P-SD-AAB-005 Language: English

Original: English

AFRICAN DEVELOPMENT BANK GROUP

PROJECT APPRAISAL REPORT

SUDAN EMERGENCY WHEAT PRODUCTION PROJECT (SEWPP)

REPUBLIC OF THE SUDAN

SCCD : F.S.
Vice-President Ms. Beth DUNFORD, AHVP
Director General Ms. Nnenna NWABUFO, RDGE
Sector Directors Mr. Martin FREGENE, AHAI
Mr. Yero BALDEH, RDTS
Regional Sector Manager Mr. Pascal SANGINGA, AHAI4
Country Manager Ms. Mary MONYAU , COSD
Team Leader Mr. Mohamud EGEH, Principal Agriculture Officer, AHAI4
Task Team Mr. Solomon GIZAW, TAAT Clearinghouse Coordinator
Mr. Wiseman VWALA-ZIKHOLE, Principal Disbursement Officer, FIFC3
Mr. Sisay WOLDETENSAY, Senior Procurement Officer, SNFI3
Mr. Alex MKANDAWIRE, Senior FM Officer, SNFI4
Mr. Kingsley EJIM, Social Safeguards Officer, SNSC
Mr. Eric BAKILANA, Principal Legal Counsel, PGCL1
Mr. Emilio DAVA, Senior Fragility & Resilience Officer, RDTS
Ms. Beatrice MWAURA, Consultant, Gender Specialist, AHGC1
Ms. Grace SHITTU, Consultant, Agricultural Economist, AHFR
Mr. Robert OCHIENG, Climate Change & Green Growth Consultant, RDGE1
Mr. Maurice WANYAMA, Country Program Officer, COSD
Mr. Duncan O. OUMA, Country Economist, ECCE/COSD
Peer Reviewers Mr. Chantal UMUHIRE, Senior Agriculture Officer, AHAI4
Ms. Asaph NUWAGIRA, Agriculture & Rural Dev. Officer, COUG/AHAI4
Mr. Innocent MUSABYIMANA, Agriculture Technologies-TAAT Coordinator, AHAI2
 AFRICAN DEVELOPMENT BANK GROUP
Public Disclosure Authorized

SUDAN

EMERGENCY WHEAT PRODUCTION PROJECT (SEWPP)

AHVP/RDGE/AHAI/RDTS/COSD DEPARTMENTS
Public Disclosure Authorized

November 2022
 CURRENCY EQUIVALENTS

Exchange rate as of September 2022

Currency Unit1 Equivalent

1 Unit of Account 1.30 USD
1 United States Dollar SDG 566.92

FISCAL YEAR
1 January – 31 December

WEIGHTS AND MEASURES

1 Metric ton 2,204.62 Pounds (lbs)
1 Kilogramme (kg) 2.20462 lbs
1 Meter (m) 3.28 Feet (ft)
1 Millimetre (mm) 0.03937 Inch (“)
1 Kilometre (km) 0.62 Mile
1 Hectare (ha) 2.471 Acres

i
ABBREVIATION AND ACRONYMS

ADF African Development Fund

AEFPF African Emergency Food Production Facility
AfDB African Development Bank
CAADP Comprehensive Africa Agriculture Development Program
CB Country Brief
CERF Central Emergency Response Fund
ESCON Environmental and Social Compliance Note
FIRR Financial Internal Rate of Return
FPA Fiduciary Principles Agreement
IFAD International Fund for Agricultural Development
IsDB Islamic Development Bank
ISS Integrated Safeguards System
MDTF Multi-Donor Trust Fund
MOAF Ministry of Agrculture and Forests
MOFEP Ministry of Finance and Economic Planning
PBA Performance-Based Allocation
PAR Project Appraisal Report
PIU Project Implementation Unit
SDG Sudanese Pound
SEWPP Sudan Emergency Wheat Production Project
SPF Sudan Partnership Forum
TSF Transition Support Facility
TPIA Third-Party Implementing Agency
UA Unit of Account
WFP World Food Programme
UNFPA United Nations Population Fund
UNICEF United Nations Children's Fund

ii
 PROJECT INFORMATION SHEET

CLIENT INFORMATION
Project Name Sudan Emergency Wheat Production Project (SEWPP)
Sector Agriculture
Grant Recipient World Food Programme
Project Instrument ADF, TSF Pillars I & III Grants
Executing Agency World Food Programme (WFP)

COUNTRY AND STRATEGIC CONTEXT

Country Brief Period: 2017-2021, extended to 2024
Country Brief Priorities supported by
Pillar 2
Project:
Government Program (PRSP, NDP or
Economic Recovery Program (2020-25)
equivalent):
Relevant High 5 Priority Area(s) and sub-theme(s)
• Feed Africa (TAAT Flagship)
• Improve the Quality of Life of the People of Africa
Project classification:
SDG Goals: 1, 2, 4 and 8
Priority selectivity:
• Limited food production and productivity
Country Performance and Institutional
2.6
Assessment:
Projects at Risk in the country portfolio: 39% of red flagged operations, August 2022

PROJECT CATEGORISATION
Environmental and Social Risk
Category 2, SNSC Validation Date: 14/10/2022
Categorization
Does the project involve involuntary
No
resettlement?
Climate Safeguards Categorization: Category 2
Fragility Lens Assessment: Yes
Gender Marker System Categorization: Category 2

Amount (millions)
Source Financing Instrument
UA USD
African Development Fund 20.03 26.04 TSF Plillar I Grant
African Development Fund 3.00 3.90 TSF Pillar III Grant
African Development Fund 33.75 43.88 PBA
Total Project Cost: 56.78 73.81

iii
PROJECT PROCESSING SCHEDULE TO BOARD APPROVAL

Appraisal Mission: 20 July – August 05 2022

Planned Board Presentation: December 2022
Effectiveness: December 2022
Project Implementation
December 2022 – December 2024
Period:
Planned Mid-term Review: 31 December 2023
Project Closing Date: 31 December 2024

iv
 TABLE OF CONTENTS
I. INTRODUCTION………………………………………..…………………………………………………………….… . 1
II. STRATEGIC THRUST & RATIONALE ...................................................................................................................... 1
2.1 MAIN DEVELOPMENT CONSTRAINTS .............................................................................................................................. 1
2.2. PROJECT LINKAGES WITH COUNTRY STRATEGY AND OBJECTIVES. ......................................................................... 2
2.3 RATIONALE FOR BANK’S INTERVENTION. ........................................................................................................................ 3
2.4 COORDINATION AND COOPERATION WITH TECHNICAL AND FINANCIAL PARTNERS. .............................................................. 4
III. PROJECT DESCRIPTION ........................................................................................................................................... 4
3.1 PROJECT OBJECTIVES, COMPONENTS AND ACTIVITIES ............................................................................................... 4
3.2 THEORY OF CHANGE................................................................................................................................................. 5
3.3 TECHNICAL SOLUTIONS RETAINED AND OTHER ALTERNATIVES EXPLORED ............................................................... 6
3.4 TYPE OF PROJECT ...................................................................................................................................................... 6
3.5 PROJECT COST AND FINANCING ARRANGEMENTS............................................................................................................. 6
3.6 PROJECT’S TARGET AREA AND POPULATION BENEFICIARIES.............................................................................................. 7
3.7 BANK GROUP EXPERIENCE AND LESSONS REFLECTED IN DESIGN ....................................................................................... 7
IV. PROJECT FEASIBILITY ............................................................................................................................................. 7
4.1 ECONOMIC AND FINANCIAL PERFORMANCE..................................................................................................................... 7
4.2 ENVIRONMENTAL AND SOCIAL IMPACTS......................................................................................................................... 8
V. IMPLEMENTATION .................................................................................................................................................. 10
5.1 INSTITUTIONAL AND IMPLEMENTATION ARRANGEMENTS .................................................................................................10
5.2 PROCUREMENT ........................................................................................................................................................10
5.3 FINANCIAL MANAGEMENT, DISBURSEMENT, AND AUDIT ........................................................................................11
5.4 MONITORING AND EVALUATION ...................................................................................................................................11
5.5 SUSTAINABILITY ......................................................................................................................................................11
5.6 RISK MANAGEMENT ................................................................................................................................................12
VI . LEGAL INSTRUMENTS AND AUTHORITY ........................................................................................................ 12
A. LEGAL INSTRUMENT ..........................................................................................................................................12
B. CONDITIONS ASSOCIATED WITH BANK’S INTERVENTION ....................................................................................12
C. COMPLIANCE WITH BANK POLICIES .....................................................................................................................13
VI. RECOMMENDATION .............................................................................................................................................. 13
I. RESULTS FRAMEWORK
II. ENVIRONMENTAL AND SOCIAL COMPLIANCE NOTE (ESCON)
III. FRAGILITY AND RESILIENCE NOTE
I. INTRODUCTION
1.1 Management submits the following report and recommendation on a proposed ADF grant
not exceeding an amount of UA 33.75 million, TSF Pillar I grant not exceeding an amount of UA
20.03 million and TSF Pillar III grant not exceeding an amount of UA 3.00 million to the World Food
Programme to finance the Sudan Emergency Wheat Production Project (SEWPP) within the
framework of the African Emergency Food Production Facility (AEFPF). The project is to support
efforts to scale up wheat production and productivity in Sudan to mitigate the impact of the Russia's
Invasion of Ukraine2 on food security. It is designed under the AEFPF Framework.,.

II. STRATEGIC THRUST & RATIONALE

2.1 Main Development Constraints
2.1.1 Sudan, Africa’s third-largest country, is strategically located along the Red Sea, at the crossroads
of sub-Saharan Africa and the Middle East. The country is rich in natural resources, with fertile lands,
abundant livestock, and extensive mineral reserves (such as oil and gold). After South Sudan’s
secession in 2011, Sudan’s oil resources declined, but its mineral and other natural resource
endowments remained substantial. The loss of 75% of oil resources unleashed profound
macroeconomic instability on domestic production, trade, and the external sector, resulting in
tumbling foreign direct investment from a peak of $3.5 billion in 2006 to a meager $0.6 billion after
the secession. The adverse impact of near hyperinflation and high Sudanese pound depreciation on
the expectations and investment decisions reduced the country’s investment and economic growth.
2.1.2 Sudan’s overarching development challenge is to overcome the limited progress made towards
higher value-added economic activities, which is holding back the pace of structural transformation.
The underlying development challenges include macroeconomic instability, multiple structural
deficiencies, and vulnerability to climate change. COVID-19 pandemic and the effects of Russia's
Invasion of Ukrainehave exacerbated Sudan’s development challenges, with the economic
contraction in 2020 and partial recovery in 2021.Political uncertainty and instability has exacrebted
the development challenges in recent years. The Countryfaces development gaps under all of the
African Development Bank’s High 5 strategic priorities. Sudan’s energy system—one of the largest
in sub-Saharan Africa—is operating efficiently from a technical standpoint but faces many challenges
and is financially unsustainable, while the private sector operates in a weak and uneven business
environment. Manufacturing sector is small, and its share in the economy has been declining in terms
of real value added and employment with most manufacturing involving processing of raw materials
by small and medium-size firms. Sudan also lags far behind the Sustainable Development Goals
(SDGs) for water, sanitation, and hygiene, while health and education outcomes also remain low.

2.1.3 Given the many opportunities that agriculture offers, the sector has the potential to transform
the Sudanese economy, although it is also grappling with many challenges. Agriculture is the
backbone of the Sudanese economy, generating one-third of GDP, accounting for 60% of exports,
and employing more than half of workers. Sudan has long been considered one of the world’s great

2
Agreed wording at the African Development Bank Annual Meetings 2022 in Ghana - Algeria, China, Egypt and South Africa entered a
reservation and proposed “Russia-Ukraine Conflict

1
breadbaskets and, with about 110 million heads of livestock, has the second-largest herd in Africa
(after Ethiopia). Sudan’s agro-ecological zones are suitable for a wide variety of crops and animal
husbandry. But agriculture suffered from neglect during the years of the oil economy, causing
agricultural productivity to decline as the enabling environment deteriorated due to limited
investments in hard and soft infrastructure and macroeconomic instability. The other challenges the
sector faces include increasing droughts, unpredictable flooding, and limited support with agricultural
inputs.

2.1.4 In many African countries, the outbreak of the COVID-19 pandemic coupled with the Russia's
Invasion of Ukraineinduced disruptions in global wheat supply chains leading to a sharp increase in
prices by 50% globally, reaching the same level it was during the 2008 global food crisis. Sudan has
for long been suffering from extreme levels of food insecurity due to multiple drivers including
economic decline and hyper inflation, conflict induced displacements, and poor harvest. This has been
compounded by the effects of the conflict in Ukraine, which has led to dramatic price increases for
food and non-food items in the country. 3Prices of sorghum and millet have increased by between 150
to 200% since 2021, and four to five times above the previous five year average in most markets in
Sudan. The price of wheat increased even higher to nearly triple compared to the 2021 prices. 60%
of wheat import to Sudan came from Russia and Ukraine in 2020, while 70-80% of total wheat
consumed in Sudan is imported. Fertilizer prices have tripled, and energy prices have increased as
well, all fuelling inflation. In turn this has a negative knock-on effect on the Sudanese economy that
has exerted significant pressure on food security and poverty levels. Sudan, with the largest irrigated
area in SSA and the second largest in all Africa, has a huge potential not only for wheat self-
sufficiency, but also as major exporter. Detailed analysis of the wheat value chain in Sudan is
presented in the Annex 1-7 of the technical annexes.
2.2. Project Linkages with Country Strategy and Objectives
2.2.1 SEWPP is well aligned to Sudan’s long-term development goals as expressed in the 25-Year
National Strategy (2007-2031). The main objectives of the strategy include the revival of the
agriculture sector through improving agricultural productivity and food security, infrastructure
development and financing, commercializing farming to increase exports, and increasing job
opportunities. The project is also in line with the country’s latest Economic Recovery Program (ERP
2020-25), which aims to diversify the economy for an accelerated and sustainable economic growth.
SEWPP will contribute toward these objectives by scaling up wheat production through dissemination
of improved inputs, financing fertilizer availability and affordability, and supporting policy reforms
and institutional strengthening.
2.2.2 The proposed project is included in the indicative program of Sudan’s Country Brief (CB, 2017-
2021 updated and extended to 2024) which focuses on two pillars: i) Capacity building for improving
social service delivery; and, 2) Agriculture for job creation and livelihoods. The project directly
contributes to the pillar II of the CB. The project will also contribute to Sudan’s Intended Nationally
Determined Contribution and National Adaptation Programs of Action whose priority adaptation
actions include enhancing the resilience of the agriculture, livestock, and fisheries value chains by
promoting climate smart agriculture; and it will contribute to Sudan’s achievements of the SDGs 1,
2, 4 and 8.

3
Integrated Food Security (IPC) report on Food Insecurity Sudan (June 20, 2022)

2
2.3 Rationale for Bank’s Intervention
2.3.1 In May 2022, the Boards of Directors of the African Development Bank Group approved a USD
1.5 billion AEFPF to help African countries avert a looming food crisis due to the disruption of food
supplies arising from the ongoing Russia's Invasion of Ukraine. The AEFPF is intended to provide
immediate financial assistance to African countries that face risks to food security as a result of the
Russia's Invasion of Ukraineand other stresses such as climate-induced food insecurity by providing
them with liquidity to support their food production, seed adaptation and storage capacities during
these unusually difficult circumstances. The government of Sudan requested the Bank’s support, but
given the de facto status of the current Government, the country could not benefit directly from the
AEFPF resources. However, the Bank allowed the repurposing of UA 56.78 million allocated for
three operations in the country’s IOP for 2022 to finance the proposed SEWPP.

2.3.2 The proposed project will build upon the successes of AfDB funded “Support to Agricultural
Research for the Development of Strategic Crops in Africa” (SARD-SC, 2013-17) and more recently
the TAAT Wheat (2018-2021) projects, which became game changers in the Sudanese wheat sector
in terms of developing, releasing and widely promoting high- yielding and heat-tolerant wheat
technologies adaptable to major wheat growing regions of the country including higher temperature
areas such as South and West Darfur. The technology had increased average yields from 1.5 to 2.3
tons/hectare and production increased from under 350,000 tons to 1.1 million tons in just five years
from 2014 to 2019. This impressive performance has shown Sudanese policy makers that a viable
solution to their country’s growing over-dependence on wheat imports is domestic production – a
policy shift that will protect Sudanese people from the vagaries of global commodity markets and
strengthen national food security. The project will also help Sudan achieve self-sufficiency in wheat
production in the medium term and become a major exporter in the long-term. The specific objective
of the project is to improve production, productivity, and profitability of local wheat production by
scaling up the delivery of certified seeds of climate resilient wheat varieties and fertilizers to
smallholder farmers in the target areas across the country.

2.3.3 The proposed SEWPP is in line with the Bank’s Feed Africa Strategy (2016 – 2025) and Jobs
for Youth in Africa Strategy (2016-2025). The project is also consistent with the principles of key
regional and national initiatives as well as the Bank Group’s policies and strategies. These include
the Comprehensive Africa Agriculture Development Program (CAADP); the Bank’s Ten Year
Strategy (2013-22) particularly in its operational focus areas (e.g. private sector development) and
areas of special emphasis (agriculture and food security) and transition to green growth; the Bank’s
High 5s, especially Feed Africa and Improve the Quality of Life for the People of Africa. The project
is also aligned with the Bank’s Gender Strategy (2021-2025) for the promotion of gender equality;
its Strategy for “Addressing Fragility and Building Resilience in Africa (2022–2026). The project
will also help achieve the Bank’s policy commitments under Pillar I of the Fifteenth General
Replenishment of the African Development Fund (ADF-15) regarding (i) technologies for
agriculture; (ii) climate-smart agriculture; and (iii) promoting gender inclusivity. It is also well
aligned with Pillar I of the Bank’s Third Climate Change and Green Growth Action Plan (2021-
2025) which focuses on boosting climate resilience and adaptation to climate change in regional
member countries.

3
2.4 Coordination and Cooperation with Technical and Financial Partners.
2.4.1 Development partners (DPs) support in Sudan focuses mainly on capacity building and
humanitarian assistance during the current de facto situation. The multilateral development partners
such as AfDB, Islamic Development Bank (IsDB), and World Bank (WB) are leading in areas of
financial governance, provision of service delivery, technical assistance, and infrastructure. AfDB,
Arab Funds, International Fund for Agricultural Development (IFAD), and IsDB are the top
development partners in the Agriculture Sector in Sudan and interventions are coordinated based on
their comparative advantages. The Bank actively participates in the agriculture sector working group,
which is currently chaired by Food and Agriculture Organization (FAO). During the appraisal
mission, consultations were made with relevant DPs including FAO, JICA, WFP, United Nations
Population Fund (UNFPA), and IFAD to explore potential for co-financing, identify a third-partyl
implementing agency, and to ensure that the project is designed in a harmonized manner with other
DPs. The Bank will continue to coordinate with these and other partners in the implementation of this
project and other Bank financed operations in Sudan. Similar projects financed by the Bank and other
partners are presented in Annex 1-8.
III. PROJECT DESCRIPTION
3.1 Project objectives, components and activities
3.1.1 The project’s overall goal is to scale up wheat production and productivity to mitigate the impact
of the Russia's Invasion of Ukraineon food security and help Sudan achieve self-sufficiency in wheat
production in the short/medium term and become a major exporter in the long-term.The specific
objective of the project is to increase production, productivity and profitability of local wheat
production by scaling up the delivery of certified seeds of climate resilient wheat varieties and
fertilizers to smallholder farmers in the target areas across the country. Wheat was chosen over other
staple crops (e.g., sorghum and millet), because of the availability of high yielding certified seeds of
heat tolerant wheat varieties developed with Bank’s funded SARD-SC (2013-17) and TAAT wheat
program, while certified seeds for sorghum and millet are not readily available. In addition, unlike
sorghum and millet which are grown in rainfed traditional areas, wheat is cultivated in large irrigated
schemes in Gezira, White Nile, River Nile and Northern State, and therefore able to mitigate the
adverse effects of climate change. Moreover, the high import and consumption of wheat and wheat
derivatives, and its huge export potential over sorghum makes it both a food and a cash crop of
preference in the country. The project components and activities are described in Table 3.1 below,
with details provided in Annex 2-2 (Technical Annexes).
Table 3.1: Description of Project Components
No Component Name Cost (UA Component Description
million)
1 Scaling up Wheat 20.19 Sub-component 1.1: Delivering certified quality seeds of climate-adapted
Production, varieties and extension services.
Productivity and • Production and delivery of high-quality heat tolerant, climate-adapted
Marketing wheat seed varieties
• Technical assistance for rolling out of the e-voucher subsidies of certified
seeds and fertilizers to smallholder wheat farmers
• Support to extension services and capacity building to improve farmer’s
awareness and adoption of certified seeds and good climate smart
agronomic practices

Sub-component 1.2: Strengthening Competitiveness of domestic wheat

production and marketing.

4
No Component Name Cost (UA Component Description
million)
• Expanding market infrastructure through upgrading and construction of
grain storage facilities along wheat production corridors for promoting
cost effective integrated wheat production and linkage to millers.
• Implementing improved harvest and post-harvest management practices.
2 Financing Fertilizer 30.33 • Delivering quality and affordable fertilizer to farmers through e-voucher
Availability and subsidies
Affordability • Technical assistance for designing and structuring a Fertilizer Financing
Mechanism for financing large-scale supply of fertilizers

3 Supporting Policy 1.0 Sub-component 3.1: Supporting development of policy actions and
Reforms and commitments
institutional • Supporting the development and dissemination of guidelines for input
strengthening subsidies and for farmer registration.
• Technical assistance and training for the preparation of a national wheat
transformation strategy with a target to reach self-sufficiency.
• Supporting the preparation of policy framework that promotes zero duties
and taxes on imports of agricultural equipment.

Sub-component 3.2. Strengthening institutions in the inputs delivery systems

• Upgrading skills and knowledge of technicians on seed production,
processing, storage, and quality control.
• Supporting the harmonization of the seed and fertilizer regulations in line
with regional standards.
4 Project Coordination 5.26 WFP, as the third-party implementing agency, will be in charge of the overall
and Management implementation of the project activities. It is also responsible for
coordination and supervision of project activities, mid-term and final project
reviews, and project procurement, disbursement, financial management,
audit and reporting.
Total 56.78

3.2 Theory of Change

3.2.1 The project’s long-term impact is to contribute to Sudan's national wheat transformation strategy
for achieving wheat self-sufficiency and moving the nation from import to export of wheat. This will
be achieved by boosting local production and productivity and reducing postharvest losses. The
project will produce an additional 891,000 MT of wheat (241% increase) food and directly benefit
400,000 smallholder farmer households, including 40% women. The direct beneficiaries will also
include seed producers and agro dealers, and 800,000 workers of women and men who will find
employment opportunities in the wheat, seed, and fertilizer value chains. These outcomes will be
achieved by (i) large scale delivery of certified quality seeds of climate-adapted varieties, fertilizers,
and extension services; (ii) Financing Fertilizer Availability and Affordability; (iii) leveraging digital
technologies for the delivery of smart subsidies of certified seeds and fertilizers to ensure transparency
and inclusion, especially for youth and women; (iv) strengthening extension services to promote
grood agronomic practices, greater fertilizer use efficiency and reduction of postharvest losses; and
(v) supporting policy actions and commitments and institutional strengthening to address the
structural factors that prevent modern inputs from reaching farmers. The project theory of change is
depicted in Annex 2-1.

5
3.3 Technical solutions retained and other alternatives explored
3.3.1 During the design of the project, the below technical alternative was considered and rejected for
its weaknesses.

Table 3.2: Alternative Considered and Reasons for Rejection

No Alternative Brief Description Reasons for Rejection
1. Project to target other Could mean better food • High yielding certified seeds of heat tolerant
key staple ceareals security. More farmers in varieties developed with Bank’s TAAT wheat
such as sorghum and Sudan are engaged in sorghum program are available locally, while certified
millet. crop, especially in vast rainfed seeds for sorghum and millet are not available.
regions such as Darfur and • Wheat is irrigated while sorghum and millet are
Kordofan. rainfed and riskier options as they are at the
mercy of climate change.
3.4 Type of project: This is an investment project.

3.5 Project Cost and Financing Arrangements

3.5.1 The total project cost is estimated at UA 56.78 million (USD 73.81 million) comprising UA
29.44 million (USD 38.72 million) in foreign currency and UA 27.34 million (USD 35.54 million) in
local currency costs. The African Development Bank Group will provide 100%4 of the project cost.
All the project costs are tax and customs exempt. Utilization and allocation of resources is line with
WFP’s full cost recovery principle governed under WFP’s General Rule XIII.4 (a)5. Summary of the
project cost estimates by components, and the financial arrangements are presented in Tables 1 and 2
below:
Table 3.3: Estimated Cost of the Project by Component
(USD Million) (UA Million) % of
Total
Components
Local Foreign Total Local Foreign Total Project
Cost
1. Scaling up Wheat Production,
10.39 14.157 24.54 7.99 10.89 18.88 33.25
Productivity and Marketing
2. Facilitating Financing Mechanism for
18.49 18.174 36.66 14.22 13.98 28.2 49.66
Large-Scale Supply of Fertilizers
3. Supporting Policy Reforms and
0.53 0.689 1.22 0.41 0.53 0.95 1.67
Institutional Strengthening
4. Project Coordination and Management 2.61 3.926 6.54 2.01 3.02 5.03 8.86
Total Base Costs 32.03 36.959 68.99 24.64 28.43 53.06 93.45
Physical Contingencies 0.56 0.585 1.14 0.43 0.45 0.88 1.55
Price Contingencies 2.96 0.728 3.69 2.28 0.56 2.84 4.99
Total Project Costs 35.54 38.27 73.81 27.34 29.44 56.78 100

Table 3.4: Project sources of financing

Sources of financing (UA Million) (USD Million)

4According to Sudan’s Country Financing Parameters approved by the Bank in 2020 (Annex IV), the Bank Group may
provide up to 100% ADF financing for some operations, on case by case basis
5
WFP’s General Rule XIII.4 (a) provides that “… all donors shall provide contributions on a “full cost recovery” basis,
that ensures recovery by WFP of all of the costs of the activities financed by the contribution…”

6
 % of Total
Foreign Local Total Foreign Local Total Project Cost
TSF Plillar I Grant 10.39 9.64 20.03 13.50 12.54 26.04 35.28
TSF Pillar III Grant 1.56 1.44 3.00 2.02 1.88 3.90 5.28
ADF (PBA) 17.50 16.25 33.75 22.75 21.13 43.88 59.44
Total Project Costs 29.44 27.34 56.78 38.27 35.54 73.81 100.0

3.6 Project’s Target Area and Population Beneficiaries

3.6.1 The SEWPP is to be implemented for 2 years and will concentrate on the major wheat growing regions and schemes
in Sudan including Gezira, New Halfa, Northern State, River Nile, and White Nile. With large scale delivery of certified
quality seeds of climate-adapted varieties, fertilizers, and extension services, the project is expected to boost the wheat
production from the current 630,000 tons to 1.52 million tons in two years. The total number of direct beneficiaries is
400,000 smallholder farmer households, including 40% women. The direct beneficiaries will also include seed producers
and agro dealers, and 800,000 casual workers of women and men who will find employment opportunities along the
wheat, seed, and fertilizer value chains.
3.7 Bank Group Experience and Lessons Reflected in Design
3.7.1 The Bank currently has 19 operations in Sudan with a total commitment of UA 374 million. The performance of the
Bank’s portfolio in the country is assessed as partially satisfactory mainly due to the de facto status and the suspension of
Bank’s operations in the country, which worsened the already slow implementation of operations due to COVID-19
pandemic, high inflation, and unstable political situation. As of 31 July 2022, cumulative disbursement stood at 42%
(sovereign operations) and 100% (non-sovereign operations). The agriculture sector has the largest allocation, amounting
to UA 210 million (56%). The proposed project builds on these similar operations in terms of design and implementation.
The project will particularly benefit from gains made the Bank-funded SARD-SC wheat project and the Technologies for
African Agricultural Transformation (TAAT), especially in the development and dissemination of high-yielding & heat-
resistant wheat varieties in Sudan. Additionally, the Bank has accumulated important lessons from previous crisis
response and agricultural subsidies programs across the continent that it brings to bear in the design and implementation
of SEWPP. Key lessons include: (i) agricultural subsidies programs can significantly increase productivity if directly
targeted to farmers; (ii) deploying electronic vouchers to build efficiency in input delivery by ensuring that the inputs get
to the hands of the target smallholder farmers; and (iii) careful advance procurement planning and implementation support
to ensure transparency and effectiveness.

IV. PROJECT FEASIBILITY

4.1 Economic and Financial Performance
4.1.1 The financial and economic analysis of the project was undertaken to assess the likely impact of the project financing on the
beneficiaries and the economic soundness of the overall project. The project is financially and economically viable with a Financial Internal
Rate of Return (FIRR) of 34.73% and an Economic Internal Rate of Return (EIRR) 37.16%. The detailed financial, economic and
sensitivity analysis are discussed in Technical Annexe 3-1.

Table 4.1: Key economic and financial figures (for cost benefit analysis)
FIRR (base case) 34.73%
EIRR (base case) 37.16%
NPV, (discount rate) USD 243.73 million, (12%)

7
4.2 Environmental and Social Impacts
4.2.1 Environmental and social safeguards
4.2.1.1 Categorization: The project activities include large-scale delivery of agricultural inputs
including certified seeds and fertilizers. The project is proposed as a category 2 but given the
emergency nature of the operation, it will be exempt from preparing and disclosing E&S documents
prior to Board approval.
4.2.1.2 Institutional capacity to implement the safeguards management plans: WFP Sudan as
Implementing Agency will lead the preparation, monitoring, and reporting on the implementation of
project safeguards management plans. WFP shall contractually require its contractors to implement
the Project in accordance with the AfDB’s Integrated Safeguards System (ISS) requirements
applicable to the Project as well as WFP’s environmental and social safeguards policies requirements
applicable to the Project. WPF shall also require its contractors to request the same from its sub-
contractors.

4.2.1.3 Environmental and social safeguards instruments: WFP will develop relevant safeguards
instruments within thirty (30) days of the Project operationalization. These instruments will define
the measures and activities to be put in place by WFP to manage environmental and social risks and
impacts, the scope of analysis and the implementation schedule of applicable environmental and
social safeguards requirements as stated in the above paragraph.

4.2.1.4 Environmental and social safeguards reporting requirements: WFP will develop and submit
to the AfDB quarterly reports and Annual Report on the implementation of E&S safeguards, including
difficulties identified and corrective measures adopted.

4.2.2 Climate Change and Green Growth

4.2.2.1 The project has been screened for climate risks using the Bank’s Climate Safeguards System
and assessed as Category 2, meaning it is moderately vulnerable to climate impacts. The main climate
risk to the project is increased growing season temperatures, which normally reduce wheat yields.
The project will address this risk using certified and early generation seeds of heat- tolerant wheat
varieties and climate-smart agricultural practices. The other climate risk is reduced rainfall that
droughts will be mitigated through irrigation as this has been the practice in wheat production in all
the selected areas in the country. Overall, the use of certified seeds of climate-resilient varieties,
provision of quality extension services, training of farmers on CSA, and rehabilitation of storage
facilities will contribute to strengthening the resilience of Sudanese wheat production systems to
climate-related risk. The project is well aligned with Sudan’s Nationally Determined Contribution
under the Paris Agreement on Climate Change and Sudan’s National Adaptation Plan. It is also
aligned with Pillar I of the Bank’s Third Climate Change and Green Growth Action Plan (2021-2025)
which focuses on “boosting climate resilience and adaptation to climate change and reducing
fragility”.

8
4.2.3 Gender Equality and Women’s Empowerment Promotion
4.2.3.1 This project is categorized as a GEN II under the Bank’s Gender Marker System and is aligned
to the Bank’s Gender Strategy (2021-2025. The project will target 40% of beneficiaries as women
(comprising actual owners and female tenants) and 50% of existing women and youth growers’
associations/groups to increase their access to and use of affordable and subsidized certified seeds,
fertilizers and trainings through digital platforms using e-vouchers that allow effective targeting,
transparency, and inclusion. About 30% of women and youth group actors operating at other nodes
of the value chain including transporters, suppliers and agro-input dealers will be targeted in the
project value chain activities. Investments in post-harvest innovations for drying and storage will also
benefit women directly as they tend to be more involved in postharvest management. Detailed gender
analysis and corresponding Gender Action Plan with budget are presented in the Annex 3.3 of the
technical annexes.

4.2.4 Fragility and resilience

4.2.4.1 Food insecurity in Sudan is currently determined by low agricultural output, climate change,
economic decline, insecurity and political crisis, COVID-19 pandemic, and the Russia's Invasion of
Ukraine. These drivers of food insecurity are mutually reinforced by the broader fragility and
resilience context of Sudan. The “Sudan wheat emergency production project” addresses these drivers
of food insecurity and country-level drivers of fragility in Sudan. The latter includes (i) limited
capacity to handle climate change events and (ii) food shortage; and (iii) implicitly, youth
unemployment. The project budget includes UA 3 million from TSF Pillar III resources that will
finance technical assistance, capacity development and strengthening of national and local institutions
in the inputs delivery systems. Where possible, addressing issues related to land access and food
transportation networks to marginalized areas could magnify the impact of the project. Nevertheless,
if successfully implemented, the project is likely to buildfood security and, ultimately contribute to
economic and environmental resilience in Sudan.

4.2.5 Technologies for African Agriculture Transformation (TAAT)

4.2.5.1 TAAT is a flagship program of the Bank Group whose mandate is to boost agricultural
productivity across the continent by rapidly expanding access to climate-resilient productivity-
enhancing technologies to more than 40 million farmers by the year 2025. Working collaboratively
with WFP and wheat value chain stakeholders in Sudan, TAAT and its compacts will provide
technical assistance in developing country seed roadmap to produce early generation (EGS) and
certified seeds, strengthen existing ICT-based digital platforms including conducting e-farmer
registration, and support efforts for enhanced seed policy and regulations. TAAT will also support
the promotion of strategic partnerships and stakeholders that will help the Government of Sudan to
build an optimal Technology Delivery infrastructure to support the deployment of modern
technologies. Technical assistance, partly funded by TSF Pillar 3 resources, will also include input
to technical specifications for procurement and quality assurance to guarantee quality where required.
The TAAT Policy Compact will support the country in the area of seed and fertilizer policy and
regulations, including any required subsidy reforms. TAAT will assist the Bank in coordination,
monitoring and reporting on implementation.

9
V. IMPLEMENTATION

5.1 Institutional and Implementation Arrangements

5.1.1 As per the PD 03/2010 on engagement with de facto Governments in regional member countries,
the AfDB may finance new operations to be implemented by the United Nations or similar agency.
The Bank, therefore explored options on a third-party project implementation arrangement by
meeting and assessing various development partners to appraise their capacity to act as Third Party
Implementing Agency (TPIA). Given the emergency nature of the poroposed project and the limited
time for implementation (2 years), the evaluations were conducted based on the following seven (7)
criteria: i) human resources capacity (staffing); ii) presence in the country (footprint); iii) beneficiary
management capacity (electronic platforms); iv) procurement & FM capacity; v) logistics
capacity/readiness (rapid deployment capacity); vi) Fiduciary Principles Agreement (FPA) with
AfDB; and vii) experience in similar emergency operations. In consultation with all relevant
stakeholders in Sudan, WFP was selected as the most suitable TPIA given that over 80% of the project
resources are allocated for procurement and delivery of seeds and fertilizers. The detailed assessment
checklist is presented in Annex 4-4 of the Technical Annexes.

5.1.2 WFP will be in charge of the overall implementation of the project including fiduciary aspects
in accordance with the FPA signed between the AfDB and WFP. WFP will utilize the grant in
accordance with the project appraisal report and grant agreement. There will be a project Steering
Committee (PSC) chaired by WFP with membership from line ministries (Finance and Agriculture
& Forest), ARC, Private Sector, Wheat Growing Schemes, Seed Sector Companies, Fertilizer
Companies, TAAT, and other entities as deemed relevant in line with the Terms of Reference that
shall be prepared by WFP and agreed upon with the Bank. The Steering Committee will be
responsible for overall policy guidance, and strategic direction of project implementation and will
convene at least once a year or as determined by the chair.

5.2 Procurement
5.2.1 In January 2018, the Bank and WFP signed an FPA that sets out the framework of cooperation
between the two institutions. This agreement will form the basis for the implementation of the project
in accordance with paragraph 5.3(e) of the Bank’s Procurement Policy. Under this arrangement, as
part of the implementation of this operation, WFP will provide the overall fiduciary oversight of the
implementation of the entire project covering, among others, procurement- and contract-related
aspects of the project.

5.2.2 Owing to the emergency nature of the operation, coupled with the fast-approaching cropping
season of wheat in November 2022, WFP has agreed to solicit its own advance financing to undertake
necessary preparations for the first year of operations including procurement of seeds and fertilizer
subsidies pending approval of the financing of the project by the Bank. WFP has confirmed that it
also has all required arrangements in place for procurement to be initiated upon signing off on the
appraisal mission Aide Memoire and clarity on available distribution channels.

10
5.3 Financial Management, Disbursement, and Audit
5.3.1 The financial management capacity assessment for the WFP office in Sudan was conducted in
accordance with the Bank’s FM Implementation Guidelines-2014 and the FPA between the WFP and
the AfDB. The assessment concluded that WFP has the adequate fiduciary capacity and experienced
staff with an overall FM risk of “Low. As per the FPA, WFP will use its own fiduciary rules,
regulations, and policies in the implementation and management of the project and will (1) ensure the
use of the funds for the intended purposes in an efficient and economical way; (2) prepare accurate,
reliable, and timely periodic financial reports in form and matter agreed upon between the Bank and
WFP; and (3) safeguard the entity’s Project assets during the project period. WFP is expected to
submit Interim Financial Reports on quarterly basis, 45 days after the end of each quarter starting
with the receipt of the first disbursement and Annual Certified Financial Statements by a Public
Authorized Official or Entity within 18 months after the close of the financial period.

5.3.2 Disubrsement of the funds shall be made in two tranches to a designated WFP project account
upon fulfilment of the conditions precedent set in the Bipartite Agreements and Disbursement Letter.
The annual financial statements of WFP, together with the report of WFP’s External Auditor, shall
be made public on WFP’s official website. WFP’s internal audit reports shall be made public on
WFP’s official website in accordance with WFP’s “Policy for Disclosure of Oversight Reports”.

5.3.3 Bank visibility: For purposes of visibility, the Bank’s and the Fund’s names and contribution
shall appear in the WFP cover page of the consolidated financial reports and subsequent reports
disclosing the list of contributors for each year.

5.4 Monitoring and Evaluation

5.4.1 The project’s results measurement framework is aligned with the AEFPF Results Measurement
Framework which, in turn, is anchored on the Feed Africa program that aims to end extreme poverty,
eliminate hunger and malnutrition, and create wealth by adding value to Africa’s agriculture sector.
Efforts will be made to ensure gender-disaggregated data at every level and where applicable. The
Bank will conduct supervision missions at least twice a year. WFP will prepare and submit quarterly
progress reports according to the format and procedures of the Bank. In addition, the Bank will carry
out a mid-term evaluation at the mid-way of implementation and a project completion report will be
prepared at the end of the project.

5.5 Sustainability
5.5.1 This project is a short-term intervention that aims to improve the local wheat production,
productivity, and profitability by scaling up the delivery of certified seeds of climate-resilient wheat
varieties and fertilizers to target smallholder farmers. To ensure sustainability, the project will roll
out the e-voucher subsidies of certified seeds and fertilizers to smallholder wheat farmers by
leveraging WFP’s farmer registration and digital platforms that can be gradually transitioned to
private sector players including seed and fertilizer companies. Other key elements of project
sustainability include: (i) promoting a market-led input delivery system that will not displace the
private sector; (ii) design & structure a fertilizer financing mechanism for financing large-scale supply
of fertilizers which will address one of the major constraints of wheat production and productivity in

11
Sudan – high cost and consequently low usage of fertilizers. On average wheat farmers spend about
40% of total production cost on fertilizer. This mechanism is expected to increase affordability,
availability, and use of quality fertilizers by farmers to improve productivity and production of local
wheat; (iii) supporting policy actions and commitments and institutional strengthening to address the
structural factors that prevent modern inputs from reaching farmers; (iv) expanding market
infrastructure along wheat production corridors and primary aggregation centres for promoting cost-
effective integrated wheat production and linkage to millers; and (v) alignment of the the project with
government’s medium term and long term development strategies will ensure continuity of
government support to the sector.

5.6 Risk Management

5.6.1 In addition to the fiduciary, environment & climate change, and social risk matters discussed
in the preceding sections of the PAR, the Project will involve other potential risks that can impact its
successful execution. The overall implementation risk is assessed as ‘moderate to substantial’. The
Bank has identified all the risks that are likely to arise and have proposed mitigation measures to
address them. Specific risks and their appropriate mitigation measures are detailed in Annex 4-2 of
the Technical Annexes. Close supervision by the Bank and WFP will ensure continuous monitoring
of risks throughout the implementation period.

VI . LEGAL INSTRUMENTS AND AUTHORITY

A. Legal Instrument
6.1 The legal instruments for the Project are: (i) an ADF Bipartite Funding and Implementation
Agreement between World Food Programme (the “WFP” or “Recipient”) and the African
Development Fund (the “Fund”) for an amount of UA 33.75 million; (ii) a TSF Pillar I Bipartite
Funding and Implementation Agreement between the Recipient and the African Development Bank
(the “Bank”) and the Fund (the Bank and the Fund together the “Fund”) as Administrators of the TSF
for an amount of UA 20.02 million; and (iii) a TSF Pillar III Bipartite Funding and Implementation
Agreement between the Recipient and the Fund as Administrators of the TSF for an amount of UA
3.00 million.
B. Conditions Associated with Fund’s Intervention

6.2 Conditions Precedent to Disbursement of the First Tranche. The obligation of the Fund to
disburse the first tranche of sixty percent (60%) of the Grant to the UN Partner shall be conditional
upon the entry into force of this Agreement in accordance with Section 2.01. (Entry int Force) of this
Agreement above and the fulfilment of the following condition by WFP, namely the submission of:
(a) annual workplan and budget approved by the Fund for the first year of the Project.

6.3 Conditions Precedent to Disbursement of the Second Tranche: The obligation of the Fund
to disburse the second tranche of forty percent (40%) of the Grant to the UN Partner will be
conditional upon the fulfilment of the following conditions by WFP in form and substance satisfactory
to the Fund, namely the submission of: (a) copies of at least two (2) quarterly progress reports to the
Fund; (b) a copy of unaudited interim financial statements showing all Project expenditures for the
12
previous tranche requested from the Fund and the expenditures reported and justified are fifty percent
(50%) or above of what was advanced in the first tranche; and (c) a copy of the revised annual
workplan and budget approved by the Fund.

6.4 Conditions precedent to First Disbursement: The obligation of the Bank and the Fund to make
the first disbursement of the Grant shall be conditional upon the entry into force of the Grant
Agreements.

C Compliance with Bank Policies

6.5 This Project complies with all applicable Bank Group policies and guidelines including the
Proposal for the Establishment of the African Food Production Facility ( AEFPF).

African Development Bank Group Independent Recourse Mechanism

6.6 Communities and individuals who believe that they are adversely affected by an African
Development Bank Group (AfDB) supported project may submit complaints to existing project-level
grievance redress mechanisms or the AfDB’s Independent Recourse Mechanism (IRM). The IRM
ensures project affected communities and individuals may submit their complaints to the AfDB’s
Independent Recourse Mechanism which determines whether harm occurred, or could occur, as a
result of AfDB's non-compliance with its policies and procedures. To submit a complaint or request
further information please contact: IRM@afdb.org or, visit the IRM website www.irm.afdb.org.
Complaints may be submitted at any time after concerns have been brought directly to the AfDB’s
attention, and Bank Management has been given an opportunity to respond before reaching out to the
IRM.

VII. RECOMMENDATION
7.1 Management recommends that the Boards of Directors approve the proposed ADF grant not
exceeding an amount of UA 33.75 million, TSF Pillar I grant not exceeding an amount of UA 20.03
million and TSF Pillar III grant not exceeding an amount of UA 3.00 million to the World Food
Programme within the framework of the African Emergency Food Production Facility (AEFPF), for
the purposes, and subject to the terms and conditions, stipulated in this report taking into consideration
the justification set out in this proposal

13
I. RESULTS FRAMEWORK

SUDAN EMERGENCY WHEAT PRODUCTION PROJECT

A PROJECT INFORMATION
❚ PROJECT NAME AND SAP CODE: SUDAN EMERGENCY WHEAT PRODUCTION PROJECT (SEWPP)
PROJECT NUMBER: P-SD-AAB-003
❚ COUNTRY: SUDAN
❚ PROJECT GOAL: Scale up wheat production and productivity in Sudan to mitigate the impact of the Russia's Invasion of
Ukraineon food security and help Sudan achieve self-sufficiency in wheat production in the medium term and become an exporter
in the long-term.
a) Country ambition: Support Sudan's National Wheat Transformation Plan towards achieving wheat
❚PROJECT self-sufficiency and moving the nation from import to export
ALIGNMENT WITH b) AEFPF: Boost localwheat production through supply of key inputs such as improved certified seeds
COUNTRY AND and fertilizers, and support to policy harmonization and reforms in the sector
AEFPF:
c) Alignment indicators: Wheat yield (tones/ha) and fertilizer consumption (kg/ha of arable land),
B RESULTS MATRIX
RESULTS CHAIN TARGET AT FREQUENCY
BASELINE MEANS OF
AND INDICATOR UNIT COMPLETION OF
2021/2022 VERIFICATION
DESCRIPTION 2024/2025 REPORTING

❚ OUTCOME STATEMENT 1: Increased Productivity

OUTCOME 2.33 3.8 Project annual
INDICATOR 1.1: Tons/ha reports. Bureau of Annual
Yield per hectare Statistics
OUTCOME Project annual
INDICATOR 1.2: US$/ha 932 1520 reports. Bureau of Annual
Increased market value Statistics
❚ OUTCOME STATEMENT 2: Increased Production
OUTCOME Project annual
INDICATOR 2.1: Tons 630,000 1,520,000 reports. Bureau of Annual
Production Statistics
OUTCOME 270,000 (15%
400,000 (15% Project annual
INDICATOR 2.2: female-headed
HH female-headed reports. Bureau of Annual
Number of beneficiary farmer
households) Statistics
farmer households households)
❚ OUTPUT 1: Increased use of certified seeds and fertilizer

OUTPUT Seeds: 38,556 Seeds: 57,120

Fertilizer Fertilizer Direct observation
INDICATOR 1.1 seeds
Tons (Project progress Quarterly
and fertilizer Urea: 61,364 Urea: 90,910 reports, M&E reports)
Consumption DAP: 30,682 DAP:45,455
OUTPUT Direct observation
INDICATOR 1.2 Area Ha 270,000 400,000 (Project progress Quarterly
sown reports, M&E reports)

I
INDICATOR 1.3
Vouchers delivered via Direct observation
ICT based platforms (or Number 0 400,000 (Project progress Quarterly
existing distributing reports, M&E reports)
channels).

Certified seeds
INDICATOR 1.4 (tons) 28,000 45,000 Direct observation
Quantity of seeds (Project progress Quarterly
delivered Foundation reports, M&E reports)
2,000 12,000
seeds (tons)

INDICATOR 1.4.1. Direct observation

Climate adapted Number 4 7 (Project progress Quarterly
varieties reports, M&E reports)

❚ OUTPUT 2: Farmers using Good Agricultural practices

OUTPUT
INDICATOR 2.1: 400,000 (15% Direct observation
Number of additional Number 0 female headed (Project progress Quarterly
farmers trained farmer reports, M&E reports)
including ICT platforms households)
OUTPUT
INDICATOR 2.2: ICT Direct observation
based interactive Number 0 At least 1 (Project progress Quarterly
extension apps reports, M&E reports)
developed

OUTPUT 3:Improved Commitment to Policy reforms

OUTPUT
INDICATOR 3.1:
Direct observation
Number of policies, Number 0 3 (Project progress Quarterly
regulations and reports, M&E reports)
guidelines developed
and disseminated
OUTPUT
INDICATOR 3.2: Direct observation
Fertilizer financing Number 0 1 (Project progress Quarterly
mechanism facility reports, M&E reports)
established

II
II. ENVIRONMENTAL AND SOCIAL COMPLIANCE NOTE
(ESCON) AFRICAN DEVELOPPEMENT BANK GROUP

A. Basic Information6
Project Title: Sudan Emergency Wheat Production Project (SEWPP) Project ‘’SAP code’’ P-SD-AAB-005
Country: Sudan Lending Instrument7: DI FI CL BS GU RPA EF RBF
Project Sector: Agriculture Task Team Leader: Mohamud EGEH
Appraisal date: July 22 to August 5 2022 Estimated Approval Date: 30th November 2022
Environmental Safeguards Officer: xxx
Social Safeguards Officer: Kingsley EJIM
Environmental and Social Category: 2 Date of categorization: October 4, 2022 Operation type: SO NSO PBO
Is this project processed under rapid responses to crises and emergencies? Yes No
Is this project processed under a waiver to the Integrated Safeguards System? Yes No
B. Disclosure and Compliance Monitoring
B.1 Mandatory disclosure
Environmental Assessment/Audit/System/Others (specify: Pest Management Plan (PMP)
Was/Were the document (s) disclosed prior to appraisal? Yes No NA
Date of "in-country" disclosure by the borrower/client
Date of receipt, by the Bank, of the authorization to disclose
Date of disclosure by the Bank
Resettlement Action Plan/Framework/Others (specify: NA.
Was/Were the document (s) disclosed prior to appraisal? Yes No NA
Date of "in-country" disclosure by the borrower/client
Date of receipt, by the Bank, of the authorization to disclose
Date of disclosure by the Bank
Vulnerable Peoples Plan/Framework/Others (specify: NA.
Was the document disclosed prior to appraisal? Yes No NA
Date of "in-country" disclosure by the borrower/client
Date of receipt, by the Bank, of the authorization to disclose
Date of disclosure by the Bank
If in-country disclosure of any of the above documents is not expected, as per the country’s legislation, please explain why: As per the provision of the
Facility paper approved by the Board, the preparation and disclosure of the PMP and any further required E&S plan are deferred after Board Approval but
will be finalized prior to the commencement of the related activities.
B.2. Compliance monitoring indicators
Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of Yes No NA
measures related to safeguard policies?
Have costs related to environmental and social measures, including for the running of the grievance redress Yes No NA
mechanism, been included in the project cost?
Is the total amount for the full implementation for the Resettlement of affected people, as integrated in the project Yes No NA
costs, effectively mobilized and secured?
Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures Yes No NA
related to safeguard policies?
Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected Yes No NA
in the project legal documents?
C. Clearance
Is the project compliant to the Bank’s environmental and social safeguards requirements, and to be submitted to the Board?
Yes No

6
Note: This ESCON shall be appended to project appraisal reports/documents before Senior Management and/or Board approvals.
7
DI=Direct Investment; FI=Financial Intermediary; CL=Corporate Loan; BS=Budget Support; GU=Guarantee; RPA=Risk Purchase Agreement; EF=Equity Financing;
RBF=Results Based Financing.
III
 Prepared by: Name Signature Date
Environmental Safeguards Officer: xxx
Social Safeguards Officer: Kingsley EJIM 25/10/2022
Task Team Leader: Mohamud EGEH 25/10/2022
Submitted by:
Sector Director: Martin FREGENE 26/10/2022

Cleared by:
Director SNSC: Maman-Sani ISSA 27/10/2022

IV
III. FRAGILITY AND RESILIENCE NOTE
Country context.
The Sudanese economy is dependent on agriculture, which employs 43% of Sudan’s labor force and
accounts for about 30% of GDP. Sudan is one of the largest producers of livestock in Africa and the
middle east.
The economic decline in recent years combined with high food inflation has been reducing the
purchasing power of the households significantly. Other factors such as political instability, drought,
and the COVID-19 pandemic hinder livelihoods. Nearly 15 million people are facing food insecurity
nation-wide.
The World Food Program (WFP) estimates in its June 2022 comprehensive food security assessment
that close to 18 million Sudanese will be food insecure by September 2022. Poor harvest, conflict and
population displacement, and the war in Ukraine are largely responsible for the negative forecast.
The price of main staple foods such as sorghum and wheat has been skyrocketing every month due
to high production costs and partially due to imported inflation (for example, wheat prices increased
255% from 2020 to 2021 and 147% from February 2021 to May 2022, while for sorghum, prices
181% and 170% during the same period). Therefore, with no urgent policy action or development
assistance, prospects for good food availability remain bleak.
Overview of fragility and resilience in Sudan.
Fragility in Sudan is currently driven by economic under performance, political uncertainty,
environmental degradation, and armed conflicts. These primary drivers are largely rooted in the
country’s history of political and ethnic/social evolution since its independence in 1956.
In terms of Inclusive Politics, it is worth noting that ethnic-based marginalization, exclusion,
corruption, poor public service delivery; suppression of basic freedoms; corruption and nepotism are
important drivers of political fragility. The military take-over of October 2021 and the subsequent
civilian protests and demands for the institution of a civilian government, render the political context
even uncertain. Security is affected by active conflicts and political instability in some areas such as
the Red Sea, Kassala, and the Gedaref States in Eastern Sudan. Economic and social Inclusiveness
is hindered by corruption and nepotism, the current economic decline and inflation and ethnic-based
marginalization in Darfur, Kordofan and the Nile. The suspension of foreign development assistance
following the military takeover in 2021, aggravates prospects for economic recovery and inclusion in
Sudan. Social Cohesion is affected by limited economic opportunities for the youth, marginalization
and violence against women, and distrust of civil society organizations. Negative
Externalities/Regional Spill-over Effects, arising from limited economic diversification and
conflicts, continue to hinder regional integration of Sudan. Community and tribal-based conflicts
along border posts with South Sudan, Ethiopia and Tchad pose a to regional security and integration.
The war in Ukraine exposed Sudan’s vulnerability to food imports and negative effects of an
undiversified economy. Resilience to Climate/Environment Impacts, despite the wealth of natural
resources, is limited due to poor policy and management capacity. The recent drought season has left
close to third of the population under the threat of hunger.
De-listing as a state sponsor of terrorism by the USA; resumption of diplomatic relations with Israel;
the transition to democratic rule in 2019 (despite the October 2021, military take-over); efforts to
clear the public debt under the HIPC initiative; the grating of basic freedoms; remittances from the
diaspora, are some of the important sources of resilience that Sudan can count on.
V
Drivers of food insecurity in Sudan and fragility.
Food insecurity in Sudan is currently determined by low agricultural output; climate change;
economic decline; insecurity and political crisis; Covid-19; and the Russia's Invasion of
Ukraine. These drivers of food insecurity are mutually reinforced by the broader fragility and
resilience context of Sudan.
The economy. Sudan’s economy has been declining since 2018, creating unemployment, income
losses and reduced economic opportunity along the way. Inflation, particularly, food inflation has
been skyrocketing, around 300% in 2021 in 2021. This dramatically reduced the incomes and the
purchasing power of the Sudanese currency, leaving a large segment of the population unable to
purchase food
Climate change. Frequent and acute changes in weather patterns are affecting Sudan. Drought and
floods are nowadays, is destroying crops, causing population displacements, and destroying
agricultural and agro-processing infrastructures. This reduces the availability of agricultural products
and raises their prices, exacerbating food insecurity. In 2021 and earlier inn 2022, the combined effect
of drought and conflicts has placed 30% of the Sudanese population under the risk of food insecurity.
Conflicts and political instability. Since its independence in 1956, Sudan has experienced cycles of
conflict and instability. Currently, Darfur and South Kordofan are examples of active conflicts that
create displacement of farmers and cattle, reducing productivity and production, therefore, leading to
lower increased food insecurity. The frequent protests against the military in 2021, further render the
political environmental uncertain and unstable with ripple economic effects on the poorest and
vulnerable populations.
Low agricultural production. Limited technological progress, combined with the effects of climate
change, land access and distribution practices, are reducing agricultural productivity and output. The
effect is food shortages and food inflation, which exacerbates food insecurity. Sudan imports 70% of
its wheat from Ukraine and Russia and is therefore highly vulnerable to the impact of the invasion on
global wheat markets.
Covid-19. This pandemic has brought the world to almost a stand-still. In Sudan, the effect has been
the absence of farmers on farms and consumers with limited income and access to markets. This has
aggravated food insecurity, especially among, those in rural areas and those depending on agricultural
incomes.
The Russia's Invasion of Ukraine. This war has reduced the supply of grains (e.g., wheat) and
fertilizers around the world. Being Sudan a net wheat importer and consumer of wheat, the price of
wheat and its derivatives has skyrocketed contributing to higher food inflation and food insecurity in
the country.
Drivers addressed by the project and opportunities to build resilience.
Why wheat and not sorghum? Sudan is among the major sorghum producers in the world, realizing
between 2.5 and 4.5 million tons annually. However, failure to achieve stability in production due to
an increase in production costs and a shift in consumption preference for wheat, mainly in urban
areas, there has been increased demand for wheat flour. Also, shorghum grows in rain-fed areas of
Sudan, which have been affected by drought. Thus, wheat imports of the country continued to increase
in recent years. Today, wheat is the most important item among all of the imported goods by Sudan
as a country and constitutes approximately 8% of the imports. Therefore, producing wheat is central
to addressing food insecurity in Sudan. Moreover, the planting season starts in November each year,
and harvesting takes place in March. Therefore, given the urgency and short span of the project (just
VI
two years), there is an opportunity to start soon and thre are two harvests in the lifespan of the current
food emergency project.
Climate change. High temperatures, often exceeding 38°C during Sudan's short wheat growing
season, severely limit crop performance and yield, while climate change, lower and inconsistent
yields inhibit efforts, and severely reduces farmers’ incomes. This project will deliver climate change
resistant and certified wheat seeds that will overcome the above limitations and contribute to food
security.
Low agricultural production. The project will support the expansion of wheat production in Sudan.
This expansion will increase food security, generate some employment, bolster market linkages and
if (as expected) Sudan will be able to export wheat which will generate international reserves.

Conflict and political instability. By increasing wheat production and access in food insecure areas
of the project target where inter and intra-communal conflicts arise over land access and food
shortages, the project has the potential to contribute indirectly to social cohesion and to peace and
stability in this conflict affected areas.
This project will build on the Technology for African Agricultural Transformation (TAAT) project is
being supported by the Bank group in Sudan. The TAAT project is aimed at accelerating production
of high-quality certified seeds of heat-tolerant wheat varieties and ensuring they reach farmers who
need them.
Conclusion and recommendations.
The “Sudan wheat emergency production project” addresses important drivers of food insecurity and
country-level drivers of fragility in Sudan. That includes, (i) limited capacity to handle climate change
events and (ii) food shortage; (iii) and implicitly, youth unemployment. Where possible, addressing
issues related to land access and food transportation networks to marginalized areas could magnify
the impact of the project. The project budget includes UA 3 million from TSF Pillar III resources to
finance technical assistance, capacity development and strengthening of national and local institutions
in the inputs delivery systems. Nevertheless, if successful implemented, the project is likely to build
food security and, ultimately contribute to build economic and environmental resilience in Sudan

VII
 IV.SUDAN COUNTRY FINANCING PARAMETERS
Items Parameters Remarks
Counterpart funding and Up to 100% Taking into consideration Sudan’s public investment needs as articulated
Cost Sharing: Limit on the in the 25-Years Strategy (2007- 2031) and the fiscal position (see section
proportion of individual 2), the Bank Group will need to provide up to 100% ADF financing for
project cost that the Bank some operations, based on justifications provided by the Country Team.
may finance. Justifications will be consistent with the following criteria: (i) Sudan’s
commitment to implement its development program; (ii) public resources
allocated to the sectors targeted by Bank Group financing; and (iii) fiscal
deficit and debt sustainability.
Recurrent Costs: The limit No limit: Bank Group can Overall, recurrent costs account for an average of 5.5% of the total project
that would apply to the finance up to 100% of costs for ongoing operations. These costs, which include training expenses,
overall amount of recurrent recurrent costs, but close project related workshops, studies, are short term and thus incurred only
expenditures that the Bank monitoring is necessary to during project implementation. The expectation is that the government will
may finance. ensure fiscal sustainability continue to cater for recurrent expenditures after project completion.

Consequently, Bank Group financing for recurrent costs will continue to

be determined by project specific considerations on a case-by-case basis,
remain short-term and cover expenditures critical to project
implementation. Nonetheless, project teams will continue to support the
authorities to identify options for maintaining similar recurrent expenditure
levels following project completion to maximize the operations’
developmental impact, while preserving fiscal sustainability.
Local Currency Costs: Yes, considering that the Sudan meets the two requirements for local cost financing: (i) financing
two applicable conditions requirements for the country’s development program would exceed the
are satisfied. public sector’s own resources (e.g. from taxation and other revenues) and
expected domestic borrowing; and (ii) the financing of foreign
expenditures alone would not enable the Bank to assist in the financing of
individual projects. Therefore, the Bank will continue to finance local costs
for its operations in Sudan.
Taxes and Duties: Are there None Sudan’s tax and duty rates are considered reasonable, and the tax regime is
any taxes and duties that the progressive. The applicable import duties are levied in line with
Bank would not finance? international customs systems with very limited or no tax imposed on
export products. Implementation of the income tax legislation is consistent
with several best practices and wide-ranging tax policy and administration
reforms to boost domestic revenue mobilization are in progress.

Accordingly, the Bank Group could consider financing VAT associated

with project expenditures for its operations on a case-by-case basis, if
satisfied that the tax system has a reasonable level of tax and duty rates and
taxes and duties do not constitute a significant share of project costs or are
not specifically directed at Bank Group-financed projects, activities or
expenses.
Provisional expenditures of Yes, subject to the The Bank Group currently does not finance provisional expenditures of
infrastructure projects fulfillment of the four infrastructure projects. However, these expenditures will be eligible for
conditions financing if the Bank Group is satisfied that they: (i) are a core part of the
project/ program during appraisal; (ii) represent a small portion of the
project/program costs, which cannot be financed by the executing agency;
(iii) contribute to the realization of the project/ program development
objectives; and (iv) can be supported on a sustainable basis by the
executing agency after the 3-year transition period.
Note: The Bank Policy, Policy on Expenditure Eligible for Bank Group Financing, contains additional eligible costs such as project
vehicle purchase, severance payment, leased costs, food, bank charges, and late payment penalties. For these costs, staff are referred
to the Policy or Management guidance.

VIII