FOR OFFICIAL USE ONLY INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized FOR OFFICIAL USE ONLY INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF EUR 14.6 MILLION (US$ 16.5 MILLION EQUIVALENT) TO THE REPUBLIC OF KOSOVO Report No: PAD2818 Public Disclosure Authorized FOR A REAL ESTATE CADASTRE & GEOSPATIAL INFRASTRUCTURE PROJECT 19 November, 2018 Public Disclosure Authorized Social, Urban, Rural And Resilience Global Practice Europe And Central Asia Region

2 CURRENCY EQUIVALENTS (Exchange Rate Effective October 31, 2018) Currency Unit = US$ 1 = 0.72 SDR US$ 1.38 = 1.0 SDR US$ 1 = 0.88 EUR US$ 1.13 = 1.0 EUR FISCAL YEAR July 1 - June 30 Regional Vice President: Cyril E Muller Country Director: Linda Van Gelder Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez Practice Manager: Jorge A. Munoz Task Team Leader(s): Aanchal Anand, Kathrine M. Kelm

3 ABBREVIATIONS AND ACRONYMS BFD CEO CPF CR CZ DB ESMF EU EUSR FDI GDP GRM GRS ICT IRR KCA KCLIS KPCVA M&E MFD MCO MESP NPV NSDI PPSD RECAP REGIP RF STEP WB Budget and Finance Department Chief Executive Officer Country Partnership Framework Cadastre Reconstruction Cadastral Zone Doing Business Environmental and Social Management Framework European Union European Union Special Representative Foreign Direct Investment Gross Domestic Product Grievance Redress Mechanism Grievance Redress Service Information and Communication Technology Internal Rate of Return Kosovo Cadastre Agency Kosovo Cadastre Land Information System Kosovo Property Comparison and Verification Agency Monitoring and Evaluation Maximizing Finance for Development Municipal Cadastre Office Ministry of Environment and Spatial Planning Net Present Value National Spatial Data Infrastructure Project Procurement Strategy Document Real Estate Cadastre and Registration Project Real Estate Cadastre and Geospatial Infrastructure Project Results Framework Systematic Tracking of Exchanges in Procurement World Bank

4 TABLE OF CONTENTS DATASHEET... 1 I. STRATEGIC CONTEXT... 6 A. Country Context... 6 B. Sectoral and Institutional Context... 7 C. Relevance to Higher Level Objectives... 8 II. PROJECT DESCRIPTION... 9 A. Project Development Objective... 9 B. Project Components... 9 C. Project Beneficiaries D. Results Chain E. Rationale for Bank Involvement and Role of Partners F. Lessons Learned and Reflected in the Project Design III. IMPLEMENTATION ARRANGEMENTS A. Institutional and Implementation Arrangements B. Results Monitoring and Evaluation Arrangements C. Sustainability IV. PROJECT APPRAISAL SUMMARY A. Economic Analysis B. Technical C. Fiduciary D. Safeguards V. KEY RISKS VI. RESULTS FRAMEWORK AND MONITORING ANNEX 1: Implementation Arrangements and Support Plan ANNEX 2: Detailed Project Description ANNEX 3: Economic Analysis... 56

5 DATASHEET BASIC INFORMATION BASIC_INFO_TABLE Country(ies) Kosovo Project Name Real Estate & Geospatial Infrastructure Project Project ID Financing Instrument Environmental Assessment Category P Investment Project Financing B-Partial Assessment Financing & Implementation Modalities [ ] Multiphase Programmatic Approach (MPA) [ ] Contingent Emergency Response Component (CERC) [ ] Series of Projects (SOP) [ ] Fragile State(s) [ ] Disbursement-linked Indicators (DLIs) [ ] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made Disaster [ ] Alternate Procurement Arrangements (APA) Expected Approval Date 18-Dec-2018 Expected Closing Date 31-Aug-2023 Bank/IFC Collaboration No Proposed Development Objective(s) The Project Development Objective is to increase the quality and availability of land administration and geospatial data and services. Page 1 of 59

6 SUMMARY-NewFin1 DETAILS-NewFinEnh1 Components Component Name Cost (US$, millions) A: Policy, Legal and Institutional Support 0.28 B: Cadastre Modernization 6.58 C: ICT and Geospatial Infrastructure 8.14 D. Project Management, Capacity Building, Public Outreach, M&E 1.00 Organizations Borrower: Implementing Agency: Republic of Kosovo Ministry of Environment and Spatial Planning Kosovo Cadastre Agency PROJECT FINANCING DATA (US$, Millions) Total Project Cost Total Financing of which IBRD/IDA Financing Gap 0.00 World Bank Group Financing International Development Association (IDA) IDA Credit IDA Resources (in US$, Millions) Credit Amount Grant Amount Total Amount National PBA Page 2 of 59

7 Total Expected Disbursements (in US$, Millions) WB Fiscal Year Annual Cumulative INSTITUTIONAL DATA Practice Area (Lead) Social, Urban, Rural and Resilience Global Practice Contributing Practice Areas Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks Gender Tag Does the project plan to undertake any of the following? a. Analysis to identify Project-relevant gaps between males and females, especially in light of country gaps identified through SCD and CPF b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or men's empowerment Yes Yes c. Include Indicators in results framework to monitor outcomes from actions identified in (b) Yes SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Rating 1. Political and Governance Moderate 2. Macroeconomic Moderate 3. Sector Strategies and Policies Substantial 4. Technical Design of Project or Program Low Page 3 of 59

8 5. Institutional Capacity for Implementation and Sustainability High 6. Fiduciary High 7. Environment and Social Substantial 8. Stakeholders 9. Other 10. Overall Substantial Low Substantial COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [ ] No Does the project require any waivers of Bank policies? [ ] Yes [ ] No Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 Performance Standards for Private Sector Activities OP/BP 4.03 Natural Habitats OP/BP 4.04 Forests OP/BP 4.36 Pest Management OP 4.09 Physical Cultural Resources OP/BP 4.11 Indigenous Peoples OP/BP 4.10 Involuntary Resettlement OP/BP 4.12 Safety of Dams OP/BP 4.37 Projects on International Waterways OP/BP 7.50 Projects in Disputed Areas OP/BP 7.60 Legal Covenants Page 4 of 59

9 Sections and Description Schedule 2, Section 1, D. The Recipient, through KCA, shall carry out the Project in accordance with the Project Operations Manual, and shall not amend, suspend, abrogate, repeal or waive any provision of the Project Operations Manual without prior approval of the Association. Sections and Description Schedule 2, Section 1, D. The Recipient, through KCA, shall: (i) not later than January 15, 2019, submit to the Association an annual work plan for calendar year 2019; and (ii) on December 1 of each year, starting on December 1, 2020, submit to the Association for review and approval an annual work plan for the following calendar year, and shall agree with the Association on steps to be taken in the following calendar year. Sections and Description Schedule 2, Section 1, D. The Recipient, through KCA, shall ensure that the Eligible MCOs abide by the terms of their respective memorandum of understanding with KCA, by which the Eligible MCOs agree to use standardized workflows and procedures for cadastre and registration, in a manner acceptable to the Association. Conditions Type Effectiveness Type Effectiveness Description The Project Operations Manual has been adopted by the Recipient, through KCA, in a form and manner satisfactory to the Association. Description The Project Implementation Unit has been established and staffed in accordance with terms of reference and in a manner satisfactory to the Association, including with a head of PIU, a procurement expert, a financial management expert, in accordance with terms of reference and in a manner satisfactory to the Association. Page 5 of 59

10 I. STRATEGIC CONTEXT A. Country Context 1. Kosovo is the youngest country in Europe both based on its new statehood and the average age of its population with all the accompanying opportunities and challenges. In terms of opportunities, Kosovo is a potential candidate for membership in the European Union (EU). In terms of challenges, post-conflict fragility, including lack of full international recognition, continue to hamper Kosovo s growth and development to its full potential. Kosovo s gross domestic product (GDP) grew by an estimated 3.7 percent in 2017, supported by strong domestic demand. Robust domestic consumption drove growth, aided by investment, mostly private and including foreign direct investment (FDI) from the diaspora. The negative contribution from net exports has been a feature of growth but was lower than in previous years due to lower oil prices. Consistent with strong consumption and the need to rebalance towards more export- and industry-driven growth, services were the key driver of growth, followed by agriculture, with lower growth of industry. 2. Kosovo s economy shrank during the global financial crisis but so did poverty in absolute terms. In the post-global financial crisis period, the Kosovar economy grew consistently above the Western Balkans average, albeit from a low base and reaching only 11 percent of EU average per capita income in Kosovo s GDP per capita grew from US$ 1,088 in 2000 to US$ 3,562 in From 2012 to 2015, 1 the poverty rate measured in purchasing power parity (PPP) fell from 5.7 in 2012 to 2.9 in During the same period, consumption of the bottom 40 percent of the population rose at 3.5% versus 1.6% for the general population, leading to reduced inequality and greater shared prosperity. Despite significant progress, Kosovo is the third-poorest country in Europe, with almost a fifth of the population living below the national poverty line in Therefore, eliminating extreme poverty and promoting the income growth of the bottom 40 percent will remain important goals for Kosovo. Addressing these challenges requires a complex agenda that would bring together improving the efficiency of and access to public services, increasing the degree of formality in the economy, and creating jobs by supporting private sector growth and development. 3. Climate change and related disasters create additional challenges to economic growth and poverty reduction. Climate projections indicate increasing mean annual temperatures and declining annual precipitation for Kosovo, but simultaneously an increase in winter precipitation associated with flooding. Climatic changes have already caused increase in extreme weather events and related hazards, such as droughts, flash floods, river flooding and forest fires, and these extremes are predicted to become more severe and frequent in future. 3 Rapid urbanization and building construction together with poorly regulated land use planning and building standards have further exposed population to hazards. 4 Also, the agricultural sector is expected to suffer significantly from climate change and related disasters eventually decreasing agricultural production and related income. The Climate Change Framework Strategy of Kosovo aims to improve climate change adaptation by better controlling land uses and building standards, promoting insurances against property damage and improving utilization of information. Well disseminated up-todate cadastre and registry data is essential for fulfilling these goals, while it also provides tenure security to the population during and after climate related disasters. 1 The most recent period with comparable data. Source: World Bank Poverty and Equity Brief, Kosovo. 2 World Bank and Kosovo Agency of Statistics Consumption Poverty in the Republic of Kosovo Ministry of Environment and Spatial Planning Climate Change Framework Strategy for Kosovo. 4 Ibid. Page 6 of 59

11 B. Sectoral and Institutional Context 4. Securing property rights remains critical for improving Kosovo s growth and development as well-defined rights are the cornerstone of a vibrant market economy. Without a complete and up-to-date cadastre and clearly defined legal rights for men and women, there is significant risk for the private sector and citizens to invest. This risk, in turn, depresses investment, raises interest rates, and fuels the informal economy. Securing property rights also improves state land management which can help the Government take stock of its assets and release unused or underutilized assets to the private sector. This increases domestic and foreign investors access to land an important factor of production and enhances the allocative efficiency of the economy. Moreover, secure property rights are not only crucial for economic prosperity but also social stability. In a post-conflict country like Kosovo, clear legal rights help stabilize the social situation and facilitate a return to normalcy. 5. Since 2011, with the support of the World Bank and other development partners, the land and property sector in Kosovo has undergone a substantial transformation. Under the Kosovo Real Estate Cadastre and Registration Project (RECAP; closed June 30, 2018), the Kosovo Cadastre Agency (KCA) has made considerable progress in introducing a modernized land administration system, securing property rights, and improving the business environment. While achieving these results has taken some time due to the need to build legal and technical procedures for registration and IT system development, RECAP s progress means that future investments in land administration and property rights will progress much more expeditiously, now that more solid legal, technical and capacity foundations are in place. The most notable achievements include: (a) a significant improvement in Kosovo s ranking in the World Bank Doing Business Index for Registering Property from 73 (DB 2012) to 34 (DB 2018); (b) systematic updating of cadastral and registration records (called cadastre reconstruction) has taken place in 30% of the priority cadastral zones of Kosovo 5 ; (c) increased land market efficiency, with the time to register a transaction dropping by 65% from 30 days before RECAP to under 10 days as of June 2018; (d) the development of a centralized IT system, the Kosovo Cadastre Land Information System (KCLIS) 6 ; (e) the IT system at KCA now collects and monitors the data for genderdisaggregated property ownership, an important statistic in understanding and analyzing the current situation for women s property ownership in the country; and (f) the introduction of a national spatial data infrastructure (NSDI) with an NSDI Strategy approved as well as the establishment of a national Geoportal 7 with access to datasets from seven institutions, including the KCA. 6. RECAP has laid the foundation for the next phase of investments and reforms that are planned under the proposed Real Estate Cadastre and Geospatial Infrastructure Project (variously, Real Estate & Geospatial Infrastructure Project or REGIP ). These investments will focus on improving public sector service delivery and strengthening private sector competitiveness through: (a) further cadastre reconstruction to improve the availability and accuracy of correct up-to-date cadastral information and thus enhance the security of tenure; (b) investments to advance ICT and geospatial infrastructure that improve availability, affordability, and transparency of public services in order to better serve citizens and businesses; (c) policy, legal, and institutional support; and (d) capacity building initiatives to improve decision-making, particularly with the use of geospatial data. 7. An important issue for the property market in Kosovo is the pending return of pre-1999 cadastral documents that were removed from Kosovo. On the one hand, the missing documents could help complete the records in Kosovo, leading to a positive effect on the land market. On the other hand, if the process of integrating the pre-1999 cadastral 5 30% of priority cadastral zones corresponds to roughly 15% of the territory of Kosovo. 6 KCLIS is operational in 35 out of 38 MCOs in Kosovo. It has not been rolled out in three northern municipalities due to political reasons. 7 Visit the Geoportal at: Page 7 of 59

12 documents is not effectively managed, their return could potentially decrease tenure security and cause property market disruptions. Furthermore, it is not possible to estimate the geographic areas that would be affected by the return of the pre-war cadastral documents. At the moment, the impact of the records is expected to be nationwide. The date of return of the pre-1999 documents is not yet known. 8. The agency responsible for processing the pending return of the cadastral documents is the Kosovo Property Comparison and Verification Agency (KPCVA). 8 In December 2016, KPCVA added a mandate, which is to receive and compare the scanned copies of the original pre-1999 cadastral records 9 removed from Kosovo with the Kosovo cadastre. If the documents are not properly integrated into the Kosovo cadastre then the process could potentially lead to decreased security of tenure, particularly for third party bona fide owners, and potential land market disruptions. In the context of Bank-financed investments in the Kosovo land sector, this could affect the sustainability of cadastre reconstruction investments done under RECAP and those planned under REGIP. 9. Even though REGIP Project will not support KPCVA directly, US$ 0.5 million will be left unallocated so KPCVA could potentially be brought in as the second implementing agency at a later date subject to a Project Restructuring. This unallocated amount could, therefore, be used to support KPCVA prepare for the pending return of the pre-1999 cadastral documents with the aim of avoiding property market disruptions and safeguarding the sustainability of investments made under RECAP and those planned under REGIP. C. Relevance to Higher Level Objectives 10. The main higher-level objective of the Project is to improve security of tenure and enhance the delivery of land administration and geospatial services in the Kosovo land and property market. Additionally, the proposed project will support two focus areas of the FY17-FY21 Country Partnership Framework. First, it will support Enhancing Conditions for Accelerated Private Sector Growth and Employment through the cadastre reconstruction activities that will expand the coverage of updated and accurate property rights and enhance the security of tenure, an important element for private sector development. Cadastre reconstruction will also help increase access to finance and reduce informality in the economy. Both these aspects are expected to have a positive effect on the credit markets and the commercial banking sector. The investments in priority geospatial datasets are expected to support the private sector through access to better location information at a lower cost. This, in turn, could result in higher investments and improved job creation. Second, the proposed project will also support Strengthening Public Service Delivery and Macro-Fiscal Management in two ways. The launch of e-services for land administration will improve the availability of services and transparency of data across the country. The investment in geospatial datasets is also expected to create cost savings for Government agencies through data sharing and this would, by extension, help improve the macro-fiscal health of the country. 8 The KPCVA is the institutional successor to bodies established to address real property issues in the wake of the 1999 conflict the Housing Property Directorate (HPD) and the Kosovo Property Agency (KPA). As a result, the KPCVA s original mandate is to complete the return of properties to owners, many of whom were displaced during the war. In August 2018, KPCVA added another mandate to formalize informal transactions that took place between 1989 and This applies to: (a) private property, (b) private commercial property, and (c) the private property of religious communities. KPCVA s mandate does not include any public property. Page 8 of 59

13 II. PROJECT DESCRIPTION A. Project Development Objective PDO Statement The Project Development Objective is to increase the quality and availability of land administration and geospatial data and services. PDO Level Indicators 11. The PDO has two main objectives: quality and availability of land administration and geospatial data and services. The quality of land administration and geospatial data and services will be measured through expanded coverage and improved accuracy of data. Without good coverage and accurate information, the resulting lack of good quality data in the IT system and Geoportal hamper the overall quality of data and services used in the property market. Therefore, by improving coverage and accuracy, the Project will increase the quality of land administration and geospatial data and services in Kosovo. Similarly, availability of land administration and geospatial data and services will be measured through greater access to and transparency of these data and services. Lack of availability leads to low levels of transparency and access in the property market, and, therefore, by increasing access and transparency, the Project will increase the availability of land administration and geospatial data and services in Kosovo. 12. Therefore, the PDO will be measured by four indicators listed below. The baseline and target values are indicated in brackets. Objective 1: Quality of land administration and geospatial data and services. Number of properties updated, validated, or registered in the digital cadastre register (0; 300,000) Target land area in priority cadastral zones with user or ownership rights recorded/updated as a result of the Project (30%; 60%) Objective 2: Availability of land administration and geospatial data and services. Number of e-services implemented (0;3) Number of datasets available through the Geoportal (10;30) B. Project Components 13. The PDO will be achieved through four components, which will be implemented by the KCA. 14. Component A. Policy, Legal and Institutional Support (US$ 0.28 million): The objective of Component A is to provide policy, legal, and institutional support to KCA. 15. This component will finance the provision of support to: (a) develop an updated KCA strategy and business plan; (b) support the preparation and implementation of Kosovo s cadastre legal and regulatory framework 10 ; and (c) conduct land market studies and analyses. 10 Whenever possible, the cadastre legal and regulatory framework will be shaped to include provisions that promote women s property rights. Page 9 of 59

14 16. Component B. Cadastre Modernization (US$ 6.58 million): The objective of this component is to continue the modernization of the cadastre in Kosovo, which commenced under the RECAP project. 17. This component will finance the provision of support to continue the modernization of Kosovo cadastre through: (a) the carrying out of cadastre reconstruction; (b) data quality improvement; (c) development of a utility cadastre; (d) development and update of the Kosovo s building register; and (e) the carrying out of reengineering of eligible MCOs Component C. ICT and Geospatial Infrastructure (US$ 8.14 million): The objective of this component is to make important IT and geospatial investments in the Kosovo land and property market, and to support the implementation of KCA s IT and NSDI Strategies. 19. This component will finance the provision of support to carry out IT and geospatial investments in the Kosovo land and property market including, inter alia: (a) the upgrade of KCLIS-SOA 12 ; (b) investments in KCA s digital archive; (c) development and implementation of the KCA IT Strategy and NSDI Strategy; (d) investments in NSDI; and (e) enhancement of the national geodetic framework. 20. Component D. Project Management, Capacity Building, Public Outreach, and Monitoring & Evaluation (US$ 1.0 million): The objective of this component is to ensure the smooth and timely implementation of the Project and support activities related to capacity building, public outreach, and monitoring and evaluation (M&E). 21. The component will finance the provision of support for project implementation and donor coordination, including, inter alia: (a) strengthen the capacity of the PIU; (b) carrying out of Project monitoring and evaluation activities; (c) carrying out of customer satisfaction surveys; (d) carrying out of public outreach and the maintenance of the Project s grievance redress mechanism; (e) carrying out of capacity building activities for KCA and KPCVA; and (f) the establishment of KCA and KPCVA joint working group. C. Project Beneficiaries 22. The Project s direct beneficiaries include the citizens in the 30% of the priority cadastral zones that will undergo cadastre reconstruction. Additionally, IT system upgrades and the launch of e-services will benefit all citizens and businesses of Kosovo as more information and services will be available online. IT system roll-out and e-services would also be discussed for the politically sensitive northern municipalities, which to-date have not connected to national systems and for which service provision tends to be low. E-services geared towards specialized users such as commercial banks, notaries and private surveyors will benefit these users and also have a positive impact on the speed, quality, and accuracy of service delivery. Investments in the priority geospatial datasets and the Geoportal will benefit the public and private sectors in Kosovo as the use of these datasets is expected to reduce the time and cost of decision-making while also improving the quality of these decisions. This investment can also help Kosovo diversify its economy, support job creation, and provide valuable input for disaster risk management. 23. Additionally, REGIP beneficiaries will include those that benefit from the gender, citizen engagement, and climate 11 Eligible MCOs are defined as MCOs that sign an MOU with KCA. 12 Under RECAP, the Kosovo Land Information System (KCLIS) was enhanced towards a Service Oriented Architecture (KCLIS-SOA). The SOA allows KCLIS to recombine existing functions to meet changing customer requirements, to develop new functions rapidly, and to scale operations to meet different levels of demand. SOA upgrade under REGIP would, therefore, include the launch of e-services, streamlining of business process and other activities. Page 10 of 59

15 change mitigation and adaptation benefits of the Project. These three themes and the relevant activities and benefits are discussed below. 24. Gender: REGIP will benefit the women of Kosovo by continuing to support the KCA s and the Government of Kosovo s efforts to promote gender equity in property rights. REGIP will reinforce and enhance the work that was started under RECAP, 13 and move forward in three specific directions. 25. First, REGIP will continue to rely on and upgrade, when necessary, the IT systems at KCA that collect and monitor the data for gender-disaggregated property ownership, an important statistic in understanding and analyzing the current situation for women s property ownership in the country. At the time of RECAP closing in June 2018, 16.8% of properties were either wholly or jointly owned by women. This will allow Kosovo to meet the requirement for gender disaggregated property data for the Sustainable Development Goals, and specifically for target Second, the percentage of women with rights to land and property will be monitored by KCA and tracked through the Results Framework (RF). One of the lessons emerging from RECAP is that the percentage of women s property ownership remained steady despite several public awareness campaigns and market-based policy interventions e.g. KCA and the Agency for Gender Equality worked together to register marital property in the names of both spouses free of charge for a targeted period of time. This shows that improving women s land rights is a slow process against prevailing social and cultural norms. At the same time, it is a worthwhile process as studies have linked women s property rights to greater income and agricultural productivity, increased access to finance, reduced gender-based violence, and increased health and education opportunities for children. 15 Under RECAP, a randomized control trial done to test the effectiveness of current messaging on women s property rights during cadastre reconstruction found that men were more open to jointly registering their spouses when the discussion centered around benefits to the children rather than the economic security of the wife. Such customized messaging may be able to boost women s property ownership given the social norms in Kosovo. A big achievement of RECAP was the commitment with which KCA began approaching the issue of gender-sensitivity in the field of property rights. KCA now applies the gender lens to all activities, including tracking the percentage of women that engage with KCA on the Agency s Facebook page. Incidentally, women s engagement on social media channels is about 20%, which mirrors the ownership figure of 16.8%. Therefore, the combination of monitoring, awareness campaigns during cadastre reconstruction, and engagement with KCA s women clients will continue even when the percentage ownership increases only gradually. Improvement in women s property rights will be monitored through a dedicated indicator in the Results Framework. 27. Third, the rich data and field knowledge available to KCA through various channels will be used for making evidencebased policy to promote women s property rights. For example, under REGIP, new market-based incentives, like free joint registration of spouses, could be considered following customized messaging that link women s property rights to children s economic security. Similarly, whenever possible, cadastre legislation and regulatory framework will be shaped to include additional provisions that promote women s property rights. 28. Citizen Engagement: REGIP will also benefit the citizens of Kosovo through the citizen engagement practices that will be implemented through this Project. Several socially inclusive citizen engagement tools will continue to be 13 In addition to using project funds, RECAP was also able to leverage complementary funding through World Bank Trust Funds for Innovation, the Umbrella Fund for Gender Equality (UFGE), and the Korea Trust Fund for Economic and Peace-Building Transitions (KTF) to further study and promote women s property rights in Kosovo. 14 SDG indicator is: Proportion of total adult population with secure tenure rights to land, with legally recognized documentation and who perceive their rights to land as secure, by sex and by type of tenure 15 A Place of Her Own: Women s Right to Land, Page 11 of 59

16 mainstreamed into different sub-components: (a) public displays (specifically inviting people from vulnerable groups having particular difficulties in registering property, including ethnic minority groups such as Serbian, Roma, Ashkali, Egyptians, Gorani and Turks) will strengthen the public awareness campaign and ensure that all citizens have a formal process in which they can voice opinions and raise concerns about aspects like property boundaries before cadastre reconstruction is finalized; (b) participatory data validation and monitoring through Cadastre Reconstruction Commissions that involve members of the public and support cadastre reconstruction activities in the target priority cadastral zones (aiming to also involve representatives from ethnic minority groups, such as Serbian, Roma, Ashkali, Egyptians, Gorani and Turks in those cadastral zones with larger minority population); (c) a comprehensive Grievance Redress Mechanism (GRM) set up at KCA to collect, monitor, and respond to citizen complaints; (d) three customer satisfaction surveys (at the beginning, mid-term and close to the end of the Project) to gather feedback about customer satisfaction with KCA and MCO services; and (e) continuation of the use of the helpdesk (online and telephone) to provide customer support and the use of social media channels (e.g. KCA Facebook Page) to provide regular updates on KCA s work to engage citizens. 29. The three customer satisfaction surveys will ensure to take samples from cadastral zones known to be characterized by a Serbian majority as well as other ethnic minority groups (such as Roma, Ashkali, Egyptians, Gorani, and Turks), and to contain additional questions targeted to the concerns of these groups (e.g., language, lack of awareness, fear of discrimination, political objections). If the survey results reveal an unwillingness to participate in registration activities in cadastral zones that are ethnically mixed or characterized by ethnic minorities, follow-up focus groups and stakeholder meetings are supposed to be conducted locally to examine the reasons behind this unwillingness and to identify possible responses to help overcome these concerns. Finally, the disability dimension will be taken into account in case of any reengineering of MCOs to make them more accessible and e-services will allow for improved access to land administration services for all. 30. Climate Change: REGIP will benefit all citizens of Kosovo as several of REGIP activities can be linked to climate change adaptation and mitigation. Six such activities have been identified under Components B and C. First, cadastre reconstruction under Component B will support the certification of private land rights. This has climate change adaptation benefits as it improves post-disaster recovery in cases of temporary resettlement or parcel boundary disappearance. More secure tenure will also mean that owners and occupants feel secure enough to leave their land and property in case of severe conditions and they would be assured that they could come back to the same land or property or get adequate compensation for it in case of any permanent damage that may occur. Second, updating cadastral data is required for monitoring land use planning and building standards, which is requested by the Climate Change Framework Strategy of Kosovo. This activity will help in collecting land use information, which would enable monitoring and controlling land use. Under Component B, establishing utility cadastre will enhance climate disaster preparation, response, and recovery, as it will allow analysis of utilities under climate disaster threats and targeting of essential utility reparation activities during disaster response and recovery. Additionally, establishing building registers will allow controlling and monitoring land use zoning regulations, and it will facilitate climate disaster recovery as it will allow property holders to legally reconstruct buildings they had on their property before disasters. Third, cadastre reconstruction would increase incentives in rural areas for long-term investments in climate-smart agriculture techniques and increase incentives in urban areas for long-term investments in high quality building materials and proper connections to water and electricity networks that are essential for climate resilience. Fourth, the geospatial investments under Component C are essential for climate change adaptation as datasets related to elevation, flood levels, topography etc. improve disaster risk management and expedite post-disaster recovery. Such datasets will be included in Component C. Fifth, the establishment of NSDI will make accessible reliable, wellmanaged cadastre data for the development of climate disaster early warning systems, systematic evaluation of Page 12 of 59

17 PDO: Increase the quality and availability of land administration and geospatial data and services Higher Level Objective: Improve security of tenure and the delivery of land administration services disaster damage, and the development of climate disaster compensation and insurance schemes. Dissemination of such cadastral data also allows for better monitoring of land use planning and building standards as planned for in Kosovo s Climate Change Strategy. Sixth, e-services that will be launched under Component C would reduce the use of paper, which, in turn, would support afforestation, reforestation, and biosphere conservation efforts in Kosovo and countries from where it imports paper. D. Results Chain Component Activity Output Outcome Objectives Component A Component B Develop KCA strategy and business plan New KCA Strategy and Business Plan Support preparation and implementation of the cadastre legal and regulatory Draft Cadastre Law and other regulations framework Develop land market studies and analyses Land market studies and analyses Cadastral information updated, Cadastral Reconstruction validated, or registered in 30% of priority Increased coverage of up to date cadastral records zones Data Quality Improvement Reduced errors in cadastral database Improved accuracy of cadastral information Utility Cadastre Utility cadastre in 3 cities Increased coverage/availability of services under KCA's mandate Building Register Development of Building Register Improved coverage and up-to-date information for urban planning and property tax collection etc. Office Reengineering Reenginnering of MCOs, including northern Serb majority municipalitities Improved operating environment, enhanced KCA strategy and procedures, and better understanding of land market challenges Improved work environment and customer experience, increased service availability to vulnerable minority communities KCLIS SOA Upgrade State of the art Land Information System with Service Oriented Architecture Increased availability of land administration data and services Component C KCA Digital Archive Support to KCA IT and NSDI Strategies Support to NSDI Enhancement of the National Geodetic Framework Advancement of KCA digital archive Long-Term Sustainability of IT systems and targeted investments in NSDI Geospatial datasets, standards, procedures, and technical training of Government agencies Additonal ground control points Increased transparency and availability of past transactions and registration information Improved sustainability beyond life of project and targeted investments to support land market Increased availability of reliable and accurate geospatial data and increased usage among Government agencies Improved accuracy of measurements Component D PIU and Donor Coordination M&E Customer Satisfaction Surveys Project implementation and donor coordination Results Framework and Analysis Customer satisfaction surveys in Years 1, 3, and 5 of the Project Public Outreach and GRM Public Awareness Campaigns and GRM Improved efficiency of project implementation and greater coordination in dealing with land sector challenges in Kosovo Improved knowledge of issues with project implementation leading to corrective action Increased transparency of project activities and increased citizen engagement with respect to feedback to improve KCA and MCO services Improved understanding of KCA services and increased transparency and accountability of Project Capacity Building of KCA and KPCVA Technical trainings and study visits Increased capacity of KCA and KPCVA staff Joint KCA KPCVA Working Group Formal mechanism for coordination between the two agencies Improved coordination for land sector activities and better management of property market-level risks Key Assumptions Cooperation between KCA and MCOs and municipalities Consistent use of KCLIS-SOA, CR Tool, and digital archive across MCOs Cooperation between KCA and external registers e.g. egateway, Civil Registry etc. Participation of different Government agencies in discussions to determine priority geospatial datasets Feedback from citizens and specialized users (notaries, surveyors etc.) to improve service delivery Government investment in maintenance of KCA's IT systems and NSDI in the absence of vertical structure for organization of cadastral services Page 13 of 59

18 E. Rationale for Bank Involvement and Role of Partners 31. Land administration is an essential public service that underpins economic growth and poverty reduction. 16 A 2014 study 17 on completed land registration projects concluded that public sector investment in land registration systems is highly beneficial to the economic development of the country with a high rate of return on public investment. In addition, increased access to geospatial data will not only have a direct impact on public sector management and decision making, but also provide new opportunities for small enterprises to generate value-adding services and jobs. At the same time, the cost of land administration services remains high, making registration usually out of the reach of ordinary Kosovars. Additionally, Kosovo has a high degree of economic informality, which means property ownership often remains informal. Therefore, the Bank s financing and technical expertise are critical to furthering the land rights agenda in Kosovo, formalizing property rights, developing a building register, and boosting the real estate and related sectors e.g. mortgage lending, construction etc. In doing so, REGIP investments will also contribute to the agenda of maximizing finance for development (MFD) or mobilizing private sector capital. For example, clarification of property rights and increased security of tenure can be seen as de-risking interventions that promote increased private sector activity domestically and increase the appetite for foreign direct investments. Similarly, geospatial investments can provide more information for private sector decision-making, thus opening new markets. For example, geospatial information shared with insurance providers can significantly reduce the due diligence costs of the private sector and make it cheaper for insurance providers to launch and/or scale crop insurance products, which may otherwise not be available at reasonable rates to farmers. 18 Value added of Bank s support: 32. has several decades of experience in supporting land administration systems and systematic registration-cadastre projects around the world. The Bank also has extensive experience in the Europe and Central Asia region where it has invested in land administration systems since the fall of communism. This demonstrates that the Bank is uniquely qualified to address the challenges of post-communist states and young democracies like Kosovo. In addition, the Bank has been involved in the land sector in Kosovo since 2010 and understands well the key challenges and opportunities. The Bank s unparalleled value-add is driven by this combination of understanding the local context and bringing regional and international global practices. In partnership with the Food and Agriculture Organization, the Bank will also bring experience implementing the Voluntary Guidelines on the Responsible Governance of Land, Forests and Fisheries, a global tool for best practices in land governance. F. Lessons Learned and Reflected in the Project Design 33. has funded land administration projects across the globe with particular attention to Europe and Central Asia region (ECA) just after the collapse of the Soviet Union given the need to secure property rights in order to develop well-functioning market economies. Over forty land administration projects were completed in ECA since Before Bank-financed projects, ECA countries did not have good property registers or cadastres, and the land administration sectors were operationally and institutionally fragmented, paper based and bureaucratic. Moreover, of the Bank-financed land projects implemented in ECA, many were implemented in the Western Balkans, including the previous RECAP project in Kosovo and, therefore, provide valuable lessons on issues like technical investments, 16 Deininger, K Land Policies for Growth and Poverty Reduction. Washington, DC:. 17 Economic Impact of 20+ Years of ECA Land Registration Projects; Satana, Adlington, Torhonen, Anand; Annual World Bank Land and Poverty Conference Based on the experience of the DFID-funded Ethiopia Land Investment for Transformation (LIFT). Page 14 of 59

19 training and capacity building, and the importance of citizen engagement to help maximize the impact of investments in activities like cadastre reconstruction. Today, many of these countries operate fully digital systems for land and property registers and cadastres 19, and are moving to the next generation of services with geospatial data, compliance with EU s INSPIRE Directive, and the launch of electronic services and interoperability as part of the e- government initiatives. Therefore, the Bank s strong foundations and track record in ECA, and particularly the Western Balkans, helped to gather the right experience for REGIP project design. 34. Overall, this project design has incorporated the following lessons learned from the Bank s experience in land projects: a. Policy and legal reforms need to be conducted alongside technical investments to achieve strategic goals and harness the complete benefits of investments; b. Public awareness and participation is critical for success, and public awareness and education campaigns add important value. Results of customer surveys are a valuable channel for feedback from public and suggests important corrective actions for agencies; c. Investments in transparency (e.g. publication of procedures and datasets) are important to gain the trust of the public and provide a good level of service delivery; d. Communication and training need to reach out to multiple stakeholders including different social groups including vulnerable groups and women considering their priorities and varying ways they access information; and e. Addressing gender inequality in access to formal property rights is important even if the law prescribes equal rights. Providing access to gender disaggregated data and including gender specific messages in public awareness campaigns, training, and education can have significant positive impact. Tailoring project activities to men and women when appropriate can help to prevent unintended biases and mitigate against negative gender impacts. 35. In addition, country-specific lessons learned from the RECAP project have also been incorporated. These key design lessons include: a. Cadastre Reconstruction Commissions can help increase the rate of updating the cadastral information and increase the number of registrations and are also a good mechanism for citizen engagement; b. Public display of survey data and focused awareness raising campaign can help to minimize errors in data collected during cadastre reconstruction and boost the overall accuracy of the cadastral information and should be designed as a crowd-sourcing activity to increase public participation around CR activities; c. An update of the current Cadastre Reconstruction process, especially moving to enhanced automation of data collection, would help improve quality assurance, data quality and get the feedback of specialized users like commercial banks and private surveyors that rely on accurate cadastral information; and d. A big achievement of RECAP was the commitment with which KCA began approaching the issue of gendersensitivity in the field of property rights. KCA now applies the gender lens to all activities, including tracking the percentage of women that engage with KCA on the Agency s Facebook page. Incidentally, women s engagement on social media channels is about 20%, which mirrors the ownership figure of 16.8%. Therefore, the REGIP and other projects should target the gender sensitization of the implementing agency as this helps to mainstream gender into regular agency operations and ensures the drive for and sustainability of gender-related outcomes beyond the life of the Bank-financed project; and e. The Bank team was able to secure money from a Bank-Executed Trust Fund, which were used alongside 19 In Doing Business 2019, ten ECA countries (Lithuania, Georgia, Belarus, Estonia, Kyrgyz Republic, Slovak Republic, Russian Federation, Armenia, Azerbaijan, and Kazakhstan) were ranked in the top 20 countries on Registering Property. Page 15 of 59

20 RECAP-financed CR activities, to design and conduct a randomized control trial 20 to inform the messaging in the field to facilitate the recording of both the husband and wife as co-owners. It was seen that public outreach activities will seek to raise women s awareness of their property rights and the importance of including their name as co-owner. Such complementary BETF activities should, therefore, be sought and implemented to improve the achievement of the Bank s corporate commitments. At the same time, the client should be included in the design and implementation of the activities so as to ensure a high degree of client ownership. III. IMPLEMENTATION ARRANGEMENTS A. Institutional and Implementation Arrangements 36. The proposed Project will replicate the implementation arrangements that have been successfully put in place under the previous Bank-financed RECAP Project (closed June 30, 2018) with KCA as the implementing agency. During RECAP, the KCA has had a good record with Procurement and Financial Management as well as the management of Environmental and Social Safeguards, and the Project s performance was deemed Satisfactory. 37. KCA will implement the Project in close cooperation with the Ministry of Environment and Spatial Planning (MESP; KCA s line ministry), and Municipal Cadastre Offices (MCOs). Other stakeholders such as the Ministry of Finance (MOF), the Ministry of Public Administration 21, the KPCVA, and other public and private sector institutions producing and managing geospatial data will be involved as needed. 38. A Project Implementation Unit (PIU) will be established at KCA and will report to the KCA Chief Executive Officer (CEO). The PIU will be staffed with a PIU Head, Procurement Specialist, FM Specialist, and technical experts or specialists on cadastre, IT, NSDI, and legal issues. In order to utilize the capacity built under RECAP, this may be done through direct contracting with respect to the staff that were engaged under RECAP. Otherwise, competitive selection will be used. The PIU will be responsible for day-to-day implementation and for providing specific technical oversight to project activities. The PIU will be responsible for procurement, financial management, monitoring and evaluation, and safeguards (including GRM) under the Project. Other activities include: preparation of annual work plans, donor coordination, public awareness campaigns, and maintaining close cooperation with eligible MCOs. 39. Furthermore, the Acting CEO of the KCA will also appoint staff members who will act as component/subcomponent leads and work in close cooperation with the PIU staff. KCA's experience in implementing the World Bank-financed RECAP project ( ) has put in place good institutional capacity to implement the Project. Therefore, overall implementation readiness is considered high. The Bank team also stands ready to provide hands-on implementation support to KCA as needed. 40. The Inter-Ministerial Committee on Land Administration (IMCLA) was established in 2009 by a Government Decision. The IMCLA consists of KCA, KPCVA, MESP, PMO, Ministry of Finance, Ministry for Public Administration, Ministry of Local Administration, Ministry of Agriculture, Forestry and Rural Development and others. The invitation to IMCLA meetings is dynamic and can include agencies and ministries as needed to improve coordination efforts where they 20 The randomized control trial looked at the difference in joint registration rates where messaging on women s land rights was given. When it found such messaging to not be effective due to strong traditions, it tested the messaging on the property rights of children and this messaging was found to be more effective in making joint ownership possible. 21 Ministry in charge of the egateway. Page 16 of 59