## tarea2024062-print-pdf ## Source details **Canonical URL:** [tarea2024062-print-pdf](https://www.imf.org/-/media/files/publications/tar/2024/english/tarea2024062-print-pdf.pdf) ## Other formats - [Markdown version](/-/media/files/publications/tar/2024/english/tarea2024062-print-pdf.pdf.md) - [Structured JSON version](/-/media/files/publications/tar/2024/english/tarea2024062-print-pdf.pdf.json) --- ### Preface and Executive Summary — mission, context, and key quantitative facts - Mission dates: 31 January to 13 February 2024. - Mission leadership and team: - Led by Bryn Battersby. - Team: Nompumelelo Radebe, Isabela Duarte, Phyllis Makau, June Nyakahuma, Ilyas Tufan. - Key meetings: Minister for Finance (Mr. Sheku Bangura), Principal Financial Secretary Mathew Dingie, senior staff of the Ministry of Finance, MoPED, Ministry of Environment, Ministry of Transport and Aviation, Ministry of Energy, National Public Procurement Agency, Auditor General, PPP Unit, National Disaster Management Authority, Environmental Protection Agency, NAMEA, Meteorological Agency, Freetown City Council. - Acknowledgements: Special gratitude to Mr. Sellu McCarthy (Climate Finance Unit, Ministry of Finance) and IMF Resident Representative Mr. Wayne Mitchell. - Key quantitative facts (preserved exactly): - Historic public capital stock change: 60 percent increase between 2008 and 2018. - Capital budget cost overruns: around 1.5 percent of GDP between 2021 and 2023. - NDC CO2 targets: 5 percent by 2025, 10 percent by 2030, 25 percent by 2050. ### Climate risks and national commitments - Observed and projected climate changes: - Average temperatures have increased by 1.32°C relative to the 1950-1980 period. - Average temperatures range: 28°C in coastal areas to 24°C inland. - Average rainfall varies from 1800 mm in the northwest to 3400 mm in coastal areas per year. - Temperatures projected: from 27.5°C to 27.7°C in 2050 and from 27.6°C to 28.1°C by 2070 across the 1-2.6 and 2-4.5 SSP emission scenarios; in SSP3-7.0, average temperatures could increase to 28.9°C by 2070. - Sea level rise projections relative to 2000 level: from 0.5 m in the Paris scenario to 0.78 m in an extreme scenario by 2100. - Climate impacts and costs: - Average annual cost of disaster response estimated at USD20 million (some 0.5 percent of non-iron ore GDP). - Cost of very severe events could exceed USD69 million. - Example event: 2017 landslide killed more than 1,000 people. - National commitments and plans: - Updated NDC: reduce CO2 emissions by 5 percent by 2025, 10 percent by 2030, and 25 percent by 2050. - Initial National Adaptation Plan (iNAP) emphasizes investments in agriculture, renewable energy, and water management. - MTNDP (2024-2030) includes climate resilience and environmental action as an enabler of the “Big 5 Game Changers”. - Ministry of Finance established a Climate Finance Unit in 2023. ### Public investment management performance — progress since 2020 PIMA and remaining gaps - Progress since 2020 PIMA: - National Public Investment Management Policy approved by Cabinet in 2021. - Pre-Investment Guidance Manual (PIGM) finalized and published in 2022. - Extension of PIP to include local councils in annual budget. - Promulgation of Public Procurement Regulations (2020). - Establishment of NAMEA and Project Preparation Facility. - Persistent gaps and coordination challenges: - No comprehensive central database for all public investments (SOEs, PPPs, donor-funded). - No pipeline of appraised and prioritized projects; many PIP projects lack appraisals. - Weak multi-year contract management, annual capital budgeting, and commitment controls. - Cost overruns and underfunding of projects, with roads sector particularly affected. - Lack of transparency: appraisal reports (including PPPs) not systematically published. - Weak coordination of variations and contract amendments between procurement and budget authorities. ### Cost overruns — findings, magnitudes, and causes - Aggregate cost overruns on the domestic capital budget: Le 3.1 billion (an aggregate loss of 1.5 percent of GDP) from 2021 to 2023. - Road projects accounted for between 52 and 78 percent of the total capital budget overrun from 2021 to 2023. - Table 4 aggregate totals by selected MDAs (selected MDAs total row): - 2021: Original Budget (Le) 472.9; Actuals (Le) 1,102.0; Deviation (Le) 629.1; Percentage contribution to total deviation 122.7 - 2022: Original Budget (Le) 937.6; Actuals (Le) 2,538.4; Deviation (Le) 1,600.8; Percentage contribution to total deviation 94.6 - 2023: Original Budget (Le) 153.6; Revised Budget (Le) 942.1; Deviation (Le) 788.5; Percentage contribution to total deviation 91.5 - Total Domestic Capital Budget (aggregate): - 2021: Original Budget 1,179.1; Actuals 1,691.9; Deviation 512.8; Percentage contribution 100.0 - 2022: Original Budget 1,190.3; Actuals 2,882.6; Deviation 1,692.4; Percentage contribution 100.0 - 2023: Original Budget 1,204.0; Actuals 2,065.6; Deviation 861.6; Percentage contribution 100.0 - Selected MDA highlights (examples): - SLRA (Sierra Leone Roads Authority): - 2021: Original Budget (Le) 270.0; Actuals (Le) 539.0; Deviation (Le) 269.0; Percentage contribution 52.5 - 2022: Original Budget (Le) 339.8; Actuals (Le) 1,342.8; Deviation (Le) 1,002.9; Percentage contribution 59.3 - 2023: Original Budget (Le) 79.0; Revised Budget (Le) 751.2; Deviation (Le) 672.2; Percentage contribution 78.0 - MoAFS (Ministry of Agriculture and Food Security): - 2021: Original Budget (Le) 111.8; Actuals (Le) 149.7; Deviation (Le) 37.9; Percentage contribution 7.4 - 2022: Original Budget (Le) 97.7; Actuals (Le) 253.6; Deviation (Le) 155.9; Percentage contribution 9.2 - MoHS (Ministry of Health and Sanitation): - 2021: Original Budget (Le) 30.6; Actuals (Le) 114.9; Deviation (Le) 84.3; Percentage contribution 16.4 - 2022: Original Budget (Le) 30.9; Actuals (Le) 111.2; Deviation (Le) 80.3; Percentage contribution 4.7 - MoE (Ministry of Energy): - 2021: Original Budget (Le) 45.5; Actuals (Le) 124.4; Deviation (Le) 78.9; Percentage contribution 15.4 - 2022: Original Budget (Le) 37.0; Actuals (Le) 160.4; Deviation (Le) 123.4; Percentage contribution 7.3 - 2023: Original Budget (Le) 74.6; Actuals (Le) 190.9; Deviation (Le) 116.3; Percentage contribution 13.5 - Four main causes of cost overruns: 1. Failure to prioritize projects — lack of clear prioritization criteria and inadequate information on ongoing projects for deprioritization. 2. An unrealistic capital budget — envelope set residually after recurrent budget; multi-year commitments not tracked by MoF. 3. Weak commitment controls — evidence of expenditure authorized exceeding appropriations (references to Section 56 of the Public Financial Management Act (2016)). 4. Poor oversight of ongoing projects — in-year variations not informed by progress reports or re-appraisals when modifications exceed the 25 percent threshold. ### C-PIMA high-level findings and diagnostic results (C1–C5) - Overall: Sierra Leone’s performance on the Climate Module (C-PIMA) is mixed; performance gaps often trace to core PIM weaknesses. - C1 Climate-aware planning: - Assessment summary: PARTLY MET. - Reform Priority: Medium. - Key issues: misalignment across national and sectoral plans; outdated Town and Country Planning Act (1946); MTNDP and NDC/iNAP exist but key investment projects not clearly identifiable. - Subnational example: Freetown committed to reduce greenhouse gas emissions by at least 44 percent by 2050 with an interim target of 13 percent by 2030 (base year 2018). - C2 Coordination between entities: - Assessment summary: PARTLY MET. - Reform Priority: High. - Key issues: weak whole-of-government coordination for climate-related public investment; Climate Change Secretariat mandate unclear for public investment; Presidential Initiative established 2023 but understaffed and lacking clear mandate. - SOE policy: new SOE ownership policy requires integration of climate considerations; SOE Ownership and Governance Commission Bill submitted to Parliament in early 2024. - C3 Project appraisal and selection: - Assessment summary: NOT MET. - Reform Priority: High. - Key issues: PIGM does not require climate-related analysis per a standard methodology; selection criteria do not explicitly include climate change; PPP framework lacks explicit climate risk allocation in practice. - C4 Budgeting and portfolio management: - Assessment summary: NOT MET. - Reform Priority: High. - Key issues: climate-related investments not readily identifiable in the budget; no audits of climate impacts; maintenance and asset management policies do not consider climate change. - Climate Budget Tagging pilot: six MDAs identified for piloting; guidelines with templates were to be issued but have not been issued. - C5 Risk management: - Assessment summary: PARTLY MET. - Reform Priority: Medium. - Key issues: Fiscal Risk Statement addresses climate change only qualitatively; analysis and management of climate-related fiscal risks nascent. ### Project appraisal, PPPs, and recommended technical elements for climate analysis - Limitations of PIGM and appraisal practice: - PIGM does not mandate climate-related analysis according to a standard methodology. - Project Appraisal Report and Review Template focuses sustainability analysis on environmental impact; lacks dedicated climate-analysis section. - Readiness and selection templates include a sustainability item but do not operationalize quantitative climate risk analysis. - PPPs and long-term contract considerations: - PPP contracts can be up to 30 years; PPP Act (2014) Section 4(1)(r) provides for risk sharing but does not specify types of risks to be considered. - Recommendation: use PPP framework review to incorporate explicit climate risk allocation and mandate contract managers to address climate-related challenges. - Key technical elements for climate-related analysis (Box 7 illustrative list): - Adaptation: hazard analysis, risk mapping, loss and damage estimation, vulnerability analysis, use of risk scenarios, climate-robust design features, staging implementation, ‘no regrets’ elements, real options. - Mitigation: estimation of business-as-usual greenhouse gas emissions and net impacts of alternatives, estimation of marginal abatement cost curves, use of social cost of carbon/shadow price of carbon and appropriate long-term discount rates. - Recommended enhancements: - Align Project Analysis and Review Reporting Template with a standard climate methodology. - Publish and independently review appraisals. - Include climate change as a criterion within multicriteria analysis used for project prioritization. ### Budgeting, asset management, information systems (IFMIS, NAMEMIS, PIMIS) and tagging - IFMIS: - IFMIS rolled out to 78 MDAs; upgrading to a new web-based system with updated chart of accounts. - Limitation: donor-funded project loans and grants processed outside IFMIS; IFMIS does not include donor-funded project spend. - Climate tagging: plans underway to roll out climate budget tagging from FY2025; IFMIS could use budget output codes or binary flags for tagging. - NAMEMIS: - Effective from FY2024, MDAs and local councils required to upload all ongoing and new projects and work plans. - NAMEMIS template includes alignment with SDGs and MTNDP goals, including climate objectives. - Proposal for PIMIS: - PIMIS to consolidate project lifecycle data (status, duration, total costs, allocated budget, cumulative spending, multiyear commitments). - Integration benefits: PIMIS + IFMIS + NAMEMIS would improve coordination, reduce cost overruns, and enable climate project identification and tagging. - Current action: government working with development partners to establish PIMIS scope. - Case example: Uganda’s Integrated Bank of Projects System integrates with IFMIS and produces pipeline and commitment reports. - Asset management: - National Asset and Government Property Commission mandated but many functions not undertaken; no government-wide asset register. - Draft National Disaster Risk Financing Strategy target dates: - (a) undertake a multi-hazard disaster risk assessment across all critical public infrastructure (by 2025); - (b) develop the public asset policy and asset register (by 2027); - (c) develop a Climate Resilient Road Strategy (by 2027). ### Risk management, fiscal risks, and disaster financing - Fiscal risk reporting and SOE coverage: - Fiscal Risks Management Division published SOE financial analysis reports (2014-18, 2015-2020; drafting 2016-2021). - Gap: climate-related fiscal risk analysis for natural disasters and infrastructure exposure remains limited. - Disaster costs and vulnerability estimates: - World Bank analyses: damages to building and infrastructure assets from floods, landslides, windstorms, and fires: around USD 5.7 to 10 million per year. - Assets at risk from coastal erosion between now and 2050: around USD131 million, with an upper estimate of USD261 million. - Contingency financing: - Contingencies Fund under Public Financial Management Act (2016): expenditures should not exceed two percent of non-extractive industries revenue. - Historical average disaster cost: around USD20 million each year (or around Le40 billion). - National Disaster Management Fund established by law (Part VII of National Disaster Management Agency Act (2020)) but not yet operationalized. - Fiscal Risk Statement recommendations: - Expand Fiscal Risk Statement to include quantitative analysis and long-term fiscal pathways under different climate scenarios. - Quantify risks for discrete entities (e.g., SOEs and PPPs such as energy and water utilities). - Use progressive quantification methods (qualitative → past disaster cost quantification → scenario-based long-term fiscal pathways). - International examples: UK OBR assumption of adaptation costs of 0.3 percent of GDP a year; Rwanda analysis showing primary deficit and debt-to-GDP impacts under worst scenarios. ### Audit, ex-post reviews, capacity, and institutional recommendations - Ex-post reviews and audit capacity: - No ex-post reviews of climate mitigation and adaptation outcomes are conducted. - Auditor General conducts compliance and performance audits under Constitution, Audit Service Act (2014), and Public Financial Management Act (2016). - Audit process weaknesses: audit reports often not fully processed in Parliament; lags in legislative review (reports submitted for 2015 and 2016 only under review in 2024). - Staffing shortfall: Audit Service understaffed and lacks sector specialists (engineers, environmental specialists). - Capacity constraints across institutions: - Public Investment Management Unit: 11 staff, three on study leave (including director). - Other understaffed entities: Climate Financing Unit in MoF, NAMEA, EPA Climate Change Division, Presidential Initiative. - Fiscal Risk Department could use IMF Q-CRAFT but requires climate expertise and staff support. - Legal and regulatory fragmentation: - Principal law: Public Financial Management Act (2016) (section 35 requires PIP annex in budget). - Other relevant acts: Environment Protection Agency Act (2022); National Disaster Management Agency Act (2020); Sierra Leone Meteorological Agency (2017); National Protected Area Authority Act (2022); Public Private Partnership Act (2014); Public Procurement Act (2016); National Asset and Government Property Commission Act (1990); Local Government Act (2022). - Policy option: consider adopting a Climate Change Act to clarify roles and coordination (examples cited: Kenya and Uganda). ### Priority recommendations, sequencing, and action plan (timings and responsibilities preserved exactly) - 1. Create a centralized database for all public investments, including PPPs and SOEs, state- and development partner-funded, incorporating multi-year contracts and commitments. Accessible to MoF and NAMEA and inform budget decision-making. - MDAs: MoPED - Timing: By December 2024 - Priority: High priority - 2. Undertake a comprehensive review of all projects underway and in the pipeline, and ensure that only appraised projects are included in the PIP and selected for funding. - MDAs: Public Investment Committees, MoPED and MoF - Timing: by December 2024 - Priority: High priority - 3. Overhaul the annex of PIP included in budget documents so it is comprehensive and includes information on total costs, multi-year commitments, project duration, and total variations. - MDAs: MoPED - Timing: By December 2025 - 4. Ensure commitment and payment controls are applied by enforcing the provisions of the Public Financial Management Act (2016) on excess spending as per Section 56 (5) and Section 120 (1 c). - MDAs: MoF - Timing: Immediately - Priority: High priority - 5. Develop and implement multi-criteria analysis, which incorporates climate change, to guide prioritization and selection of projects in the PIP. - MDAs: MoPED - Timing: By December 2025 - 6. Expand the sustainability analysis required in the Project Appraisal Report and Review Template to cover climate-related analysis of project proposals in line with a standard methodology. - MDAs: MoPED - Timing: By June 2025 - 7. Identify and highlight climate-related projects in budget documents; build on plans to implement a climate-sensitive tagging framework and summarize in a short budget chapter. - MDAs: MoF - Timing: By December 2027 - 8. Develop the planned asset register and update maintenance manuals to ensure critical infrastructure (energy, transport, communications, health, and education) is resilient to climate change. - MDAs: National Asset and Government Property Commission - Timing: By December 2027 - 9. Gradually incorporate climate vulnerability analysis into asset registries and include quantitative analysis of both long-term and discrete fiscal risks of climate change in the Fiscal Risk Statement. - MDAs: MoF (Fiscal Risk Department) with the Ministry of Environment and National Asset and Government Property Commission - Timing: By December 2028 - 10. Clarify and strengthen climate-relevant roles, responsibilities, and capabilities within the public investment management process, particularly for MoPED and MoF, through targeted training and a review of legal mandates. - MDAs: MoPED, MoF, Environmental Protection Agency, and Ministry of Environment, with MDAs - Timing: By December 2024 - Priority: High priority - Sequencing emphasis: - Climate sensitivity in appraisal/selection to build on a pipeline of appraised projects and supporting legal and IT infrastructure. - Vulnerability assessment of public assets to be sequenced with development of a comprehensive public asset register. - Capacity building and governance clarification prioritized to enable climate-sensitive public investment. *IMF Technical Assistance Report | Preface and Executive Summary (pages shown in source).* ### Preface ____________________________________________________________________________ 6 ### Preface and Executive Summary ### Mission and context - An IMF Fiscal Affairs Department (FAD) mission visited Freetown from 31 January to 13 February 2024 in response to a request from the Sierra Leone Minister for Finance for capacity development support. - Mission leadership and team: - Led by Bryn Battersby. - Team comprised Nompumelelo Radebe and Isabela Duarte (all FAD), Phyllis Makau (Public Financial Management Advisor at AFRITAC West 2), June Nyakahuma (FAD Expert) and Ilyas Tufan (IMF Public Financial Management Resident Advisor in Sierra Leone). - Key meetings: - Minister for Finance, Mr. Sheku Bangura; Principal Financial Secretary Mathew Dingie; senior staff of the Ministry of Finance. - Ministries and agencies: Ministry of Planning and Economic Development (MoPED), Ministry of Environment, Ministry of Transport and Aviation, Ministry of Energy, National Public Procurement Agency, Auditor General, Public Private Partnership Unit, National Disaster Management Authority, Environmental Protection Agency, National Monitoring and Evaluation Agency, Meteorological Agency, and Freetown City Council. - Acknowledgements: - Special gratitude to Mr. Sellu McCarthy, head of the Climate Finance Unit in the Ministry of Finance, for coordinating and facilitating meetings. - Thanks to the IMF Resident Representative, Mr. Wayne Mitchell, and his office for pre-mission and in-mission support. ### Climate risks and national commitments - Sierra Leone faces rising temperatures, changing precipitation patterns, increased risk of extreme weather events, heighted risks of floods, landslides, coastal erosion, and sea level rise. - Existing infrastructure is particularly susceptible to climate-induced stresses due to historical factors, including a decade-long civil war and inadequate maintenance. - National mitigation and adaptation commitments: - CO2 emissions reduction targets in updated Nationally Determined Contribution (NDC): reduce CO2 emissions by 5 percent against the baseline by 2025, 10 percent by 2030, and 25 percent by 2050. - Development of an initial National Adaptation Plan (iNAP) emphasizing investments in agriculture, renewable energy, and water management. ### Public investment management performance and fiscal implications - Progress since the 2020 Public Investment Management Assessment (PIMA) is uneven: - National Public Investment Management Policy approved by Cabinet in 2021. - Introduction of the Pre-Investment Guidance Manual and enhancements in procurement and project oversight mechanisms. - Persistent gaps: no unified project database, no clear criteria for project selection, weaknesses in multi-year contract management, annual capital budgeting, and commitment controls. - Fiscal impact: - Cost overruns in the capital budget, particularly within the roads sector, of around 1.5 percent of GDP between 2021 and 2023. - Historical PIMA diagnostic: - The 2020 PIMA found a 60 percent increase in the volume of public capital stock between 2008 and 2018 without a corresponding increase in public infrastructure outputs, attributed to inefficient public investment and institutional weaknesses. ### C-PIMA (Climate Module of the PIMA) high-level findings - Sierra Leone’s performance on the Climate Module (C-PIMA) is mixed; performance gaps often trace to core PIM weaknesses. - Institutional design summary (Table 1 style): - C1 Climate-aware planning: PARTLY MET. "There is some alignment between plans and commitments and limited centralized guidance, but building codes and urban planning requirements do not consider the effects of climate change." Reform priority: Medium. - C2 Coordination between entities: PARTLY MET. "There is weak coordination of decision-making on climate investments across the public sector, but the SOE oversight framework has been strengthened to require climate considerations." Reform priority: High. - C3 Project appraisal and selection: NOT MET. "A framework to guide project appraisal and selection exists but this does not include climate-related analysis. The PPP framework does not incorporate climate risk identification and allocation." Reform priority: High. - C4 Budgeting and portfolio management: NOT MET. "Climate related investments are not readily identifiable in the budget and there are no audits of climate impacts of projects. Maintenance and asset management policies do not consider climate change." Reform priority: High. - C5 Risk management: PARTLY MET. "Some climate change vulnerability and hazard analysis is undertaken, a contingency fund exists, and the Fiscal Risk Statement addresses climate change, but only qualitatively." Reform priority: Medium. - Key disconnects: - NDC and iNAP frameworks exist, but public investments, national and sectoral development plans, and land use regulations are not fully consistent with climate commitments. - Project appraisal guidelines do not adequately cover climate-related analysis; PPP framework lacks climate risk provisions. - Budgeting and portfolio management do not sufficiently account for climate considerations. ### Sequencing and reform emphasis - Climate-sensitive reforms must be sequenced with reforms that strengthen core public investment management: - Climate sensitivity in appraisal and selection should build on development of a pipeline of appraised projects and supporting legal and IT infrastructure. - Vulnerability assessment of public assets should be sequenced with development of a comprehensive register of public assets. - Address capacity and coordination weaknesses and develop a cohesive governance framework for climate-related public investments. - Annex 1 provides a detailed set of actions to support recommendations; Figure 1 and Table 1 summarize C-PIMA diagnostic results. ### Key quantitative facts and timelines (preserved exactly) - Mission dates: 31 January to 13 February 2024. - Historic public capital stock change: 60 percent increase between 2008 and 2018. - Capital budget cost overruns: around 1.5 percent of GDP between 2021 and 2023. - NDC CO2 targets: 5 percent by 2025, 10 percent by 2030, 25 percent by 2050. ### Priority recommendations (Table 2 — MDAs, priority, timing) - 1. Create a centralized database for all public investments, including PPPs and SOEs, that are both state and development partner-funded and incorporate multi-year contracts and commitments. This should be accessible to the MoF and NAMEA and inform budget decision-making. - MDAs: MoPED - Timing: By December 2024 - Priority: High priority - 2. Undertake a comprehensive review of all projects underway and in the pipeline, and ensure that only appraised projects are included in the PIP and selected for funding. - MDAs: Public Investment Committees, MoPED and MoF - Timing: by December 2024 - Priority: High priority - 3. Overhaul the annex of PIP that is included in the budget documents so that it is comprehensive and includes information on total costs, multi-year commitments, project duration, and total variations. - MDAs: MoPED - Timing: By December 2025 - 4. Ensure commitment and payment controls are applied by enforcing the provisions of the Public Financial Management Act (2016) on excess spending as per Section 56 (5) and Section 120 (1 c). - MDAs: MoF - Timing: Immediately - Priority: High priority - 5. In conjunction with Recommendation 2, develop and implement multi-criteria analysis, which incorporates climate change, to guide prioritization and selection of projects in the PIP. - MDAs: MoPED - Timing: By December 2025 - 6. Expand the sustainability analysis required in the Project Appraisal Report and Review Template to cover climate-related analysis of project proposals in line with a standard methodology. - MDAs: MoPED - Timing: By June 2025 - 7. Identify and highlight climate-related projects in budget documents. This should build on current plans to implement a climate-sensitive tagging framework and be summarized in a short budget chapter. - MDAs: MoF - Timing: By December 2027 - 8. Develop the planned asset register and update maintenance manuals to ensure critical infrastructure (energy, transport, communications, health, and education) is resilient to climate change. - MDAs: National Asset and Government Property Commission - Timing: By December 2027 - 9. Gradually incorporate climate vulnerability analysis into asset registries that are being developed and include quantitative analysis of both long-term and discrete fiscal risks (such as risks to specific infrastructure-providing SOEs and PPPs) of climate change in the Fiscal Risk Statement. - MDAs: MoF (Fiscal Risk Department) with the Ministry of Environment and National Asset and Government Property Commission - Timing: By December 2028 - 10. Clarify and strengthen the climate-relevant roles, responsibilities, and capabilities within the public investment management process, particularly for MoPED and MoF, through targeted training and a review of legal mandates. - MDAs: MoPED, MoF, Environmental Protection Agency, and Ministry of Environment, with MDAs - Timing: By December 2024 - Priority: High priority *IMF Technical Assistance Report | Preface and Executive Summary (pages shown in source).* ### 2. Some progress has been made in strengthening institutions since the 2020 PIMA. A ### 2. Some progress has been made in strengthening institutions since the 2020 PIMA. ### Summary of institutional improvements - Finalization and publication of the Pre-investment Guidance Manual in 2022, setting requirements for preparation, submission, screening, evaluation, and selection of project proposals. - Extension of the Public Investment Program (PIP) to include a list of capital projects for local councils for publication in the annual budget. - Promulgation of the 2020 Public Procurement Regulations, which set thresholds and procedures for managing contract modifications and coordination between the Ministry of Finance (MoF) and National Public Procurement Authority. - Establishment of the National Monitoring and Evaluation Agency (NAMEA) to lead monitoring and evaluation of the Medium-term National Development Plan (MTNDP), including all public sector programs and government and donor funded projects. - Establishment of the Project Preparation Facility to fund feasibility studies. ### Remaining gaps and cross-government coordination challenges - No comprehensive database that consolidates key information on public investments to aid prioritization, selection, pipeline inclusion, budgeting, and monitoring. - No pipeline of appraised and prioritized projects and a lack of clear criteria to inform prioritization and selection decisions. - Inclusion of many projects in the PIP without sufficient funding, leading to underfunding and cost overruns on the capital budget. - Lack of transparency in some areas, for example non-publication of appraisal reports, including for PPPs. - Weak coordination and management of variations and contract amendments across procurement and budget authorities. ### Box 1 — Progress, Challenges and MTNDP (2024-2030) PIP Reform Priorities Progress and reforms since the 2020 PIMA - Approval of the National Public Investment Management Policy. - Publication of the Pre-investment Guidance Manual, which also covers SOEs and local councils. - Establishment of the Project Preparation Facility to fund feasibility studies. - Inclusion of capital projects for local councils in the PIP and annual budget. - Promulgation of the Public Procurement Regulations (2020). - Establishment and operationalization of NAMEA. Challenges - No clear pipeline of projects. - Cost overruns on the capital budget. - No central database for all public investment projects. - No clear criteria to guide the prioritization and deprioritization of projects. - Weak coordination and management of variations and contract amendments. - Lack of transparency (e.g., non-publication of appraisal reports, including for PPPs). MTNDP PIP Reform Priorities (2024-2030) - Rationalization of projects in the PIP. - Implementation of the PIP in line with the National Public Investment Management Policy. - Development of bankable projects in line with the ‘Big Five Game Changer’ agenda. - Development of a Public Investment Management Information System. _Source: MTNDP (2024-2030) and Mission team._ ### Review of progress on the nine 2020 PIMA recommendations (summary statuses) - Recommendation 1 (Road Sector Master Plan; review sectoral strategies): Some progress. New MTNDP launched January 30, 2024; Roads Master Plan still not finalized. - Recommendation 2 (Project appraisal templates/guidelines; publish appraisals including PPPs): Some progress. Pre-Investment Guidance Manual Section 6 and Annex 5 provide appraisal guidance and template; appraisals not always done for domestically financed projects; PPP appraisals not covered by the manual; appraisal reports not systematically published. - Recommendation 3 (Publish annex of annual budget with key project/budget information; clarify deprioritization criteria): Some progress. 2024 Budget extended publication to include local councils; published info includes name, location, status, implementing agency, source/type of funding, and medium-term baseline estimates; missing published items include total project costs, cumulative spending including paid and unpaid invoices, and multi-year commitments; no criteria for deprioritization. - Recommendation 4 (Publish maintenance policy; separate budget line for routine maintenance; include Road Maintenance Fund Administration in budget docs): Some progress. Maintenance budgeting is centralized by sector MDA; maintenance policies not published; Road Maintenance Fund Administration budget now included in published budget documents; other MDAs’ maintenance line items generally not separately published. - Recommendation 5 (Publish project selection criteria; develop prioritization methodologies; maintain prioritized pipeline of appraised projects including PPPs): Some progress. PIGM Section 8 outlines prioritization process and implementation readiness check but does not set specific prioritization weights/criteria; Budget Call Circular lists conditions (i) clear objectives; (ii) duration; (iii) reasonable estimates of cost for each activity; and (iv) clear inputs, outputs, and indicators, but does not specify prioritization ranking; absence of clear criteria has contributed to under-financing and cost overruns. - Recommendation 6 (Improve procurement system and coordination; capacitate awareness of Independent Procurement Review Panel): Some progress. Public Procurement Regulations (2020) provide for joint review and approval of procurement plans by MoF and National Public Procurement Agency; compliance with procurement plan submission by MDAs is about 60 percent; National Public Procurement Agency should maintain a contracts database; e-procurement system is under development; Independent Procurement Review Panel is fully operational and issuing judgments. - Recommendation 7 (Implement FAD recommendations on quarterly allotment and commitment control): Little progress. Weak commitment controls persist; overspending and cost overruns continue. - Recommendation 8 (Operationalize National Monitoring and Evaluation Department; assess Audit Service resource needs): Some progress. NAMEA established and operational; finalizing national monitoring and evaluation framework; NAMEA publishes some information via NANEMIS dashboard though reports are not available on NAMEA’s website; Auditor General has a public investment audit unit for ex-post audits; greater NAMEA-Auditor General collaboration recommended. - Recommendation 9 (Require reappraisal/reselection when cost increases exceed threshold or projects are prolonged): Little progress. Procurement Regulations (2020) Section 149 sets a variation threshold of 25 percent and requires procedures treating such modifications as new projects, but this is not consistently adhered to in practice; some projects exceeding 25 percent have not been reappraised; long-standing projects generally not reappraised; many large variations tendered as single sourcing with some identified irregularities by the Auditor General. ### Box 2 — Causes and Impact of Capital Budget Cost Overruns (key findings) - Total cost overruns on the domestic capital budget amounted to Le 3.1 billion (an aggregate loss of 1.5 percent of GDP) from 2021 to 2023. - Road projects accounted for between 52 and 78 percent of the total capital budget overrun from 2021 to 2023. Four main causes of cost overruns: 1. Failure to prioritize projects — lack of clear prioritization criteria and inadequate information on ongoing projects for deprioritization. 2. An unrealistic capital budget — envelope set residually after recurrent budget; multi-year commitments are not collected or tracked by MoF, leading to under-budgeting for non-discretionary multi-year contractual commitments. 3. Weak commitment controls — expenditure authorization not guided by approved budget; Section 56 of the Public Financial Management Act (2016) prohibits commitments in excess of an allotment or an appropriation; evidence that expenditure authorized for selected MDAs far exceeds approved original budgets by year-end; anecdotal evidence of commitments and payments in excess of appropriations. 4. Poor oversight of ongoing projects — in-year variations and excess expenditure authorizations are not informed by detailed progress reports or re-appraisals when modifications exceed the 25 percent threshold; some projects receive allocations for many years, sometimes more than double initial costed budgets, without proper account of performance and outputs. ### Key statistics from Table 4 — Major Capital Expenditure Deviations by MDA (2021-2023) - Aggregate totals by highlighted MDAs (selected MDAs total row) - 2021: Original Budget (Le) 472.9; Actuals (Le) 1,102.0; Deviation (Le) 629.1; Percentage contribution to total deviation 122.7 - 2022: Original Budget (Le) 937.6; Actuals (Le) 2,538.4; Deviation (Le) 1,600.8; Percentage contribution to total deviation 94.6 - 2023: Original Budget (Le) 153.6; Revised Budget (Le) 942.1; Deviation (Le) 788.5; Percentage contribution to total deviation 91.5 - Total Domestic Capital Budget (aggregate) - 2021: Original Budget 1,179.1; Actuals 1,691.9; Deviation 512.8; Percentage contribution 100.0 - 2022: Original Budget 1,190.3; Actuals 2,882.6; Deviation 1,692.4; Percentage contribution 100.0 - 2023: Original Budget 1,204.0; Actuals 2,065.6; Deviation 861.6; Percentage contribution 100.0 - Selected MDA annual highlights (examples from table) - SLRA (Sierra Leone Roads Authority) - 2021: Original Budget (Le) 270.0; Actuals (Le) 539.0; Deviation (Le) 269.0; Percentage contribution 52.5 - 2022: Original Budget (Le) 339.8; Actuals (Le) 1,342.8; Deviation (Le) 1,002.9; Percentage contribution 59.3 - 2023: Original Budget (Le) 79.0; Revised Budget (Le) 751.2; Deviation (Le) 672.2; Percentage contribution 78.0 - MoAFS (Ministry of Agriculture and Food Security) - 2021: Original Budget (Le) 111.8; Actuals (Le) 149.7; Deviation (Le) 37.9; Percentage contribution 7.4 - 2022: Original Budget (Le) 97.7; Actuals (Le) 253.6; Deviation (Le) 155.9; Percentage contribution 9.2 - MoHS (Ministry of Health and Sanitation) - 2021: Original Budget (Le) 30.6; Actuals (Le) 114.9; Deviation (Le) 84.3; Percentage contribution 16.4 - 2022: Original Budget (Le) 30.9; Actuals (Le) 111.2; Deviation (Le) 80.3; Percentage contribution 4.7 - MoE (Ministry of Energy) - 2021: Original Budget (Le) 45.5; Actuals (Le) 124.4; Deviation (Le) 78.9; Percentage contribution 15.4 - 2022: Original Budget (Le) 37.0; Actuals (Le) 160.4; Deviation (Le) 123.4; Percentage contribution 7.3 - 2023: Original Budget (Le) 74.6; Actuals (Le) 190.9; Deviation (Le) 116.3; Percentage contribution 13.5 ### Policy implications and priorities emerging from the review - Develop and operationalize a centralized Public Investment Management Information System to consolidate project data across entities. - Rationalize the PIP to remove non-viable or no-longer-required projects given current funding constraints. - Publish appraisal reports for approved projects, including PPPs, to strengthen accountability and transparency. - Develop and publish clear project prioritization and deprioritization criteria and apply these in PIP selection and budgeting. - Strengthen MoPED and MDAs’ capacity to appraise, challenge, and reappraise projects, particularly complex projects. - Ensure publication of critical project budget information (total project costs, cumulative spending including paid and unpaid invoices, and multi-year commitments) in annual budget annexes. - Create separate budget line items in detailed estimates for maintenance across all relevant MDAs and publish maintenance policies. - Strengthen coordination and enforcement mechanisms between MoF and National Public Procurement Agency; develop and maintain a contracts database and ensure effective design and rollout of e-procurement. - Implement FAD recommendations on quarterly allotment and commitment controls to reduce overspending and unauthorized commitments. - Ensure consistent application of the 25 percent variation threshold in Procurement Regulations (2020) and require reappraisal/reselection where thresholds or prolonged project durations warrant it. - Enhance NAM EA–Auditor General collaboration to improve performance oversight and ex-post audits of major capital projects. *Source: IMF Technical Assistance Report (Mission team).* ### 5. The most pressing priority is to review and rationalize all public investments, with an ### 5. The most pressing priority is to review and rationalize all public investments, with an ### Public investment rationalization: findings and urgent actions - Capital budget has experienced significant cost overruns, primarily in the roads sector. - Road projects have expanded well beyond their original scope. - The MTNDP might incorporate new priorities and projects that need to be included in the PIP. - MoPED has indicated that a rationalization of the PIP has been initiated several times in the past, leading to some projects being removed from the PIP. - A stringent rationalization of the PIP is urgently needed, with clear criteria for project prioritization, deprioritization, and selection. - MoPED should develop Project Adjustment Guidelines and conduct a thorough review of the project portfolio for both central and local governments within the current year. ### Project appraisal and project bank requirements - The creation of a bank of appraised projects is crucial. - The 2020 PIMA recommended that MoPED maintain a prioritized pipeline of appraised projects, including PPPs. - In its current form, the PIP does not represent a pipeline of appraised projects ready for selection. - The PIP includes long-standing projects with no clear account of performance or duration; some ongoing projects have been modified to the extent that a reappraisal is required but has never been undertaken. - Rationalization should remove all projects in the PIP for which there is no record of appraisal; if deemed important, such projects should be reappraised to inform inclusion in the PIP. - The Budget Call Circular should set appraisal as one of the conditions for inclusion in the PIP and budget. ### Central database and information management (PIMIS) - A rationalized PIP should be used to develop a central database to manage public investments (Public Investment Management Information System—PIMIS). - The central database would include, for all ongoing projects and the pipeline: - project duration and status - total estimated costs - allocated or required budget - cumulative spending - multiyear commitments - Current information is fragmented across entities, creating risks of: - incomplete information (i.e., not covering all projects, e.g., for SOEs and PPPs) - inconsistent information (i.e., not the same across institutions) - inconclusive information (i.e., contains inadequate data) - Fragmentation undermines informed decision-making, budget credibility, and fiscal policy. - Example data locations (existing pockets): - project duration and status information in MoPED - capital budget allocations, spending and multiyear commitments in MoF - details on public investment contracts awarded and variations in the National Public Procurement Agency - implementation progress in NAMEA ### Climate exposure and observed changes (Climate PIMA: A. Climate Change and Public Infrastructure) - Sierra Leone climate characteristics: - two distinct seasons: rainy season May to November; dry season December to May. - Average temperatures range from 28°C in the coastal areas to 24°C inland. - Average temperatures have increased by 1.32°C relative to the 1950-1980 period. - Average annual rainfall varies spatially from 1800 mm in the northwest to 3400 mm in coastal areas per year. - Climate model projections: - temperatures projected to increase from 27.5°C to 27.7°C in 2050 and from 27.6°C to 28.1°C by 2070 across the 1-2.6 and 2-4.5 SSP emission scenarios. - In SSP3-7.0, average temperatures could increase to 28.9°C by 2070. - Average rainfall is expected to increase, with heavy precipitation rates becoming more volatile and unpredictable. - Note: Significant uncertainty surrounds precipitation projections. ### Sea-level rise, disasters, and costs - Sea level rise projections relative to 2000 level: - from 0.5 m in the Paris scenario to 0.78 m in an extreme scenario by 2100. - Climate-related natural disasters include floods, landslides, storms, and wildfires. - Sierra Leone has one of the highest percentages of informal population residing in hazard-prone areas in Sub-Saharan Africa. - Example event: 2017 landslide in the western area killed more than 1,000 people. - Health impacts: increasing temperatures and heavy rains increase prevalence of malaria, dengue fever, cholera, and other communicable diseases. - Cost estimates: - average annual cost of disaster response estimated at USD20 million (some 0.5 percent of non-iron ore GDP). - cost of very severe events could exceed USD69 million. ### Vulnerabilities in development, livelihoods, and infrastructure - Weak social development indicators, high dependency on rain-fed agriculture, and poor infrastructure compromise capacity to cope with climate shocks. - Poverty and food insecurity levels are high and increasing, particularly among the rural population. - Agriculture: - represents some 60 percent of employment and 50 percent of total value added. - relies mostly on small-scale farmers with poor access to irrigation and transportation systems. - Infrastructure vulnerability: - Sierra Leone’s vulnerability level of infrastructure is among the 30 percent highest in sub-Saharan Africa. - Energy and water systems: - Hydropower represents a large share of energy generation, but generation capacity is insufficient to meet demand, particularly during the dry season. - The country relies on Independent Power Producers for additional power generation at a significant fiscal cost. - Water and sanitation systems are vulnerable to storm surges, sea level rise, and flooding. - The Guma Valley Dam, main source of clean water in Freetown, is threatened by unpredictable rainfall patterns and loss of forest cover in catchment areas. - Transportation: - Roads often flood during the rainy season. - Coastal communities such as Kroobay and Moa Wharf lack flood escape routes. ### Climate change objectives, commitments, and institutions (Climate PIMA: B. Climate Change Objectives and Strategy) - Recent policy developments: - National Climate Change Policy and an initial National Adaptation Plan (iNAP). - Updated NDC. - National Disaster Management Agency established. - Medium-Term National Development Plan (2024-2030) includes advancing climate resilience and environmental action as one of three enablers of the “Big 5 Game Changers”. - Capacity constraints: - Operationalizing strategies is challenged by weak capacity and lack of resources. - Building capacity and strengthening cooperation between MDAs, stakeholders, and development partners is key. - NDC mitigation commitments (2021 updated NDC): - reduce CO2 emissions to 5 percent by 2025, 10 percent by 2030, and 25 percent by 2050. - Identified priority sectors: renewable energy, waste management, agriculture, forestry, and other land use. - NDC implementation plan is at an advanced stage, designed with support of local communities through regional NDC committees. - Infrastructure role: - Development and improvement of infrastructure is central to climate mitigation and adaptation (water and sanitation, health facilities, energy systems, transportation). - iNAP and NDC interventions include energy efficiency, sustainable energy generation, adaptive infrastructure for agricultural productivity, and improved rural transportation systems. - Box 3 highlights infrastructure actions (summary): - agriculture: irrigation and water harvesting systems, construction of feeder roads, seed banks - mitigation/pollution reduction: off-grid solar systems, waste management, water/sanitation monitoring in informal settlements - sustainable transportation infrastructure for economic diversification and reduced emissions - investments in research infrastructure: weather stations, hydrological and water use monitoring - An NDC implementation and financing plan, designed with regional stakeholders, is under development. ### Financing, fiscal constraints, and institutional arrangements - Sierra Leone assessed as being at high overall risk of public debt distress. - Meeting climate objectives requires rationalizing priority spending and identifying sources of sustainable climate financing. - Need for a strong policy framework to catalyze private investment and development partner support. - Institutional step: Ministry of Finance established a Climate Finance Unit in 2023 to strengthen coordination and mobilization of climate finance. ### Table 5 — Strategies, plans, and institutional coverage (summary) - MTNDP (2024-2030): advances climate resilience and environmental action; priority investment in climate-smart agriculture and renewable energy. - iNAP (2021): integrates adaptation into agriculture, water, energy, coastal management, environment, and disaster management; identifies investment in hard and soft infrastructure; aims to halve vulnerabilities by 2030. - NDC Update (2021): commits to CO2 reductions of 5 percent by 2025, 10 percent by 2030, and 25 percent by 2050; targets interventions and REDD+. - National Disaster Preparedness and Response Plans: provide disaster preparedness strategies; a Disaster Risk Financing Strategy expected in H1-2024. - Institutions and responsibilities: - Climate Change Directorate, Environmental Protection Agency: National Climate Change Secretariat and focal point. - Ministry of Environment and Climate Change: regulates agencies implementing adaptation and mitigation plans; leading inter-ministerial committee on climate change; planning a functional and managerial review. - Presidential Initiative on Climate Change, Renewable Energy, and Food Security (established 2023): coordinates and elevates climate-related issues and international representation. - Sector ministries and local councils: critical role in development and implementation of climate-relevant infrastructure projects and rules. *IMF Technical Assistance Report | 20–27* ### 16. The C-PIMA assesses five key public investment management practices from the climate ### 16. The C-PIMA assesses five key public investment management practices from the climate change perspective ### Climate Public Investment Management Assessment Framework — scope - The C-PIMA assesses five specific practices (extension of the existing PIMA framework): - C1. Climate-aware planning: Is public investment planned from a climate change perspective? - C2. Coordination across the public sector: Is there effective coordination of decision-making on climate change-related public investment across the public sector? - C3. Project appraisal and selection: Do project appraisal and selection include climate-related analysis and criteria? - C4. Budgeting and Portfolio management: Is climate-related investment spending clearly identified in the budget and subject to active management and oversight? - C5. Risk management: Are fiscal risks relating to climate change and infrastructure incorporated in budgets and fiscal risk analysis and managed according to a plan? ### Detailed Assessment — C1. Climate-aware Planning - Assessment summary: - Strength: Partly Met - Reform Priority: Medium - Key findings: - National and sectoral planning processes need to incorporate mitigation and adaptation factors to promote climate-sensitive public investment and align with government climate objectives and international commitments. - The 2020 PIMA identified a significant gap: sectoral and national development plans exhibit inconsistencies. - MoPED introduced a standardized planning template for Local Councils since 2020, but irregularities persist between sectoral and national development plans, particularly in the roads sector. - Sierra Leone’s updated NDC and iNAP are the overarching strategic policy documents; they set long-term goals including: - reducing CO2 emission levels by 2050, - enhancing adaptive capacity, - halving vulnerability by 2030. - Mitigation and adaptation sectors listed: energy, agriculture, food security, forestry and land use, blue economy, water resources, fisheries, coastal zone management, tourism, disaster management, gender and social inclusion, infrastructure, waste, and industry. - MTNDP (2024-2030) sets mitigation and adaptation objectives as priorities but key investment projects in climate planning documents are not clearly identifiable. - Sectoral strategic plans are not aligned with the MTNDP and climate strategies, e.g.: - National Sustainable Agriculture Development Plan (2010-2030) is inconsistent with climate-smart agriculture in the NDC and iNAP. - National Energy Policy and Strategic Plan (2009) is outdated and does not outline key climate-related energy projects. - Subnational examples and targets: - Some subnational plans incorporate climate considerations, including: - Transform Freetown Strategy (2019-2022) - Freetown’s Climate Action Strategy (2022-2030) - Freetown committed to reduce greenhouse gas emissions by at least 44 percent by 2050 compared to the base year (2018) level, with an interim target of 13 percent below base year levels by 2030. - Strategy focuses on urban energy, mobility, sanitation (mitigation); ecosystems and land restoration, disaster risk management, water and urban planning (adaptation). - Institutional and regulatory issues: - Urban planning/building regulations: - Town and Country Planning Act (1946) is outdated and does not integrate climate change actions. - Local Government Act (2022) intended devolution of land use plans to local councils, but local councils lack technical capacity to prepare and implement land use plans. - Authority to issue building permits sits with the Ministry of Lands, Housing, and Country Planning; decentralization in 2004 was reversed by legislation in 2022, creating unresolved devolution issues. - The Directorate of Country Planning application form includes a checklist for flood risk and biodiversity/geological conservation but does not explicitly assess likely climate change impacts. - Programs and guidance: - Resilient Urban Sierra Leone project (World Bank support) focuses on improving urban management capacity and mainstreaming disaster and climate considerations into territorial planning and infrastructure design; project completion should upgrade climate-sensitive urban planning framework. - Environmental Protection Agency produced Guidelines for Mainstreaming Climate Change Adaptation and Mitigation into Development Planning aligned with National Climate Change Policy, third national communication, iNAP, and updated NDC; guidelines focus on preparing strategies and plans but do not provide project-level preparation and costing guidance. - Overall conclusion for C1: - Commendable strategies exist (NDC, iNAP, MTNDP) but implementation is weakened by gaps and misalignment across national and sectoral plans, outdated sector plans (e.g., energy), and weaknesses in spatial and urban planning and building codes. Review of Town and Country Planning Act (1946) and completion of Resilient Urban Sierra Leone project are expected to improve climate-sensitive planning. ### Detailed Assessment — C2. Coordination Between Entities - Assessment summary: - Strength: Partly Met - Reform Priority: High - Key findings: - A whole-of-government approach is necessary to coordinate climate actions across central government and the wider public sector, including subnational governments, SOEs, extra-budgetary units, and PPPs. - Absence of a comprehensive pipeline of projects (central, local, PPPs, SOEs) reduces coordination effectiveness. Some progress: PIP in the annual budget now includes capital projects for central government and local councils. - Regulatory and institutional arrangements: - Environmental Protection Agency provides regulatory oversight on climate issues, but public investment planning decisions from a climate-change perspective are largely taken in isolation. - Ministry of Environment instituted an inter-ministerial committee on climate change for political-level coordination. - Environmental Protection Agency Act (2022) mandates the Climate Change Secretariat to serve as the focal point for all climate actions, but the Act does not state coordination of public investments from a climate perspective, implying need for legal clarity or climate-focused laws. - The Environmental Protection Agency coordinated preparation of the Plan for Implementing and Financing the Nationally Determined Contributions (Box 5), assigning actions (including projects) across central government to achieve NDC and iNAP targets. - Presidential Initiative on Climate Change, Renewable Energy, and Food Security established in 2023 to provide coherence for MTNDP (2024-2030) but lacks a clear mandate and is understaffed. - No platform currently brings all parties together to coordinate public investment from a climate perspective. - Subnational coordination: - Regional climate change committees for subnational coordination were established in 2020, but no evidence of formal discussions with central government or coordinated public investment with these committees. - Local council capital projects appear in the PIP but are not identifiable from a climate change perspective; some councils (e.g., Freetown) independently mainstream climate considerations aligned with NDC and iNAP. - State-owned enterprises (SOEs): - New SOE ownership policy requires SOEs to integrate climate change considerations in operations and investments. - SOEs operate in energy, water, agriculture, and roads—sectors exposed to climate risks and important for climate objectives. - SOE Ownership and Governance Commission Bill, implementing the new SOE ownership and governance policy, was submitted to Parliament in early 2024. - SOE policy provisions: - Compliance with relevant environmental Acts and policies. - Maintenance of environmentally sustainable operations. - Requirement for SOEs to identify, assess, and adopt measures to minimize exposure to climate risks and report on climate-related activities and investments. - Climate-resilient investments to be included in annual aggregate SOE reports. - Institutional capacity and mandate issues: - Public investment coordination is generally weak and similarly weak for climate-related investments. - The Climate Change Secretariat’s mandate under the Environmental Protection Agency Act does not explicitly cover coordinating climate-related public investments. - MoPED has a central role in public investment management but lacks technical capacity in climate-related analysis and lacks a mandate for climate coordination. - Need to clarify mandates and coordinating authorities is a high priority; capacity building in central agencies such as MoPED is recommended to improve coherence. - Box 5 / NDC Implementation Plan (high-level points): - Draft Plan for Implementing and Financing the NDC (2023-2030) is in final stages; aims to structure NDC implementation, align processes with development outcomes, prioritize policies, assess capacities, and provide costing and financing strategies. - The plan selects eight mitigation and seven adaptation activities to support through 2030 based on trialability, measurability, scalability, local appropriateness, benefit distribution potential, and alignment with national development goals. - The plan will form the basis for disaggregating national targets to sectors and harmonizing sectoral roadmaps. ### Detailed Assessment — C3. Project Appraisal and Selection - Assessment summary: - Strength: Not Met - Reform Priority: High - Key finding: - The text indicates project appraisal and selection do not yet include climate-related analysis and criteria, implying the need for substantial reforms to ensure climate considerations are integrated into prioritization to maximize climate impacts of public investments with available resources. *Source: IMF Technical Assistance Report — excerpt from the C-PIMA assessment section* ### 29. Rigorous project appraisal should include the impact of projects in climate change ### 29. Rigorous project appraisal should include the impact of projects in climate change ### Gaps identified in project appraisal and selection - 2020 PIMA found gaps: lack of guidelines and criteria for appraising projects; partial and, in some cases, non-appraisal of projects (especially in the roads sector); absence of a clear pipeline for appraised projects; non-publication of appraisals. - Since 2020, authorities developed the Pre-Investment Guidance Manual (PIGM) to guide MDAs, local councils, and SOEs on preparation of feasibility studies and project appraisals, but it is not yet fully institutionalized. - Shortcomings remain that limit the extent and usefulness of climate-related risk analysis in appraisal and selection. ### Project appraisal framework (PIGM) — limitations on climate analysis - The PIGM does not require climate-related analysis on major infrastructure projects to be conducted in line with a standard methodology. - A standard climate-related methodology would require project proposals to include: - detailed assessment of impact of projects on greenhouse gas emissions; and - assessment of exposure of projects to damage from climate-related disasters before inclusion in public investment plans/pipelines or budget selection. - Project Appraisal Report and Review Template (PIGM annex 5) provides guidance on economic, financial, and risk analysis (including mitigation measures), but sustainability analysis focuses only on environmental impact; no specific climate-related analysis other than references to some climate elements (e.g., air and water quality) in PIGM Annex 9. - Environmental, Social, and Health Impact Assessment guidelines require description of a project’s contribution to climate emission abatement relating to prevention of air, water, soil, and groundwater pollution, but do not include a dedicated climate-analysis section. ### PPP framework and long-term contract risk allocation - PPP contracts can commit the government for terms up to 30 years; climate risks (adaptation exposures and mitigation risks) can arise during contract terms and should be considered in contractual arrangements and risk sharing. - Section 4(1)(r) of the PPP Act (2014) provides for sharing of risks between contracting authority and private partner and requires the PPP project proposal to stipulate key allocations of risk. - The PPP Act does not specify the nature of risks to be considered; its definition of risk transfer is: “the allocation of the probability of losses or other harmful consequences to the project.” ### Project selection process and climate criteria - Two main templates for project selection: the selection criteria matrix (PIGM annex 3) for pre-screening, and the project readiness checklist (PIGM Annex 7) for assessing implementation readiness. - MoPED undertakes analysis but final selection decisions rest with the Ministerial Investment Committee (which includes the MoF). - Section 8 of the PIGM outlines prioritization steps; climate change is not included among selection criteria. - Prioritization sequence in PIGM: 1. Determine existing investment commitments. 2. Establish the fiscal space for new projects. 3. Define the high-level priority projects. 4. Prioritize new projects. 5. Subject prioritized projects to available fiscal space. - Selection criteria matrix includes a sustainability analysis component requiring identification of significant potential climate threats that need further investigation. For a positive assessment, a project must get a ‘pass’ across all criteria, including the climate-related sustainability item. - Readiness checklist assesses whether environmental and social impacts and mitigation measures are identified in the Project Appraisal Report and Review Template, but it does not specify technical or analytical climate-change elements and focuses on resilience (not mitigation). - Apart from the pre-screening checklist provision, there are no explicit climate-change references used as selection criteria. ### Recommended enhancements to appraisal, PPP, and selection - Integrate climate-related analysis by aligning the Project Analysis and Review Reporting Template with a standard methodology (see Box 7 for key technical elements). - Publish and independently review appraisals — a recommendation from 2020 PIMA that is not fully implemented. - Use the ongoing PPP framework review to: - explicitly incorporate climate risk allocation for long-term contracts; and - ensure contract managers in MDAs are mandated to address climate-related challenges, building on current environmental standards in the Public-Private Partnership Act (2014). - Include climate change as a criterion within multicriteria analysis as guided by the PIGM to develop a robust project pipeline aligned with public financial management reform and international best practices. - Annex 4 (not reproduced here) provides an example from Rwanda after updating project selection criteria to incorporate climate change. ### Key technical elements for climate-related analysis (illustrative, Box 7) - Climate change adaptation elements: - Hazard analysis (cyclones, tornadoes, high winds, extreme temperatures). - Risk mapping and screening. - Loss and damage estimation. - Vulnerability analysis. - Use of risk scenarios. - Dealing with climate uncertainty in project design (climate-robust design features; staging implementation; ‘no regrets’ elements; real options). - Climate change mitigation elements: - Estimation of business-as-usual greenhouse gas emissions and net greenhouse gas impacts of alternative technologies. - Estimation of marginal abatement cost curves. - Use of parameters such as the social cost of carbon, shadow price of carbon, appropriate long-term discount rates. ### Budgeting, portfolio management, and climate tagging (C4) - Effective management of government climate-related investment projects across the project cycle is critical for mitigation and adaptation targets; failure to account for climate geophysical risks can underestimate future asset maintenance costs and erode public assets. - 2020 PIMA identified gaps: capital expenditures not fully capturing multiannual commitments; lack of alignment with international classifications; fragmented and non-standardized asset management; no systematic inclusion of maintenance in budgets. - Progress: introduction of PIGM and budget extension to cover local council projects. - Remaining challenges: no unified public investment database; unclear project prioritization criteria; persistent underfunding and cost overruns. - Climate-related public investment spending is not clearly identified in the budget and related documents, though piloting of Climate Budget Tagging was planned in the 2024 Budget Call Circular. - Six MDAs were identified for the piloting: the Ministry of Environment and Climate Change, the Ministry of Agriculture and Food Security; the Ministry of Tourism and Culture Affairs; the Environmental Protection Agency; the Sierra Leone Meteorological Agency; and the National Protected Area Authority. - Guidelines with templates were to be issued, but this has not happened. - No clear definition of what constitutes climate-related expenditures and projects; 2024 Budget contains allocations to activities related to climate (environmental health and sanitation; environmental impact assessment for civil works under the Ministry of Education; forest management and sustainability). - No standardized methodology or tagging framework exists in Sierra Leone to define and tag climate-change-related expenditures. - Section 34 of the Public Financial Management Act (2016) mandates Ministry of Finance to include annexes to budget documents, providing an opportunity to include statements on climate-sensitive expenditure, including capital expenditure. - Box 8 outlines four key steps for designing a climate/green tagging system: define climate/green scope; decide which budget measures to tag; develop a linked classification system with guidance; identify information needs and weighting system. Examples cited include binary and weighted approaches; France’s 2021 Green Budget is noted for comprehensiveness. ### Asset management and institutional objectives - National Asset and Government Property Commission has mandate for management and oversight of public assets but faces challenges: many commission functions are not undertaken; most MDAs have not allocated specific budget lines for asset maintenance. - Ministry of Public Works and Ministry of Transport are exceptions with allocations for maintenance of government buildings and vehicles, respectively. - Some ministries have asset registers, but no comprehensive government-wide asset register; sector-wide maintenance standards and funding are insufficient, increasing climate vulnerability. - Development of a public asset policy and asset register is an important climate objective; draft National Disaster Risk Financing Strategy highlights development of the public asset policy and asset register as a key action to be achieved by 2027, with support of the European Union. *IMF Technical Assistance Report* ### 39. There are no ex-post reviews or audits conducted on the climate mitigation and adaptation ### tarea2024062-print-pdf - 39. There are no ex-post reviews or audits conducted on the climate mitigation and adaptation ### Ex-post reviews and audit capacity - Finding: There are no ex-post reviews of projects conducted on climate mitigation and adaptation outcomes. - Finding: The Auditor General continues to carry out regular compliance and performance audits in compliance with the Constitution, the Audit Service Act (2014), and the Public Financial Management Act (2016). - Constraint: Absence of identified climate-relevant projects in the budget limits the performance audits the Auditor General can carry out annually or periodically. - Process weakness: Audit reports are submitted to the legislature upon completion but are often not fully processed in parliament, undermining follow-up and lesson-learning and weakening incentives for MDAs to comply with laws and regulations. - Capacity gap: Significant lags in legislative review of audit reports (reports submitted for 2015 and 2016 only under review in 2024). - Staffing shortfall: The audit service is understaffed and lacks sector specialists such as engineers and environmental specialists. ### Risk management (C5) — summary assessment and priorities - Strength: Partly Met. - Reform Priority: Medium. - Recommendation implied: Integrate identification and management of fiscal risks from climate change into the government’s risk management function akin to other fiscal risks. ### Fiscal risk analysis and SOE reporting progress - Progress: Fiscal Risks Management Division published the first SOE Financial Analysis report (2014-18), followed by the 2015-2020 Financial Performance of SOEs report, and is drafting the 2016-2021 report. - Finding: These reports highlight potential fiscal risks from SOEs and propose remedial measures. - Gap: Analysis and management of other fiscal risks related to natural disasters and climate change remain nascent, with considerable scope to deepen analysis and improve management. ### Disaster risk management framework and vulnerability analysis - Institutional change: National Disaster Management Agency established in 2020; National Disaster Management Agency Act (2020) designates coordination and implementation responsibilities. - Plans/documents: National Disaster Preparedness and Response Plan (2021) includes climate-related risks and individual preparedness plans for larger cities, but does not contain an analysis of vulnerability of key infrastructure to climate change-related events or natural disasters. - Existing analyses: Several analyses undertaken over past four years, including the Coastal Vulnerability Assessment and the World Bank’s multicity hazard and risk assessment. - Quantified estimates from World Bank analysis: - Damages to building and infrastructure assets from floods, landslides, windstorms, and fires: around USD 5.7 to 10 million per year. - Assets at risk (including private buildings) from coastal erosion between now and 2050: around USD131 million, with an upper estimate of USD261 million. - Coastal Vulnerability Assessment: projects coastal erosion in Freetown by 2050 and anticipates loss of assets within areas of high coastal erosion hazard. - Coverage gap: Existing documents do not provide a comprehensive analysis of infrastructure vulnerability nationwide; need to extend beyond coastal zones to include key infrastructure such as roads. ### Planned actions and data systems to support vulnerability assessment - Draft National Disaster Risk Financing Strategy actions (target dates as specified in source): - (a) undertake a multi-hazard disaster risk assessment across all critical public infrastructure (by 2025); - (b) develop the public asset policy and asset register (by 2027); - (c) develop a Climate Resilient Road Strategy (by 2027). - Data opportunity: NAMEMIS database contains Geographic Information System data on projects and could be leveraged for comprehensive evaluation of disaster-related risks to infrastructure. - Support need: Assistance in developing the register of public assets at the Ministry of Works would supplement efforts for improved planning and risk mitigation. ### Contingency financing and ex-ante arrangements - Legal instrument: Contingencies Fund established under the Public Financial Management Act (2016); expenditures under this fund should be for urgent and unforeseen events and should not exceed two percent of non-extractive industries revenue. - Observed usage: Actual expenditures have varied considerably; FY20 actuals reflect extraordinary spending related to COVID-19. - Capacity limitation: Fund typically used to cover high-frequency, low-intensity events and is limited in addressing more severe climate-related disasters. - Historical disaster costs: Intended appropriation often insufficient to cover costs of most historical disasters, with an average cost of around USD20 million each year (or around Le40 billion). - Road Maintenance Fund: Used for urgent road repairs after disasters but Section 17 of the Road Maintenance Fund Administration Act (2010) does not delineate a role as an ex-ante disaster contingency facility; legally constrained to road maintenance, insurance costs, and Administration objectives. ### National Disaster Management Fund and ex-ante financing strategy - Statutory provision: Part VII of the National Disaster Management Agency Act (2020) establishes a framework for a National Disaster Management Fund, yet to be operationalized. - Fund design: To be financed by national budget allocations, grants, donations, and other sources as approved by Parliament; subject to investment regulations; managed by the National Disaster Management Agency with audited annual financial statements by the Auditor-General. - Status: Fund not yet operationalized; systems and processes for deployment pending. - Strategic development: Government presented a draft National Disaster Risk Financing Strategy to Cabinet, building on World Bank assistance in 2022; strategy seeks to operationalize the Disaster Management Fund and assess contingent credit lines and sovereign risk transfer instruments. ### Fiscal Risk Statement coverage and recommended enhancements - Current coverage: Sierra Leone’s Fiscal Risk Statement contains a short subsection (6.3.4) acknowledging climate-related fiscal risks and notes risks of climate-related natural disasters on SOEs, but lacks explicit incorporation of climate-related risks to public infrastructure assets. - Limitation: Mitigating measures section presents a general framework for macroeconomic risks, SOE fiscal risks, and policy implementation but does not specifically extend to climate-related risks. - Recommendation: Expand the Fiscal Risk Statement to include quantitative analysis of climate-related fiscal risks and quantification of long-term fiscal pathways under different climate change scenarios. - Suggested extensions: - Quantify risks for discrete entities such as SOEs and PPPs (e.g., energy and water utilities) vulnerable to climate-induced operational and financial disruptions. - As asset management registries improve and vulnerability analysis is undertaken (see Box 9), project costs associated with increased frequency and intensity of extreme weather events, including impacts on maintenance, repair, and replacement cycles. ### International examples and analytic approaches (lessons) - United Kingdom OBR approach: Adds an “unmitigated global warming scenario” to a long-term fiscal baseline, assuming adaptation costs of 0.3 percent of GDP a year and that natural disasters are twice as costly and twice as frequent. - Rwanda example: Fiscal Risk Statement (with IMF TA support) assessed fiscal impact of climate change under several scenarios; under the worst scenario, the primary deficit reaches 3.9 percent of GDP by 2073 (compared to 3.1 percent under the baseline) and the debt-to-GDP ratio surpasses 65 percent by 2039 and exceeds 100 percent by the end of the century. - Recommendation implied: Use progressive quantification methods (qualitative discussion → past disaster cost quantification → scenario-based long-term fiscal pathways) to inform fiscal buffers and policy choices. ### Legal and regulatory framework for climate-related public investment - Principal law: Public Financial Management Act (2016) and attendant regulations of 2018 provide the legal framework for allocation and management of public funds, including requirement (section 35) for the minister to annually prepare and submit a Public Investment Program document as part of the budget estimates. - Gap: The Public Financial Management Act (2016) and 2018 regulations do not expressly provide guidance on climate-related expenditure. - Relevant acts in place: Environment Protection Agency Act (2022); National Disaster Management Agency Act (2020); Sierra Leone Meteorological Agency (2017); National Protected Area Authority Act (2022); Public Private Partnership Act (2014); Public Procurement Act (2016); National Asset and Government Property Commission Act (1990); Local Government Act (2022). - Institutional coordination need: Legal framework for climate-related public investment is dispersed across instruments and actors, requiring collaboration between Ministry of Environment, National Protected Areas Agency, National Disaster Management Agency, Environment Protection Agency, MoF, and MoPED. - Policy option: Consider adopting a Climate Change Act to clarify roles of MDAs and create a coordination framework (examples cited: Kenya and Uganda). _Source: IMF Technical Assistance Report content provided in the source content unit._ ### 53. Reporting of financial information on public investments is done through the Integrated ### Reporting of financial information on public investments is done through the Integrated Financial Management Information System (IFMIS). ### IFMIS: current status and limitations - IFMIS was developed to support the management of budgetary, financial, and accounting operations of the government and promote better public financial management. - IFMIS has been rolled out to 78 MDAs and is currently being upgraded to a new web-based system with an updated chart of accounts. - Existing limitation: not all expenditure is processed through IFMIS. Example: donor-funded project loans and grants are part of the approved budget but spending for these projects is processed outside IFMIS. - Consequence: IFMIS currently does not include information on donor-funded projects, causing inconsistencies between budget execution reports and the approved budget. - IFMIS could support tagging of climate-related expenditure; plans are underway to roll out climate budget tagging from FY2025. - Technical proposal: budget output codes or binary flags could be created on IFMIS to facilitate tagging recurrent and investment expenditure for both climate change adaptation and mitigation. ### Project monitoring systems and gaps - Sierra Leone has no centralized IT system to manage public investments; capital projects are mostly managed through Excel spreadsheets compiled by different central government MDAs. - Examples of existing MDA systems: - MoPED maintains an Excel spreadsheet with information on project duration and status. - MoF maintains a database for contract management. - NAMEMIS (National Monitoring and Evaluation Agency’s system): - Launched as an integrated online monitoring and evaluation system for government and donor-funded projects, programs, and policies. - Designed to support project cycle management with features for planning, monitoring, and reporting of all capital projects related to the National Development Plan. - Effective from FY2024, MDAs and local councils are required to upload all ongoing and new projects and work plans on the system to enable tracking during implementation. - Template includes questions on alignment with Sustainable Development Goals and MTNDP goals, including climate change-related objectives. ### Proposal: Public Investment Management Information System (PIMIS) - Definition: a software-based solution to support management of public investments throughout the project life cycle; enables instant access to key project information (status, duration, total costs, allocated budget). - Benefits of integrating systems: - Integration of PIMIS (capital projects) with IFMIS (capital budget and expenditure information) and NAMEMIS (status of project execution and outputs) would improve institutional coordination, management, monitoring, and reporting. - Would help address weaknesses such as cost overruns, incomplete information on multiyear commitments, and authorization of spending above allocated budgets. - Current action: government is working with development partners to establish the scope for a PIMIS. - Suggested database scope: include information on all pipeline projects (all appraised projects ready for implementation but still awaiting funding) and those included in the budget to ensure consistency of information across entities. - Climate dimension: a PIMIS would be useful in identifying and tracking climate-related projects, enabling their tagging in IFMIS and monitoring in NAMEMIS. - Box 11 (case example): Integrated Bank of Projects System, Uganda — a web-based central repository that integrates with government systems (Program Budgeting System and IFMIS) and produces system-generated reports (project pipeline by vote and sector, commitments by sectors over five years, cost evaluation reports). The system covers the four stages of the Project Cycle and is developing a project monitoring and evaluation module. ### Capacity constraints affecting climate-sensitive public investment management - Integration of climate change into fiscal planning and budgetary processes requires substantial capacity-building, integrating work of the Environmental Protection Agency and the Public Financial Management Reform Strategy. - Public Investment Management Unit staffing: comprises only 11 staff, of which three are currently on study leave, including the director. - Consequence: shortfall in trained personnel undermines effectiveness of public investment management and integration of climate change into public investment processes. - Other understaffed entities: Climate Financing Unit in MoF, NAMEA, the Environmental Protection Agency's Climate Change Division, and the Presidential Initiative on Climate Change, Renewable Energy, and Food Security. - Existing capacity: Fiscal Risk Department within the MoF could start assessing climate-related fiscal risks with current staff, but requires staff and climate expertise to support use of tools such as the IMF’s Quantitative Climate Change Risk Assessment Fiscal Tool (Q-CRAFT). - Coordination challenge: limited capacity and unclear responsibilities hinder cohesive, climate-sensitive public investment management; a capacity-building strategy should clarify roles and foster collaboration. ### Key recommendations and action priorities (selected from report) - Recommendation 1: MoPED to create a centralized database for all public investments including PPPs and SOE projects that are both state and donor-funded and incorporate multi-year contracts and commitments. This information should be accessible to the MoF and NAMEA and be utilized to inform budget decision-making. (By December 2024, High priority). - Recommendation 2: The Public Investment Committees with MoPED and MoF to undertake a comprehensive review of all ongoing and planned projects and ensure that only appraised projects are included in the PIP and selected for funding. (By December 2024, High priority). - Recommendation 3: MoPED to overhaul the annex of PIP that is included in the budget documents so that it is comprehensive and include information on total costs, multiyear commitments, project duration, and total variations. (By December 2025). - Recommendation 4: MoF to ensure commitment and payment controls are applied by enforcing the provisions of the Public Financial Management Act on excess spending as per section 56 (5) and enforcement of liabilities and penalties section 120 (1 c). (Immediately, High priority). - Recommendation 5: In conjunction with Recommendation 2, MoPED to develop and implement multicriteria analysis which incorporates climate change to guide prioritization and selection of projects in the PIP. (By December 2025). - Recommendation 6: MoPED to expand the sustainability analysis required in the Project Appraisal Report and Review Template to cover climate-related analysis of project proposals in line with a standard methodology. (By June 2025). - Recommendation 7: MoF to identify and highlight climate-related projects in budget documents. This should build on current plans to implement a climate-sensitive tagging framework and be summarized in a short budget chapter. (By December 2027). - Recommendation 8: The National Asset and Government Property Commission to develop the planned asset register and update maintenance manuals to ensure critical infrastructure (energy, transport, communications, health, and education) is resilient to climate change. (By December 2027). - Recommendation 9: MoF, along with the Ministry of Environment and the National Asset and Government Property Commission to gradually incorporate climate vulnerability analysis into asset registries and include quantitative analysis of both long-term and discrete fiscal risks of climate change in the Fiscal Risk Statement. (By December 2028). - Recommendation 10: MoPED, MoF, the Environmental Protection Agency, and the Ministry of Environment to clarify and strengthen the climate-relevant roles, responsibilities, and capabilities within the public investment management process, particularly for MoPED and MoF, through targeted training and a review of legal mandates. (By December 2024, High priority). ### Action plan highlights (timings and responsibilities) - Effective from FY2024: MDAs and local councils required to upload ongoing and new projects and work plans to NAMEMIS. - By December 2024 (High): create centralized database for public investments; undertake comprehensive review to ensure only appraised projects included in PIP; provide training in MoPED and MoF on climate-sensitive public investment and NDC and iNAP commitments. - By June 2025 / December 2025: develop standard methodology and expand PARRT to include climate-related analysis; design MCA that includes climate change (Dec 2025). - By December 2027 / December 2028: implement climate tagging rollout and identify climate projects in budget documents; develop asset register and include climate vulnerability and fiscal risk analysis in Fiscal Risk Statement. *IMF Technical Assistance Report — selected excerpts on IFMIS, NAMEMIS, PIMIS, capacity, and recommendations.* ### Annex 2. C-PIMA Questionnaire ### Annex 2. C-PIMA Questionnaire ### Indicator Scoring - 1 = To no or a lesser extent - 2 = To some extent - 3 = To a greater extent ### C1. Climate-aware planning: Is public investment planned from a climate change perspective? - C.1.a Are national and sectoral public investment strategies and plans consistent with NDC or other overarching climate change strategy on mitigation and adaptation? - National and sectoral public investment strategies and plans are not consistent with NDC or other overarching climate change strategy. - National public investment strategies and plans are consistent with NDC or other overarching climate change strategy for some sectors. - National and sectoral public investment strategies and plans are consistent with NDC or other overarching climate change strategy for most sectors. - C.1.b Do central government and/or sub-national government regulations on spatial and urban planning, and construction address climate-related risks and impacts on public investment? - Central government and/or sub-national government regulations on spatial and urban planning, and construction do not address climate-related risks and impacts on public investment. - Central government and/or sub-national government regulations on spatial and urban planning, or construction (through building codes) addresses climate-related risks and impacts on public investment. - Central government and/or sub-national government regulations on spatial and urban planning, and construction (through building codes) address climate-related risks and impacts on public investment. - C.1.c Is there centralized guidance/support for government agencies on the preparation and costing of climate-aware public investment strategies? - There is no centralized guidance/support for government agencies on the preparation and costing of climate-aware public investment strategies. - There is centralized guidance/support for government agencies on the preparation of climate-aware public investment strategies. - There is centralized guidance/support for government agencies on the preparation and costing of climate-aware public investment strategies. ### C2. Coordination between entities: Is there effective coordination of decision making on climate change-related public investment across the public sector? - C.2.a Is decision making on public investment coordinated across central government from a climate-change perspective? - Decision making on public investment is not coordinated across central government from a climate-change perspective. - Decision making on public investment is coordinated across budgetary central government from a climate-change perspective. - Decision making on public investment is coordinated across all central government, including externally financed projects, PPPs and extra-budgetary entities, from a climate-change perspective. - C.2.b Is the planning and implementation of capital spending of Sub National Governments (SNGs) coordinated with the central government from a climate-change perspective? - The planning and implementation of capital spending of SNGs is not coordinated with the central government from a climate-change perspective. - The central government issues guidance on the planning and implementation of capital spending from a climate-change perspective and information on major climate-related projects of SNGs is shared with the central government and is published alongside data on central government projects. - The central government issues guidance on the planning and implementation of capital spending from a climate-change perspective, information on major climate-related projects of SNGs is shared with the central government and is published alongside data on central government projects, and there are formal discussions between central government and SNGs on the planning and implementation of climate-related investments. - C.2.c Does the regulatory and oversight framework for public corporations ensure that their climate-related investments are consistent with national climate policies and guidelines? - The regulatory and oversight framework for public corporations does not promote consistency between their climate-related investments and national climate policies and guidelines. - The regulatory and oversight framework for public corporations promotes consistency between their climate-related investments and national climate policies and guidelines. - The regulatory and oversight framework for public corporations requires that their climate-related investments be consistent with national climate policies and guidelines. ### C3. Do project appraisal and selection include climate-related analysis and criteria? - C.3.a Does the appraisal of major infrastructure projects require climate-related analysis to be conducted according to a standard methodology with central support? - The appraisal of major infrastructure projects does not require climate-related analysis to be conducted according to a standard methodology. - The appraisal of major infrastructure projects requires climate-related analysis to be conducted according to a standard methodology. - The appraisal of major infrastructure projects requires climate-related analysis to be conducted according to a standard methodology, and a summary of appraisals is published or subject to independent external review. - C.3.b Does the framework for managing longer-term public investment contracts, such as PPPs, explicitly address climate-related challenges? - The referred framework does not include explicit consideration of climate change for risk allocation or contract management. - The referred framework includes explicit consideration of climate change with respect to how risks are allocated between the parties in infrastructure contracts. - The referred framework includes explicit consideration of climate change with respect to how risks are allocated between the parties in infrastructure contracts, and contract managers in government departments and agencies are mandated to address climate-related challenges. - C.3.c Are climate-related elements included among the criteria used by the government for the selection of infrastructure projects? - Either there are no explicit selection criteria or climate-related elements are not included among the criteria used by the government for the selection of projects for financing. - Climate-related elements are included among the criteria used by the government for the selection of all major budget-funded projects, and the criteria are published. - Climate-related elements are included among the criteria used by the government for the selection of all major projects, including externally financed projects, projects financed by extra-budgetary entities, and PPPs, and the criteria are published. ### C4. Budgeting and portfolio management: Is climate-related investment spending subject to active management and oversight? - C.4.a Are planned climate-related public investment expenditure, sources of financing, outputs and outcomes identified in the budget and related documents, monitored, and reported? - Planned climate-related public investment expenditure are not identified in the budget and related documents. - Some planned climate-related public investment expenditure are identified in the budget and related documents, including investment expenditure funded externally, by extra-budgetary entities, and PPPs. - Most planned climate-related public investment expenditure, sources of financing, and outputs and outcomes are identified in the budget and related documents, including investment expenditure funded externally, by extra-budgetary entities, and PPPs, and expenditure on these projects is monitored and reported. - C.4.b Are ex-post reviews or audits conducted of the climate change mitigation and adaptation outcomes of public investments? - No ex-post reviews or audits are conducted of the climate change mitigation and adaptation outcomes of public investments. - Ex-post reviews or audits are conducted for selected major public investments of either the climate change mitigation or adaptation outcomes. - Ex-post reviews or audits are conducted and published for selected major public investments of both the climate change mitigation and adaptation outcomes. - C.4.c Do the government’s asset management policies and practices, including the maintenance of assets, address climate-related risks? - Neither the government’s asset management policies and practices nor methodologies for estimating the maintenance needs of climate change-exposed infrastructure assets address climate-related risks. - Methodologies prepared by the government for estimating the maintenance needs of some climate change-exposed infrastructure assets address climate-related risks. - Methodologies prepared by the government for estimating the maintenance needs and associated costs of most climate change-exposed infrastructure assets address climate-related risks, and government asset registers include climate-related information of these assets. ### C5. Risk management: Are fiscal risks relating to climate change and infrastructure incorporated in budgets and fiscal risk analysis and managed according to a plan? - C.5.a Does the government publish a national disaster risk management strategy that incorporates the potential impact of climate change on public infrastructure assets and networks? - Either there is no published national disaster risk management strategy, or the strategy does not identify the key climate-related risks to public infrastructure assets and networks. - The government publishes a national disaster risk management strategy that identifies the key climate-related risks to public infrastructure assets and networks in terms of hazards, exposure, and vulnerability. - The government publishes a national disaster risk management strategy that identifies and analyses the key climate-related risks to public infrastructure assets and networks in terms of hazards, exposure and vulnerability, and includes the government’s plans to mitigate and respond to these risks. - C.5.b Has the government put in place ex ante financing mechanisms to manage the exposure of the stock of public infrastructure to climate-related risks? - The government has not put in place any ex-ante financing mechanisms to manage the exposure of the stock of public infrastructure to climate-related risks. - There is an annual contingency appropriation in the budget or other financing mechanisms that is available to meet the costs of climate-related damages to public infrastructure. - There is an annual contingency appropriation in the budget and other financing mechanisms that are available to meet the costs of climate-related damages to public infrastructure. - C.5.c Does the government conduct and publish a fiscal risk analysis that incorporates climate-related risks to public infrastructure assets? - The government does not conduct a fiscal risk analysis that incorporates climate-related risks to public infrastructure assets. - The government conducts and publishes a fiscal risk analysis that incorporates a qualitative assessment of climate-related risks to public infrastructure assets over the medium term. - The government conducts and publishes a fiscal risk analysis that incorporates a quantitative assessment of climate-related risks to public infrastructure assets over the medium term and policies to mitigate these risks, and a qualitative assessment of the risks that may arise over the long-term. ### Cross-cutting issues - A IT support. Is there a comprehensive computerized information system for public investment projects to support decision making and monitoring? - B Legal Framework. Is there a legal and regulatory framework that supports institutional arrangements, mandates, coverage, standards and accountability for effective - C Staff capacity. Does staff capacity (number of staff and/or their knowledge, skills, and experience) and clarity of roles and responsibilities support effective *Annex 2. C-PIMA Questionnaire — IMF Technical Assistance Report* --- _Source: https://www.imf.org/-/media/files/publications/tar/2024/english/tarea2024062-print-pdf.pdf_