Mozambique - Water Services and Institutional Support Project

Page 1 PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB2977 Project Name Water Services and Institutional Support Project Region AFRICA Sector Water supply (100%) Project ID P104566 Borrower(s) REPUBLIC OF MOZAMBIQUE Implementing Agency Government of Mozambique FIPAG/DNA/CRA Mozambique Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared April 6, 2007 Date of Appraisal Authorization April 19, 2007 Date of Board Approval July 19, 2007 1. Country and Sector Background Poverty reduction and role of efficient service delivery. Mozambique, a country of 20 million people with more than 70 percent of the population in rural areas, is located in the southern tip of the African continent. Coming out of a devastating three-decade civil war in 1992, Mozambique grew rapidly. Since 2000, its growth rate has stabilized between 7 and 8 percent. As the Country Partnership Strategy (2007) notes, Mozambique has achieved the highest average growth rate in the past 10 years among the non-oil producing countries in Africa. Concurrent with growth, Mozambique also succeeded in containing poverty and enhancing access to social services. The rate of pro-poor growth at 3.9 percent in the past decade implies that poverty reduction in Mozambique was equitable, with all groups including the bottom quintile of population, benefiting from economic growth. Though poverty still remains a rural phenomenon, this reduction was unique because rural poverty fell faster than urban poverty (CEM, 2005). At the current rate of growth, Mozambique is on track to meet the MDG of halving the population living in poverty by 2015. In spite of impressive progress, 10 million Mozambicans still live in absolute poverty (PARPA II). The Gover nment of Mozambique