreement and the UIIDP POM; and
ii) build the capacity of BOFEDs to carry out disbursement of funds, financial
management and financial reporting of the UIIDP as per the POM.
iii) submit financial and physical reports quarterly and annually to MUDCo
c) That MoFshall ensure that Operation resources are budgeted for and disbursed within the
expenditure framework.
d) That MoFshall be responsible for funds flow, disbursement of funds and financial reporting of
the UIIDP funds and for arranging the financial auditing of the UIIDP.
e) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by MOF in accordance with Government of Ethiopia legislation and the UIIDP POM; and
such goods, works and services shall be used exclusively in carrying out government
activities.
f) That MoF shall maintain adequate records to reflect, in accordance with sound accounting
practices, the operations, resources and expenditures in respect of the UIIDP Activities;

P a g e 227 | 326
 g) That MUDCo shall have the right to suspend or terminate the right of the MOF to use or
benefit from the use of the proceeds of the UIIDP support upon failure by the MoF to perform
its obligations under this Agreement;
In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.
On Behalf of the Ministry of Urban Development and Construction
Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /MUDCo/ Witness 1 /MUDCo/
Name________________________________ Name____________________________
Title: ________________________________ Title: ____________________________
Signature: ____________________________ Signature: ________________________
Date: ________________________________ Date:_____________________________

On Behalf of the Ministry of Finance (MoF)

Name :………………………………………………………………………………………..
Title: …………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /MoF / Witness 1 /MoF/
Name________________________________ Name______________________________
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM

(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
MINISTRY OF URBAN DEVELOPMENT & CONSTRUCTION(MUDCo)
AND
MINISTRY OF LABOUR ANDSOCIAL AFFAIRS(MoLSA)

1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through MUDCo, to the Ministry of Labour and Social Affairs
(MoLSA)to enhance the institutional and organizational performance of urban local government(s)
(ULGs) in developing and sustaining urban infrastructure and services.
2. Now therefore MUDCoand MoLSA agree as follows:
a) That MUDCo shall make available to the MoLSA the UIIDP funding for the period
coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out
activities agreed with MUDCo as per the UIIDP Financing Agreement and procedures set out
P a g e 228 | 326
 in the Program Operations Manual (POM) for the UIIDP. The POM provides details of
allowable activities in the UIIDP Investment Menu for capacity building activities. The
support shall be provided in the form of two semi-annual transfers as per the procedures set
out in the POM;
b) That MoLSA shall:
i) build their own capacity to support regions and cities on employment issues,
occupational health and safety; and
ii) build the capacity of BoLSAs to support ULGs on employment issues, occupational
health and safety as required by relevant legislation governing these issues;
iii) submit financial and physical reports quarterlyand annually to MUDCo.

c) That MoLSA shall provide guidance to MUDCo, Regional Governments and UIIDP
participating ULGs regarding employment issues, occupational health and safety;
d) That MoLSA shall follow up the implementation of occupational health and safety standards
in the regional Governments and UIIDP participating ULGs
e) That MoLSA shall undertake studies on manpower employed in the formal and informal
sectors, unemployed manpower and the classification of jobs in the Regional Government and
UIIDP participating ULGs and disseminate information on labour market;
f) That MoLSA shall undertake and facilitate the implementation of studies on ensuring and
improving the social well-being of citizens, in particular, the job employment creation of
equal opportunity for persons with disabilities; the provision of care to the elderly and the
encouragement of their participation in regional governments and UIIDP participating ULGs
g) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by MoLSA in accordance with Government of Ethiopia legislation and the UIIDP POM; and
such goods, works and services shall be used exclusively in carrying out government
activities
h) That MoLSA shall maintain adequate records to reflect, in accordance with sound accounting
practices, the operations, resources and expenditures in respect of the UIIDP Activities;
i) That MUDCo shall have the right to suspend or terminate the right of MoLSA to use or
benefit from the use of the proceeds of the UIIDP support upon failure by MoLSA to perform
its obligations under this Agreement;

In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.
On Behalf of the Ministry of Urban Development and Construction
Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /MUDCo/ Witness 1 /MUDCo/
Name________________________________ Name____________________________
Title: ________________________________ Title: ____________________________
Signature: ____________________________ Signature: ________________________
Date: ________________________________ Date:_____________________________

On Behalf of the Ministry of Labour and Social Affairs

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Name :………………………………………………………………………………………..
Title: …………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /MoLSA / Witness 1 /MoLSA/
Name________________________________ Name______________________________
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM

(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
MINISTRY OF URBAN DEVELOPMENT & CONSTRUCTION(MUDCo)
AND
THE MINISTRY OF PEACE (MOP)

1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through MUDCo, to the Ministry of Peace (MoP)to enhance the
institutional and organizational performance of urban local government(s) (ULGs) in developing and
sustaining urban infrastructure and services.
2. Now therefore MUDCoand the Ministry of Peace (MoP) agree as follows:
a) That MUDCo shall make available to the MoP the UIIDP funding for the period
coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out
activities agreed with MUDCo as per the UIIDP Financing Agreement and procedures set out
in the Program Operations Manual (POM) for the UIIDP. The POM provides details of
allowable activities in the UIIDP Investment Menu for capacity building activities. The
support shall be provided in the form of two semi-annual transfers as per the procedures set
out in the POM;
b) That MoP shall:
i) based on their special responsibility for Developing Regional States, build their own
capacity to support the Developing Regional States and their respective participating
ULGs to enable them to achieve the objectives of the UIIDP and to carry out the UIIDP
activities as stated in the POM 73;
ii) provide support, as and when required or requested, to MUDCo in ensuring that the
Developing Regional States (DRS), for which it has special responsibility, carry out
their obligations and responsibilities in regard to the UIIDP objectives and activities
stated in the POM;
iii) provide support to the Developing Regional States by organising workshops and
training that provide awareness and orientation, especially to higher officials of the

Restricted to support for coordinating Developing Regional States and their respective participating
73

ULGs to facilitate Program implementation, unrelated to security apparatus

P a g e 230 | 326
 DRS and their respective participating ULGs, on UIIDP objectives and activities as
stated in the POM
iii) submit financial and physical reports quarterly and annually to MUDCo
c) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by MoP in accordance with Government of Ethiopia legislation and the UIIDP POM; and
such goods, works and services shall be used exclusively in carrying out government
activities.
e) That MoP shall maintain adequate records to reflect, in accordance with sound accounting
practices, the operations, resources and expenditures in respect of the UIIDP Activities
f) That MUDCo shall have the right to suspend or terminate the right of the MoP to use or
benefit from the use of the proceeds of the UIIDP support upon failure by the MoP to perform
its obligations under this Agreement;
In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.
On Behalf of the Ministry of Urban Development and Construction
Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /MUDCo/ Witness 1 /MUDCo/
Name________________________________ Name____________________________
Title: ________________________________ Title: ____________________________
Signature: ____________________________ Signature: ________________________
Date: ________________________________ Date:_____________________________

On Behalf of the Ministry of Peace (MoP)

Name :………………………………………………………………………………………..
Title: …………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /MoP / Witness 1 /MoP/
Name________________________________ Name______________________________
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM

(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
MINISTRY OF URBAN DEVELOPMENT & CONSTRUCTION(MUDCo)
AND
THE MINISTRY OF TRADE & INDUSTRY (MOTI)

P a g e 231 | 326
1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through MUDCo, to the Ministry of Trade & Industry (MoTI)to
enhance the institutional and organizational performance of urban local government(s) (ULGs) in
developing and sustaining urban infrastructure and services.
2. Now therefore MUDCoand the Ministry of Trade & Industry (MoTI)agree as follows:
a) That MUDCo shall make available to the MoTI the UIIDP funding for the period
coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out
activities agreed with MUDCo as per the UIIDP Financing Agreement and procedures set out
in the Program Operations Manual (POM) for the UIIDP. The POM provides details of
allowable activities in the UIIDP Investment Menu for capacity building activities. The
support shall be provided in the form of two semi-annual transfers as per the procedures set
out in the POM;
b) That MoTI shall:
i) build their own capacity to support regions and ULGs in job creation, support to MSEs
and in creating a conducive and enabling environment for investment, local economic
development and industrial development;
ii) provide support to the regions and ULGs by organising workshops and training that
increase their knowledge and capacity related to job creation, support for MSEs and in
creating a conducive and enabling environment for investment, local economic
development and industrial development;
iii) submit financial and physical reports quarterly and annually to MUDCo
c) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by MoTI in accordance with Government of Ethiopia legislation and the UIIDP POM; and
such goods, works and services shall be used exclusively in carrying out government
activities.
e) That MoTI shall maintain adequate records to reflect, in accordance with sound accounting
practices, the operations, resources and expenditures in respect of the UIIDP Activities
f) That MUDCo shall have the right to suspend or terminate the right of the MoTI to use or
benefit from the use of the proceeds of the UIIDP support upon failure by the MoTI to
perform its obligations under this Agreement;
In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.
On Behalf of the Ministry of Urban Development and Construction
Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /MUDCo/ Witness 1 /MUDCo/
Name________________________________ Name____________________________
Title: ________________________________ Title: ____________________________
Signature: ____________________________ Signature: ________________________

P a g e 232 | 326
Date: ________________________________ Date:_____________________________

On Behalf of the Ministry of Trade & Industry (MoTI)

Name :………………………………………………………………………………………..
Title: …………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /MoTI / Witness 1 /MoTI/
Name________________________________ Name______________________________
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

4. Memorandum of Understanding between MUDCo and Federal Ministries/Agencies

URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM

(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
MINISTRY OF URBAN DEVELOPMENT &CONSTRUCTION (MUDCo)
AND
FEDERAL MINISTRY OF WOMEN, CHILDREN AND YOUTH
(MOWCY)
1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through MUDCo, to the FEDERAL MINISTRY OF WOMEN,
CHILDREN AND YOUTH (MOWCY)to enhance the institutional and organizational performance
of urban local government(s) (ULGs) in developing and sustaining urban infrastructure and services.
2. Now therefore MUDCoand the MOWCY agree as follows:
a) That MUDCo shall make available to the MOWCY the funding for the period
coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out
activities agreed with MUDCoas per the UIIDP Financing Agreement and procedures set out
in the Program Operations Manual (POM) for the UIIDP. The POM provides details of
allowable activities in the UIIDP Investment Menu for capacity building activities.The
funding shall be provided in the form of two semi-annual cash transfers as per the procedures
set out in the POM;
b) That MOWCY shall:
(iii) i) build their own capacity to monitor and support the UIIDP participating
ULGs to enable them to achieve the objectives of the UIIDP by establishing gender
mainstreaming system and to carry out the UIIDP activities as stated in the POM.ii)
Assist and support UIIDP participating ULGs to carry out UIIDP activities to pay
more attention to women’s participation in decision making and women’s rights at
workplace, both staff and planning, implementing and monitoring system, and to give
more economic opportunity and support to women and women-headed MSEs. Assist

P a g e 233 | 326
 and support ULGs in enforcing code of conduct in employment and sub-project
contract documents for women’s rights in workplace including gender based violence,
sexual harassment, and equal payment for equal work as required by relevant
government policy and Program Operation Manual (POM).

(iv) Assist and support ULGs to carry out the action plan indicated in the UIIDP Program
documents to ensure gender equality and women empowerment in UIIDP ULGs, and
guides the gender mainstreaming system to better perform in planning, M&E, reporting
and management.
v) MOWCY shall have responsibility to submit financial and physical reports quarterly and
annually to MUDCo.

m) That MOWCY shall follow on Women activities by monitoring and submitting semi-annual
and annual reports to the MUDCo.
n) That MOWCY shall be geared towards the effective gender mainstreaming through the
enhancement gender education, helping to create gender sensititve society
therebycontributing to the achievement of the UIIDP and of the country in general.
o) That MOWCYwill provide guidance to MUDCo, Regional Governments and UIIDP
participating ULGs regarding relevant genderpolicies, legislation, regulation and procedures;
p) That MOWCY will be supported by a team of experts that will mentor and provide support to
the MUDCo for efficient and effective program preparation and implementation activities in
general and for satisfactory compliance with gender policies, legislation, regulation and
procedures;
q) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by MOWCY in accordance with Government of Ethiopia legislation and the UIIDP POM;
and such goods, works and services shall be used exclusively in carrying out government
activities
r) That MOWCY shall maintain adequate records to reflect, in accordance with sound
accounting practices, the operations, resources and expenditures in respect of the Activities
funded from UIIDP; and
s) That MUDCo shall have the right to suspend or terminate the right of MOWCY to use or
benefit from the use of the proceeds of the UIIDP funding upon failure by the MOWCY to
perform its obligations under this Agreement.
In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.

ON BEHALF OF THE MINISTRY OF URBAN DEVELOPMENT AND CONSTRUCTION

Name :………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /MUDCo/ Witness 1 /MUDCo/
Name________________________________ Name____________________________
Title: ________________________________ Title: ____________________________
Signature: ____________________________ Signature: ________________________

P a g e 234 | 326
Date: ________________________________ Date:_____________________________
FEDERAL MiINISTRY OF WOMEN, CHILDREN AND YOUTH
(MOWCY)

Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 / (MOWCY) Witness 1 / (MOWCY)
/ /
Name________________________________ Name______________________________
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

5. Memorandum of Understanding between BUDHo and Regional Agencies

URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM
(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
BUREAU OF URBAN DEVELOPMENT &HOUSING (BUDHo)
AND
REGIONAL ETHICS AND ANTI-CORRUPTION COMMISSION
(REACC)
1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through BUDHo,to the Regional Ethics and Anti-Corruption
Commission (REACC)to enhance the institutional and organizational performance of urban local
governments (ULGs) in developing and sustaining urban infrastructure and services.
2. Now therefore BUDHoand REACC agree as follows:
a) That BUDHo shall make available to REACC the funding for the period coveringEthiopian
Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out activities agreed with
BUDHo as per the UIIDP Financing Agreement and procedures set out in the Program
Operations Manual (POM) for the UIIDP. The POM provides details of allowable activities
for capacity buildingin the UIIDP Investment Menu for capacity building activities.The
funding shall be provided in the form of two semi-annual cash transfers as per the procedures
set out in the POM;
b) That REACC shall:
i) build their own capacity to monitor and support the UIIDP participating ULGs
effectively as required by relevant ethics and anti-corruption legislation, regulation and
procedures; and

P a g e 235 | 326
 ii) assist and support UIIDP participating ULGs to carry out UIIDP activities as required
by relevant ethics and anti-corruption legislation, regulation and procedures;
iii) have responsibility to submit financial and physical reports quarterlyand annually to
BUDHo
c) That REACC shall follow on fraud and corruption of UIIDP fund by monitoring and
submitting reporting to the FEACC

d) That REACC creating an ethical society that doesn’t condone corruption through expanding
and promotion of ethics and anti-corruption education and contributing to the achievement of
the UIIDP and in general to the country.
e) That REACC shall be geared towards the effective prevention of corruption through the
enhancement and expansion of ethics and anti-corruption education.
f) That REACC will provide guidance, to BUDHo, Regional Governments and UIIDP participating
ULGs regarding relevant ethics and anti-corruption legislation, regulation and procedures;
g) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by REACC in accordance with Government of Ethiopia legislation and the UIIDP POM; and
such goods, works and services shall be used exclusively in carrying out government
activities
h) That REACC shall maintain adequate records to reflect, in accordance with sound accounting
practices, the operations, resources and expenditures in respect of the activities funded from
UIIDP;
i) That BUDHo shall have the right to suspend or terminate the right of REACC to use or
benefit from the use of the proceeds of the UIIDP funding upon failure by the REACC to
perform its obligations under this Agreement;

In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.

ON BEHALF OF THE BUREAU OF URBAN DEVELOPMENT AND HOUSING

Name :………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /BUDHO/ Witness 1 /BUDHo/
Name________________________________ Name____________________________
Title: ________________________________ Title: ____________________________
Signature: ____________________________ Signature: ________________________
Date: ________________________________ Date:_____________________________
ON BEHALF OF REGIONAL ETHICS AND ANTI-CORRUPTION COMMISSION
Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /REACC / Witness 1 /REACC /
Name________________________________ Name______________________________

P a g e 236 | 326
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM

(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
BUREAU OF URBAN DEVELOPMENT & HOUSING(BUDHo)
AND
THE REGIONAL PUBLIC PROCUREMENT AND PROPERTY ADMINISTRATION
AGENCY (RPPPAA),
1Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through BUDHo,to the Regional Public Procurement and Property
Administration Agency(RPPPAA),to enhance the institutional and organizational performance of
urban local government (ULGs) in developing and sustaining urban infrastructure and services.
2. Now therefore BUDHoand the RPPPAA agree as follows:
a) That BUDHo shall make available to the RPPPAA the UIIDP funding for the period
coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out
activities agreed with BUDHo as per the UIIDP Financing Agreement and procedures set out
in the Program Operations Manual (POM) for the UIIDP. The POM provides details of
allowable activities for capacity building in the UIIDP Investment Menu for capacity building
activities. The support shall be provided in the form of two semi-annual transfers as per the
procedures set out in the POM;
b) That the RPPPAA shall:
i) build their own capacity to carry out timely and quality annual procurement audits of
the UIIDP participating ULGs effectively as required by relevant legislation governing
the procurement activities of ULGs; and
ii) assist and support UIIDP participating ULGs to carry out procurement of UIIDP and
other goods, works and services efficiently and effectively as required by relevant
legislation governing the procurement activities of ULGs;
iii) have responsibility to submit financial and physical reports quarterly and annually to
BUDHo
c) That the RPPPAAshall check and control goods, services and works financed from the UIIDP
procured in accordance with Government of Ethiopia procedures as set forth in the POM and
the Procurement Plan; and such goods, works and services shall be used exclusively in
carrying out the activities defined under the UIIDP as per this POM;
d) That the RPPPAAshallmake every effort to fulfil the Disbursement Linked Indicator 9
(DLI 9):RPPPAAs carry out timely and quality procurement audits of participating
ULGs under their jurisdiction (final procurement audit report is issued no later than
January 7 after the EFY to which the audit applies) . – – as described in the UIIDP
Program Operations Manual and APA Guideline.

P a g e 237 | 326
 e) That the BUDHoshall circulate to all participating UIIDP ULGs a list of firms and individuals
that are ineligible for invitation or award of contract for Performance Grant Activities. The list
may be found on the World Bank website: http://web.worldbank.org › Projects › Procurement;
f) That the RPPPAA will provide guidance, to BUDHo, Regional Governments and UIIDP
participating ULGS regarding the domestic preferences to be applied in procurement of
works, goods and services;
g) That the RPPPAA will be supported by a team of experts that will mentor and provide
support to the BUDHo for efficient and effective program preparation and implementation
activities in general and for satisfactory achievement of procurement audit and procurement
support to UIIDP participating ULGs.
h) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by RPPPAA in accordance with Government of Ethiopia legislation and the UIIDP POM;
and such goods, works and services shall be used exclusively in carrying out government
activities
i) That the RPPPAA shall maintain adequate records to reflect, in accordance with sound
accounting practices, the operations, resources and expenditures in respect of the Performance
Grant Activities;
j) That BUDHo shall have the right to suspend or terminate the right of the RPPPAA to use or
benefit from the use of the proceeds of the UIIDP support upon failure by the RPPPAA to
perform its obligations under this Agreement;
In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.
On Behalf of the Bureau of Urban Development and Housing
Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 / BUDHo / Witness 1 / BUDHo /
Name________________________________ Name____________________________
Title: ________________________________ Title: ____________________________
Signature: ____________________________ Signature: ________________________
Date: ________________________________ Date:_____________________________

On Behalf of the Regional Public Procurement & Property Administration Agency

Name :………………………………………………………………………………………..
Title: …………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /RPPPAA / Witness 1 /RPPPAA/
Name________________________________ Name______________________________
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

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 URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM
(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
BUREAU OF URBAN DEVELOPMENT & HOUSING(BUDHo)
AND
OFFICE OF REGIONAL AUDITOR GENERAL
(ORAG)
1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through BUDHo, to the Office of Regional Auditor General (ORAG)to
enhance the institutional and organizational performance of urban local government (ULGs) in
developing and sustaining urban infrastructure and services.
2. Now therefore BUDHoand the ORAG, agree as follows:
a) That BUDHo shall make available to the ORAG the UIIDP funding for the period
coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out
activities agreed with BUDHo as per the UIIDP Financing Agreement and procedures set out
in the Program Operations Manual (POM) for the UIIDP. The POM provides details of
allowable activities for capacity buildingin the UIIDP Investment Menu for capacity building
activities. The support shall be provided in the form of two semi-annual transfers as per the
procedures set out in the POM;
b) That the ORAG shall:
i) build their own capacity to carry out timely and quality annual financial audits of the
UIIDP participating ULGs effectively as required by relevant legislation governing the
finance activities of ULGs; and
ii) have responsibility to submit financial and physical report quarterly and annually to
BUDHo
c) Thatthe ORAG, or their delegated agencies, which includes certified private audit firms,shall
make every effort to fulfil the Disbursement Linked Indicator 6 (DLI 6): Offices of the
Regional Auditor Generals (ORAGs) carry out timely audits of ULGs’ financial reports
(final audit report is issued no later than January 7 after the EFY to which the audit
applies).and after the ULGs close their financial accounts by October 10 of each year– – as
described in the UIIDP Program Operations Manual and APA Guideline.
d) That the ORAG will be supported by a team of experts to be efficient and effective in
carrying out program implementation activities in general and for satisfactory achievement of
financial audit of UIIDP participating ULGs. The team of experts will be trained and
capacitated by the Office of Regional Auditor General; and
e) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by ORAG in accordance with Government of Ethiopia legislation and the UIIDP POM; and
such goods, works and services shall be used exclusively in carrying out government activities

P a g e 239 | 326
 f) That the ORAG shall maintain adequate records to reflect, in accordance with sound
accounting practices, the operations, resources and expenditures in respect of the Performance
Grant Activities;
g) That BUDHo shall have the right to suspend or terminate the right of the ORAG to use or
benefit from the use of the proceeds of the UIIDP support upon failure by the ORAG to
perform its obligations under this Agreement;
In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.
On Behalf of the Bureau of Urban Development and Housing
Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 / BUDHo / Witness 1 / BUDHo /
Name________________________________ Name____________________________
Title: ________________________________ Title: ____________________________
Signature: ____________________________ Signature: ________________________
Date: ________________________________ Date:_____________________________

On Behalf of the Office of Regional Auditor General

(ORAG)
Name :………………………………………………………………………………………..
Title: …………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /ORAG/ Witness 1 /ORAG/
Name________________________________ Name______________________________
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM

(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
BUREAU OF URBAN DEVELOPMENT &CONSTRUCTION(BUDHo)
AND
REGIONAL ENVIRONMENT, FOREST AND CLIMATE CHANGE COMMISSION
(REFCCCC)
1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through BUDHo, to the Regional Environment, Forest and Climate
Change Commission Commission (REFCCCC)to enhance the institutional and organizational
P a g e 240 | 326
performance of urban local government(s) (ULGs) in developing and sustaining urban infrastructure
and services.
2. Now therefore BUDHoand the REFCCCC, agree as follows:
a) That BUDHo shall make available to the REFCCCC the UIIDP funding for the period
coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out
activities agreed with BUDHo as per the UIIDP Financing Agreement and procedures set out
in the Program Operations Manual (POM) for the UIIDP. The POM provides details of
allowable activities for capacity buildingin the UIIDP Investment Menu for capacity building
activities. The support shall be provided in the form of two semi-annual transfers as per the
procedures set out in the POM;
b) That the REFCCCC shall:
i) build their own capacity to support ULGs on environmental and social management
and to review and approve environmental screening reports of the UIIDP participating
ULGs effectively as required by the POM and the relevant legislation governing
thesafeguards activities of ULGs; and
ii) build their own capacity tocarry out timely and quality annual environmental and social
management auditsof the UIIDP participating ULGs efficiently and effectively as
required by relevant legislation governing the safeguards activities of ULGs;
iii) submit financial and physical report quarterly and annually to BUDHo
c) That the REFCCCC shall maintain adequate records to reflect, in accordance with sound
accounting practices, the operations, resources and expenditures in respect of the Performance
Grant Activities;
d) That the REFCCCCshall make every effort to fulfil the Disbursement Linked Indicator 7
(DLI 7): Regional Environment, Forest and Climate Change Commission authorities
(REFCCCs) carry out timely review of ULG safeguards compliance. This indicator will
be fulfilled when the REFCCCCs have carried out the safeguards reviews/audits of
ULGs in their jurisdictions by end October – as described in the UIIDP Program
Operations Manual and APA Guideline.
e) That the REFCCCCshall review and approve the environmental and social screening of all the
capital projects in CIP by ULGs as per ESMSG & RSG at planning stage and before
construction starts. REFCCC shall check all the Screening Reports of all capital projects in
CIP in the year against the set of environment and social criteria and provide Letters of
approval to the ULGs.
f) That the REFCCCshall review and approve all the capital projects in CIP that project require
Environmental Impact Assessments(EIA), Environmental Management Plans (EMP) and
Resettlement Action Plans (REP) prepared by ULGs as per ESMSG & RSG at planning stage
before construction starts and provide Letters of approval to the ULGs.
g) That the REFCCCshall follow up and check the implementation of Environmental
Management Plans and RAPs prior to commencement of the project or/ and during,
construction based on a visit of the projects that EMPs and/or RAPs and all have to comply
with the ESMSG and RSG.
h) That theREFCCC will be supported by a team of experts to be efficient and effective in
providingSafeguards support to UIIDP participating ULGs and for satisfactory achievement of

P a g e 241 | 326
 Environmental and Social Management audit of the ULGs. The team of experts will be
trained and capacitated by the REFCCC;
i) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by REFCCC in accordance with Government of Ethiopia legislation and the UIIDP POM;
and such goods, works and services shall be used exclusively in carrying out government
activities
j) That the REFCCC shall maintain adequate records to reflect, in accordance with sound
accounting practices, the operations, resources and expenditures in respect of the Performance
Grant Activities;
k) That BUDHo shall have the right to suspend or terminate the right of the REFCCC to use or
benefit from the use of the proceeds of the UIIDP support upon failure by the REFCCC to
perform its obligations under this Agreement;
In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.
On Behalf of the Ministry of Urban Development and Construction
Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 / BUDHo / Witness 1 / BUDHo /
Name________________________________ Name____________________________
Title: ________________________________ Title: ____________________________
Signature: ____________________________ Signature: ________________________
Date: ________________________________ Date:_____________________________

On Behalf of the Regional Environment, Forest and Climate Change Commission

(REFCCC)
Name :………………………………………………………………………………………..
Title: …………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /REFCCC/ Witness 1 /REFCCC/
Name________________________________ Name______________________________
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM

(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
BUREAU OF URBAN DEVELOPMENT &HOUSING(BUDHo)

P a g e 242 | 326
 AND
THE REGIONAL REVENUE AUTHORITY (RRA)

1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through BUDHo,to the Regional Revenue Authority (RRA)to enhance
the institutional and organizational performance of urban local governments (ULGs) in developing
and sustaining urban infrastructure and services.
2. Now therefore BUDHoand the Regional Revenue Authority (RRA) agree as follows:
a) That BUDHo shall make available to the RRA the UIIDP funding for the period
coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out
activities agreed with BUDHo as per the UIIDP Financing Agreement and procedures set out
in the Program Operations Manual (POM) for the UIIDP. The POM provides details of
allowable activities for capacity buildingin the UIIDP Investment Menu for capacity building
activities. The support shall be provided in the form of two semi-annual transfers as per the
procedures set out in the POM;
b) That the RRAshall:
i) build their own capacity to provide support for revenue mobilization and generationto
theUIIDP participating ULGs effectively as required by relevant legislation governing
the revenue activities of ULGs; and
ii) build the capacity of UIIDP participating ULGs to mobilize and generate revenues
efficiently and effectively as required by relevant legislation governing the revenue
activities of ULGs;
iii) submit financial and physical report quarterlyand annually to BUDHo
c) That the RRAshall work on improving the general rules and regulations on revenue
generation to support ULGs in up scaling own source revenue generation;
d) That the RRA shall continuously, at least once a year, review the regional tariff proclamation
for ULGs to ensure that it is updated taking into account the prevailing economic and social
situation in the region.
e) Thatthe RRAshall make every effort to fulfil the Disbursement Linked Indicator 8 (DLI 8):
Regional Revenue Authorities (RRAs) support ULGs’ efforts to mobilize revenue . as
described in the UIIDP Program Operations Manual and APA Guideline.
f) That the RRA shall assist and actively support ULGs in the preparation of the annual ULGs
Revenue Enhancement Plan (REP) particularly in regard to carrying out detailed analysis of
each main revenue source and potential, identifying new sources of revenueand in developing
strategies for revenue enhancement. The RRA shall also monitor and report to BUDHo on the
implementation of the REPs by ULGs in its jurisdiction.
g) That the RRAshall provide guidance, to BUDHo, Regional Government and UIIDP
participating ULGs regarding own source and other revenue to be applied in revenue
generation;
h) That the RRA will be supported by a team of experts that will mentor and provide support for
efficient and effective program preparation and implementation activities in general and for

P a g e 243 | 326
 satisfactory achievement of revenue generation byUIIDP participating ULGs. The team of
experts will be trained and capacitated by RRA.
i) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by RRA in accordance with Government of Ethiopia legislation and the UIIDP POM; and
such goods, works and services shall be used exclusively in carrying out government activities
j) That the RRA shall maintain adequate records to reflect, in accordance with sound accounting
practices, the operations and resources in respect of the Performance Grant activities.
k) That BUDHo shall have the right to suspend or terminate the right of the RRA to use or
benefit from the use of the proceeds of the UIIDP support upon failure by the RRA to perform
its obligations under this Agreement;
In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.
On Behalf of the Bureau of Urban Development and Housing
Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 / BUDHo / Witness 1 / BUDHo /
Name________________________________ Name____________________________
Title: ________________________________ Title: ____________________________
Signature: ____________________________ Signature: ________________________
Date: ________________________________ Date:_____________________________

On Behalf of the RegionalRevenue Authority

Name :………………………………………………………………………………………..
Title: …………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /RRA / Witness 1 /RRA/
Name________________________________ Name______________________________
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM

(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
BUREAU OF URBAN DEVELOPMENT & HOUSING(BUDHo)
AND
BUREAU OF FINANCE AND ECONOMIC DEVELOPMENT(BoFED)
1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed

P a g e 244 | 326
to make finances available, through BUDHo,to the Bureau of Finance and Economic Development
(BoFED)to enhance the institutional and organizational performance of urban local governments
(ULGs) in developing and sustaining urban infrastructure and services.
2. Now therefore BUDHoand BoFED agree as follows:
a) That BUDHo shall make available to the BoFED the UIIDP funding for the period
coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out
activities agreed with BUDHo as per the UIIDP Financing Agreement and procedures set out
in the Program Operations Manual (POM) for the UIIDP. The POM provides details of
allowable activities for capacity buildingin the UIIDP Investment Menu for capacity building
activities. The support shall be provided in the form of two semi-annual transfers as per the
procedures set out in the POM;
b) That the BoFED shall:
i) build their own capacity to carry out funds flow, disbursement of funds, financial
management and reporting of the UIIDP as per the financing agreement and the UIIDP
POM;
ii) build the capacity of ULGs in its jurisdiction in the area of capital investment planning,
budgeting, financial management, financial reporting, internal control and internal audit
as per the POM and the relevant legislation governing the finances of ULGs.
iii) submit financial and physical report quarterly and annually to BUDHo.
c) ThatBoFEDshall be responsible for ensuring that Operation resources are budgeted for and
disbursed within the expenditure framework and manages the regional fund flow,disbursement
of funds, financial management and reporting, internal control and internal auditing.
d)ThatBoFEDshall be responsible for drawdown of funds from MoF, transfers of funds to, and/or
payments on behalf of,BUDHo, other regional bureaus/agencies and ULGs.
e) That BoFED shall provide guidance, to BUDHo, Regional Government and UIIDP
participating ULGson all aspects of financial management;
f) That BoFEDshall be supported by a team of experts that will mentor and provide support to
the BUDHo for efficient and effective program preparation and implementation activities in
general and for satisfactory achievement of financial management support to UIIDP
participating ULGs.
g) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by BoFEDin accordance with Government of Ethiopia legislation and the UIIDP POM; and
such goods, works and services shall be used exclusively in carrying out government activities
h) ThatBoFED shall maintain adequate records to reflect, in accordance with sound accounting
practices, the operations, resources and expenditures in respect of the Performance Grant
Activities;
g) That BUDHo shall have the right to suspend or terminate the right of the BoFED to use or
benefit from the use of the proceeds of the UIIDP support upon failure by the BoFED to
perform its obligations under this Agreement;
In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.

P a g e 245 | 326
 On Behalf of the Bureau of Urban Development and Housing
Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /BUDHo/ Witness 1 /BUDHo/
Name________________________________ Name____________________________
Title: ________________________________ Title: ____________________________
Signature: ____________________________ Signature: ________________________
Date: ________________________________ Date:_____________________________

On Behalf of the Bureau of Finance & Economic Development

Name:………………………………………………………………………………………..
Title: …………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /BoFED / Witness 1 /BoFED/
Name________________________________ Name______________________________
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM

(UIIDP)
MEMORANDUM OF UNDERSTANDING
BETWEEN
BUREAU OF URBAN DEVELOPMENT &HOUSING(BUDHo)
AND
BUREAU OF LABOUR AND SOCIAL AFFAIRS (BoLSA)
1. Whereas the Ministry of Finance (MoF) has entered into an agreement with the International
Development Association (IDA) to be known as the Financing Agreement of the Urban Institutional
and Infrastructure Development Program (UIIDP Financing Agreement) and whereas MoF has agreed
to make finances available, through BUDHo,to the Bureau of Labour and Social Affairs
(BoLSA)to enhance the institutional and organizational performance of urban local governments
(ULGs) in developing and sustaining urban infrastructure and services.
2. Now therefore BUDHo and BoLSA agree as follows:
a) That BUDHo shall make available to the BoLSA the UIIDP funding for the period
coveringEthiopian Fiscal Years EFY 2012 through to EFY 2015 inclusiveto carry out
activities agreed with BUDHo as per the UIIDP Financing Agreement and procedures set out
in the Program Operations Manual (POM) for the UIIDP. The POM provides details of
allowable activities in the UIIDP Investment Menu for capacity building activities. The
support shall be provided in the form of two semi-annual transfers as per the procedures set
out in the POM;
b) That BoLSA shall:
i) build their own capacity to support ULGs on employment issues, occupational health
and safety; and

P a g e 246 | 326
 ii) build the capacity of ULGs on handling employment issues, occupational health and
safety as required by relevant legislation governing these issues;
iii) submit financial and physical reports quarterly and annually to BUDHo.

j) That BoLSAshall provide guidance to BUDHo, Regional Government and UIIDP

participating ULGs regarding employment issues, occupational health and safety;
k) That BoLSA shall follow up the implementation of occupational health and safety standards
in the regional and UIIDP participating ULGs
l) That BoLSA shall undertake studies on manpower employed in the formal and informal
sectors, unemployed manpower and the classification of jobs in the region and UIIDP
participating ULGs and disseminate information on labour market;
m) That the goods and services to be financed from the proceeds of the UIIDP shall be procured
by BoLSA in accordance with Government of Ethiopia legislation and the UIIDP POM; and
such goods, works and services shall be used exclusively in carrying out government
activities
n) That BoLSA shall maintain adequate records to reflect, in accordance with sound accounting
practices, the operations, resources and expenditures in respect of the UIIDP Activities;
o) That BUDHo shall have the right to suspend or terminate the right of BoLSA to use or
benefit from the use of the proceeds of the UIIDP support upon failure by BoLSA to perform
its obligations under this Agreement;
In witness of whereof the parties hereto, acting through their duly authorized representatives,
have caused this Agreement to be signed in their respective names as of the day and year first
below written.
On Behalf of the Bureau of Urban Development and Housing
Name:………………………………………………………………………………………..
Title: ………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /BUDHo/ Witness 1 / BUDHo/
Name________________________________ Name____________________________
Title: ________________________________ Title: ____________________________
Signature: ____________________________ Signature: ________________________
Date: ________________________________ Date:_____________________________

On Behalf of the Bureau of Labour and Social Affairs

Name :………………………………………………………………………………………..
Title: …………………………………………………………………………………………..
Signature: ………………………………………………..
Date: ………………………………………
Witness 1 /BoLSA / Witness 1 /BoLSA/
Name________________________________ Name______________________________
Title: _______________________________ Title: ______________________________
Signature: ____________________________ Signature: __________________________
Date: ______________________________ Date: _____________________________

P a g e 247 | 326
P a g e 248 | 326
 6. TOR for UIIDP Federal Steering Committee

MINISTRY OF URBAN DEVELOPMENT &CONSTRUCTION

URBAN REVENUE ENHANCEMENT, FUND
MOBILIZATION AND FINANCE BUREAU

URBAN INSTITUTIONAL & INFRASTRUCTURE

DEVELOPMENT PROGRAM
(UIIDP)

TERMS OF REFERENCE
FOR
FEDERAL STEERING COMMITTEE
(FSC)

Urban Revenue Enhancement, Fund Mobilization & Finance Bureau

Ministry of Urban Development &Construction

P a g e 249 | 326
Introduction
The Ministry of Urban Development &Construction, Federal Democratic Republic of Ethiopia, with
support from the World Bank and the Agence Francaise de Developpement (AFD)is implementing the
Urban Institutional and Infrastructure Development Program (UIIDP) during the period from March
2018 to December 2023.

The UIIDP will provide Performance Grants (PGs) for investments in infrastructure and services and
in capacity building for 117 urban local governments (ULGs) and capacity building in all nine
Regional Governments (RGs), MUDCo and several federal Ministries/Agencies.

The UIIDP is being financed through World Bank & AFD Program-for-Results (PforR) financing
instrument at the regional and ULG levels and an Investment Project Financing (IPF) instrument at
the federal level. The regional governments and urban local governments are expected to provide
matching funds (counterpart contributions) as per the percentages agreed between MUDCo and the
World Bank which are stated in the IIDP Program Operations Manual.
Funding available under the UIIDP will depend on the performance of each city and Regional
Government assessed annually against verifiable results described in the Program Operations Manual
(POM) and in the Annual Performance Assessment Guideline (APAG) which is a standalone Annex
of the POM.

Program Development Objective

The Program Development Objective (PDO) of the UIIDP is to enhance the institutional
performance of participating urban local governments to develop and sustain urban
Key Result Areas
It is expected that the institutional performance improvements and the infrastructure delivered by
cities will result in: -
(h) enhanced citizen participation and engagement in ULG planning and budgeting;
(i) increased own source revenue at the ULG level;
(j) improved infrastructure, service delivery, O&M systems;
(k) improved efficiency and effectiveness in fiduciary management;
(l) Improved environmental and social management and safeguards; and
(m) strengthened accountability and oversight systems; and
(n) strengthened ULG resilience, improved local economic development (LED) and enhanced
gender equity in the ULG operations.
Key Result Indicators
The key results indicators are:
(f) People provided with improved urban living conditions under the UIIDP [corporate indicator].
(g) Cities with improved livability, sustainability, and management [corporate indicator].
(h) Composite institutional performance of participating ULGs, averaged across all cities.74
(i) Composite performance for achievement of urban infrastructure and service targets,
maintenance performance and value for money in investments by ULGs, averaged across all
cities.

74
In the core thematic areas of:Planning and budgeting, assets management, public financial management,
procurement, own source revenues, accountability and transparency, environment and social safeguards, land
management, and strategic urban planning.
P a g e 250 | 326
 (j) Composite performance for achievement of LED targets, averaged across all cities
The complete table on the results framework and monitoring is provided in the POM Annex 1.

Program Scope and Coverage of Urban Centres

The UIIDP will have an additional 73 cities to the existing 44 cities making a total of 117 cities that
will participate in the program. This substantial scale-up to 117 cities will bring about greater impact
in terms of population coverage and size of the Program (increasing beneficiaries from 4.36 million
under UGLDP II to an estimated 6.62 million in UIIDP) and result in exponentially larger positive
impact for the country. The scale-up allows strengthening of the overall programmatic and
performance-based approach to support sustainable urban development and leverages on economies
of scale for program management and implementation. In addition, the scale-up is built on the solid
foundations and tried-and-tested overall successful experiences of ULGDP I and II. Timely support to
improve institutional performance in the planning, delivery, and sustained provision of urban services
and infrastructure by local governments is critical especially for these rapidly growing cities.
Figure 1. Cities Participating in UIIDP

Amhara
32 Cities
BG
Gambella
Oromia
Harari
38 Cities
Dire Dawa
(1 city each)

Total
117
Afar cities SNNPRS
23 cities
4 cities

Tigray
Ethiopian Somali
12 cities
4 cities

P a g e 251 | 326
Key Features and Financing Modalities
The program will provide 4 rounds of performance grants in EFY 2012 (2019/20), EFY 2013
(2020/21), EFY 2014 (2021/22), and EFY 2015 (2022/23). Total UIIDP expenditures over this period
are estimated at Ethiopian Birr (ETB) 20.1 billion (US$ 859.86 million), of which ETB 14 billion
(US$ 600 million of which US$200 million is from IDA Scale Up Funding - 70% will be provided by
the World Bank and ETB 262 million (US$11.2 million) -1%- will be provided by AFD and ETB 5.8
billion (US$248.66 million75) – 29% - will be provided by regions and ULGs as matching fund
contributions.

Figure 2. UIIDP Windows & Main Expenditure Items

75
Regions and cities contribute to the performance based transfers in the following manner: Amhara, Oromia,
SNNPR, and Tigray: 30 percent funding in addition to IDA funded grants; DRS regions: 20 percent; original 16
ULGDP I ULGs: 40 percent; new cities under ULGDP II in the DRS regions 10 percent; and other new
(ULGDPII) cities: 20 percent; Harar and Dire Dawa contribute 50 percent in addition to the IDA funded grants.
The new 73 ULGs under UIIDP will followthe same principles as the ULGDPII newcomers.
P a g e 252 | 326
 Window 1. ULG level. Performance
Grants
$690.64m
(IDA $432.38m; AFD $9.6m;
Regions & ULGs $248.66m)

Window 1.
Window 1: Regional
Level. Support for Prior Results
RGs to strengthen (Financing Gap
capacity to support UIDDP Total under ULGDP II due
ULGs Budget to overachievement
$859.9m of performance
$70.04m results by ULGs)
(IDA) $63.74
(IDA)

Window 2. Federal Level. Investment

Project Financing (IPF)
Support for MUDCo to administer &
coordinate the UIIDP & to strengthen
capacity to guide regions & ULGs
$35.4m
(IDA $33m; AFD $2.4m)

Figure 3. ULG & Regional Contributions to UIIDP (Matching Funds)

P a g e 253 | 326
 Old 16 ULGDP I
ULGs in Major
regions
40%

New ULGs in
Dire Dawa non - DRS
50% Regional regions
Contributions 20%
4 Major Regions:
30%
DRS: 20%
Harari: 25%

New ULGs in
Harar
DRS
25%
10%

ULGs will use the Program funds to finance urban infrastructure works as well as capacity building
activities, in compliance with the Program’s investment menu and capacity building manual. Eligible
infrastructure investments fall under eight groups including: (a) urban roads, (b) integrated
infrastructure and land services, (c) sanitation (liquid waste), (d) solid waste management, (e) urban
drainage, (f) urban disaster risk management and urban resilience, (g) built facilities, and (h) urban
green infrastructure. Ineligible investments include any World Bank environment and social impact
assessment Category A projects. Compliance with the investment menu is a minimum condition for
receiving funds. In addition, ULGs will be required to prepare the project in a participatory manner,
and consider: (a) social inclusion requirements, including gender and disability considerations; (b)
climate change and disaster adaptation; and (c) contribution to LED and long-term job creation. 76
ULGs could also spend up to 5 percent of investment grants and regional/city contributions on
capacity building support. For regional government entities, the grants will mainly be used for
capacity building, operations and management expenses, subject to the eligible capacity building
areas, similar to the ULGs.
The IPF window will be used to fund a range of institutional and capacity development interventions
at federal level coordinated by MUDCo. The MUDCo will undertake activities in four areas: (a)
developing capacity, systems, and organizations of federal entities; (b) developing capacity, systems,
and organizations of regional and ULG entities, (c) UIIDP management and monitoring and
evaluation, and (d) procuring and managing APAs and VfM audits. The capacity building activities,
technical assistance and feasibility studies will focus on core and strategic areas such as revenue

76
Details of and procedures for the use of investment project prioritization and selection criteria will be
included in the POM.
P a g e 254 | 326
enhancement, asset management, CIP preparation, financial management, as well as introducing
initiatives on local economic development, urban resilience, cultural heritage, and urban planning.
Disbursement Linked Indicators, Minimum Conditions, Performance Measures and Verification
Protocols
Almost 96 percent (or around US$576 million) of the Operation’s funds will be disbursed against
disbursement linked indicators (DLIs). The DLIs are structured to provide incentives to participating
ULGs and regional governments for improved management and development of urban areas. (More
details on the DLIs, MCs, PMs, performance assessments, verification protocols and disbursement
arrangements are provided in the UIIDP Annual Performance Assessment Guideline (APAG) which
is a part of this POM and is a standalone Annex of the POM

DLIs 1 to 4 focus on ULGs to strengthen ULG institutional roles in the delivery of

infrastructure and services and enhance local economic development. Each of these DLIs is a
composite index of defined MCs and PMs.
The disbursement system for DLI 1, 2, 3, and 4 is scalable based on actual performance of
ULGs. It is particularly important to note that if the ULGs perform better (or poorer) than expected
(as set out in the disbursement related targets in the DLI matrix), disbursements will be adjusted
accordingly. This means that if ULGs perform higher than expected they will receive higher than
expected disbursements. If this continues throughout the Program, additional financing may be
needed.

DLIs 5 to 9 focus on regional government entitiesto enhance their abilities in fulfilling their
mandates to support ULGs.These DLIs will disburse based on results achieved by regional
government entities in providing support to ULGs (DLI 5) as well as focusing on their performance in
conducting essential audits for ULGs such as on fiduciary and environmental and social management.

DLI 10 is a legacy DLI disbursing against prior results achieved under the ULGDP II that has
arisen due to overachievement of performance results. This DLI will be disbursed upon verification in
FY 2018/19, when the fifth APA of the ULGDP II has been completed in February 2018.

Collectively the DLIs address the PDO and key result areas. The DLIs are designed to address the
challenges of ULGs’ and regional governments’ institutional performance and, in turn, ULGs’ ability
to deliver, operate, and manage infrastructure and services, and expand LED. They provide incentives
to address the core issues such as on timely audit, social and environmental management, own-source
revenue generation, and strengthen the system and procedures for capacity building. In addition, there
is enhanced focus to strengthen urban resilience, promote LED and job creation, and enhance gender
equality. The PMs have a direct link to the key result areas and the GoE’s program intended
outcomes.

P a g e 255 | 326
 Table 1. Program DLIs
Approximate Percent of
Amount Total
Results area DLIs (IDA+SUF+A PforR
FD) amount
(US$ million)
ULGs deliver DLI 1: ULGs have achieved Program MCs.77 109.33 18.99
infrastructure
and services DLI 2: ULGs have strengthened institutional performance. 189.62 32.93

DLI 3: ULGs have implemented quality infrastructure and 90.09 15.65

maintenance activities and ensured value for money.

DLI 4:ULGs have strengthened performance on LED, urban 52.94 9.20

resilience and gender mainstreaming.

Regional DLI 5: Regional support teams have delivered effective capacity 27.88 4.84
government building services to ULGsin urban institutional and infrastructure
entities support development.
ULGs to
strengthen DLI 6: Regional Government Audit Agencies (ORAGs) have carried
institutions and 14.96 2.60
out timely audits of ULGs’ financial reports.
enable them to
deliver
DLI 7: Regional Environment Protection, Forest and Climate Change
infrastructure 13.12 2.28
Authorities (REFAs) have completed timely review of ULGs’
and services.
environmental and social safeguards compliance.

DLI 8: Regional Revenue Authorities (RRAs) have supported ULG

revenue mobilization. 7.04 1.22

DLI 9: Regional Public Procurement & Property Administration

Agencies (RPPPAAs) conduct timely and quality procurement audit 7.04 1.22
of ULG’s procurement transactions and performance.
Prior results DLI 10: Strengtheninginstitutional performance,infrastructure and 63.74 11.07
service delivery, maintenance, and job creationfor 44 ULGDP II
ULGs.78
Total 575.76 100.0

Institutional Arrangements

The MUDCo will be the lead implementing agency, with a Federal Mobile Team (FMT) in the Urban
Revenue Enhancement, Fund Mobilization and Finance Bureau (UREFMFB) responsible for daily
coordination of the Operation.
Federal Level

77
ULGs must comply with the MCs to get access to the allocations from DLIs 2, 3, and 4, as the MCs are the basic
safeguards for handling of larger discretionary funds.
78
Part of the DLI10 will also finance MUDCo limited to the legacy activities carried over by ULGDP 2
P a g e 256 | 326
Figure 4. Organizational Structure for Federal Level

P a g e 257 | 326
 Federal Steering Committee (FSC)
MUDCo Minister (Chair), MUDCO State Minister
(UDS), MOF, EFCCC, MoLSA, MoTI, MoP,
FEACC, OFAG & MOR, MOWCYMUDCo
UREMFB Bureau Head (Member/Secretary)
(the members from the other Ministries & Agencies are
at the level of minimum State Minister and no
representatives are allowed)

Federal Technical Committee

(FTC)
MUDCo UREMFB Bureau Head (Chair),
MUDCO PR & A Bureau Head, MOF, EFCCC,
MoLSA, MoTI, MoP, FPPPA, FEACC,
FUJCFSA, OFAG, MOR, MOWCY,MUDCo
UIIDP Coordinator (Member/Secretary)
(Members from other Ministries & Agencies are at
the level of minimum Director and no representatives
are allowed)

MUDCo
UREFMFB
Federal Mobile Team (FMT)
Overall management of the UIIDP

MOF OFAG
Fund flow, disbursement,
reporting, and arranging program Carrying out program audits
auditing

P a g e 258 | 326
Objective of the UIIDP Federal Steering Committee (FSC)
The UIIDP Federal Steering Committee (FSC) is the executive policy and decision-making body
responsible for providing the direction that contributes to achievement of the UIIDP development
objective which is to enhance the institutional performance of participating urban local governments
to develop and sustain urban infrastructure, services, and local economic development.

Responsibilities of the UIIDP Federal Steering Committee (FSC)

The UIIDP Federal Steering Committee (FSC) key responsibilities are:
 To provide overall direction, coordination of GoE organs and decision-making authority in
general regarding the UIIDP; and
 To make decisions as to the annual allocation of UIIDP IDA Performance Grant funds each
year in advance of the Ethiopian Financial Year (EFY) for which the fund allocation applies.
The FSC’s specific responsibilities are:

1 Promote the achievement of theUIIDP development objectives which contribute to the

realization of the Government’s ECSPG vision and mission;
2 Provide overall direction to the UIIDP and its key implementing agencies;
3 Receive reports from the UIIDP Federal Technical Committee (FTC) and determine follow-
up actions and requirements as necessary;
4 Monitor and evaluate UIIDP performance and impacts;
5 Ensure good communication and coordination between all involved and interested
stakeholders as to UIIDP objectives and activities;
6 Follow and enforce the laws of the Federal Democratic Republic of Ethiopia, the provisions
of the UIIDP Financing Agreement, the POM and the applicable World Bank guidelines in
the implementation of UIIDP;
7 Ensure that the UIIDP achieves the agreed objectives and targets set in the POM for each
year of program implementation.
8 Review and approve the annual UIIDP Federal Capacity Building Plans for MUDCO and
other participating Federal Ministries/Agencies.
9 Review and approve the APA results and the annual allocation of UIIDP IDA Performance
Grant funds each year in advance of the Ethiopian Financial Year (EFY) for which the fund
allocation applies.
10 Review the results of the APA for regional entities and ULGs in the region and receive from
the FTC the Strategies and Action Plan that each region will be taking to address
weaknesses/gaps on each DLI and performance indicator. Provide direction.
11 Receive from the FTC quarterly and annual progress reports on the Strategies and Action
Plan that each region have taken to address weaknesses/gaps on each DLI and performance
indicator. Provide direction.
12 Decide sitting allowances for FSC and FTC members.
13 Attend to any other business or issue that may be deemed to require the attention or decision
of the FSC.

P a g e 259 | 326
 Composition of the UIIDP Federal Steering Committee (FSC)
The FSC is made up of 11 members from the following institutions:
1. H. E. The Minister, Ministry of Urban Development &Construction (MUDCo)
2. H. E. The State Minister (Urban Development Sector), MUDCo
3. Ministry of Finance (MOF)
4. Environment, Forest and Climate Change Commission (EFCCC)
5. Ministry of Labour & Social Affairs (MoLSA)
6. Ministry of Trade and Industry (MoTI)
7. Ministry of Peace (MoP)
8. Office of Federal Auditor General (OFAG)
9. Federal Ethics and Anti-Corruption Commission (FEACC)
10. Ministry of Revenues (MOR)
11. Ministry of Women, Children and Youth (MOWCY)

12.MUDCo UREFMFB Bureau Head, Member/Secretary of the Committee.

The members of the Committee are minimum State Minister level and no representatives are allowed.
Each Ministry/Agency shall provide its nominated member of the FSC by official letter to MUDCo,
Urban Revenue Enhancement, Fund Mobilization and Finance Bureau.
Workings of the UIIDP Federal Steering Committee (FSC)

1. The FSCshall meet quarterly until the FSCis by unanimous decision vote of its voting
members dissolved. The Chairman may however, call for urgent ad-hoc meetings as and
when necessary outside of the scheduled meetings. Note: it is recommended that, because
the UIIDP reporting system is quarterly based on the EFY, the FSCscheduled meetings take
place in the month that follows the end of each quarter: i.e., November, February, May and
August each year. The Secretary, will endeavour to circulate in advance to all members the
meeting dates for the year. The meetings to approve the APA results and allocations and the
Federal Capacity Building Plan are critical and may be held anytime depending on when the
FTC provides its recommendation.
2. Prior to each FSCmeeting, the Secretary, in consultation with the Chairman, shall prepare an
Agenda for the forthcoming meeting and, at least seven calendar days prior to the meeting,
the Secretary shall circulate by hand or fax, a copy of the Agenda to all members of the
FSC.
3. If an FSC Member wishes to have a matter placed on the Agenda, s/he shall notify the
Secretary of the matter in writing (by hand delivery, fax or email) at least 14 calendar days
prior to the scheduled meeting.
4. Decisions of the FSC shall be agreed, to the extent possible, by consensus of all Voting
Members present at the meeting. In the event of consensus not being reached, the matter
shall be put to the vote and shall be decided by simple majority. In the event of a hung vote
on any matter, the Chair’s vote shall carry. In the event that SC members are not present at
a meeting at which a decision is to be made, they may send in advance of the meeting, their
views on any matter on the agenda, and their vote should it come to a vote, to the meeting
P a g e 260 | 326
 by letter, fax or email, which shall be received by and read out to the meeting by the
Secretary. The quorum for all meetings of the FSC shall be 6 members present.
5. The Secretaryshall be responsible for keeping the minutes of all FSC meetings in
accordance with generally accepted standard of minutes. The draft minutes shall be
circulated immediately to all members after the meeting and corrections sought, from those
present at the meeting in question and these may be incorporated into the revised draft
minutes. The revised draft minutes shall be presented at the next meeting of the FSC where
they will be formally corrected and adopted.
6. In the event that a Member does not receive adequate notice of a meeting and/or Minutes of
the previous meeting, the matter shall be raised at the next Committee meeting so that the
matter can be rectified.
7. The FSC may establish such other committees, task forces and working groups as are
required to facilitate its work and that of the program in general without delegating any of
its powers and responsibilities as stated in this TOR.
8. The FSC meetings will be held at a venue determined by the Chairman.

P a g e 261 | 326
 7. TOR for UIIDP Federal Technical Committee

MINISTRY OF URBAN DEVELOPMENT &CONSTRUCTION

URBAN REVENUE ENHANCEMENT, FUND
MOBILIZATION AND FINANCE BUREAU

URBAN INSTITUTIONAL & INFRASTRUCTURE

DEVELOPMENT PROGRAM
(UIIDP)

TERMS OF REFERENCE
FOR
FEDERAL TECHNICAL COMMITTEE
(FTC)

Urban Revenue Enhancement, Fund Mobilization & Finance Bureau

Ministry of Urban Development &Construction

P a g e 262 | 326
Introduction
The Ministry of Urban Development &Construction, Federal Democratic Republic of Ethiopia, with
support from the World Bank and the Agence Francaise de Developpement (AFD is implementing the
Urban Institutional and Infrastructure Development Program (UIIDP) during the period from March
2018 to December 2023.

The UIIDP will provide Performance Grants (PGs) for investments in infrastructure and services and
in capacity building for 117 urban local governments (ULGs) and capacity building in all nine
Regional Governments (RGs), MUDCo and several federal Ministries/Agencies.

The UIIDP is being financed through World Bank & AFD Program-for-Results (PforR) financing
instrument at the regional and ULG levels and an Investment Project Financing (IPF) instrument at
the federal level. The regional governments and urban local governments are expected to provide
matching funds (counterpart contributions) as per the percentages agreed between MUDCo and the
World Bank which are stated in the IIDP Program Operations Manual.
Funding available under the UIIDP will depend on the performance of each city and Regional
Government assessed annually against verifiable results described in the Program Operations Manual
(POM) and in the Annual Performance Assessment Guideline (APAG) which is a standalone Annex
of the POM.

Program Development Objective

The Program Development Objective (PDO) of the UIIDP is to enhance the institutional
performance of participating urban local governments to develop and sustain urban
Key Result Areas
It is expected that the institutional performance improvements and the infrastructure delivered by
cities will result in: -
(o) enhanced citizen participation and engagement in ULG planning and budgeting;
(p) increased own source revenue at the ULG level;
(q) improved infrastructure, service delivery, O&M systems;
(r) improved efficiency and effectiveness in fiduciary management;
(s) Improved environmental and social management and safeguards; and
(t) strengthened accountability and oversight systems; and
(u) strengthened ULG resilience, improved local economic development (LED) and enhanced
gender equity in the ULG operations.
Key Result Indicators
The key results indicators are:
(k) People provided with improved urban living conditions under the UIIDP [corporate indicator].
(l) Cities with improved livability, sustainability, and management [corporate indicator].
(m) Composite institutional performance of participating ULGs, averaged across all cities.79
(n) Composite performance for achievement of urban infrastructure and service targets,
maintenance performance and value for money in investments by ULGs, averaged across all
cities.

79
In the core thematic areas of:Planning and budgeting, assets management, public financial management,
procurement, own source revenues, accountability and transparency, environment and social safeguards, land
management, and strategic urban planning.
P a g e 263 | 326
 (o) Composite performance for achievement of LED targets, averaged across all cities
The complete table on the results framework and monitoring is provided in the POM Annex 1.

Program Scope and Coverage of Urban Centres

The UIIDP will have an additional 73 cities to the existing 44 cities making a total of 117 cities that
will participate in the program. This substantial scale-up to 117 cities will bring about greater impact
in terms of population coverage and size of the Program (increasing beneficiaries from 4.36 million
under UGLDP II to an estimated 6.62 million in UIIDP) and result in exponentially larger positive
impact for the country. The scale-up allows strengthening of the overall programmatic and
performance-based approach to support sustainable urban development and leverages on economies
of scale for program management and implementation. In addition, the scale-up is built on the solid
foundations and tried-and-tested overall successful experiences of ULGDP I and II. Timely support to
improve institutional performance in the planning, delivery, and sustained provision of urban services
and infrastructure by local governments is critical especially for these rapidly growing cities.
Figure 1. Cities Participating in UIIDP

Amhara
32 Cities
BG
Gambella
Oromia
Harari
38 Cities
Dire Dawa
(1 city each)

Total
117
Afar cities SNNPRS
23 cities
4 cities

Tigray
Ethiopian Somali
12 cities
4 cities

P a g e 264 | 326
Key Features and Financing Modalities
The program will provide 4 rounds of performance grants in EFY 2012 (2019/20), EFY 2013
(2020/21), EFY 2014 (2021/22), and EFY 2015 (2022/23). Total UIIDP expenditures over this period
are estimated at Ethiopian Birr (ETB) 20.1 billion (US$ 859.86 million), of which ETB 14 billion
(US$ 600 million of which US$200 million is from IDA Scale Up Funding - 70% will be provided by
the World Bank and ETB 262 million (US$11.2 million) -1%- will be provided by AFD and ETB 5.8
billion (US$248.66 million80) – 29% - will be provided by regions and ULGs as matching fund
contributions.

80
Regions and cities contribute to the performance based transfers in the following manner: Amhara, Oromia,
SNNPR, and Tigray: 30 percent funding in addition to IDA funded grants; DRS regions: 20 percent; original 16
ULGDP I ULGs: 40 percent; new cities under ULGDP II in the DRS regions 10 percent; and other new
(ULGDPII) cities: 20 percent; Harar and Dire Dawa contribute 50 percent in addition to the IDA funded grants.
The new 73 ULGs under UIIDP will followthe same principles as the ULGDPII newcomers.
P a g e 265 | 326
 Figure 2. UIIDP Windows & Main Expenditure Items

Window 1. ULG level. Performance

Grants
$690.64m
(IDA $432.38m; AFD $9.6m;
Regions & ULGs $248.66m)

Window 1.
Window 1: Regional
Level. Support for Prior Results
RGs to strengthen (Financing Gap
UIDDP Total under ULGDP II due
capacity to support
ULGs Budget to overachievement
$859.9m of performance
$70.04m results by ULGs)
(IDA) $63.74
(IDA)

Window 2. Federal Level. Investment

Project Financing (IPF)
Support for MUDCo to administer &
coordinate the UIIDP & to strengthen
capacity to guide regions & ULGs
$35.4m
(IDA $33m; AFD $2.4m)

P a g e 266 | 326
 Figure 3. ULG & Regional Contributions to UIIDP (Matching Funds)

Old 16 ULGDP I
ULGs in Major
regions
40%

New ULGs in
Dire Dawa non - DRS
50% Regional regions
Contributions 20%
4 Major Regions:
30%
DRS: 20%
Harari: 25%

New ULGs in
Harar
DRS
25%
10%

ULGs will use the Program funds to finance urban infrastructure works as well as capacity building
activities, in compliance with the Program’s investment menu and capacity building manual. Eligible
infrastructure investments fall under eight groups including: (a) urban roads, (b) integrated
infrastructure and land services, (c) sanitation (liquid waste), (d) solid waste management, (e) urban
drainage, (f) urban disaster risk management and urban resilience, (g) built facilities, and (h) urban
green infrastructure. Ineligible investments include any World Bank environment and social impact
assessment Category A projects. Compliance with the investment menu is a minimum condition for
receiving funds. In addition, ULGs will be required to prepare the project in a participatory manner,
and consider: (a) social inclusion requirements, including gender and disability considerations; (b)
climate change and disaster adaptation; and (c) contribution to LED and long-term job creation. 81
ULGs could also spend up to 5 percent of investment grants and regional/city contributions on
capacity building support. For regional government entities, the grants will mainly be used for
capacity building, operations and management expenses, subject to the eligible capacity building
areas, similar to the ULGs.
The IPF window will be used to fund a range of institutional and capacity development interventions
at federal level coordinated by MUDCo. The MUDCo will undertake activities in four areas: (a)
developing capacity, systems, and organizations of federal entities; (b) developing capacity, systems,
and organizations of regional and ULG entities, (c) UIIDP management and monitoring and
evaluation, and (d) procuring and managing APAs and VfM audits. The capacity building activities,
technical assistance and feasibility studies will focus on core and strategic areas such as revenue
81
Details of and procedures for the use of investment project prioritization and selection criteria will be
included in the POM.
P a g e 267 | 326
enhancement, asset management, CIP preparation, financial management, as well as introducing
initiatives on local economic development, urban resilience, cultural heritage, and urban planning.
Disbursement Linked Indicators, Minimum Conditions, Performance Measures and Verification
Protocols
Almost 96 percent (or around US$576 million) of the Operation’s funds will be disbursed against
disbursement linked indicators (DLIs). The DLIs are structured to provide incentives to participating
ULGs and regional governments for improved management and development of urban areas. (More
details on the DLIs, MCs, PMs, performance assessments, verification protocols and disbursement
arrangements are provided in the UIIDP Annual Performance Assessment Guideline (APAG) which
is a part of this POM and is a standalone Annex of the POM

DLIs 1 to 4 focus on ULGs to strengthen ULG institutional roles in the delivery of

infrastructure and services and enhance local economic development. Each of these DLIs is a
composite index of defined MCs and PMs.
The disbursement system for DLI 1, 2, 3, and 4 is scalable based on actual performance of
ULGs. It is particularly important to note that if the ULGs perform better (or poorer) than expected
(as set out in the disbursement related targets in the DLI matrix), disbursements will be adjusted
accordingly. This means that if ULGs perform higher than expected they will receive higher than
expected disbursements. If this continues throughout the Program, additional financing may be
needed.

DLIs 5 to 9 focus on regional government entitiesto enhance their abilities in fulfilling their
mandates to support ULGs.These DLIs will disburse based on results achieved by regional
government entities in providing support to ULGs (DLI 5) as well as focusing on their performance in
conducting essential audits for ULGs such as on fiduciary and environmental and social management.

DLI 10 is a legacy DLI disbursing against prior results achieved under the ULGDP II that has
arisen due to overachievement of performance results. This DLI will be disbursed upon verification in
FY 2018/19, when the fifth APA of the ULGDP II has been completed in February 2018

Collectively the DLIs address the PDO and key result areas. The DLIs are designed to address the
challenges of ULGs’ and regional governments’ institutional performance and, in turn, ULGs’ ability
to deliver, operate, and manage infrastructure and services, and expand LED. They provide incentives
to address the core issues such as on timely audit, social and environmental management, own-source
revenue generation, and strengthen the system and procedures for capacity building. In addition, there
is enhanced focus to strengthen urban resilience, promote LED and job creation, and enhance gender
equality. The PMs have a direct link to the key result areas and the GoE’s program intended
outcomes.

P a g e 268 | 326
 Table 1. Program DLIs
Approximate Percent of
Amount Total
Results area DLIs (IDA+SUF+A PforR
FD) amount
(US$ million)
ULGs deliver DLI 1: ULGs have achieved Program MCs.82 109.33 18.99
infrastructure
and services DLI 2: ULGs have strengthened institutional performance. 189.62 32.93

DLI 3: ULGs have implemented quality infrastructure and 90.09 15.65

maintenance activities and ensured value for money.

DLI 4:ULGs have strengthened performance on LED, urban 52.94 9.20

resilience and gender mainstreaming.

Regional DLI 5: Regional support teams have delivered effective capacity 27.88 4.84
government building services to ULGsin urban institutional and infrastructure
entities support development.
ULGs to
strengthen DLI 6: Regional Government Audit Agencies (ORAGs) have carried
institutions and 14.96 2.60
out timely audits of ULGs’ financial reports.
enable them to
deliver
DLI 7: Regional Environment Protection, Forest and Climate Change
infrastructure 13.12 2.28
Authorities (REFAs) have completed timely review of ULGs’
and services.
environmental and social safeguards compliance.

DLI 8: Regional Revenue Authorities (RRAs) have supported ULG

revenue mobilization. 7.04 1.22

DLI 9: Regional Public Procurement & Property Administration

Agencies (RPPPAAs) conduct timely and quality procurement audit 7.04 1.22
of ULG’s procurement transactions and performance.
Prior results DLI 10: Strengtheninginstitutional performance,infrastructure and 63.74 11.07
service delivery, maintenance, and job creationfor 44 ULGDP II
ULGs.83
Total 575.76 100.0

Institutional Arrangements

The MUDCo will be the lead implementing agency, with a Federal Mobile Team (FMT) in the Urban
Revenue Enhancement, Fund Mobilization and Finance Bureau (UREFMFB) responsible for daily
coordination of the Operation.
Federal Level

82
ULGs must comply with the MCs to get access to the allocations from DLIs 2, 3, and 4, as the MCs are the basic
safeguards for handling of larger discretionary funds.
83
Part of the DLI10 also finances consultancies, studies, and related operating costs managed by MUDCo but limited to the
legacy activities carried over by ULGDP 2.
P a g e 269 | 326
 Figure 4. Organizational Structure for Federal Level

Federal Steering Committee (FSC)

MUDCo Minister (Chair), MUDCO State Minister
(UDS), MOF, EFCCC, MoLSA, MoTI, MoP,
FEACC, OFAG & MOR,MOWCY MUDCo
UREMFB Bureau Head (Member/Secretary)
(the members from the other Ministries & Agencies are
at the level of minimum State Minister and no
representatives are allowed)

Federal Technical Committee

(FTC)
MUDCo UREMFB Bureau Head (Chair),
MUDCo PR & A Bureau Head, MUDCo UGCBB
Bureau Head, MOF, EFCCC, MoLSA, MoTI,
MoP, FPPPA, FEACC, FUJCFSA, OFAG, MOR,
MOWCY, MUDCo UIIDP Coordinator
(Member/Secretary)
(Members from other Ministries & Agencies are at
the level of minimum Director and no representatives
are allowed)

MUDCo
UREFMFB
Federal Mobile Team (FMT)
Overall management of the UIIDP

MOF OFAG
Fund flow, disbursement,
reporting, and arranging program Carrying out program audi
auditing

P a g e 270 | 326
Objective of the UIIDP Federal Technical Committee (FTC)
To provide administrative and technical support to the UIIDP Federal Steering Committee (FSC) in
the implementation of the UIIDP and bring to its attention those issues arising that require executive
policy and decision making. To provide assistance, technical support and advice to MUDCo,
especially in the FTC members’ respective thematic areas and ensuring that there is proper
coordination between the various federal Ministries and Agencies during the implementation of the
UIIDP.
Responsibilities of the UIIDP Federal Technical Committee (FTC)
The FTC’s responsibilities are:

1 Provide administrative and technical support to the UIIDP Federal Steering Committee
(FSC) in the achievement of theUIIDP development objectives which contribute to the
realization of the Government’s ECSPG vision and mission;
2 Follow and enforce the laws of the Federal Democratic Republic of Ethiopia, the provisions
of the UIIDP Financing Agreement, the POM and the applicable World Bank guidelines in
the implementation of UIIDP;
3 Provide assistance, support and advice to MUDCo and the Federal Mobile Team (FMT) on
technical issues, especially regarding the members’ respective thematic areas;
4 Liaise with the Regional Technical Committees and provide guidance on
UIIDPimplementation and ensure good communication and coordination between all
involved and interested stakeholders at federal and regional levels;
5 Address any technical issues that may be adversely affecting the program which may be
beyond the capability of the FMT to resolve or which may require FTC intervention to move
forward;
6 Review and recommend for FSC approval the annual APA results and allocations
7 Review and recommend for FSC approval the annual Federal Capacity Building Plan &
Budget.
8 Review the results of the APA for regional entities and ULGs and receive from each region
(BUDHo) the Strategies and Action Plan that each region will be taking to address
weaknesses/gaps on each DLI and performance indicator. Consolidate and submit to FSC
with recommendations.
9 Receive from each region quarterly and annual progress reports on the Strategies and Action
Plan that each region have taken to address weaknesses/gaps on each DLI and performance
indicator. Consolidate and submit to FSC with recommendations.
10 Receive ad-hoc, quarterly, semi-annual and annual reports from the FMT and determine
follow-up actions and requirements as necessary;
11 Monitor and evaluate UIIDP performance and impacts taking action to ensure that the
UIIDP achieves the agreed objectives and targets set in the POM for each year of program
implementation;
12 Attend to any other business or issue that may be deemed to require the intervention of the
FTC.
Composition of the UIIDP Federal Technical Committee (FTC)
The FTC is made up of 12 members from the following institutions:

P a g e 271 | 326
1. Ministry of Urban Development &Construction (MUDCo), Urban Revenue Enhancement, Fund
Mobilization and Finance Bureau Head
2. Ministry of Urban Development &Construction (MUDCo), Policy, Research &Advisory Bureau
Head
3. Ministry of Urban Development & Construction (MUDCo), Urban Governance & Capacity
Building Bureau Head
3. Ministry of Finance (MOF)
4. Environment, Forest and Climate Change Commission (EFCCC)
5. Ministry of Labour & Social Affairs (MoLSA)
6. Ministry of Trade and Industry (MoTI)
7. Office of Federal Auditor General (OFAG)
8. Federal Ethics and Anti-Corruption Commission (FEACC)
9. Ministry of Revenues (MOR)
10.Ministry of Women, Children, and Youth (MOWCY)
11. Federal Urban Job Creation & Food Security Agency.
12. Program Coordinator, UIIDP, UREFMFB, MUDCo.
The Program Coordinator, UIIDPis also the Secretary of the Committee. The Technical Advisor,
UIIDP provides technical support to the Committee.
The members of the Committee are minimum Director level and no representatives of the nominated
persons are allowed. Each Ministry/Agency shall provide its nominated member of the FTC by
official letter to MUDCo, Urban Revenue Enhancement, Fund Mobilization and Finance Bureau.

Workings of the UIIDP Federal Technical Committee (FTC)

1. The FTCshall meet quarterly until the FTCis dissolved by FSC or MUDCo. The Chairman
may however, call for urgent ad-hoc meetings as and when necessary outside of the scheduled
meetings. Note: it is recommended that, because the UIIDP reporting system is quarterly
based on the EFY, the FTCscheduled meetings take place in the month that follows the end of
each quarter: i.e., November, February, May and August each year. The Secretary, will
endeavour to circulate in advance to all members the meeting dates for the year. The meetings
to review the APA results and allocations and the Federal Capacity Building Plan are critical
and may be held anytime depending on when they are submitted to the FTC.
2. Prior to each FTCmeeting, the Secretary, in consultation with the Chairman, shall prepare an
Agenda for the forthcoming meeting and, at least seven calendar days prior to the meeting,
the Secretary shall circulate by hand or fax, a copy of the Agenda to all members of the
FTC.
3. If an FTC Member wishes to have a matter placed on the Agenda, s/he shall notify the
Secretary of the matter in writing (by hand delivery, fax or email) at least 14 calendar days
prior to the scheduled meeting.
4. Decisions of the FTC shall be agreed, to the extent possible, by consensus of all Voting
Members present at the meeting. In the event of consensus not being reached, the matter

P a g e 272 | 326
 shall be put to the vote and shall be decided by simple majority. In the event of a hung vote
on any matter, the Chair’s vote shall carry. In the event that SC members are not present at
a meeting at which a decision is to be made, they may send in advance of the meeting, their
views on any matter on the agenda, and their vote should it come to a vote, to the meeting
by letter, fax or email, which shall be received by and read out to the meeting by the
Secretary. The quorum for all meetings of the FTC shall be six members present.
5. The Secretaryshall be responsible for keeping the minutes of all FSC meetings in
accordance with generally accepted standard of minutes. The draft minutes shall be
circulated immediately to all members after the meeting and corrections sought, from those
present at the meeting in question and these may be incorporated into the revised draft
minutes. The revised draft minutes shall be presented at the next meeting of the FTC where
they will be formally corrected and adopted.
6. In the event that a Member does not receive adequate notice of a meeting and/or Minutes of
the previous meeting, the matter shall be raised at the next Committee meeting so that the
matter can be rectified.
7. The FTC may establish such other committees, task forces and working groups as are
required to facilitate its work and that of the program in general without delegating any of
its responsibilities as stated in this TOR.
8. The FTC meetings will be held at a venue determined by the Chairman.

P a g e 273 | 326
 8. TOR for UIIDP Regional Steering Committee

MINISTRY OF URBAN DEVELOPMENT &CONSTRUCTION

URBAN REVENUE ENHANCEMENT, FUND
MOBILIZATION AND FINANCE BUREAU

URBAN INSTITUTIONAL & INFRASTRUCTURE

DEVELOPMENT PROGRAM
(UIIDP)

TERMS OF REFERENCE
FOR
REGIONAL STEERING COMMITTEE
(RSC)

Urban Revenue Enhancement, Fund Mobilization & Finance Bureau

Ministry of Urban Development &Construction

P a g e 274 | 326
Introduction
The Ministry of Urban Development &Construction, Regional Democratic Republic of Ethiopia, with
support from the World Bank and the Agence Francaise de Developpement (AFD is implementing the
Urban Institutional and Infrastructure Development Program (UIIDP) during the period from March
2018 to December 2023.

The UIIDP will provide Performance Grants (PGs) for investments in infrastructure and services and
in capacity building for 117 urban local governments (ULGs) and capacity building in all nine
Regional Governments (RGs), MUDCo and several Regional Ministries/Agencies.

The UIIDP is being financed through World Bank & AFD Program-for-Results (PforR) financing
instrument at the regional and ULG levels and an Investment Project Financing (IPF) instrument at
the Regional level. The regional governments and urban local governments are expected to provide
matching funds (counterpart contributions) as per the percentages agreed between MUDCo and the
World Bank which are stated in the IIDP Program Operations Manual.
Funding available under the UIIDP will depend on the performance of each city and Regional
Government assessed annually against verifiable results described in the Program Operations Manual
(POM) and in the Annual Performance Assessment Guideline (APAG) which is a standalone Annex
of the POM.

Program Development Objective

The Program Development Objective (PDO) of the UIIDP is to enhance the institutional
performance of participating urban local governments to develop and sustain urban
Key Result Areas
It is expected that the institutional performance improvements and the infrastructure delivered by
cities will result in: -
(v) enhanced citizen participation and engagement in ULG planning and budgeting;
(w) increased own source revenue at the ULG level;
(x) improved infrastructure, service delivery, O&M systems;
(y) improved efficiency and effectiveness in fiduciary management;
(z) Improved environmental and social management and safeguards; and
(aa) strengthened accountability and oversight systems; and
(bb) strengthened ULG resilience, improved local economic development (LED) and enhanced
gender equity in the ULG operations.
Key Result Indicators
The key results indicators are:
(p) People provided with improved urban living conditions under the UIIDP [corporate indicator].
(q) Cities with improved livability, sustainability, and management [corporate indicator].
(r) Composite institutional performance of participating ULGs, averaged across all cities.84
(s) Composite performance forachievement of urban infrastructure and service targets, maintenance
performance and value for money in investments by ULGs, averaged across all cities.
(t) Composite performance for achievement of LED targets, averaged across all cities

84
In the core thematic areas of:Planning and budgeting, assets management, public financial management,
procurement, own source revenues, accountability and transparency, environment and social safeguards, land
management, and strategic urban planning.
P a g e 275 | 326
The complete table on the results framework and monitoring is provided in the POM Annex 1.

Program Scope and Coverage of Urban Centres

The UIIDP will have an additional 73 cities to the existing 44 cities making a total of 117 cities that
will participate in the program. This substantial scale-up to 117 cities will bring about greater impact
in terms of population coverage and size of the Program (increasing beneficiaries from 4.36 million
under UGLDP II to an estimated 6.62 million in UIIDP) and result in exponentially larger positive
impact for the country. The scale-up allows strengthening of the overall programmatic and
performance-based approach to support sustainable urban development and leverages on economies
of scale for program management and implementation. In addition, the scale-up is built on the solid
foundations and tried-and-tested overall successful experiences of ULGDP I and II. Timely support to
improve institutional performance in the planning, delivery, and sustained provision of urban services
and infrastructure by local governments is critical especially for these rapidly growing cities.
Figure 1. Cities Participating in UIIDP

Amhara
32 Cities
BG
Gambella
Oromia
Harari
38 Cities
Dire Dawa
(1 city each)

Total
117
Afar cities SNNPRS
23 cities
4 cities

Tigray
Ethiopian Somali
12 cities
4 cities

P a g e 276 | 326
Key Features and Financing Modalities
The program will provide 4 rounds of performance grants in EFY 2012 (2019/20), EFY 2013
(2020/21), EFY 2014 (2021/22), and EFY 2015 (2022/23). Total UIIDP expenditures over this period
are estimated at Ethiopian Birr (ETB) 20.1 billion (US$ 859.86 million), of which ETB 14 billion
(US$ 600 million of which US$200 million is from IDA Scale Up Funding - 70% will be provided by
the World Bank and ETB 262 million (US$11.2 million) -1%- will be provided by AFD and ETB 5.8
billion (US$248.66 million85) – 29% - will be provided by regions and ULGs as matching fund
contributions.

85
Regions and cities contribute to the performance based transfers in the following manner: Amhara, Oromia,
SNNPR, and Tigray: 30 percent funding in addition to IDA funded grants; DRS regions: 20 percent; original 16
ULGDP I ULGs: 40 percent; new cities under ULGDP II in the DRS regions 10 percent; and other new
(ULGDPII) cities: 20 percent; Harar and Dire Dawa contribute 50 percent in addition to the IDA funded grants.
The new 73 ULGs under UIIDP will followthe same principles as the ULGDPII newcomers.
P a g e 277 | 326
 Figure 2. UIIDP Windows & Main Expenditure Items

Window 1. ULG level. Performance

Grants
$690.64m
(IDA $432.38m; AFD $9.6m;
Regions & ULGs $248.66m)

Window 1.
Window 1: Regional
Level. Support for Prior Results
RGs to strengthen (Financing Gap
UIDDP Total under ULGDP II due
capacity to support
ULGs Budget to overachievement
$859.9m of performance
$70.04m results by ULGs)
(IDA) $63.74
(IDA)

Window 2. Regional Level. Investment

Project Financing (IPF)
Support for MUDCo to administer &
coordinate the UIIDP & to strengthen
capacity to guide regions & ULGs
$35.4m
(IDA $33m; AFD $2.4m)

P a g e 278 | 326
 Figure 3. ULG & Regional Contributions to UIIDP (Matching Funds)

Old 16 ULGDP I
ULGs in Major
regions
40%

New ULGs in
Dire Dawa non - DRS
50% Regional regions
Contributions 20%
4 Major Regions:
30%
DRS: 20%
Harari: 25%

New ULGs in
Harar
DRS
25%
10%

ULGs will use the Program funds to finance urban infrastructure works as well as capacity building
activities, in compliance with the Program’s investment menu and capacity building manual. Eligible
infrastructure investments fall under eight groups including: (a) urban roads, (b) integrated
infrastructure and land services, (c) sanitation (liquid waste), (d) solid waste management, (e) urban
drainage, (f) urban disaster risk management and urban resilience, (g) built facilities, and (h) urban
green infrastructure. Ineligible investments include any World Bank environment and social impact
assessment Category A projects. Compliance with the investment menu is a minimum condition for
receiving funds. In addition, ULGs will be required to prepare the project in a participatory manner,
and consider: (a) social inclusion requirements, including gender and disability considerations; (b)
climate change and disaster adaptation; and (c) contribution to LED and long-term job creation. 86
ULGs could also spend up to 5 percent of investment grants and regional/city contributions on
capacity building support. For regional government entities, the grants will mainly be used for
capacity building, operations and management expenses, subject to the eligible capacity building
areas, similar to the ULGs.
The IPF window will be used to fund a range of institutional and capacity development interventions
at Regional level coordinated by MUDCo. The MUDCo will undertake activities in four areas: (a)
developing capacity, systems, and organizations of Regional entities; (b) developing capacity,
systems, and organizations of regional and ULG entities, (c) UIIDP management and monitoring and
evaluation, and (d) procuring and managing APAs and VfM audits. The capacity building activities,
technical assistance and feasibility studies will focus on core and strategic areas such as revenue
86
Details of and procedures for the use of investment project prioritization and selection criteria will be
included in the POM.
P a g e 279 | 326
enhancement, asset management, CIP preparation, financial management, as well as introducing
initiatives on local economic development, urban resilience, cultural heritage, and urban planning.
Disbursement Linked Indicators, Minimum Conditions, Performance Measures and Verification
Protocols
Almost 96 percent (or around US$576 million) of the Operation’s funds will be disbursed against
disbursement linked indicators (DLIs). The DLIs are structured to provide incentives to participating
ULGs and regional governments for improved management and development of urban areas. (More
details on the DLIs, MCs, PMs, performance assessments, verification protocols and disbursement
arrangements are provided in the UIIDP Annual Performance Assessment Guideline (APAG) which
is a part of this POM and is a standalone Annex of the POM

DLIs 1 to 4 focus on ULGs to strengthen ULG institutional roles in the delivery of

infrastructure and services and enhance local economic development. Each of these DLIs is a
composite index of defined MCs and PMs.
The disbursement system for DLI 1, 2, 3, and 4 is scalable based on actual performance of
ULGs. It is particularly important to note that if the ULGs perform better (or poorer) than expected
(as set out in the disbursement related targets in the DLI matrix), disbursements will be adjusted
accordingly. This means that if ULGs perform higher than expected they will receive higher than
expected disbursements. If this continues throughout the Program, additional financing may be
needed.

DLIs 5 to 9 focus on regional government entitiesto enhance their abilities in fulfilling their
mandates to support ULGs.These DLIs will disburse based on results achieved by regional
government entities in providing support to ULGs (DLI 5) as well as focusing on their performance in
conducting essential audits for ULGs such as on fiduciary and environmental and social management.

DLI 10 is a legacy DLI disbursing against prior results achieved under the ULGDP II that has
arisen due to overachievement of performance results. This DLI will be disbursed upon verification in
FY 2018/19, when the fifth APA of the ULGDP II has been completed in February 2018.

Collectively the DLIs address the PDO and key result areas. The DLIs are designed to address the
challenges of ULGs’ and regional governments’ institutional performance and, in turn, ULGs’ ability
to deliver, operate, and manage infrastructure and services, and expand LED. They provide incentives
to address the core issues such as on timely audit, social and environmental management, own-source
revenue generation, and strengthen the system and procedures for capacity building. In addition, there
is enhanced focus to strengthen urban resilience, promote LED and job creation, and enhance gender
equality. The PMs have a direct link to the key result areas and the GoE’s program intended
outcomes.

P a g e 280 | 326
 Table 1. Program DLIs
Approximate Percent of
Amount Total
Results area DLIs (IDA+SUF+A PforR
FD) amount
(US$ million)
ULGs deliver DLI 1: ULGs have achieved Program MCs.87 109.33 18.99
infrastructure
and services DLI 2: ULGs have strengthened institutional performance. 189.62 32.93

DLI 3: ULGs have implemented quality infrastructure and 90.09 15.65

maintenance activities and ensured value for money.

DLI 4:ULGs have strengthened performance on LED, urban 52.94 9.20

resilience and gender mainstreaming.

Regional DLI 5: Regional support teams have delivered effective capacity 27.88 4.84
government building services to ULGsin urban institutional and infrastructure
entities support development.
ULGs to
strengthen DLI 6: Regional Government Audit Agencies (ORAGs) have carried
institutions and 14.96 2.60
out timely audits of ULGs’ financial reports.
enable them to
deliver
DLI 7: Regional Environment Protection, Forest and Climate Change
infrastructure 13.12 2.28
Authorities (REFAs) have completed timely review of ULGs’
and services.
environmental and social safeguards compliance.

DLI 8: Regional Revenue Authorities (RRAs) have supported ULG

revenue mobilization. 7.04 1.22

DLI 9: Regional Public Procurement & Property Administration

Agencies (RPPPAAs) conduct timely and quality procurement audit 7.04 1.22
of ULG’s procurement transactions and performance.
Prior results DLI 10: Strengtheninginstitutional performance,infrastructure and 63.74 11.07
service delivery, maintenance, and job creationfor 44 ULGDP II
ULGs.88
Total 575.76 100.0

Institutional Arrangements

The MUDCo will be the lead implementing agency, with a Regional Mobile Team (FMT) in the
Urban Revenue Enhancement, Fund Mobilization and Finance Bureau (UREFMFB) responsible for
daily coordination of the Operation.

The respective regional BUDs are responsible for daily coordination of the Operation at the regional
level. Specifically, the BUDs are responsible for:
 Capacity building support of the ULGs in their jurisdiction.
 Preparation of consolidated (ULG and regional government) progress
reports covering all ULGs in their jurisdiction.
 Oversight and backstopping support related to aspects of the Operation.

Other regional entities will play important roles. The (a) ORAGs will conduct external audits of ULG
financial reports; (b) the REPAs will oversee the Program’s environmental and social safeguards

87
ULGs must comply with the MCs to get access to the allocations from DLIs 2, 3, and 4, as the MCs are the basic
safeguards for handling of larger discretionary funds.
88
Part of the DLI10 also finances consultancies, studies, and related operating costs managed by MUDCo but limited to the
legacy activities carried over by ULGDP 2.
P a g e 281 | 326
agreements; (c) the Bureaus of Finance and Economic Development (BoFEDs) will manage the
regional fund flow and reporting, the regional public procurement and property administration
agencies will guide and support on procurement procedures and capacity building; (d) the Regional
Revenue Authorities (RRAs) will support ULGs in the areas of own source revenue generation; (e)
the Regional Public Procurement and Property Administration Agency (RPPPAA)to conduct the
annual procurement audits of ULGs;and (f) the Regional Ethics and Anti-Corruption Commissions
(REACCs) will be responsible for fraud and corruption monitoring and reporting.

Figure 4. Organizational Structure for Federal Level

Regional Steering Committee (RSC)

BUDHo (Chair), BOFED, REFCCC, BoLSA,
BOWCY, RPPPAA, REACC, ORAG and RRA
(these should be Bureau Heads and not representatives.
The BUDHo Deputy Bureau Head assisted by the UIIDP
Regional Coordinator provide secretarial services )
Regional Technical
Subcommittee (RTSC)
BUDHo Deputy Bureau Head (Chair),UIIDP
Regional Coordinator, BOFED, REFCCC,
BoLSA, BOWCY, RUJCFSA, RPPPAA,
REACC, ORAG and RRA
(Members are the technical focal persons from
the abovementioned Bureaus & Agencies)

BUDHo
Regional Mobile Team (RMT) or
Overall Coordinator in case of
regions with more than one RMT
Overall management of the UIIDP

BOFED
Financial management
and reporting

RMT 1
RMT 2
RMT 3
P a g e 282 | 326
Objective of the UIIDP Regional Steering Committee (RSC)
The UIIDP Regional Steering Committee (RSC) isthe executive policy and decision-making body at
the regional level responsible for providing the direction that contributes to achievement of the UIIDP
development objective in the region which is to enhance the institutional performance of participating
urban local governments in the region to develop and sustain urban infrastructure, services, and local
economic development.

Responsibilities of the UIIDP Regional Steering Committee (RSC)

The UIIDP Regional Steering Committee (RSC) key responsibilities are:
 To provide overall direction, coordination of regional organs and decision-making authority
in general regarding the UIIDP at regional level; and
 To approve the Regional Capacity Building Plan and the allocations to the various regional
organs.
 Review the results of the APA for all regional entities and ULGs, provide direction on the
actions to be taken to address weaknesses and gaps on the DLIs and performance indicators.
The RSC’s specific responsibilities are:

1 Promote the achievement of theUIIDP development objectives in the region which contribute to
the realization of the Government’s ECSPG vision and mission;
2 Provide overall direction on implementation of the UIIDP in the region and to the regional
implementing agencies;
3 Receive reports from the UIIDP Regional Technical Committee (FTC) and determine follow-up
actions and requirements as necessary;
4 Monitor and evaluate UIIDP performance and impacts;
5 Ensure good communication and coordination between all involved and interested stakeholders
as to UIIDP objectives and activities;
6 Follow and enforce the laws of the country and region, the provisions of the UIIDP Financing
Agreement, the POM and the applicable World Bank guidelines in the implementation of UIIDP;
7 Ensure that the regionand its ULGs achieve the UIIDPobjectives and targets set in the POM for
each year of program implementation.
8 Review and approve the annual UIIDP Regional Capacity Building Plan.
9 Review the results of the APA for regional entities and ULGs in the region and receive from the
RTC the Strategies and Action Plan that each regional entity and ULG will be taking to address
weaknesses/gaps on each DLI and performance indicator. Provide direction.
10 Receive from the RTC quarterly and annual progress reports on the Strategies and Action Plan
that each regional entity and ULG have taken to address weaknesses/gaps on each DLI and
performance indicator. Provide direction.
11 Decide sitting allowances for RSCmembers.
12 Attend to any other business or issue that may be deemed to require the attention or decision of
the RSC.
Composition of the UIIDP Regional Steering Committee (RSC)
The RSC is made up of 10 members from the following institutions:

P a g e 283 | 326
1. Bureau Head, Bureau of Urban Development & Housing (MUDCo)
2. Bureau of Finance and Economic Cooperation (BoFED)
3. Regional Environment, Forest and Climate Change Commission (REFCCC)
4. Bureau of Labour & Social Affairs (BoLSA)
5. Bureau of Industry and Trade
6. Bureau of Women, Children and Youth (BOWCY)
7. Office of Regional Auditor General (ORAG)
8. Regional Ethics and Anti-Corruption Commission (REACC)
9. Regional Revenue Authorities (RRAs)
10. Regional Public Procurement and Property Administration Agency (RPPPAA)

The Deputy Bureau Head, BUDHo is the Secretary of the Committee.

The members of the Committee are Bureau Heads and no representatives are allowed. Each
Bureau/Agency shall provide its nominated member of the RSC by official letter to BUDHo.

Workings of the UIIDP Regional Steering Committee (RSC)

1. The RSCshall meet quarterly until the RSCis by unanimous decision vote of its voting
members dissolved. The Chairman may however, call for urgent ad-hoc meetings as and
when necessary outside of the scheduled meetings. Note: it is recommended that, because the
UIIDP reporting system is quarterly based on the EFY, the RSCscheduled meetings take
place in the month that follows the end of each quarter: i.e., November, February, May and
August each year. The Secretary, will endeavour to circulate in advance to all members the
meeting dates for the year. The meeting to approve the Regional Capacity Building Plan is
critical and may be held anytime depending on when the RTC provides its recommendation.
2. Prior to each RSCmeeting, the Secretary, in consultation with the Chairman, shall prepare
an Agenda for the forthcoming meeting and, at least seven calendar days prior to the
meeting, the Secretary shall circulate by hand or fax, a copy of the Agenda to all members
of the RSC.
3. If an RSC Member wishes to have a matter placed on the Agenda, s/he shall notify the
Secretary of the matter in writing (by hand delivery, fax or email) at least 14 calendar days
prior to the scheduled meeting.
4. Decisions of the RSC shall be agreed, to the extent possible, by consensus of all Voting
Members present at the meeting. In the event of consensus not being reached, the matter
shall be put to the vote and shall be decided by simple majority. In the event of a hung vote
on any matter, the Chair’s vote shall carry. In the event that SC members are not present at
a meeting at which a decision is to be made, they may send in advance of the meeting, their
views on any matter on the agenda, and their vote should it come to a vote, to the meeting
by letter, fax or email, which shall be received by and read out to the meeting by the
Secretary. The quorum for all meetings of the RSC shall be 5 members present.

P a g e 284 | 326
5. The Secretaryshall be responsible for keeping the minutes of all RSC meetings in
accordance with generally accepted standard of minutes. The draft minutes shall be
circulated immediately to all members after the meeting and corrections sought, from those
present at the meeting in question and these may be incorporated into the revised draft
minutes. The revised draft minutes shall be presented at the next meeting of the RSC where
they will be formally corrected and adopted.
6. In the event that a Member does not receive adequate notice of a meeting and/or Minutes of
the previous meeting, the matter shall be raised at the next Committee meeting so that the
matter can be rectified.
7. The RSC may establish such other committees, task forces and working groups as are
required to facilitate its work and that of the program in general without delegating any of
its powers and responsibilities as stated in this TOR.
8. The RSC meetings will be held at a venue determined by the Chairman.

P a g e 285 | 326
8. TOR for UIIDP Regional Technical Committee

MINISTRY OF URBAN DEVELOPMENT &CONSTRUCTION

URBAN REVENUE ENHANCEMENT, FUND
MOBILIZATION AND FINANCE BUREAU

URBAN INSTITUTIONAL & INFRASTRUCTURE

DEVELOPMENT PROGRAM
(UIIDP)

TERMS OF REFERENCE
FOR
REGIONAL TECHNICAL COMMITTEE
(RTC)

Urban Revenue Enhancement, Fund Mobilization & Finance Bureau

Ministry of Urban Development &Construction

P a g e 286 | 326
Introduction
The Ministry of Urban Development &Cinstruction, Regional Democratic Republic of Ethiopia, with
support from the World Bank and the Agence Francaise de Developpement (AFD is implementing the
Urban Institutional and Infrastructure Development Program (UIIDP) during the period from March
2018 to December 2023.

The UIIDP will provide Performance Grants (PGs) for investments in infrastructure and services and
in capacity building for 117 urban local governments (ULGs) and capacity building in all nine
Regional Governments (RGs), MUDCo and several Regional Ministries/Agencies.

The UIIDP is being financed through World Bank & AFD Program-for-Results (PforR) financing
instrument at the regional and ULG levels and an Investment Project Financing (IPF) instrument at
the Regional level. The regional governments and urban local governments are expected to provide
matching funds (counterpart contributions) as per the percentages agreed between MUDCo and the
World Bank which are stated in the IIDP Program Operations Manual.
Funding available under the UIIDP will depend on the performance of each city and Regional
Government assessed annually against verifiable results described in the Program Operations Manual
(POM) and in the Annual Performance Assessment Guideline (APAG) which is a standalone Annex
of the POM.

Program Development Objective

The Program Development Objective (PDO) of the UIIDP is to enhance the institutional
performance of participating urban local governments to develop and sustain urban
Key Result Areas
It is expected that the institutional performance improvements and the infrastructure delivered by
cities will result in: -
(cc) enhanced citizen participation and engagement in ULG planning and budgeting;
(dd) increased own source revenue at the ULG level;
(ee) improved infrastructure, service delivery, O&M systems;
(ff) improved efficiency and effectiveness in fiduciary management;
(gg) Improved environmental and social management and safeguards; and
(hh) strengthened accountability and oversight systems; and
(ii) strengthened ULG resilience, improved local economic development (LED) and enhanced
gender equity in the ULG operations.
Key Result Indicators
The key results indicators are:
(u) People provided with improved urban living conditions under the UIIDP [corporate indicator].
(v) Cities with improved livability, sustainability, and management [corporate indicator].
(w) Composite institutional performance of participating ULGs, averaged across all cities.89
(x) Composite performance forachievement of urban infrastructure and service targets, maintenance
performance and value for money in investments by ULGs, averaged across all cities.
(y) Composite performance for achievement of LED targets, averaged across all cities

89
In the core thematic areas of:Planning and budgeting, assets management, public financial management,
procurement, own source revenues, accountability and transparency, environment and social safeguards, land
management, and strategic urban planning.
P a g e 287 | 326
The complete table on the results framework and monitoring is provided in the POM Annex 1.

Program Scope and Coverage of Urban Centres

The UIIDP will have an additional 73 cities to the existing 44 cities making a total of 117 cities that
will participate in the program. This substantial scale-up to 117 cities will bring about greater impact
in terms of population coverage and size of the Program (increasing beneficiaries from 4.36 million
under UGLDP II to an estimated 6.62 million in UIIDP) and result in exponentially larger positive
impact for the country. The scale-up allows strengthening of the overall programmatic and
performance-based approach to support sustainable urban development and leverages on economies
of scale for program management and implementation. In addition, the scale-up is built on the solid
foundations and tried-and-tested overall successful experiences of ULGDP I and II. Timely support to
improve institutional performance in the planning, delivery, and sustained provision of urban services
and infrastructure by local governments is critical especially for these rapidly growing cities.
Figure 1. Cities Participating in UIIDP

Amhara
32 Cities
BG
Gambella
Oromia
Harari
38 Cities
Dire Dawa
(1 city each)

Total
117
Afar cities SNNPRS
23 cities
4 cities

Tigray
Ethiopian Somali
12 cities
4 cities

Key Features and Financing Modalities

P a g e 288 | 326
The program will provide 4 rounds of performance grants in EFY 2012 (2019/20), EFY 2013
(2020/21), EFY 2014 (2021/22), and EFY 2015 (2022/23). Total UIIDP expenditures over this period
are estimated at Ethiopian Birr (ETB) 20.1 billion (US$ 859.86 million), of which ETB 14 billion
(US$ 600 million of which US$200 million is from IDA Scale Up Funding - 70% will be provided by
the World Bank and ETB 262 million (US$11.2 million) -1%- will be provided by AFD and ETB 5.8
billion (US$248.66 million90) – 29% - will be provided by regions and ULGs as matching fund
contributions.

90
Regions and cities contribute to the performance based transfers in the following manner: Amhara, Oromia,
SNNPR, and Tigray: 30 percent funding in addition to IDA funded grants; DRS regions: 20 percent; original 16
ULGDP I ULGs: 40 percent; new cities under ULGDP II in the DRS regions 10 percent; and other new
(ULGDPII) cities: 20 percent; Harar and Dire Dawa contribute 50 percent in addition to the IDA funded grants.
The new 73 ULGs under UIIDP will followthe same principles as the ULGDPII newcomers.
P a g e 289 | 326
 Figure 2. UIIDP Windows & Main Expenditure Items

Window 1. ULG level. Performance

Grants
$690.64m
(IDA $432.38m; AFD $9.6m;
Regions & ULGs $248.66m)

Window 1.
Window 1: Regional
Level. Support for Prior Results
RGs to strengthen (Financing Gap
UIDDP Total under ULGDP II due
capacity to support
ULGs Budget to overachievement
$859.9m of performance
$70.04m results by ULGs)
(IDA) $63.74
(IDA)

Window 2. Regional Level. Investment

Project Financing (IPF)
Support for MUDCo to administer &
coordinate the UIIDP & to strengthen
capacity to guide regions & ULGs
$35.4m
(IDA $33m; AFD $2.4m)

P a g e 290 | 326
 Figure 3. ULG & Regional Contributions to UIIDP (Matching Funds)

Old 16 ULGDP I
ULGs in Major
regions
40%

New ULGs in
Dire Dawa non - DRS
50% Regional regions
Contributions 20%
4 Major Regions:
30%
DRS: 20%
Harari: 25%

New ULGs in
Harar
DRS
25%
10%

ULGs will use the Program funds to finance urban infrastructure works as well as capacity building
activities, in compliance with the Program’s investment menu and capacity building manual. Eligible
infrastructure investments fall under eight groups including: (a) urban roads, (b) integrated
infrastructure and land services, (c) sanitation (liquid waste), (d) solid waste management, (e) urban
drainage, (f) urban disaster risk management and urban resilience, (g) built facilities, and (h) urban
green infrastructure. Ineligible investments include any World Bank environment and social impact
assessment Category A projects. Compliance with the investment menu is a minimum condition for
receiving funds. In addition, ULGs will be required to prepare the project in a participatory manner,
and consider: (a) social inclusion requirements, including gender and disability considerations; (b)
climate change and disaster adaptation; and (c) contribution to LED and long-term job creation. 91
ULGs could also spend up to 5 percent of investment grants and regional/city contributions on
capacity building support. For regional government entities, the grants will mainly be used for
capacity building, operations and management expenses, subject to the eligible capacity building
areas, similar to the ULGs.
The IPF window will be used to fund a range of institutional and capacity development interventions
at Regional level coordinated by MUDCo. The MUDCo will undertake activities in four areas: (a)
developing capacity, systems, and organizations of Regional entities; (b) developing capacity,
systems, and organizations of regional and ULG entities, (c) UIIDP management and monitoring and
evaluation, and (d) procuring and managing APAs and VfM audits. The capacity building activities,
technical assistance and feasibility studies will focus on core and strategic areas such as revenue
91
Details of and procedures for the use of investment project prioritization and selection criteria will be
included in the POM.
P a g e 291 | 326
enhancement, asset management, CIP preparation, financial management, as well as introducing
initiatives on local economic development, urban resilience, cultural heritage, and urban planning.
Disbursement Linked Indicators, Minimum Conditions, Performance Measures and Verification
Protocols
Almost 96 percent (or around US$576 million) of the Operation’s funds will be disbursed against
disbursement linked indicators (DLIs). The DLIs are structured to provide incentives to participating
ULGs and regional governments for improved management and development of urban areas. (More
details on the DLIs, MCs, PMs, performance assessments, verification protocols and disbursement
arrangements are provided in the UIIDP Annual Performance Assessment Guideline (APAG) which
is a part of this POM and is a standalone Annex of the POM

DLIs 1 to 4 focus on ULGs to strengthen ULG institutional roles in the delivery of

infrastructure and services and enhance local economic development. Each of these DLIs is a
composite index of defined MCs and PMs.
The disbursement system for DLI 1, 2, 3, and 4 is scalable based on actual performance of
ULGs. It is particularly important to note that if the ULGs perform better (or poorer) than expected
(as set out in the disbursement related targets in the DLI matrix), disbursements will be adjusted
accordingly. This means that if ULGs perform higher than expected they will receive higher than
expected disbursements. If this continues throughout the Program, additional financing may be
needed.

DLIs 5 to 9 focus on regional government entitiesto enhance their abilities in fulfilling their
mandates to support ULGs.These DLIs will disburse based on results achieved by regional
government entities in providing support to ULGs (DLI 5) as well as focusing on their performance in
conducting essential audits for ULGs such as on fiduciary and environmental and social management.

DLI 10 is a legacy DLI disbursing against prior results achieved under the ULGDP II that has
arisen due to overachievement of performance results. This DLI will be disbursed upon verification in
FY 2018/19, when the fifth APA of the ULGDP II has been completed in February 2018.

Collectively the DLIs address the PDO and key result areas. The DLIs are designed to address the
challenges of ULGs’ and regional governments’ institutional performance and, in turn, ULGs’ ability
to deliver, operate, and manage infrastructure and services, and expand LED. They provide incentives
to address the core issues such as on timely audit, social and environmental management, own-source
revenue generation, and strengthen the system and procedures for capacity building. In addition, there
is enhanced focus to strengthen urban resilience, promote LED and job creation, and enhance gender
equality. The PMs have a direct link to the key result areas and the GoE’s program intended
outcomes.

P a g e 292 | 326
 Table 1. Program DLIs
Approximate Percent of
Amount Total
Results area DLIs (IDA+SUF+A PforR
FD) amount
(US$ million)
ULGs deliver DLI 1: ULGs have achieved Program MCs.92 109.33 18.99
infrastructure
and services DLI 2: ULGs have strengthened institutional performance. 189.62 32.93

DLI 3: ULGs have implemented quality infrastructure and 90.09 15.65

maintenance activities and ensured value for money.

DLI 4:ULGs have strengthened performance on LED, urban 52.94 9.20

resilience and gender mainstreaming.

Regional DLI 5: Regional support teams have delivered effective capacity 27.88 4.84
government building services to ULGsin urban institutional and infrastructure
entities support development.
ULGs to
strengthen DLI 6: Regional Government Audit Agencies (ORAGs) have carried
institutions and 14.96 2.60
out timely audits of ULGs’ financial reports.
enable them to
deliver
DLI 7: Regional Environment Protection, Forest and Climate Change
infrastructure 13.12 2.28
Authorities (REFAs) have completed timely review of ULGs’
and services.
environmental and social safeguards compliance.

DLI 8: Regional Revenue Authorities (RRAs) have supported ULG

revenue mobilization. 7.04 1.22

DLI 9: Regional Public Procurement & Property Administration

Agencies (RPPPAAs) conduct timely and quality procurement audit 7.04 1.22
of ULG’s procurement transactions and performance.
Prior results DLI 10: Strengtheninginstitutional performance,infrastructure and 63.74 11.07
service delivery, maintenance, and job creationfor 44 ULGDP II
ULGs.
Total 575.76 100.0

Institutional Arrangements

The MUDCo will be the lead implementing agency, with a Regional Mobile Team (FMT) in the
Urban Revenue Enhancement, Fund Mobilization and Finance Bureau (UREFMFB) responsible for
daily coordination of the Operation.

The respective regional BUDs are responsible for daily coordination of the Operation at the regional
level. Specifically, the BUDs are responsible for:
 Capacity building support of the ULGs in their jurisdiction.
 Preparation of consolidated (ULG and regional government) progress
reports covering all ULGs in their jurisdiction.
 Oversight and backstopping support related to aspects of the Operation.

Other regional entities will play important roles. The (a) ORAGs will conduct external audits of ULG
financial reports; (b) the REPAs will oversee the Program’s environmental and social safeguards
agreements; (c) the Bureaus of Finance and Economic Development (BoFEDs) will manage the
regional fund flow and reporting, the regional public procurement and property administration
92
ULGs must comply with the MCs to get access to the allocations from DLIs 2, 3, and 4, as the MCs are the basic
safeguards for handling of larger discretionary funds.
P a g e 293 | 326
agencies will guide and support on procurement procedures and capacity building; (d) the Regional
Revenue Authorities (RRAs) will support ULGs in the areas of own source revenue generation; (e)
the Regional Public Procurement and Property Administration Agency (RPPPAA)to conduct the
annual procurement audits of ULGs;and (f) the Regional Ethics and Anti-Corruption Commissions
(REACCs) will be responsible for fraud and corruption monitoring and reporting.

Figure 4. Organizational Structure for Federal Level

Regional Steering Committee (RSC)

BUDHo (Chair), BOFED, REFCCC, BoLSA,
BOWCY, RPPPAA, REACC, ORAG and RRA
(these should be Bureau Heads and not representatives.
The BUDHo Deputy Bureau Head assisted by the UIIDP
Regional Coordinator provide secretarial services )
Regional Technical
Subcommittee (RTSC)
BUDHo Deputy Bureau Head (Chair),UIIDP
Regional Coordinator, BOFED, REFCCC,
BoLSA, BOWCY, RUJCFSA, RPPPAA,
REACC, ORAG and RRA
(Members are the technical focal persons from
the abovementioned Bureaus & Agencies)

BUDHo
Regional Mobile Team (RMT) or
Overall Coordinator in case of
regions with more than one RMT
Overall management of the UIIDP

BOFED
Financial management
and reporting

RMT 1
RMT 2
RMT 3

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Objective of the UIIDP Regional Technical Committee (RTC)
To provide administrative and technical support to the UIIDP Regional Steering Committee (FSC) in
the implementation of the UIIDP and bring to its attention those issues arising that require executive
policy and decision making. To provide assistance, technical support and advice to BUDHo,
especially in the RTC members’ respective thematic areas and ensuring that there is proper
coordination between the various Regional Bureaus and Agencies during the implementation of the
UIIDP.
Responsibilities of the UIIDP Regional Technical Committee (RTC)
The RTC’s responsibilities are:

1 Provide administrative and technical support to the UIIDP Regional Steering Committee (FSC)
in the achievement of theUIIDP development objectives in the region which contribute to the
realization of the Government’s ECSPG vision and mission;
2 Follow and enforce the laws of the country and the region, the provisions of the UIIDP Financing
Agreement, the POM and the applicable World Bank guidelines in the implementation of UIIDP;
3 Provide assistance, support and advice to BUDHo and the Regional Mobile Team (FMT) on
technical issues, especially regarding the members’ respective thematic areas;
4 Liaise with the ULGs’ UIIDP Program Coordinators and focal persons as well as City Mayors
and Managers and provide guidance on UIIDPimplementation and ensure good communication
and coordination between all involved and interested stakeholders at regional and ULG levels;
5 Address any technical issues that may be adversely affecting the program which may be beyond
the capability of the RMT or Regional Coordinator and his team to resolve or which may require
RTC intervention to move forward;
6 Review and recommend for RSC approval the annual Regional Capacity Building Plan &
Budget.
7 Receive ad-hoc, quarterly, semi-annual and annual reports from the RMT or Regional
Coordinator and determine follow-up actions and requirements as necessary;
8 Monitor and evaluate UIIDP performance and impacts taking action to ensure that the UIIDP
achieves the agreed objectives and targets set in the POM for the region and its ULGs for each
year of program implementation;
9 Review the results of the APA for regional entities and ULGs in the region and receive from the
regional entities and ULGs, the Strategies and Action Plan that each regional entity and ULG
will be taking to address weaknesses/gaps on each DLI and performance indicator. Consolidate
and submit to RSC and MUDCo the consolidated Regional Strategy and Action Plan to address
weaknesses/gaps on each DLI and performance indicator. Provide recommendations to RSC.
10 Receive from the regional entities and ULGs quarterly and annual progress reports on the
Strategies and Action Plan that each regional entity and ULG have taken to address
weaknesses/gaps on each DLI and performance indicator. Consolidate and submit to MUDCo
and to RSC with recommendations.
11 Attend to any other business or issue that may be deemed to require the intervention of the RTC.
Composition of the UIIDP Regional Technical Committee (RTC)
The RTC is made up of 10 members from the following institutions:

1. Deputy Bureau Head, Bureau of Urban Development & Housing (MUDCo)

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2. Bureau of Finance and Economic Cooperation (BoFED)
3. Regional Environment, Forest and Climate Change Commission (REFCCC)
4. Bureau of Labour & Social Affairs (BoLSA)
5. Bureau of Industry and Trade
6.Bureau of Women, Children and Youth (BOWCY)
7. Office of Regional Auditor General (ORAG)
8. Regional Ethics and Anti-Corruption Commission (REACC)
9. Regional Revenue Authorities (RRAs)
10. Regional Public Procurement and Property Administration Agency (RPPPAA)
The UIIDP Regional Coordinator, BUDHo is the Secretary of the Committee.
The members of the Committee are the nominated Focal Persons form the various Bureaus &
Agencies and no representatives are allowed. Each Bureau/Agency shall provide its nominated focal
persons and members of the RTC by official letter to BUDHo.
Workings of the UIIDP Regional Technical Committee (RTC)

1. The RTCshall meet quarterly until the RTCis dissolved by FSC or BUDHo. The Chairman may
however, call for urgent ad-hoc meetings as and when necessary outside of the scheduled
meetings. Note: it is recommended that, because the UIIDP reporting system is quarterly based
on the EFY, the RTCscheduled meetings take place in the month that follows the end of each
quarter: i.e., November, February, May and August each year. The Secretary, will endeavour to
circulate in advance to all members the meeting dates for the year. The meetings to review the
APA results and allocations and the Regional Capacity Building Plan are critical and may be held
anytime depending on when they are submitted to the RTC.
2. Prior to each RTCmeeting, the Secretary, in consultation with the Chairman, shall prepare an
Agenda for the forthcoming meeting and, at least seven calendar days prior to the meeting, the
Secretary shall circulate by hand or fax, a copy of the Agenda to all members of the RTC.
3. If an RTC Member wishes to have a matter placed on the Agenda, s/he shall notify the Secretary
of the matter in writing (by hand delivery, fax or email) at least 14 calendar days prior to the
scheduled meeting.
4. Decisions of the RTC shall be agreed, to the extent possible, by consensus of all Voting
Members present at the meeting. In the event of consensus not being reached, the matter shall be
put to the vote and shall be decided by simple majority. In the event of a hung vote on any
matter, the Chair’s vote shall carry. In the event that SC members are not present at a meeting at
which a decision is to be made, they may send in advance of the meeting, their views on any
matter on the agenda, and their vote should it come to a vote, to the meeting by letter, fax or
email, which shall be received by and read out to the meeting by the Secretary. The quorum for
all meetings of the RTC shall be six members present.
5. The Secretaryshall be responsible for keeping the minutes of all FSC meetings in accordance
with generally accepted standard of minutes. The draft minutes shall be circulated immediately to
all members after the meeting and corrections sought, from those present at the meeting in
question and these may be incorporated into the revised draft minutes. The revised draft minutes
shall be presented at the next meeting of the RTC where they will be formally corrected and
adopted.

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6. In the event that a Member does not receive adequate notice of a meeting and/or Minutes of the
previous meeting, the matter shall be raised at the next Committee meeting so that the matter can
be rectified.
7. The RTC may establish such other committees, task forces and working groups as are required to
facilitate its work and that of the program in general without delegating any of its responsibilities
as stated in this TOR.
8. The RTC meetings will be held at a venue determined by the Chairman.

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 9. Template for Annual Capacity Building Plan

ECSPG Pillar & Capacity UIIDP Gaps Capacity Performance Target96 Lead Person Year Start End Resources Packaging
Building Activities POM identified Building Indicators95 Responsible date date required : Goods,
/investments Thematic Modality94 (budget) Works,
Area93 in Birr Services,
Training
Adm.
Pillar 1: Urban
Transformational
Leadership
Name of Activity
Name of Activity
etc
Subtotal
Pillar 2: Micro & Small
Enterprise and Urban
Productivity (Economy)
Name of Activity
Name of Activity
etc

93
For regions, the CBP should cover at least 80% of the UIIDP POM thematic areas. There are 16 thematic areas and the CBP should cover at least 13 areas. The 16 thematic
areas are 1. Planning & Budgeting (P & B); 2. Procurement & Contract Management;(PM) 3. Financial Management & Audit (Internal & External) (FM & A); 4.
Environmental & Social Management System (ESMS); 5. Accountability & Transparency in City Operations & Service Delivery (A & T); 6. Urban Planning (UP); 7. Land
Development, Management & Inventory System (LM); 8. Local Economic Development (LED); 9. Job Creation (JC); 10. Gender Equity & Development (GED); 11. Urban
Resilience & DRM (UR & DRM); 12. Complaint Handling System (CHS); 13. Fraud, Ethics & Corruption Handling System (FE& CHS); 14. Monitoring, Evaluation &
Reporting System (M & E); 15. Own source revenue enhancement; 16. Infrastructure Asset Management
94
(a) structured learning through classroom training (CT), (b) technical assistance and on-the-job training (TA and/or OJT), (c) learning and knowledge exchange platforms
(LKEP), and (d) guidelines and systems rollout (GSR)
95
E.g. Number of trainees
96
E.g. 500 trainees
ECSPG Pillar & Capacity UIIDP Gaps Capacity Performance Target Lead Person Year Start End Resources Packaging
Building Activities POM identified Building Indicators Responsible date date required : Goods,
/investments Thematic Modality (budget) Works,
Area in Birr Services,
Training
Adm.
Subtotal
Pillar 3: Urban
Developmental Good
Governance & Services
Name of Activity
Name of Activity
etc
Subtotal
Pillar 4: Urban Planning,
Land Development and
Management
Name of Activity
Name of Activity
etc
Subtotal
Pillar 5: Housing
Development, Shelter
Provision and
Administration
Name of Activity
Name of Activity
etc
Subtotal

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ECSPG Pillar & Capacity UIIDP Gaps Capacity Performance Target Lead Person Year Start End Resources Packaging
Building Activities POM identified Building Indicators Responsible date date required : Goods,
/investments Thematic Modality (budget) Works,
Area in Birr Services,
Training
Adm.
Pillar 6: Integrated Urban
Infrastructure
Name of Activity
Name of Activity
etc
Subtotal
Pillar 7: Environmental,
Green Services &
Recreation
Name of Activity
Name of Activity
etc
Subtotal
Pillar 8: Resilient,
Inclusive and Safer Cities
Name of Activity
Name of Activity
etc
Subtotal
Pillar 9: Urban Finance
Name of Activity
Name of Activity

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ECSPG Pillar & Capacity UIIDP Gaps Capacity Performance Target Lead Person Year Start End Resources Packaging
Building Activities POM identified Building Indicators Responsible date date required : Goods,
/investments Thematic Modality (budget) Works,
Area in Birr Services,
Training
Adm.
etc
Subtotal

Other Activities97
Name of Activity
Name of Activity
etc
Subtotal
Total Capacity Building
Plan for EFY 20….

10. Format for Capacity Building Implementation Report

97
These are activities that cannot be attributed to any one Pillar e.g. common or support services
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ECSPG Pillar & UIIDP POM Packaging: Capacity Performance Target101 Actual Start End Budget in Birr Actual
Capacity Building Thematic Goods, Works, Building Indicators100 date date expenditu
Activities Area98 Services, Modality99 re in Birr
/investments Training Adm.
Pillar 1: Urban
Transformational
Leadership

98
For regions, the CBP should cover at least 80% of the UIIDP POM thematic areas. There are 16 thematic areas and the CBP should cover at least 13 areas. The 16 thematic
areas are 1. Planning & Budgeting (P & B); 2. Procurement & Contract Management;(PM) 3. Financial Management & Audit (Internal & External) (FM & A); 4.
Environmental & Social Management System (ESMS); 5. Accountability & Transparency in City Operations & Service Delivery (A & T); 6. Urban Planning (UP); 7. Land
Development, Management & Inventory System (LM); 8. Local Economic Development (LED); 9. Job Creation (JC); 10. Gender Equity & Development (GED); 11. Urban
Resilience & DRM (UR & DRM); 12. Complaint Handling System (CHS); 13. Fraud, Ethics & Corruption Handling System (FE& CHS); 14. Monitoring, Evaluation &
Reporting System (M & E); 15. Own source revenue enhancement; 16. Infrastructure Asset Management
99
(a) structured learning through classroom training (CT), (b) technical assistance and on-the-job training (TA and/or OJT), (c) learning and knowledge exchange platforms
(LKEP), and (d) guidelines and systems rollout (GSR)
100
E.g. Number of trainees
101
E.g. 500 trainees
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ECSPG Pillar & UIIDP POM Packaging: Capacity Performance Target Actual Start End Budget in Birr Actual
Capacity Building Thematic Area Goods, Works, Building Indicators date date expenditu
Activities Services, Modality re in Birr
/investments Training Adm.
Name of Activity
Name of Activity
etc
Subtotal
Pillar 2: Micro &
Small Enterprise and
Urban Productivity
(Economy)
Name of Activity
Name of Activity
etc
Subtotal
Pillar 3: Urban
Developmental Good
Governance &
Services
Name of Activity
Name of Activity
etc
Subtotal
Pillar 4: Urban
Planning, Land
Development and
Management
Name of Activity

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ECSPG Pillar & UIIDP POM Packaging: Capacity Performance Target Actual Start End Budget in Birr Actual
Capacity Building Thematic Area Goods, Works, Building Indicators date date expenditu
Activities Services, Modality re in Birr
/investments Training Adm.
Name of Activity
etc
Subtotal
Pillar 5: Housing
Development, Shelter
Provision and
Administration
Name of Activity
Name of Activity
etc
Subtotal
Pillar 6: Integrated
Urban Infrastructure
Name of Activity
Name of Activity
etc
Subtotal
Pillar 7:
Environmental,
Green Services &
Recreation
Name of Activity
Name of Activity
etc
Subtotal

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ECSPG Pillar & UIIDP POM Packaging: Capacity Performance Target Actual Start End Budget in Birr Actual
Capacity Building Thematic Area Goods, Works, Building Indicators date date expenditu
Activities Services, Modality re in Birr
/investments Training Adm.
Pillar 8: Resilient,
Inclusive and Safer
Cities
Name of Activity
Name of Activity
etc
Subtotal
Pillar 9: Urban
Finance
Name of Activity
Name of Activity
etc
Subtotal

Other Activities102
Name of Activity
Name of Activity
etc
Subtotal
Total Capacity
Building Plan Budget
& Actual Expenditure
for EFY ………

102
These are activities that cannot be attributed to any one Pillar e.g. common or support services
P a g e 305 | 326
ECSPG Pillar & UIIDP POM Packaging: Capacity Performance Target Actual Start End Budget in Birr Actual
Capacity Building Thematic Area Goods, Works, Building Indicators date date expenditu
Activities Services, Modality re in Birr
/investments Training Adm.
Implementation Rate ….%
(Actual as percentage
of Budget)

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11. Checklists for Review and Approval of CIPs, AMPs & REPs

MINISTRY OF URBAN DEVELOPMENT AND CONSTRUCTION

URBAN REVENUE ENHANCEMENT, FUND MOBILIZATION AND FINANCE BUREAU
URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM (UIIDP)
CHECKLIST FOR REVIEW OF ASSET MANAGEMENT PLAN, REVENUE ENHANCEMENT PLAN & CAPITAL INVESTMENT PLAN
FOR EFY 2011

CITY: ………………………..CITY ADMINISTRATION REGION: ………………

CHECKLIST FOR REVIEW OF ASSET MANAGEMENT PLAN

S/N Description Yes/ Comment
No

A GENERAL
1 Is the AMP prepared/updated for EFY 2011 (2017/18) – EFY 2012 (2019/20)?
Is it prepared as per the Revised GIS-based AMP Manual dated June 2016 and
consider all the10 steps? (This can be completed after B below)
2
Asset inventory updated, featuring a tabular database of all infrastructure with
specification and characteristics for the all infrastructure categories as per the
AMP Manual
3 Conditions of assets reflected in assets inventories correctly(professional input)
4 Asset inventory show an asset value and deficit, which calculates the remaining
asset value, maintenance and rehabilitation deficit based on annual depreciation
rate
B REVIEW OF STEPS OF AMP

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1 Step 1: Build the GIS Project and the Data Management Structure
1.1 Step 1.1: Establishing of a GIS project.
1.2 Step 1.2: Understanding the different databases, their role in the AMP
process, and the relationship between them.
1.3 Step 1.3. Defining and creating the coordinate system for the project.
1.4 Step 1.4. The identification of a backdrop image for the project.
1.5 Step 1.5. Geo-referencing the backdrop image and integrating this into
the project
2 Step 2: Build the institutional framework and the asset management
structure
2.1 Step 2.1: Establishing the institutional structure.
2.2 Step 2.2: Defining the organisational responsibilities and relationships.
2.3 Step 2.3: Setting out the framework for an asset strategy
2.4 Step 2.4: Building a comprehensive list of all the Categories of Assets
that will be included in the City’s AMP
2.5 Step 2.5: Linking Categories to operational units in the City (e.g.
departments, enterprises) and identifying an AMP coordinator within
each of the operational units. Note that this would not be a full-time
position but a responsibility for an existing member of staff.
2.6 Step 2.6: Employing a full-time AMP focal person within the city
administration, with a second person in larger cities.
2.7 Step 2.7: Building a complete list of all Feature Classes that will be
included in the City’s AMP
2.8 Step 2.8: Constructing a table that allocates every feature class of asset to
one of the three feature types in the GIS feature classification system.
2.9 Step 2.9: Creating a comprehensive reference identifier system for all
assets included in the AMP.
3 Step 3: Compile an Inventory of Assets. 
3.1 Step 3.1: Ensure that the spatial database template is linked to the GIS
project.
3.2 Step 3.2: Working on one category at a time, and, within that, one feature
class at a time. identify every element within each feature class.
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3.3 Step 3.3: For every element, provide a unique identifier (compulsory
field).
3.4 Step 3.4: For every element, enter an element identifier (compulsory
field).
3.5 Step 3.5: Once an element has a unique identifier, enter the data for that
element in the spatial database.
3.6 Step 3.6: Enter any additional information for the element deemed useful
into the database of physical attributes, TDS 1.
3.7 Step 3.7: Once all the elements within a feature class have been entered
in the data, generate a summary item for that feature class.
3.8 Step 3.8: When all feature classes have been completed create a summary
table for each category of asset, by feature class.
3.9 Step 3.9: Ensure that the asset data associated with all new works handed
over to the City. during the past year has been incorporated into the
spatial database and database TDS 1.
3.10 Step 3.10: Ensure that assets that have been decommissioned during the
past year have their data removed from the spatial database and TDS 1.
4 Step 4: Assess the Condition of the Assets.
4.1 Become familiar with the five levels of the condition indicator applicable
to point and polygon feature assets.
4.2 Understand how linear feature assets require a different approach to
condition assessment, which is based upon the type of deterioration
specific to each feature class of assets.
4.3 Become familiar with the tables that show the different forms of
deterioration for linear feature assets and how the degree of deterioration
defines the condition indicator level.
4.4 Carry out a detailed survey of all assets to assess their condition, using
the guidelines provided in these tables.
4.5 Become familiar with the database templates (TDS 4) showing the
different forms of deterioration associated with the five condition
indicator levels for each feature class of asset.

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4.6 Link TDS 1 (the dataset for physical attributes) to TDS 4 to use the
surface area data for linear and polygon feature assets.
4.7 Enter the condition and the relevant quantities associated with the form of
deterioration in the appropriate field of TDS 4.
4.8 Develop summary tables showing the condition of all assets, listed by
feature class and category, with additional sub-divisions, e.g. road surface
types, where required.
5 Step 5: Calculate the Maintenance Budget and Deficit
5.1 Developing a list of maintenance actions (tasks) for each feature class of
assets, by matching the maintenance action to the specific maintenance
condition indicator identified in step 4.
5.2 Building a list of unit rates for each maintenance action.
5.3 Use the template TDS 4 to build the maintenance budget and deficit for
each feature class of asset.
5.4 Develop a summary table of the maintenance budget requirements for all
assets, listed by category.
6 Step 6: Calculate the current replacement cost and residual value of all
assets.
6.1 Step 6.1: Assembling a list of unit costs for all feature classes of assets.
6.2 Step 6.2: Becoming familiar with the calculation of the depreciated cost
of assets (i.e. their current value), and all its component parts.
6.3 Step 6.3: Collecting data for all the variables that contribute to the
calculation of the depreciated cost, for all assets.
6.4 Step 6.4: Linking database TDS 1 with the database for cost and value
(TDS 2) and entering the data into the database TDS 2.
6.5 Step 6.5: Producing a summary table that provides the current
replacement cost and the current value (depreciated cost) of assets for
each feature class.
7 Step 7: Cost and Prioritise New Works Projects within the CIP Process.
7.1 Step 7.1: Bring forward, from step 6, the list of unit replacements costs,
to estimate for new works projects.

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7.2 Step 7.2: Collect together the full list of new works projects proposed by
the CIP team.
7.3 Step 7.3: Using the list of unit costs for new works, build the project cost
for the proposed new works projects, using the dataset TDS 3.
7.4 Step 7.4: Provide a summary of all new works project proposals, broken
down by feature class.
7.5 Step 7.5: Build a graphical breakdown of proposed project expenditure,
using pie or bar charts, for the major investment activity areas.
8 Step 8: Develop the Maintenance Plan.
8.1 Step 8.1. Bring forward the list of routine and periodic maintenance
activities and the maintenance deficit from step 5.
8.2 Step 8.2. Analyse the maintenance deficit to gain an understanding of the
deterioration across different assets and carry out a quantitative
assessment of the spread, and relative cost, of deterioration across and
within different strategic activity areas.
8.3 Step 8.3. Prioritise the maintenance activities using a strategic analysis
based upon the guidelines set out in the body of step 8.
8.4 Step 8.4. Agree a budget allocation for routine and periodic maintenance
and backlog maintenance activities required to address the maintenance
deficit.
8.5 Step 8.5. Build a prioritised list of maintenance activities, showing the
cut-off point equating to the budget available.

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8.6 Step 8.6. Ensure that the prioritised list provides a balance both across
and within the strategic activity areas.

9 Step 9: Convert the Agreed Budget for all New Works and Maintenance
Projects to a 3-year Rolling Program.
9.1 Step 9.1. Converting the new works projects database to a 3-year rolling
program.
9.2 Step 9.2. Updating the list of maintenance projects and creating an
implementation strategy.
9.3 Step 9.3. Ensuring that all maintenance activities going forward have an
approved budget.
9.4 Step 9.4. Building a 3-year rolling program for maintenance activities.
10 Step 10: Manage the transition of all completed new works and
maintenance projects across to the existing assets databases.

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10.1 Step 10.1: Monitor all new works projects through procurement and
construction.

10.2 Step 10.2: At the point of handover of new works projects to the City,
update the costs and spatial and attribute data to reflect any changes that
were made during construction.
10.3 Step 10.3: At the point of handover of new works projects to the City,
take all the appropriate information on the completed project and transfer
this to the spatial data base and the attribute databases TDS 1 (physical
properties) and TDS 2 (cost and value of assets).
10.4 Step 10.4: Once this is done delete the spatial data link from the new
works database and mark the project as completed.
10.5 Step 10.5: Track all approved maintenance activities through their
maintenance planning process.
10.6 Step 10.6: Once completed, amend the Asset Condition database to
reflect the new condition.
10.7 Step 10.7: Identify all projects completed in the last full year of operation
(AMP year minus 2).
10.8 Step 10.8: Compare the list of initiated projects to the proposals for the
last full year of operation (AMP year minus 2).
10.9 Step 10.9: Compare the list of maintenance activities completed against
activities proposed for the last full year of operation (AMP year minus 2).
11 Final Maintenance Plan AMP Table …. on page …..Birr………………..for EFY 2011
How much is the operation and maintenance requirement and is it all reflected in CIP Table …..on page ….. = Total Birr ……………….for EFY
the CIP? Or how is it detailed in the AMP? 2011
REP Table ……… on page ………= Total Birr ……………..for
EFY 2011

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12 Total Maintenance Deficit as per AMP Birr …………………………..(Table ……. on page …….)

13 Total Asset Replacement Cost Birr …………………………….. (Table ………. on page …….)
14 Final Maintenance Budget Analysis (a) Maintenance Budget as % of CIP: ………%
Expected maintenance budget as per AMP Manual is the lesser of either 2% of (b) Maintenance Budget as % of Asset Replacement Cost: ……..%
Asset Replacement Cost or 10% of CIP (c) Maintenance Budget as % of Total Maintenance Deficit: ……%
(d) Maintenance Budget as % of Municipal Revenues: ……..%
15 Linkages between AMP, REP and CIP. AMP Figure …….. on page …….. and Table …….on page …..Total
Birr……………………………
CIP Table ……..on page …….. = Birr ………………………….
REP Table ……… on page ……. = Birr ………………………..
16 Major comments

C OVERALL CONCLUSIONS AND RECOMMENDATIONS ON AMP AMP is acceptable/not acceptable and recommended/not
recommended for approval/signing by BUDHo

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 CHECKLIST FOR REVIEW OF REVENUE ENHANCEMENT PLAN

S/N Description Yes Comment

/No
1. Is the REP prepared/updated as per the format
and content in REP Guideline and REP
Template?

1.1 Background, Vision, Mission etc

1.2 Policy, legal and institutional framework
1.3 Analysis of sources of municipal revenue as per REP
1.4 Analysis of past revenue performance including Average growth rate in last 5 years (2006-10) is …….%
trend analysis ……….. (…..) revenue items (……….%) out of ……items account for over 80% of revenue (i.e. ……%) thereby fulfilling
the 80/20 rule. There should therefore be strategies which go with this rule which say at least 80% of the city’s efforts on
revenue enhancement should be directed at these items. Their contribution is as follows:-
Sample
BISHOFTU
Top Operating Revenue Items in EFY 2009
Total revenue 52,218,265.79
Transfer of title deed fee - 1772 12,264,736.38 23%
Urban land rent - 1721 9,570,102.54 18%
Business and professional registration and licence fees - 1741 7,701,410.44 15%
Urban land lease -1731 5,572,369.08 11%
Market stall rent -1724 2,748,833.93 5%
Bus terminal services - 1747 2,469,248.75 5%
Building & Fence Construction Permit - 1742 1,987,030.58 4%
Fines for violation of rules and regulations-1746 1,224,451.55 2%
Total 8 revenue items/sources 43,538,183.25 83%

City has analysed each individual revenue source, challenges face, constraints/gaps and proposed interventions. Page …… to
…….

1.5 Analysis of municipal expenditures including trend Page …..to ……

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 analysis and expenditure plan
1.6 Analysis of potential for increasing revenues from Page ……to …….
existing sources and other new sources.
1.7 Does the city mention an increase in rate? What is
the proposed rate increment and on which sources
and when will it be implemented/revised?
1.8 Are the new tariffs forecasted as per the analysis (if
instead a uniform rate is used comment on how this
has been derived and justified)?
1.9 Does the city take inflation into account?
1.10 Is the impact of the rate increment shown in the
forecast figures i.e. by what amount it would
increase the revenue for the particular revenue
items? (Comment on whether the impact is
significant or not)
1.11 Financial Data (multi-year budget forecast)
1.12 Challenges faced in municipal revenue performance Page …… to ……..
in previous year and corrective actions taken or
planned
1.13 Strategies for revenue enhancement Page …… to …….
1.14 Implementation Plan/Action Plan Annex …….on page …..
2 Review of REP against the APA Guideline
performance indicators
2.1 ULG has carried out detailed analysis of each
main revenue source & potential as per the
Revenue Enhancement Plan Manual

2.2 ULG has developed strategies for revenue

enhancement as per the Revenue Enhancement
Plan Manual.
Check if there is a strategy and if it is well translated
into activities and these activities are further
specified when they are going to be undertaken.
2.3 ULG’s municipal revenues (excluding land lease  This will need to be verified through IBEX

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 income) increase percentage EFY 2010 vs EFY  EFY 2010: Birr ……………………..
2009  EFY 2009: Birr ……………………..
5 to 10% increase = 1 point  Therefore, there is a decrease/increase of …….%
11 to 20% increase = 2 points  City will score …….. points.
Greater than 20% increase = 3 points
2.4 Revenue Planning: Percentage of municipal revenue  According to Annual Report for EFY 2010, the planned for EFY 2010 is Birr ………………….. and the actual
(excluding land lease income) on business taxes, achieved was Birr ……………………..
municipal rent and charges and fees collected  The variation was therefore ………% and city will score ….points. This needs to be verified through IBEX reports
against planned target for the previous EFY.
Variation percentage less than 5 % = 2 points
Variation less than 10% = 1 point.
2.5 Co-funding from ULG is above minimum threshold Prior year EFY 2010:IDA Actual Birr ………………………………; ULG Birr ……………………………. (…..%)
level – as percentage of performance grant amount City will score …… points.
Planned EFY 2011: IDA budget Birr ………………………………; ULG Budget Birr …………………….. (….%). Region
Budget Birr ……………………..(…..%). City therefore fulfils/does not fulfill the Minimum Condition 1.4.
3 Overall Analysis of City’s revenues and expenditures BISHOFTU
and the impact that the REP will have for EFY 2011 as Average
compared with previous years Compound Annual for EFY 2010
EFY 2009 % increase
Sample Annual 5 Year Projected
S /N Indicator Period EFY 2010
 Operating Revenues are forecast to go up by 26% from Growth
vs 2009
Birr 52,218,266 in EFY 2009 to Birr 65,583,581 in EFY Rate (%) EFY 2005-9 Actual (in Birr)
2010. (in Birr) (in Birr)
 Recurrent expenditure is projected to increase by 29% 1 Annual (Average) Operating Revenues 10% 54,589,033 52,218,266 65,583,581 26%
from Birr 49,636,534in EFY 2009 to Birr 64,000,000in 2 Recurrent expenditures 16% 42,706,186 49,636,534 64,000,000 29%
EFY 2010. Capital expenditures (from municipal sources only i.e. Net operating
 Capital expenditures are projected to decrease by 3% surplus after deducting ULGDP II city co-funding + 90% land lease +
3 22% 67,963,584 84,070,958 81,903,574 -3%
from Birr 84,070,958 in EFY 2009 to Birr 81,903,574 in community contributions + property sales + ULGDP II city co-
EFY 2010. funding to ULGDP )
 Operating surplus is projected to decrease by 39% from 4 Capital expenditure as % of total expenditures N/A 67% 68% 56% N/A
Birr 2,581,732 in EFY 2009 to Birr 1,583,581 in EFY 5 Recurrent expenditures as a % of total expenditures N/A 33% 32% 44% N/A
2010. 6 Recurrent expenditure as % of operating revenues N/A 63% 55% 98% N/A
 Operating surplus as a percentage of operating revenues 7 Operating surplus -27% 11,882,847 2,581,732 1,583,581 -39%
(key performance indicator) is going down from 5% in Operating surplus as % of operating revenues (Key Performance
EFY 2009 to 2% in EFY 2010. 8 N/A 22% 5% 2% N/A
Indicator)

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4 Other general comments and corrections

5 Conclusions and recommendations
 The revenue indicators in 3 above clearly show that the strategies and actions that the city has taken in previous years and is planning for EFY2010 will enhance revenues by a
projected 26% in EFY 2010. However, operating surplus is on a downward trend and this needs to be closed monitored and reversed in EFY 2010.
 The REP is thereforerecommended/not recommended foracceptanceand approval/signing by BUDHo

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 CHECKLIST FOR REVIEW OF CAPITAL INVESTMENT PLAN

S.No Description Reference Yes/No Comment

A General
1 Name of ULG
2 Region
3 Population
4 Assumed Rate of Growth
5 Contact Details
6 Council
CIP, REP, AMP approved by city council. Are there Minutes of Meeting of
Minutes of
City Councils showing the approval of CIP or published newsletter/newspaper
Meeting or
that reports approval of CIP, AAP, annual budget and APP by the council
published
newspaper
report
7 Participation & Performance Agreement (PPA) signed by city and region PPA
8 Maximum of 5% of CIP for Capacity Building (CB) activities defined in a CIP Total CBP is Birr ………………………………. Table …….on page
menu of eligible CB activities. …….
5% of CIP is Birr …………………..x …..% = Birr …………………….
Therefore, budget is within the maximum of 5% of CIP.
Items proposed are as per the Eligible Capacity Building Areas specified
in the POM and APAG.
B Details
1 Financial Data consistent with REP and AMP Table 7 of AMP Table ………on page ……and Table ……on page …..Total
Linkages Does the Capital Investment Plan have linkages between AMP, REP, CIP; AMP Birr……………………………………..
the annual budget, annual action plan and annual procurement plan & REP CIP Table ……..on page ……. = Birr ……………………………
REP Table ……. on page ….. = Birr …………………………...
2 Summary of past three years CIP Table 9
3 Three years rolling CIP. Is it rolling and realistic Table 10,
11 & 13
4 Summary of three -year CIP by IBEX Components Table 12
5 Detailed Annual Project Plan& Annual Action Plan. Table 14 &
15
6 Three -Year Maintenance Budget & Annual Action Plan for Maintenance Table 16 & AMP Table ………. on page……. Birr…………………….. for EFY 2011

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S.No Description Reference Yes/No Comment

17 CIP Table …… on page …….= Total Birr………………….for EFY

2011
REP Table …….. on page ……..= Total Birr ………………….for EFY
2011
7 Annual Procurement Plan for the CIP and CBP. Linkage with Action plan and Table 18
budget in Birr Works Goods Consultancy Other Total
CIP .
PP .
Action .
Plan
8 Staffing for delivery and management of the CIP Table 19
9 Summary of Temporary Jobs Creation Targets through the CIP by Gender & Table 20
Age Group. Does the CIP clearly show the number of temporary jobs to be
created as per the agreed format?
10 Capacity Building Plan (CBP) of the City & Annual Action Plan for CBP Table 21 &
22
11 Appendices:Each Appendix should begin on a new page
12 Current status of infrastructure (linked to AMP) Appendix 1
13 Detailing the participatory process (gender, age, sex, etc) Section 6 ………. (number of rounds)
Evidence of public participation(attendance, meeting agenda, Minutes, &Appendix 1st round: Female…….(…..%); Total…………..
pictures) 2 2nd round: Female…….(…..%): Total………….
a. Invitation letters or call for the meeting notice posted in the public places or Total : Female ……….(….%): Total………….
through mass media for the public to attend public consultations meeting
indicating date of meeting and purpose of the meeting? Yes/No
b.At least two public consultations? Yes/No
c. Initial consultation separate for women and men? Yes/No
d.Increase in number of people involved? Yes/No
e. Women involved is > 40% ? Yes/No
f. Evidence of agenda & issues discussed? Yes/No
g. Minutes of meetings? Yes/No

14 Maintenance Budget, Implementation Strategy/Plan & Procurement Plan for Appendix 3

Maintenance
15 Identification of Low Carbon and Resilient Alternatives Appendix 4
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S.No Description Reference Yes/No Comment

16 Eligible Investment Areas for Infrastructure and Services for UIIDP. Are all Appendix 5
the projects in the CIP which are being financed through UIIDP Performance
Grants (World Bank & AFD) eligible as per the Investment Menu in the POM
& APAG?
17 Eligible Capacity Building Areas for UIIDP. Are all the capacity building Appendix 6
activities in the CBP eligible as per the Capacity Building Menu in the POM &
APAG?
18 Is CIP in accordance with up-to-date approved statutory plan(structure plan)?
19 Are the IDA performance grants the same as the disbursement approved by Approved Birr ……………………………Budgeted in CIP Birr
WB/MUDCo? ……………………………
20 Is the CIP in the correct format as per the Project Operational Manual (POM),
CIP Manual and CIP Template?

C Other general comments:


D Conclusions & recommendations
 The CIP is recommended/not recommended for approval/signing
by BUDHo

AMP, REP AND CIP FINAL CHECK BY:

Name: Designation:

Signature: Date:

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 AMP, REP AND CIP APPROVED & SIGNED BY BUDHo:

Name: Designation:

Signature: Date:

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12. Checklists for Review of Capacity Building Plans of Regions
S/N Item Yes/No Remarks
1 Is the CBP in the correct format as per the Project
Operational Manual?
2 Was the CBP submitted before the due date Indicate date submitted: .
3 Is the total cost of the CBP for the year within the
allocation/disbursement for the current year Allocation: USD ……………………………..
(Birr ……………………………….)
Cost of CBP: USD………………………..
(Birr ………………………………..)
Balance: USD ……………………………..
(Birr ……………………………………..)
4 Is the regional CB team (RMCBM team) stated in the
CBP showing positions filled/vacant?
5 Does the CBP state the capacity building objectives
including the DLI for each bureau/agency (Table 3)?
Does the CBP incorporate the four capacity building
modalitiesand at least 80% of the thematic focus
areas from the POM.?
6 Does the CBP state the process in compiling the CBP
with activities and dates as per the 3 stages and the
steps in the OM?
7 Does the CBP contain narrative on broader context in
which it is formulated and the issues to be addressed?
8 Does the CBP state whether the region has conducted
annual capacity building need assessment involving
all regional entities covering all thematic areas and
representatives of the ULGs.?
9 Are capacity issues that came up in previous APAs
covered in the CBP
10 Does the CBP show or state whether the region has
adopted service delivery standards (as issued by
MUDCo) and issued those for the cities, and provided
guidance in implementation (reports)?
11 Does the CBP adequately cover the three focus areas:
(a) audit, (b) environmental and social safeguards,
and (c) revenue enhancement and mobilization?
12 Does the CBP adequately cover the six UIIDP targeted
bureaus and agencies (BUDHo, ORAG, RRA, REFCCC,
RPPPAA, REACC) and have they been consulted?
Other general comments on the CBP:

Checked Name: Designation:

by

Signature: Date:
 S/N Item Yes/No Remarks

13. Checklists for Review of Capacity Building Plans of ULGs

S/N Item Yes/No Remarks
1 Is the CBP in the correct format as per the UIIDP Program
Operations Manual and UIIDP Capacity Building Manual?
2 Was the CBP submitted to the region before the due date Indicate date submitted: ……..
3 Is the total cost of the CBP for the year within the
allocation/disbursement for the current year Allocation: USD………………………….

(Birr …………………………………...)

Cost of CBP: USD………………………..

(Birr …………………)

Balance: USD ………………………….

(Birr ……………………….)
4 Does the CBP contain narrative on broader sector and
local context in which it is formulated and the issues to
be addressed?
5 Does the CBP state the capacity building objectives for
the ULG
6 Does the CBP state the process in compiling the CBP with
activities and dates as per the UIIDP Capacity Building
Manual?
7 Has the ULG conducted capacity self-assessment as per
the assessment tool provided in the UIIDP Capacity
Building Manual?
8 Does the CBP incorporate the four capacity building
modalities?
9 Are capacity issues that came up in previous APAs
covered in the CBP
10 Does the CBP adequately address the UIIDP MACs &
Areas of Performance?
11 Is the ULG focal team for UIIDP stated in the CBP showing
positions filled/vacant?
Other general comments on the CBP:

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S/N Item Yes/No Remarks
Checked Name: Designation:
by

Signature: Date:

P a g e 325 | 326
Additional Annexes in Volume II of UIIDP POM
1. Organization, Staffing & TORs for Federal Mobile Team,
2. Organization, Staffing & TORs for Regional Mobile Team
3. Organization, Staffing & TORs for ULG Focal Persons
4. TOR for Value for Money Audit
5. TOR for Annual Independent Procurement Audit
6. TOR for Annual Environmental and Social Audit
7. TOR for Financial Audit of UIIDP

List of Standalone Annexes of the POM

1. Annual Performance Assessment Guideline (APAG) for UIIDP
2. Capital Investment Planning Manual
3. Capital Investment Plan Template
4. Revenue Enhancement Plan Manual
5. Revenue Enhancement Plan Template
6. Asset Management Plan Manual
7. Asset Management Plan Model
8. FPPPAA Procurement Manual
9. Project Procurement Strategy Document (PPSD)
10. MOF Financial Management Manual
11. Environmental and Social Management System Guideline (ESMSG)
12. Resettlement System Guideline (RSG) (
13. Municipal Service Delivery Standards issued by MUDCo
14. Land Management Manuals issued by MUDCo
15. Urban Planning Manuals issued by MUDCo
16. Local Economic Development (LED) Guideline
17. Job Creation and Measurement Guideline including use of SOEs and MSEs and procedures
on registration, incentivemechanisms, follow-up and graduation procedures for MSEs (to be
developed by Consultants)
18. Gender Development Manual
19. Urban Resilience and Disaster Risk Management Guideline (developed by MUDCo and
waiting finalization)
20. Complaint Handling System Manual (developed by TA Consultants for each region)
21. Ethics and Corruption Handling System Manual (developed by TA Consultants for each
region)
22. Capacity Building Manual for UIIDP
23. Monitoring, Evaluation & Reporting Guideline for UIIDP for Federal Level, Volume 1.
24. Monitoring, Evaluation & Reporting Guideline for UIIDP for Regional Level, Volume 2.
25. Monitoring, Evaluation & Reporting Guideline for UIIDP for ULG Level, Volume 3.