Mobility and Transport Connectivity Series Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning Guillermo Diaz-Fanas and Fatima Arroyo Arroyo © 2025 The World Bank 1818 H Street NW, Washington DC 20433 Internet: https://www.worldbank.org/transport Standard Disclaimer This work is a product of the staff of World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 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Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning v Table of Contents Foreword............................................................................................................................................................xi Acknowledgments.........................................................................................................................................xiii Acronyms........................................................................................................................................................xiv About the Authors..........................................................................................................................................xvi Executive Summary.......................................................................................................................................... 1 Addressing the Challenge.....................................................................................................................................3 Key Principles of the Framework........................................................................................................................3 A. Introduction...................................................................................................................................................7 A.1 Context ...........................................................................................................................................................8 B. The Climate Risk Landscape of Rural Logistics...................................................................................... 9 B.1 Understanding Climate Hazards and Uncertainty.................................................................................10 B.2 Assessing Climate Risk Assessment in Multiple Future Contexts.....................................................10 B.3 How Climate Stressors Could Evolve in Different Climate Scenarios................................................11 B.4 The Extended Impact of Climate Change................................................................................................ 12 B.5 Why Investments in Low-Carbon and Resilient Logistics Matter..................................................... 13 C. Five Principles of the Strategic Framework...........................................................................................14 C.1 Compatibility with the Sahelian Context................................................................................................. 15 C.2 Green and Climate-informed Investments.............................................................................................. 16 C.3 Focus on Both Hard and Soft Infrastructure Measures....................................................................... 17 C.4 Supply Chain Integration............................................................................................................................. 17 C.5 Data-driven Decision-making..................................................................................................................... 18 D. Structure of the Framework.................................................................................................................... 19 D.1 Baseline Modules (1–3).................................................................................................................................. 21 D.2 Investment Options Evaluation Modules (4–6)......................................................................................22 D.3 Enhancement and Monitoring Modules (7–8)........................................................................................ 23 D.4 Strategy Appraisal Module (9)...................................................................................................................24 Module - 1 - Assessment of the National Context and Identification of Needs................................... 25 1.1 Assessment of the Current Development Stage and Identification of Needs..................................27 1.2 Development Goals....................................................................................................................................... 28 Module - 2 - Identification of Development Barriers and Opportunities.............................................. 36 2.1 Identification of Development Barriers and Opportunities................................................................. 38 2.2 Barriers to Rural Development in the Sahel........................................................................................... 39 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning vi 2.3 Subnational Prioritization of Rural Regions............................................................................................ 41 2.4 Decision-making Framework...................................................................................................................... 51 Module - 3 - Potential Solutions to Barriers and Classification of Investments................................. 55 3.1 Potential Solutions to Barriers and Classification of Investments....................................................57 Module - 4 - Logistics Nodes: Evaluation of Investment Options.......................................................... 59 4.1 Location and Hierarchy................................................................................................................................. 61 4.2 Type of Facility.............................................................................................................................................. 64 4.3 Infrastructure and Capacities................................................................................................................... 69 Module - 5 - Road Infrastructure: Evaluation of Investment Options .................................................. 72 5.1 Level of Intervention......................................................................................................................................75 5.2 Road Construction.........................................................................................................................................78 Module - 6 - Logistics Fleet and Services: Evaluation of Investment Options..................................... 81 6.1 Fleet Composition.......................................................................................................................................... 83 6.2 Transition to e-Mobility............................................................................................................................... 92 Module - 7 - Recommended Investments in Institutional Capacity and Technology..........................96 Module - 8 - Assessment of the Impact of Investments....................................................................... 105 8.1 Assessment of the Impact of Investments............................................................................................107 Module - 9 - Investment Strategy: Assessment of Costs and Benefits...............................................113 9.1 Investment Strategy: Assessment of Costs and Benefits................................................................. 115 9.2 Features and Categories of Interventions............................................................................................. 121 9.3 Benefits of an Adjustable Investment Strategy Framework............................................................125 9.4 Appraisal of Investment Costs and Benefits........................................................................................125 E. Deep Dives in the Sahel........................................................................................................................... 136 Lake Chad, Chad.................................................................................................................................................137 SKBo Triangle, Burkina Faso............................................................................................................................148 Maradi-Zinder-Diffa, Niger...............................................................................................................................163 Appendix 1..................................................................................................................................................... 176 Appendix 2.....................................................................................................................................................180 Figures..............................................................................................................................................................vii Tables...............................................................................................................................................................viii Box.......................................................................................................................................................................ix Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning vii Figures Figure ES.1 Regional road network of the G5+Senegal countries................................................................. 2 Figure D.1 The Sunday market in the village of Tiogo next to the Tiogo Forest, Burkina Faso.......... 21 Figure 1.1 Performance of the six Sahelian countries in the seven development variables examined by the framework........................................................................................ 33 Figure 2.1 People and merchandise on a truck in Mauritania................................................................... 40 Figure 2.2 A woman carrying water................................................................................................................ 52 Figure 3.1 From solutions to investment options. Interventions in rural accessibility and logistics described in Module 3............................................................................................. 58 Figure 4.1 Traditional storage structure for maize and groundnut in Burkina Faso............................ 61 Figure 5.1 Aerial view of the Route Nationale 14 from Dosso to Loga, Niger.........................................75 Figure 5.2 Paved road in Ouaga District, Burkina Faso...............................................................................78 Figure 6.1 Overloaded truck on a rural paved road in Niger...................................................................... 83 Figure 6.2 Solar panels in Malika, Dakar, Senegal....................................................................................... 92 Figure 9.1 Outline of the proposed investment strategy...........................................................................117 Figure 9.2 Conceptual outline of the main short- and long-term interventions.................................. 119 Figure 9.3 Compatibility of the investment strategy with the four pillars of the EASI framework ............................................................................................................................. 120 Figure 9.4 Road network map of the Sahel revealing the very low accessibility characterizing most rural areas in the region..........................................................................123 Figure E.1 Overview of proposed investment strategy in Lake Chad....................................................143 Figure E.2 Overview of the proposed investment strategy in the SKBo triangle, Burkina Faso ....................................................................................................................................158 Figure E.3 Examples of Geographic Information System (GIS) analysis mapping key product routes affected by the road upgrades and the volumes traded on each route to calculate the post-investment decrease in transportation costs....................................... 161 Figure E.4 Overview of the proposed investment strategy in Niger’s Maradi, Zinder and Diffa regions.....................................................................................................................................170 Figure A2.1 Results of the subnational priority indexing for the G5+Senegal countries: Priority regions are highlighted in darker colors...................................................................... 181 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning viii Tables Table 1.1 Appraisal of the development status in each country.............................................................27 Table 1.2 Country-level development indicators........................................................................................ 29 Table 2.1 Assignment of weight factors to indicators used for the subnational prioritization............................................................................................................... 52 Table 4.1 Evaluation of investments in logistic nodes: Decision considerations for investing in local nodes................................................................................................................... 62 Table 4.2 Evaluation of Investments in logistic nodes: Decision considerations for investing in peri-urban nodes........................................................................................................ 63 Table 4.3 Evaluation of investments in logistic nodes: Decision considerations for investing in post-harvest storage facilities............................................................................... 64 Table 4.4 Evaluation of Investments in logistic nodes: Decision considerations for investing in processing units......................................................................................................... 65 Table 4.5 Evaluation of investments in logistic nodes: Decision considerations for investing in distribution centers................................................................................................... 66 Table 4.6 Appraisal of investments in logistic nodes: Decision considerations for investing in transport/freight depots .........................................................................................67 Table 4.7 Evaluation of investments in logistic nodes: Decision considerations for investing in multi-purpose facilities............................................................................................ 68 Table 4.8 Evaluation of investments in logistic nodes: Decision considerations for investing in grid-connected, solar-powered, or zero-carbon facilities................................ 69 Table 4.9 Evaluation of investments in logistic nodes: Decision considerations for investing in security and surveillance systems..........................................................................70 Table 5.1 Evaluation of investments in road infrastructure: Decision considerations for investing in micro-level interventions..........................................................................................76 Table 5.2 Evaluation of investments in road infrastructure: Decision considerations for investing in meso-level interventions........................................................................................... 77 Table 5.3 Evaluation of investments in road infrastructure: Decision considerations for investing in all-weather road construction ................................................................................79 Table 6.1 Evaluation of investments in logistics fleet: Decision considerations for Investing in non-motorized transport......................................................................................... 84 Table 6.2 Evaluation of investments in logistics fleet: Decision considerations for Investing in IMTs.............................................................................................................................. 85 Table 6.3 Evaluation of investments in logistics fleet: Decision considerations for investing in private cars................................................................................................................. 86 Table 6.4 Evaluation of investments in logistics fleet: Decision considerations for investing in light and medium commercial vehicles..................................................................87 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning ix Table 6.5 Evaluation of investments in logistics fleet: Decision considerations for investing in heavy trucks .............................................................................................................. 89 Table 6.6 Evaluation of investments in logistics fleet: Decision considerations for investing in rail transport............................................................................................................... 90 Table 6.7 Evaluation of investments in logistics fleet: Decision considerations for investing in water transport.......................................................................................................... 91 Table 6.8 Evaluation of investments in logistics fleet: Decision considerations for investing in e-mobility..................................................................................................................... 93 Table 8.1 Definition of decision variables, objectives, and example KPIs........................................... 108 Table 8.2 Evaluation of the potential impact of different investment categories on rural development..................................................................................................................................... 112 Table A1.1 An indicator-based assessment of the development stages of Sahelian countries....... 177 Box Box 1.1 Calculating complex development descriptors from single development indicators...... 32 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning x Foreword The Sahel region, stretching across Africa from Senegal and Mauritania to Chad, combines arid climate and socio-economic challenges. Several countries face significant threats from climate change, food insecurity, and fragility, conflict, and violence (FCV). In this context, developing low-carbon and climate-resilient transportation systems is crucial for the region's sustainable development. Climate change exacerbates the already harsh environmental conditions in the Sahel, leading to more frequent and severe droughts, floods, and extreme weather events. These conditions disrupt traditional transportation networks, making it difficult to deliver essential goods and services, including food and medical supplies, to vulnerable communities. It also disrupts trade and especially the value chains for agriculture and livestock, which employ most of the region’s population. By investing in resilient transportation infrastructure, the Sahel can mitigate the impacts of climate change, ensuring that critical supply and value chains remain operational even in adverse conditions. This not only enhances food security by facilitating the timely distribution of agricultural products but also supports emergency response efforts during crises, thereby reducing the vulnerability of communities to climate-induced shocks. Moreover, the transition to low-carbon transportation systems in the Sahel presents a unique opportunity for job creation and socioeconomic growth. The development and maintenance of sustainable transportation infrastructure require a skilled workforce, creating employment opportunities in construction, engineering, and technology sectors. These jobs can provide stable income sources for many in the region, contributing to poverty alleviation and improving livelihoods. Resilient networks also highly contribute to maintaining jobs and revenue, especially in rural areas. Additionally, the shift towards renewable energy sources for transportation, such as solar-powered vehicles and electric public transport, can stimulate local industries and innovation. This report is a core element of the World Bank’s updated Western and Central Africa Development Corridors Strategy for infrastructure investment priorities and policy enablers for the new generation of development corridors and the challenges for its implementation and steps necessary to maximize its potential benefits. The approach presents a roadmap to enhance transportation systems in the towards fostering regional integration and economic development through the use of the “Basins of Integration” approach. The proposed framework is shaped by a network approach widening catchments to peri-urban and rural territories, while reinforcing resilience and value chains that improve access to economic and social opportunities through improved connectivity that facilitates trade and commerce, allowing local businesses to access broader markets and attract investment. This is particularly important in a region where many communities are isolated due to inadequate infrastructure and low population density. The proposed interventions support communities by increasing trade, job creation, household incomes in specific basins of population, by helping address FCV and food insecurity challenges, and This report can help countries and financing institutions tackle both the challenges and opportunities resulting in the currently insufficient rural logistics systems. It provides a flexible framework which can help prioritize types of investment in infrastructure, services and to improve institutions, with tools to evaluate them while considering their adaptation and mitigation impact. The approach presented in this report was used to inform the preparation of several projects in the Sahel, including Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning xi four projects approved by the World Bank’s board of directors in Niger, Burkina Faso, Chad and Mali, and a regional project between Mauritania and Senegal. Case studies for the corresponding projects in Niger, Burkina Faso and Chad are included in this report summarizing proposed shorter- and longer-term investments. The investment plans in these case studies go beyond the interventions included in the design of the respective projects due to the limitation in funding in the Sahel at the moment of their approval. However, the presented interventions are meant to serve as an expanded roadmap for full territorial development projects which may be used by each country to seek additional financing from the World Bank or other donors. The framework and associated methodologies in this case are used at a subnational level in each country (e.g. areas with a few hundred thousand people typically) but can be used on a larger scale or at a very local level. Investing in sustainable transportation in the Sahel is not only a strategic response to climate change and food insecurity but also a catalyst for economic prosperity and peacebuilding in the region. By prioritizing low-carbon and climate-resilient transportation, the Sahel can pave the way for a more sustainable and stable future, addressing its most pressing challenges while unlocking new opportunities for growth and development. Jean-Francois Marteau Anne-Cecile Souhaid Practice Manager, Transport Practice Manager, Transport Senegal, Gambia, Guinea Bissau, Nigeria, Ghana, Sierra Leone, Liberia, Cape Verde, Mauritania, Sahel countries, Cameroon, Republic of Congo, Cote d’Ivoire, Togo, Benin and Guinea Central African Republic, Gabon and Equatorial Guinea Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning xii Acknowledgments This report was jointly prepared by a World Bank Group team led by Guillermo Diaz-Fanas and Fatima Arroyo Arroyo, and a consortium which included GRID Engineers, Regenopolis and ES Partners led by Rallis Kourkoulis and Fani Gelagoti, with contributions from Maria Antoniou, Angelos Tsatsis, Dionysia, Marianna Loli and Diane Binder. The team would like to thank Carolina Monsalve and Charles Kunaka for their contributions and valuable inputs. The team would also like acknowledge the support of the World Bank West and Central Africa and other regions transport teams, including Papa Mamadou, Anne-Cecile Souhaid, Hatem Chahbani, Ndeye Anna Ba, Ibrahim Kaboré, Idrissa Sibailly, Oneall Marcy Fenesh Massamba, Maria Cordeiro, Julien Emmanuel Galant, and Andre Pierre Marie Merrien. The team would like to extend their gratitude to Jonathan Davidar for his invaluable guidance in enhancing the design, narrative, flow, and storytelling of this report. The team would also like to thank Lisa Warouw for providing excellent administrative support. Opinions and Limitations This document is a product of the staff of the World Bank with contributions from external sources. Any findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the World Bank, its Board of Executive Directors, or the governments they represent. The material contained in this document is intended for general information purposes only and does not constitute legal advice in any regard. Such material is intended to be neither exhaustive nor prescriptive and should in no circumstances be construed as or substituted for appropriate professional financial, technical or legal advice on any project or program. This report has been prepared with support from the Global Facility to Decarbonize Transport (GFDT), a multi-donor trust fund managed by the World Bank Group that aims to accelerate innovation and investment toward climate-smart mobility solutions. GFDT is supported by contributions from GFDT Partners: Luxembourg, Germany, the Netherlands, Spain, and the United Kingdom. GFDT Partners Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning xiii Acronyms AfCFTA Africa Continental Free Trade Agreement BAU Business as Usual BCR Benefit-to-Cost Ratio BESS Battery Energy Storage System CAPEX Capital Expenditure CCDR Country Climate Development Report CMIP Coupled Model Intercomparison Project DFI Direct Foreign Investments DPU Dairy Processing Unit EBM Equipment-Based Method ECOWAS Economic Community of West African States EPC Engineering, Procurement, and Construction EV Electric Vehicle FAO Food and Agriculture Organization of the UN FCV Fragility, Conflict, and Violence GCA Global Center on Adaptation GDP Gross Domestic Product GHG Greenhouse Gas HDI Human Development Index ICE Internal Combustion Engine ICEV Internal Combustion Engine Vehicle ICT Information and Communication Technology IFPRI International Food Policy Research Institute IMF International Monetary Fund IMT Intermediary Mode of Transport KPI Key Performance Indicator LBM Labor-Based Method LC Low-Carbon LCB Life Cycle Benefit Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning xiv LPD Land productivity dynamic LPI Logistics Performance Index MCC Milk Collection Center MDB Multilateral Development Bank MPF Multi-Purpose Facility NDC Nationally Determined Contribution NGO Nongovernmental Organization NTM Non-tariff Measure O&M Operation and Maintenance OPEX Operational Expenditure PEWS Pastoral Early Warning System PIK Potsdam Institute for Climate Impact Research PPP Purchasing Power Parity PSP Private Sector Participation PV Photovoltaic RAI Rural Accessibility Index RCP Representative Concentration Pathway RGDP Regional Gross Domestic Product SKBo Sikasso-Korhogo-Bobo Dioulasso SME Small and Medium Enterprise SPV Special Purpose Vehicle SSATP Sub-Saharan Africa Transport Policy Program SSP Shared Socioeconomic Pathways UN United Nations UNHCR United Nations High Commissioner for Refugees URRAP Universal Rural Road Access Program VC Value Chain WAEMU West African Economic and Monetary Union WHO World Health Organization WPI Water Poverty Index Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning xv About the Authors Guillermo Díaz-Fañas Guillermo Díaz-Fañas is a Transport Specialist at the World Bank. His expertise spans advisory, financing, consulting, and the development of low-carbon and resilient transport infrastructure globally. In his current assignment, he works with the Transport Global Practice for the Western and Central Africa region, with a geographic focus on the Sahel. His track record includes multisectoral projects that promote regional integration, road asset management and maintenance, transport services, and logistics aimed at reducing food insecurity, fragility, and instability. These efforts have the potential to generate positive spillover effects, such as improved job opportunities, while enhancing climate-resilient and inclusive connectivity and access to basic services and infrastructure for vulnerable populations, including women, children, and displaced communities. He holds a Master’s degree in Civil Engineering from the University of Illinois at Urbana- Champaign and a Civil Engineering degree from the Pontificia Universidad Católica Madre y Maestra. Fatima Arroyo Arroyo Fatima Arroyo Arroyo is a Senior Transport Specialist and Program Leader of Infrastructure at the World Bank. Her experience in the transport sector spans across Africa, Central Asia, Southeast Asia, and Latin America & the Caribbean. In her more recent assignment in Kingston, Jamaica, she oversees the World Bank transport, energy, digital, urban and disaster portfolios in the Caribbean. Fatima's work is distinguished by her integration of infrastructure development with climate resilience, emerging technologies, and inclusive practices. She holds a Master’s degree in Civil Engineering from both École Nationale des Ponts et Chaussées and Universidad Politécnica de Madrid, as well as a Master’s degree in International Business Administration from Universidad Internacional Menéndez Pelayo. Executive Summary Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 2 The Sahel region is marked by extreme climate vulnerability, fragile ecosystems, and persistent social and economic challenges. Rural populations, heavily reliant on agriculture, pastoralism, and fisheries, are increasingly strained by the impacts of climate change, land degradation, and food insecurity. Climate projections suggest rising temperatures, more frequent extreme weather events, and prolonged droughts, all of which threaten the region’s infrastructure, food production systems, and overall economic stability. At the same time, the Sahel faces significant development challenges, including weak institutional capacity, poor governance, and ongoing conflicts, which amplify fragility, conflict, and violence (FCV) risks. These two factors interact to create a vicious cycle, where climate impacts exacerbate existing tensions, grievances, and inequalities, and FCV-related issues undermine the ability of governments and communities to respond effectively to environmental changes. Rural infrastructure deficits— particularly in connectivity and service delivery— aggravate this situation, leaving many communities marginalized, limiting their access to markets and basic services. As a result, many remain trapped in a cycle of poverty, lacking the tools and resources to adapt to a changing climate and build resilient economies. This report outlines a Strategic Transport Framework to promote low-carbon, climate-resilient rural accessibility and logistics in Senegal and the G5 Sahel countries (Burkina Faso, Chad, Mali, Mauritania, and Niger). The framework is a structured, data-driven approach to guide investments in rural accessibility and logistics. It integrates road construction and rehabilitation with modern logistics solutions, institutional capacity building, and innovative financing mechanisms to maximize the impact of investments on regional economic activity and improve the livelihoods of the local population in one of the world’s most vulnerable regions. Figure ES.1 Regional road network of the G5+Senegal countries Source: OpenStreetMap data. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 3 Addressing the Challenge The Sahel region faces significant development challenges, including diverse economic conditions, infrastructure gaps, and varying institutional capacities. These are compounded by climate change, which threatens the resilience of rural logistics systems. To address these issues, a comprehensive framework has been proposed to guide effective and sustainable investments in rural accessibility and logistics. Key Principles of the Framework • Compatibility with the Sahelian context: The framework is tailored to the unique development challenges and opportunities of the Sahel. It recognizes the region’s diverse economic conditions, infrastructure gaps, and institutional capacities, ensuring that proposed solutions are context- specific and feasible. • Green and climate-informed investments: Prioritizing low-carbon, climate-resilient infrastructure and services, the framework advocates for the integration of renewable energy sources, particularly solar power, into transport and logistics systems. It includes exposure and vulnerability assessments to identify climate risks in rural logistics, informing the design of interventions to mitigate future climate impacts. The framework uses two climate scenarios for analysis: the ‘middle-of-the-road’ scenario (SSP2–RCP4.5) and the ‘pessimistic’ scenario (SSP5–RCP8.5). • Focus on both hard and soft infrastructure measures: The framework emphasizes targeted investments in hard logistics infrastructure, such as roads and transport facilities, while also focusing on institutional and capacity-building initiatives. This dual approach ensures the sustainable development of the logistics sector. • Supply chain integration: To maximize impact, the framework promotes an integrated investment approach that addresses the entire supply chain, from production to market access. It supports interventions that benefit multiple economic sectors simultaneously, enhancing overall economic resilience. • Data-driven decision-making: All methodological steps are underpinned by reliable data and indicators to monitor and evaluate rural logistics systems. The framework is designed to be adaptable for use in both data-rich and data-poor environments, ensuring its applicability across different contexts. Framework structure The framework is organized into nine modules, providing a step-by-step guide for identifying development needs, assessing barriers and opportunities, and appraising potential investment. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 4 Assessment of the Current Development Stage and Identification of Needs: Module 1 1 establishes a baseline assessment of each country’s development landscape, to inform decisions on resource allocation and context-appropriate interventions. It uses an index- based approach that combines seven key parameters that reflect the country’s status: demographics, rural economic growth, human welfare, quality of transport corridors and accessibility, trade activity, sustainable transport outlook, and security and safety. Each parameter is associated with specific, measurable indicators, accompanied by recommended resources for their estimation. By scoring the individual indicators and aggregating them into a single score for each development parameter, the user can instantly determine a country’s development stage. Identification of Development Barriers and Opportunities: This module assesses the 2 barriers and opportunities for advancing development priorities across different Sahelian regions. It is based on rigorous, evidence-based assessments that are supported by geospatial data. It identifies five categories of opportunities (primary sector and manufacturing, entrepreneurship and job creation, trade and services, existing financing, penetration of renewables) and five categories of barriers (connectivity and accessibility deficits, logistics infrastructure gaps, climate risks, FCV risks and food insecurity, weak institutional capacity). These are evaluated through measurable indicators at the regional scale. A multi-criteria decision-making process is used to aggregate individual indicators, weighted by importance, into a single score. This score ranks Sahelian regions (at the subnational level) by their urgency of intervention. Following the selection of a specific rural region, the module shows examples of how to increase data granularity with respect to the development barriers faced by regional value chains, ensuring tailored interventions for the local population. Potential Solutions to Barriers and Classification of Investments: This module explores 3 four main categories of solutions for rural accessibility and logistics in the Sahel, focusing on addressing the barriers and maximizing the opportunities identified in Module 2. It also provides an overview of relevant investment options under each category, which are further evaluated as per their suitability and cost-efficiency in subsequent modules. Evaluation of Investment Options in Logistics Nodes: This module evaluates a set of 4 key investment options in logistics nodes, including post-harvest (cold) storage facilities, processing units, distribution centers, and transport depots. The analysis lists the pros and cons of each option, considering not only their type but also their location (local or peri-urban) and capacity (grid or renewable-powered, with or without surveillance systems), given the region’s electricity constraints and FCV risks. Evaluation of Investment Options in Road Infrastructure: Given the significant road 5 infrastructure deficits in the Sahel, this module evaluates the scale (from local to interregional) and type of road interventions (for example, constructing new road links or upgrading existing roads to all-weather standards). These are based on logistics requirements and the current state of the road network. Special emphasis is placed on ensuring that rural road investments are sustainable, cost-effective, and resilient to climate change impacts. Evaluation of Investment Options in Logistics Fleet and Services: This module focuses 6 on modernizing rural logistics fleets and services. It evaluates the pros and cons of various transport options in the Sahel, including non-motorized transport, two- and Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 5 three-wheelers, cars, light trucks and vans, large-capacity trucks, buses, rail, and water transport. While full electrification is not immediately feasible in most rural areas of the Sahel, the framework promotes low-emission transport options. It also recommends pilot electrification projects in regions with reliable renewable energy supply. Hybrid solutions, such as short-term leasing of low-emission vehicles, are encouraged as a transitional strategy. Recommended Investments in Institutional Capacity and Technology: This module 7 highlights the importance of strengthening institutional capacity to support sustainable logistics systems. It recommends investments in governance, regulatory frameworks, and capacity-building initiatives, along with the integration of technology to improve the efficiency and transparency of rural logistics. Assessment of the Impact of Investments: This module qualitatively assesses various 8 investment options based on their potential to have a measurable impact on the following major development objectives: (i) Connectivity and accessibility; (ii) Rural logistics infrastructure and services; (iii) Climate risk reduction; (iv) FCV protection; (v) Institutional capacity; (vi) Agropastoral economy; (vii) Employment and entrepreneurship; (viii) Trade; (ix) Food security and (x) Low-carbon economic development. The assessment outlook may be used to: • Formulate an investment strategy by combining investment categories that score higher than their peers in key priority objectives, • Compare alternative investment options in terms of their potential to address a specific priority, • Prioritize investments that serve multiple objectives and identify positive spillover effects worth pursuing, and • Monitor progress toward achieving the objectives of the investment strategy. For the latter, objectives are linked to key performance indicators (KPIs) that track progress by measuring performance against a predefined target. The module provides a non-exhaustive list of example KPIs that have been commonly used in the assessment of rural development initiatives. Investment Strategy - Assessment of Costs and Benefits: The final module outlines an 9 integrated strategy for rural accessibility and logistics investments in the Sahel. It also establishes the principles for conducting a comprehensive cost-benefit analysis for each component of the strategy. The strategy is designed to serve as a comprehensive roadmap for decision-makers, allowing adjustments based on cost-benefit findings and the evolving needs of each region. It involves interventions in: (i) Local and peri-urban logistics nodes and hubs (crucial for improving supply chain efficiency and reducing post-harvest losses in regional VCs), (ii) An expandable fleet of light motorized vehicles for freight and passenger transport, All-weather roads designed to serve intermediate destinations to connect rural communities (iii)  to markets, rather than addressing last-mile connectivity, which can be extremely resource- demanding, and Institutional and business practice reforms, aiming to create a sustainable ecosystem that (iv)  supports enduring VCs and fosters rural development in the Sahel. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 6 The strategy outlines both short- and long-term interventions, promoting a gradual transition to e-mobility supported by renewable energy infrastructure such as solar-powered charging stations. The framework is implemented at a regional scale in three rural areas of Chad, Niger, and Burkina Faso (referred to as ‘deep dive areas’). It provides practical examples of how the strategy can be adapted to the unique socioeconomic conditions and challenges of each region, and proving that under certain conditions—which are present in many parts of the Sahel—low-carbon development is not a luxury, but a necessity for development. With benefit-to-cost ratios (BCRs) ranging from 2.3 to 5.5 (for a discount rate of 12 percent and a 20-year investment horizon), the case studies demonstrate the measurable, positive impact of investment strategies on rural accessibility and logistics in the Sahel. A. Introduction Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 8 This report describes a strategic framework that integrates climate considerations to evaluate social and economic development through rural transportation and logistics solutions in the Sahel region. The framework is designed to be applicable in the context of the Sahel, considering the specific development goals, characteristics, and challenges that define the region. Built around the concepts of green, resilient, and inclusive development, the objective of the framework is to promote low-carbon investments in the transportation and logistics sector. It aims to maximize resilience and inclusivity while optimizing their benefit-to-cost ratio (BCR). It also attempts to guide investments to an optimum combination of hard infrastructure options with interventions in logistics equipment, operations, business models, and institutional capacity at the regional level and not exclusively toward the construction of infrastructure and adaptation works. A comprehensive set of measurable indicators helps users quantify all necessary parameters for appraising investments, ensuring that decisions are data driven and aligned with the framework’s goals. A.1 Context The framework supports low-carbon rural development in the Sahel, considering current conditions and future pathways, from ‘business as usual’ to more ambitious sustainable development scenarios. It focuses on the potential for enhancing rural logistics and promoting sustainable economic growth in the region. While the concepts presented aim to support low-carbon rural development, their applicability may vary across regions due to differences in resources, infrastructure, and institutional capacity. However, the framework aims to be an integrated investment strategy that will be parameterizable, and thus, applicable to various regions at different development stages. It can then be recalibrated as the development barriers in a region are lifted (for example, gradually support investments in e-mobility as the electrification rate of a region increases). Through this prism, the framework examines an array of investments ranging from rehabilitation of existing tertiary roads to assist producers in transferring their products, to investments in automation of processing to enhance trade volumes and the establishment of special economic zones to support cross-country trade. It emphasizes the production and processing activities that are crucial for rural economies in the Sahel. Specifically, the framework supports: • Agricultural production, food processing, and trading; • Livestock farming, trading, and processing including meat and dairy production facilities; and • Fishing and fish farming, including production, processing, and trading. B. The Climate Risk Landscape of Rural Logistics Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 10 B.1 Understanding Climate Hazards and Uncertainty The G5 Sahel Country Climate Development Report (CCDR) notes that several climate threats affect rural logistics in the region. Increased temperatures exacerbate drought conditions. Combined with changes in land-use practices, this can drive drylands to desertification. As a result, fewer agricultural products will be produced and traded, causing gradual changes in the demand side of the logistics chain. Prolonged and more frequent heat waves can be catastrophic for certain crops and fishing activities, especially in water-scarce communities. Increased temperatures and changes in water oxygen levels, along with the infrastructure required to adapt to climate change, are likely to affect inland fisheries, a significant source of food for many rural populations. The livestock sector is also severely affected, as heat stress reduces feed availability, lowers ruminant productivity, and compromises animal health, resulting in higher mortality rates and further straining livestock-dependent populations. Rising temperatures also pose a direct threat to the structural integrity of paved roadways and bridges, potentially leading to greater maintenance costs and disruptions. Fluvial and pluvial flooding may directly affect the supply side of the physical transport infrastructure, obstructing local products from reaching consumers, interrupting the efficient distribution of agricultural inputs, and hindering access to markets and food. It also reduces supply due to flooded croplands or flood-induced damage to main distribution hubs. Since 2000, floods in the Sahel have affected an average of 248,000 people each year, causing widespread damage to homes, roads, and other infrastructure while disrupting essential services.1 Sandstorms drastically reduce the usability of transportation corridors and may increase the risk of inundation as they block drainage routes where available. Rising sea levels, coastal erosion, and flooding threaten both road infrastructure and agricultural lands in Mauritania and Senegal, the only countries with a coastline. Coastal fisheries are also adversely affected as global warming disrupts ocean upwellings, altering nutrient availability and oxygen levels. B.2 Assessing Climate Risk Assessment in Multiple Future Contexts The present framework suggests analyzing two different scenarios in line with the RCP-SSP1 framework,2 capturing a range of potential future climate trajectories. The first, the ‘intermediate scenario,’ follows the SSP2.0–RCP4.5 pathway. It assumes a ‘middle-of-the-road’ trajectory with moderately effective mitigation policies, resulting in moderate global emissions. The second, the ‘pessimistic scenario’, follows the SSP5–RCP8.5 pathway. It assumes the most severe projections for global emissions with minimal mitigation efforts. RCP: Representative Concentration Pathway; SSP: Shared Socioeconomic Pathway 1 Available through Phase 6 of the Coupled Model Intercomparison Project (CMIP6), the SSP framework contains a total of eight 2 different multi-model climate trajectories based on alternative/plausible scenarios of future emissions and land-use changes, by which society and ecosystems will evolve in the 21st century. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 11 To assess climate risks, the exposure and vulnerability determinants are combined. The analyses consider two sources of vulnerability: • Physical vulnerability of the transport network measures the sensitivity of rural transport infrastructure to specific hazards. In the absence of detailed engineering data, the physical vulnerability of a corridor and its interconnected network will be assessed using qualitative vulnerability indicators such as (i) age; (ii) material (for example, paved or unpaved road surfaces); (iii) adaptation measures (for example, lack of drainage systems); and (iv) historical failures and disruptions on the network. • Social vulnerability measures the propensity of dependent rural communities to be adversely affected by specific hazards. To estimate this vulnerability, the network accessibility criteria are combined with social indicators (for example, the area’s poverty index).3 ‘Future landscape mapping’ is used to evaluate how possible changes to other social and physical systems (possibly driven by climate change) will contribute to climate risk—through vulnerability and exposure increase—within the project cycle. Indicative examples of such changes include: • Heavier land use due to changes in irrigation/agricultural practices, combined with drier future climates, will exacerbate water scarcity. The resulting competition may increase fragility, conflict, and violence (FCV) risks.4 • Changes in land-use patterns (for example, due to desertification) can affect runoff generation and, eventually, the region’s flood risk. • Demographic changes (that is, changes in population growth and annual income) can increase the demand for rural logistics and, by extension, increase the climate risk. At the same time, a sharp rise in the population will exacerbate water competition, which, if not adequately mitigated (for example, through water conservation practices), may reduce agricultural production, especially for smallholder farmers. B.3 How Climate Stressors Could Evolve in Different Climate Scenarios Compared to preindustrial levels, the temperature in the Sahel is projected to rise between o o approximately 2.5 C in the intermediate scenario and 4.3 C in the pessimistic one by 2080. This increase is expected to be most pronounced in the northern Sahel (closer to the desert), which could also experience a larger number of temperature extremes. The most extreme projections o refer to Niger, where the number of very hot days (temperatures above 35 C) per year may rise above 330 by 2080 in the pessimistic scenario. 3 https://hdr.undp.org/content/2023-global-multidimensional-poverty-index-mpi#/indicies/MPI 4 Barbosa, Caio de Araújo, and Shaadee Jasmine Ahmadnia. 2024. Assessing Climate Change Risks in Fragile and Conflict-Affected Situations - Insights and Recommendations from a Global Analysis (English). Washington, D.C. World Bank Group. http://documents.worldbank.org/curated/en/099090524150045260/P1771511f143250c819dca17a6cfecbd251 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 12 Projections of mean annual precipitation are uncertain due to the high variability in year-to-year precipitation patterns. According to the region’s Country Climate Development Report (CCDR), most climate models suggest an increase in precipitation for Burkina Faso, Chad, and Niger, while most forecasts suggest a decline in precipitation for Mali and Mauritania. An increase in precipitation does not necessarily mean more water availability, because higher temperatures at the same time can cause higher evaporation. In all cases, projections show that extreme precipitation events will rise. In the pessimistic scenario, extreme droughts followed by extreme precipitation may have a severe impact on the eastern Sahel countries. A recent study5 by the United Nations High Commissioner for Refugees (UNHCR) and the Potsdam Institute for Climate Impact Research (PIK) predicts a sea level rise of 38 cm on the Atlantic Coast and 40 cm in the Gulf of Guinea under the RCP6.0 scenario. B.4 The Extended Impact of Climate Change Climate change is expected to affect the economy, biodiversity, infrastructure, and human welfare. Under the pessimistic scenario, water scarcity will threaten the agricultural economy and reduce the water reserves, gradually drying wetlands. When combined with the projections for demographic increases, it will probably exacerbate conflicts over the control of water resources in a region already affected by FCV. As agriculture and fisheries constitute the main economic activities in the region, droughts, combined with land degradation, could lead to an increase in the number of food-insecure people— especially in the northern parts of the region. According to the CCDR, under a pessimistic climate scenario, crop revenues in Sahelian cropland areas are projected to decline (due to negative crop yield shocks) by an average of 5 to 10 percent. https://www.unhcr.org/in/sites/en-in/files/legacy-pdf/61a49df44.pdf 5 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 13 Extreme weather events may cause damage to infrastructure, although none of the scenarios predict a significant increase in the exposure of existing infrastructure assets (which are limited). Yet, settlements and economic production sites may be severely affected by extreme flooding and heat events, forcing the population to migrate internally. As a result, the region may experience substantial losses due to disrupted logistics, reduced productivity, and production shortfalls. According to the UNHCR report, these factors are projected to affect around 20 percent of the region’s total economic activity by 2080 under the RCP6.0 scenario. B.5 Why Investments in Low-Carbon and Resilient Logistics Matter Initial estimates suggest that the return on investments due to loss avoidance over a planning horizon of 20–35 years may be of the order of 5 to 10. Results from a parallel activity coordinated by the Global Center on Adaptation (GCA) titled “Climate Risks and Resilience and Adaptation Options Appraisal Report” for the Niamey-N’Djamena corridor6 suggest that the benefit-to-cost ratio (BCR) of investments in adaptation solutions ranges between 3 and 7.4 for the pessimistic scenario. Investments in low-carbon, resilient rural infrastructure can further increase BCR estimates by enhancing value through improved interactions among roads, logistics, governance, and trade practices. Based on this principle, low-carbon and resilient development paths for transportation in the Sahel are presented in Module 9 of this report, which focuses on a proposed investment strategy. GCA (Global Center on Adaptation). 2024. Climate Risks and Resilience & Adaptation Options Appraisal Report. 6 Niamey - Ndjamena Corridor (NNC) Upgrade. Project Report. Global Center on Adaptation. C. Five Principles of the Strategic Framework Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 15 The framework is designed to provide an integrated method for evaluating and selecting strategies to optimize investments in rural accessibility and logistics in the Sahel using objective and measurable data. It is built in accordance with five principles. C.1 Compatibility with the Sahelian Context Despite their development potential, Sahelian countries are characterized by a series of common challenges. Although the figures differ—sometimes significantly—the G5 countries are predominantly landlocked and exhibit tremendous disparities between the south and the north. They also suffer from the compounding effects of climate change and FCV, two phenomena that interact to create a ‘vicious cycle’, with each exacerbating the other. Climate change can intensify existing tensions, grievances, and inequalities, while FCV-related challenges can weaken the ability of governments and communities to effectively respond to climate change.7 In all countries, production and trade are further hampered by poor connectivity and inefficient logistics infrastructure and services. Moreover, Human Development Index (HDI)8 scores for the Sahelian countries remain among the lowest in the world: Niger and Chad have the lowest scores (0.394 and 0.398, respectively), with Mauritania (0.546) and Senegal (0.517) ranking the highest among the countries examined. Although the G5 countries achieved notable economic growth over the past decade—real gross domestic product (GDP) for the region grew at an average of 4.9 percent per year from 2010 to 2019—this growth has not translated into significant gains in GDP per capita, which increased by only 1.65 percent annually, largely due to rapid population growth.9 Income levels remain low across the region, ranging from $600 per capita in Niger to $2,150 in Mauritania (2023).10 Nearly 31 percent of the population lives below the international poverty line, underscoring the persistent socioeconomic challenges faced by the region. On the other hand, there are recurring opportunities for growth if the existing ecosystem is properly mobilized. This ecosystem includes the demographic composition of the population in all countries, the land fertility at specific sites (which would benefit further by the materialization of irrigation projects), renewable energy potential, and the existence of multiple development initiatives in the region. As such, the strategic framework has been built so that the proposed investments can be specific to the Sahelian countries, offering solutions to the identified barriers while simultaneously maximizing opportunities. 7 Barbosa and Ahmadnia 2024; World Bank Group. 2024. “Promoting FCV-Sensitive Climate Action in CCDRs: An Approach Note.” Washington, D.C. 8 https://hdr.undp.org/data-center/human-development-index#/indicies/HDI 9 World Bank Group. 2022. G5 Sahel Region Country Climate and Development Report. CCDR Series. © Washington, DC: World Bank. http://hdl.handle.net/10986/37620. License: CC BY 3.0 IGO. 10 https://data.worldbank.org Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 16 C.2 Green and Climate-informed Investments The rural sections of the Sahel countries are the most vulnerable to climate change, significantly lacking adaptation works or disaster prevention measures. Extreme heat and drought are frequently interspersed with flooding, affecting thousands of people and severely disrupting production, services, and accessibility across countries and within regions. This fact highlights the fragility of the economic model and the communities. Current development patterns rely almost exclusively on the primary sector and limited processing activities. Additionally, people need to travel long distances on foot to reach markets or basic services. However, the urgency for action toward development should not undermine the necessity to include climate mitigation11 in any investment. Sahelian countries have great solar power potential due to constant sunshine, enabling the development of both utility-scale and off-grid solar parks12 and solar-powered facilities despite inadequate grid coverage. Zero-carbon facilities, large-scale investments in electric logistics fleet, or short-term e-mobility access cannot be planned due to the current infrastructure, as well as the density and condition of the power grid in most of the rural regions of the Sahelian countries. The strategy aims to structure investment plans that ensure a forward-looking approach and avoid locking in carbon-intensive means and equipment. For example, instead of choosing between investing in a large fleet of electric vehicles (EVs) and conventional ones, the framework explores various options and combinations: • Investing in a small fleet of EVs and solar-powered chargers in preset locations (for example, collocated with solar-powered processing plants) to provide logistics services within a specific range by specific users, if the road conditions meet the necessary standards. The fleet and geographic coverage could then gradually increase following the region’s development pathway. • Investing in leasing a fleet of low emissions conventional vehicles to perform specific operations short term rather than fully acquiring their ownership. These could gradually be replaced by EVs, if the appropriate infrastructure is developed. In both cases, the decision regarding investments would not be made in isolation, but rather as part of the overall investment package for the corresponding value chain. EV chargers would be collocated with the solar-powered warehouse as part of an integrated strategy. This strategy would aim to optimize the size, location, and function of each component of the investment, delivering increased returns. Similarly, in the case of conventional vehicles, short-term leasing is prioritized over purchasing them or providing subsidies to private parties or the local population to acquire them. This is because the latter would augment the risk of carbon lock-in for decades. Examples of application of the strategy in various rural regions in the Sahel are provided in the chapter ‘Deep Dives in the Sahel’. 11 In the Sahelian context in particular, investing in green solutions, for example, solar energy, may also be the least-cost solution to provide ample energy access. 12 https://www.un.org/africarenewal/sahel Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 17 C.3 Focus on Both Hard and Soft Infrastructure Measures The framework focuses on interventions in rural accessibility and logistics as sectors where growth- boosting interventions are possible. Such interventions may include constructing or upgrading transportation infrastructure, logistics fleet and services, and storage and processing units. They also include the design and implementation of the appropriate climate adaptation works (hard or soft solutions), security measures, improvements or enhancements in the institutional framework, as well as investments in the generation, storage, and transmission of energy to support the foreseen actions. In line with the ‘Green and Resilient Investments’ principle, the framework promotes renewable energy generation, such as solar and wind power, to support green and sustainable logistics operations. This approach ensures that transportation and logistics activities rely on clean energy sources, reducing carbon emissions and environmental impact. The framework also calls for actions that amplify additional benefits such as empowerment of women, employment opportunities, diversification of the production mix, building an attractive ecosystem for small and medium enterprises (SMEs) and entrepreneurship. This would maximize the transformative power of these investments and reveal the untapped development potential of the Sahel. C.4 Supply Chain Integration The Sahel needs immense interventions in rural accessibility and logistics. The region requires the generation of massive capital needs for investments in road or rail infrastructure, logistics fleet and services, hubs and storage facilities, power generation and transmission, adaptation works, training, and modernization of the regulatory framework and business procedures. Such interventions could also increase the desired growth potential of the region, as they form the foundations for developing trade and exploiting agricultural production. In this challenging environment, the current strategic transport framework introduces a new approach. It is based on the core principle that an investment strategy delivers the best results when following a masterplan addressing the entire value chain. This approach aims to avoid broken links created by interventions targeting specific barriers. These barriers often neglect how the entire system will respond, usually due to lack of funding. Ultimately, this limits the efficiency of the interventions. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 18 C.5 Data-driven Decision-making The strategic framework is designed to support users in: i. estimating the differences in the development stages among the countries and their development potential, ii. estimating barriers and opportunities, iii. evaluating the urgency for interventions, and iv. appraising solutions based on their cost-to-benefit ratio. Depending on the assessment stage at which the framework is implemented, it may be used to prioritize regions within a country, make comparisons among countries, or evaluate specific solutions locally. Based on the level of analysis (national, regional, or local), the framework contains different instances, each demanding an extra level of granularity of the input data. It is essential that these data are from reliable sources to ensure objective results. The framework includes various indicators and proposed resources for each data category, specifying the level of detail based on the analysis level (selection/prioritization or assessment of specific solutions). For detailed assessments such as investment planning, the data should come from advanced analyses and extensive stakeholder consultations. The framework is also designed to be applicable to both data-rich and data-poor environments, recognizing that the user may have limited access to information or insufficient resources. To ensure applicability even under such conditions, the framework proposes alternative high-level indicators that are still measurable (and hence provide objective outputs) or appropriate proxies in cases where the original indicators may be unavailable. D. Structure of the Framework Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 20 The strategic investments framework is organized into nine modules: Modul 1: Modul 2: Ch r ct ri s countr ’s Id ntifi s b rri rs nd opportuniti s t d v lopm nt st t hi h l v l. th r ion l l v l to prioriti rur l r ions b s d on th ur nc for int rv ntions. Modul 3–8: Modul 9: • Ass ss s pl usibl inv stm nt options in • Pr s nts r comm nd d inv stm nt lo istics infr structur nd s rvic s for str t for rur l r ions in th S h l, th r ion of int r st. djust bl b s d on sp cific • Outlin s th pros nd cons of ch option. inv stm nt obj ctiv s. • Ev lu t s th imp ct of ch option in • Provid s uid nc on v lu tin th r l tion to th inv stm nt obj ctiv s. costs nd b n fits of ch str t compon nt. • Culmin t s in compr h nsiv conomic ppr is l of th ov r ll inv stm nt. Based on the outcome of the economic appraisal, users may need to revisit Modules 4–8. They can iterate through different investment options and replace certain strategy components with more economically viable alternatives. The framework supports low-carbon investments in resilient rural logistics and transport, aiming to enhance the growth of rural economies. It focuses on: i. the primary sector (crop and livestock production, aquaculture, fisheries, and forestry for food and non-food products), ii. manufacturing, iii. rural trade, and iv. services. Activities associated with high greenhouse gas (GHG) emissions or not directly characterized as rural, such as mining and fossil fuel extraction, are excluded from the framework and the Deep Dives conducted as part of this assignment. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 21 Figure D.1 The Sunday market in the village of Tiogo next to the Tiogo Forest, Burkina Faso Source: Sam Phelps on Flickr (Creative commons license). D.1 Baseline Modules (1–3) The first three modules of the framework are designed to appraise the current landscape and determine future goals and strategies for their implementation. Evaluations are implemented using indicators from reliable resources, facilitating an objective assessment even in data-poor environments. The intended outcomes of the baseline modules are: • The development goals at the country level • A longlist of regions requiring interventions in rural accessibility & logistics • The barriers and opportunities of the selected region(s) for intervention, capturing their sub-regional characteristics to inform targeted investments • A set of solutions to address the identified barriers, which can be implemented through interventions in rural accessibility and logistics. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 22 Current Development Stage and Development Goals Evaluate the country’s outlook in key development areas: demographics, rural economic growth, human welfare, transport, trade, energy, and security and 01 safety. This assessment helps users map the current development landscape and define high-level development needs, specifying priority sectors for investments in rural accessibility and logistics. Development Barriers and Opportunities Assess barriers and opportunities for achieving development priorities in different Sahelian regions. Identify five classes of opportunities (primary sector and 02 manufacturing; entrepreneurship and jobs creation; trade and services; existing financing; penetration of renewables) and five classes of barriers (connectivity and accessibility; logistics infrastructure and services; climate risks; FCV risks and food insecurity; institutional capacity). Calculate a unique score for each barrier and opportunity for each administrative unit in the Sahel. Use these scores to prioritize regions for interventions. Refine identified barriers and opportunities for selected regions with more detailed data on sub-regional characteristics and economic activity. Potential Solutions to Barriers and Classification of Investments Identify solutions to the barriers identified in Module 2 through interventions in rural accessibility and logistics. Classify solutions into three investment 03 options (logistics nodes, fleet, and road infrastructure) for evaluation in subsequent modules. D.2 Investment Options Evaluation Modules (4–6) Modules 4–6 assist users in evaluating investment options in rural accessibility and logistics. For every class of investment, the relevant module provides pros and cons of various intervention options when considered in the Sahelian context, with the aim of informing users on the (cost) efficiency of each option under different scenarios. The outcomes are utilized to: • Inform the investment strategy • Guide the assessment of investments that are to be designed in the Deep Dive areas • Inform users on the complementarity of interventions and the synergies required to maximize the impact of the investment plan Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 23 Evaluation of Investments in Logistics Nodes Guide users on deciding the location and hierarchy of logistics nodes (local or peri-urban), their intended use (single or multi-purpose facilities), and capacities 04 (grid-connected, solar-powered, or zero-carbon security and surveillance equipment). Demonstrate that while every investment category is important in the supply chain, not all are immediately applicable in the Sahelian context due to cost implications or lack of institutional capacity and interconnected infrastructure. Evaluation of Investments in Road Infrastructure Provide guidance on evaluating the efficiency of road infrastructure considering the level of intervention (micro- or meso-level network) and the type of intervention 05 (new connections or all-weathering of existing sections). Discuss alternatives that maximize the efficiency of the rural logistics supply chain Evaluation of Investments in Logistics Fleet and Services Present key considerations on fleet composition (non-motorized transport, intermediary modes, cars, light trucks and buses, and heavy trucks) and transition 06 to e-mobility. Inform investment plans on the optimal conditions for each transport mode and the associated infrastructure for operation and maintenance. For example, while electric two-wheelers are excellent for short distances, their cost-efficiency decreases over longer distances or on dirt roads. Highlight that an aggressive decarbonization strategy is not viable for most Sahelian countries. Instead, adopting a small fleet of electric buses could be beneficial, especially with operational and fiscal reforms. D.3 Enhancement and Monitoring Modules (7–8) Modules 7 and 8 include provisions to ensure that investments in rural accessibility and logistics are both well-designed and efficiently executed in a way that addresses the overall development goals identified in the first modules. This is accomplished through: • A set of no-regret actions that create the appropriate institutional environment and synergies for nurturing the interventions • An evaluation methodology to assist planning decisions • A monitoring scheme to keep track of the performance of the interventions over time and assess their long-term impacts Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 24 Recommended Investments in Institutional Capacity and Technology Evaluate investments in institutional capacity and technology to maximize the impact of the main investment package. These investments include: 07 i) interventions in trade policies and agreements (for example, village clusters, farming partnerships, agreements with retailers); ii) governance of the logistics sector (for example, tariff policy, regulatory framework, tax incentives); iii) legislative reforms (for example, law enforcement, border friction removal, special economic zones); iv) capacity-building activities across economic sectors; v) exploration of risk transfer mechanisms (such as CAT-DDOs, MIGA insurance, cargo/product liability insurance); and vi) investments in technology and govtech. Consider these as no-regret options, though some may have implementation costs. Assessment of the Impact of Investments Present a framework for evaluating the performance of investments across different development priorities. Guide users on structuring an investment 08 strategy aligned with their development goals. Introduce measurable KPIs to set implementation targets, monitor investment performance, and define success. D.4 Strategy Appraisal Module (9) The final module offers recommendations for formulating an integrated investment strategy in rural logistics and accessibility within the Sahelian context, and guides users through conducting a comprehensive cost-benefit analysis of the investment components. Formulation of Investment Strategy and Appraisal of Costs and Benefits Build on the findings of previous modules to present an integrated investment strategy for rural accessibility and logistics in the Sahel. Cover both short- and 09 long-term interventions, including the development of logistics nodes and hubs, all-season roads, low-carbon or electric vehicles, and institutional and business practice reforms. Aim to foster value chain growth to support rural development in the region. Ensure the strategy is flexible and can be adjusted to fit the specific characteristics of the intervention region, investment objectives, and outcomes of Modules 2–8. Establish principles for conducting a thorough cost-benefit analysis of the strategy’s components, leading to a comprehensive economic appraisal of the overall investment. FRAMEWORK Module - 1 Assessment of the National Context and Identification of Needs Overview An index-based approach is used to assess the development stage of Sahelian countries using seven key parameters: • Demographics • Rural Economic Growth • Human Welfare Status • Condition of Transport Corridors • Trade Activity • Sustainable Transport Outlook • Safety and Security Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 27 1.1 Assessment of the Current Development Stage and Identification of Needs Development descriptors The development stage may be appraised through an index-based approach combining seven parameters that can be used as descriptors of various aspects of the status of development of a country in the Sahel Each parameter is associated with specific, measurable indicators accompanied by recommended resources that can be used for their estimation. By scoring the individual indicators and aggregating them into a single score per development parameter, the user can instantly determine the country’s development stage and pinpoint areas where urgent action is needed. For completeness, the disaggregated results are provided in Appendix 1, as they contain valuable information that may be concealed by the averaging process. The details of the scoring methodology are described in Box 1.1. Table 1.1 Appraisal of the development status in each country Parameter Relation to development status The first class of necessary information refers to demographic data such as country statistics, population growth, rural population, available workforce and growth potential, age distribution, and spatial distribution of population Demographics within the country. It, therefore, serves as a measure of the boundaries and scale of the assessment in terms of overall potential beneficiaries identifying— where possible—differences even among regions within the same country. This index provides an overview of basic economic development indicators and is used to understand the economy's productivity and its upside potential at the national and regional levels. Emphasis is given to descriptors of rural economic growth, including agricultural production and employment in the Rural economic sector, thereby funneling the assessment from the global (that is, country- growth level) outlook toward the regional and local levels. The index can be used as a high-level quantifier of the differences in economic development among the various countries and as a key performance indicator (KPI) to evaluate the effectiveness of any intervention proposed. Decisions regarding investments in rural accessibility and logistics cannot be agnostic of the social context of the country/region in which they are applied. Given that the detailed assessment of the socioeconomic landscape Human welfare in a region is a complex task that may include different interpretations, the status proposed index is considered as a simplified way to reliably represent an overall score encompassing data on health and life expectancy, access to knowledge, and living standards. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 28 This index is a product of a group of indicators meant to assess, at a high Condition of level, the status, operability, and functionality of the existing transportation transport corridors within a country without requiring a field inspection. It helps shape corridors and an understanding of the existence and density of the primary road network accessibility and the accessibility from various regions and the network’s exposure to potential climate-related hazards (for example, proximity to waterways). The dynamics of trade activity in a region and logistics performance are important parameters for prioritizing investments as they serve as measures of its development potential. The index is meant to provide an overview of Trade activity the region's main trade patterns, the sector's main players, and the logistics performance. This is achieved using indicators appropriate for the level of appraisal required at the preliminary stage. This is a combined index used as a preliminary measure of the carbon footprint of transportation and logistics operations in a region and as an indicator of the national targets for CO2 reduction (prescribed by the Sustainable country’s Nationally Determined Contributions [NDCs]). It can, therefore, transport outlook be used to determine the GHG emissions baseline and as a comprehensive descriptor of the country’s goals (and hence as an indicator of the performance of an intervention). The Sahel is a fragile region dominated by frequent conflicts and violent events. Security and safety concerns are expected to have an impact on the decisions regarding investments in rural accessibility and logistics. On the Safety and other hand, the investments themselves should—to the extent possible— security contribute to combatting insecurity and ensuring safety for all. This index is an important decision-making parameter encompassing indicators of the frequency of violent events, population affected by climate-related events, displaced population, as well as political violence. Source: World Bank. 1.2 Development Goals Using the outcomes of this module, decision-makers will be able to draw conclusions on the current development stage of each country and outline the general context within which investments may be proposed.13 An illustrative presentation of the development outlook of the six Sahelian countries— expressed in terms of the seven development descriptors—is provided in Figure 1.1. The score of each development descriptor can be seen as a proxy for the country’s capabilities in the corresponding parameter. Values below 0.2 indicate underperformance and urgency for action; medium-range scores (0.4–0.6) are representative of a performance that complies with average trends and can be considered acceptable, while scores above 0.75 demonstrate a fairly good performance. Note that the scope of Module 1 is to introduce each country’s profile and is not meant to serve as a guide for developing a 13 country-level strategy which is beyond the scope of the present document. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 29 Table 1.2 Country-level development indicators Development Indicator Goalposts Weights14 Source Demographics https://databank.worldbank. Population growth: Max: +15% | Min: −15% 0.4 org/source/world-development- annual % indicators https://databank.worldbank. Rural population: Max: 100% | Min:0% 0.4 org/source/world-development- % of total population indicators Population ages World Population Prospects (0–14 years): % of total Max: 100% | Min:0% 0.2 2022: Summary of Results | population Population Division (un.org) Rural Economy https://databank.worldbank. GDP per capita: $ Max: $8,737 | Min: $110 0.25 org/source/world-development- indicators https://databank.worldbank. Annual GDP growth Max: +100% | Min: −100% 0.2 org/source/world-development- (5-year average) indicators High-income Class: 1; New World Bank country Upper-middle: 0.66; Country’s income group15 0.25 classifications by income level: Lower-middle: 0.33; 2022-2023 Low: 0 Agriculture, forestry, https://databank.worldbank. and fishing, value added: Max: +50% | Min: 0% 0.08 org/source/world-development- % of GDP indicators http://databank.worldbank. Manufacturing, value Max: +50% | Min: 0% 0.07 org/source/world-development- added: % of GDP indicators Employment to population ratio, 15+: % to tola Max: +100% | Min: 0% 0.15 Ilostat.ilo.org/data (5-year average) Weights may be subject to change. 14 The World Bank’s definition of income groups (FY23): Upper: >$13,205, Upper-Middle: $4,256–$13,205; Lower-Middle: $1,086– 15 $4,256; Low: <$1,086. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 30 Development Indicator Goalposts Weights14 Source Human Welfare https://hdr.undp.org/data- Human Development Index Max: 1 | Min: 0 0.75 center/human-development- (HDI)16: - index#/indicies/HDI https://databank.worldbank. Poverty headcount ratio: Max: 0% | Min: 100% 0.25 org/source/world-development- % of population indicators Transport Corridors https://www.worlddata.info/ Road Density: km/100 km2 Max: 6117 | Min: 0 0.4 africa Total corridor18 density: https://www.worlddata.info/ Max: 10019 | Min: 0 0.2 km/100 km2 africa Rural Accessibility Index Rural Access Index (RAI) Max: 100 | Min: 0 0.4 (Country-level calculation) | Data Catalog (worldbank.org)20 Trade Activity https://databank.worldbank. Logistics Performance Min: 1 | Max:5 0.33 org/source/world-development- Index (LPI) indicators https://databank.worldbank. Imports of goods and Max: +100% | Min: 0% 0.33 org/source/world-development- services: % GDP indicators https://databank.worldbank. Exports of goods and Max: +100% | Min: 0% 0.33 org/source/world-development- services: % GDP indicators Energy Production/Consumption Max: 246.8121 TWh | https://ourworldindata.org/ Electricity generation: TWh 0.4 Min: 0 energy/country 16 Composite index summarizing achievements in key dimensions of human development including life expectancy, education levels, and living standards. 17 The maximum value has been set equal to the road density of South Africa which is the highest among African countries. 18 Includes roads, waterways, railroads. 19 The maximum value has been set equal to the road density of South Africa which is the highest among African countries. 20 Where information was missing, it was completed by the calculations of Component 3. 21 Representing the energy generation capacity of South Africa which is the highest across Africa. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 31 Development Indicator Goalposts Weights14 Source Population with access to Max: +100% | Min: 0% 0.3 https://ourworldindata.org/ electricity: % of total Max: 0 tons | Min: 11.1 CO2 emissions per capita 0.3 https://ourworldindata.org/ tons22 Safety & Security High: 0 Medium: 0.5 (if the country was included Fragile and conflict- FCSList-FY06toFY23.pdf in the ‘Medium Conflict 0.4 affected situation index (worldbank.org) Category’ anytime between FY20–FY22) Not in the list: 1 Negative Exposure to major climate High: 0 threats: Water scarcity, 0.6 https://www.thinkhazard.org/ Flood, Extreme heat23 Medium: 0.5 Low: 1 Source: World Bank. Having established a clear picture of where each country is lagging compared to other African countries, as well as the size of the development challenge for the country to advance to the next stage, it will be possible for decision-makers to define development needs and set targets regarding the variables that require improvement. Representing the CO2 emissions per capita of Libya which are the maximum across the Africa region. 22 Each hazard shall be scored separately. The score of the indicator is the arithmetic mean of the individual scores. 23 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 32 Box 1.1 Calculating complex development descriptors from single development indicators The first step is to transform the indicators expressed in different units into indices between 0 and 1. To this end, minimum and maximum values (goal posts24) have been determined based on historical evidence, global practices/standards, and judgment. The transformation sets the maximum of each indicator to 1, and the rest fall between 0 and 1 in a linear manner: (actual value-min value) Dimension index = 1.1 (max value-min value) The aggregation is performed between indicators that take positive values and have a positive impact on the respective development parameter (that is, the higher the indicator score, the better the parameter’s performance). Indicators describing negative impacts are hence represented by their reciprocal value (for example, low scores are assigned for high unemployment rates that negatively affect the performance of the rural economy). In the case of binary indicators (that is, cases where a Yes/No response applies), one value is assigned to the response that improves the performance of the corresponding development parameter. Once the single indicators have been transformed, the score of each development descriptor can be calculated as the weighted average of the individual scores (xi) according to the linear combination formula of Eq. 1.2: 1.2 The choice of weights, , is essential in this method as they represent the importance of each indicator in the evaluation process. Guidance on the selection of weights is provided in Module 2. Determination of goalposts has been based on historical evidence, global practices/standards and judgement. 24 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 33 Figure 1.1 Performance of the six Sahelian countries in the seven development variables examined by the framework A D mo r phics Low Av r Good Afric n countri s ( xc. North Afric ) S n l Ni r M urit ni M li Ch d Burkin F so 0 0.25 0.5 0.75 1 B Rur l Econom Low Av r Good Afric n countri s ( xc. North Afric ) S n l Ni r M urit ni M li Ch d Burkin F so 0 0.25 0.5 0.75 1 C Hum n w lf r Low Av r Good Afric n countri s ( xc. North Afric ) S n l Ni r M urit ni M li Ch d Burkin F so 0 0.25 0.5 0.75 1 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 34 Figure 1.1 Performance of the six Sahelian countries in the seven development variables examined by the framework (cont.) D Tr nsport Low Av r Good S n l Ni r M urit ni M li Ch d Burkin F so 0 0.25 0.5 0.75 1 E Hum n w lf r Low Av r Good Afric n countri s ( xc. North Afric ) S n l Ni r M urit ni M li Ch d Burkin F so 0 0.25 0.5 0.75 1 F Tr d ctivit Low Av r Good Afric n countri s ( xc. North Afric ) S n l Ni r M urit ni M li Ch d Burkin F so 0 0.25 0.5 0.75 1 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 35 Figure 1.1 Performance of the six Sahelian countries in the seven development variables examined by the framework (cont.) G En r Low Av r Good Afric n countri s ( xc. North Afric ) S n l Ni r M urit ni M li Ch d Burkin F so 0 0.25 0.5 0.75 1 H S f t & S curit Low Av r Good S n l Ni r M urit ni M li Ch d Burkin F so 0 0.25 0.5 0.75 1 Source: World Bank. FRAMEWORK Module - 2 Identification of Development Barriers and Opportunities Overview This module identifies development barriers and opportunities in the Sahel region. It highlights five main categories of opportunities for rural development: 1. Primary and Manufacturing Sectors 2. Trade 3. Financing Opportunities 4. Entrepreneurship and Jobs Creation 5. Penetration of Renewables and e-Mobility The module also identifies five main barriers to rural development: 1. Connectivity and Accessibility 2. Climate Risks 3. Logistics Infrastructure 4. FCV Risks and Food Insecurity 5. Institutional Capacity It concludes with a methodology for subnational prioritization of rural regions based on the assessment of barriers and opportunities. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 38 2.1 Identification of Development Barriers and Opportunities Opportunities for rural development in the sahel Based on a preliminary high-level analysis in the Sahelian countries, the module highlights five main categories of opportunities that may be explored extensively to augment growth through investments in rural accessibility and logistics. Primary and Manufacturing Sectors A large portion of the northern parts of the Sahel are deserted. However, the land is quite fertile in several areas in the south. Although agriculture and livestock farming are the most common revenue-generating activities in the rural regions, important opportunities in the primary sector may also arise from the development of fisheries around Lake Chad or in the Senegalese sea. Manufacturing and handcrafting are also identified as sectors that are able to augment growth in some rural regions. Trade Rural regions in the Sahel produce several highly nutritious crops that can be traded domestically and internationally, offering significant employment opportunities and potential for socioeconomic growth. Additionally, the existence of numerous treaties and trade initiatives (for example, AfCFTA25) to support domestic and international trade in developing Africa constitute a major opportunity for multiple investments in the sector with an obvious upside potential. Financing Opportunities By leveraging existing MDB26 financing to strategically drive investments in rural logistics and accessibility—particularly in areas where infrastructure gaps persist— the Sahelian governments have a unique opportunity to unlock the economic potential of rural areas, create jobs, and build more resilient economies toward long-term, sustainable development. Entrepreneurship and Jobs Creation The Sahelian rural regions are inhabited by one of the youngest populations in Africa. Hence, there is a sizable workforce that could significantly contribute to increasing the GDP of rural regions of their countries by exploiting employment opportunities or embarking on entrepreneurial initiatives. Penetration of Renewables and e-Mobility As growth is ramping up, the Sahelian countries have a unique chance to strategically focus their development plans on the adoption of renewable energy sources to support processing and e-mobility. This is supported by the fact that the Sahel benefits from a massive renewable energy potential. Harvesting it is both practical and forward-looking. Africa Continental Free Trade Agreement. 25 Multilateral Development Bank. 26 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 39 2.2 Barriers to Rural Development in the Sahel As evidenced by a thorough institutional capacity baseline and geospatial assessment performed for the G5+Senegal countries of the Sahel as part of this report, the region currently faces a plethora of challenges obstructing its growth. These barriers have been classified into five main categories that could benefit from investments in rural accessibility and logistics. Connectivity and Accessibility The rural regions in the Sahel are widely spread geographically and suffer from a lack of access to transportation corridors and poor connectivity between settlements and markets or facilities. People usually travel long distances on foot, lacking access to motorized means of transportation (for freight or people), while logistics services are fragmented and mostly informal. Paved or all-weather roads mainly exist in some of the major transnational corridors or in parts of the main urban centers, while most tertiary rural tracks are largely inaccessible by motorized vehicles. Climate Risks Almost all countries in the region examined suffer from the consequences of extreme climate events, further exacerbated by climate change. Extreme heat and prolonged drought are often interspersed with high-intensity floods, often resulting in fatalities and hampering economic activity across sectors, while dust storms in the parts bordering the desert further reduce connectivity. Logistics Infrastructure In many cases, loads are still carried on the head or animal carts, while people carriers (for example, buses) only serve major routes, albeit quite infrequently. Where available, the logistics fleet is aged and inefficient—a problem exacerbated by the road conditions that drastically limit the attainable driving speed. The lack of hubs and storage facilities obstructs the development of a competitive ecosystem to support the growth of commercial activities. FCV Risks and Food Insecurity For more than 15 years, the Sahel region has been marked by escalating violence and communal conflicts driven by competition for land and resources. Displacement, rapid population growth, and food scarcity—exacerbated by the adverse effects of climate change—have led to acute humanitarian crises, hampered further by ongoing political insecurity and conflicts at the borders of the Sahel region. At the same time, weak state institutions and a lack of government legitimacy hinder efforts to address threats to peace, security, and healthy socioeconomic development. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 40 Institutional Capacity Most countries examined rank very low on the Poverty and Human Development Indexes, often characterized by political instability and weak institutions. A high degree of informality prevailing in numerous sectors of the economy hinders the development of healthy business conditions and drastically undermines the confidence of potential (local and international) investors and entrepreneurs in the countries’ institutional capacity. Figure 2.1 People and merchandise on a truck in Mauritania Source: Ferdinand Reus on Flickr (Creative commons license). Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 41 2.3 Subnational Prioritization of Rural Regions Based on the assessment of barriers and opportunities at the regional level, it is possible to prioritize regions within each country regarding the need for investments in rural accessibility and logistics to foster their development pathways. This is done through a two-step methodology comprising (i) the quantification of opportunities and barriers using measurable indicators and (ii) the ranking of regions based on their combined score for all indicators. Quantification of barriers and opportunities In the absence of a meticulous analysis of barriers and opportunities, an index-based assessment is recommended, especially since the quantification is to be performed at the initial investment planning phase. Hence, each barrier or opportunity is quantified based on one, or a combination of more, indicators that can be either measured (using geospatial mapping tools) or directly retrieved from available resources. The granularity of the analysis depends on the prioritization requirements. For the subnational prioritization performed here, the indicators are measured in general at the Admin level 3,27 sporadically complemented by lower granularity data (where Admin level 3 data cannot be reliably retrieved). The methodology has been designed so that it may be used in both data-rich and data-poor environments, by using different indicators for each case. The higher the quality of data, the more informed the scoring of each parameter. The selected indicators for each parameter are outlined in Tables O1 to O5 and B1 to B5. Aggregation Perform the aggregation in two steps. First, combine the sub-indicators into a single score for each identified opportunity and barrier. Normalize each sub-indicator into a 0–1 range using the methodology described in Box 1.1. Set the goalpost values (the upper and lower limits of the normalization range) to be equal to the largest and lowest value of the dataset, unless stated otherwise. The region with the highest value in a particular sub-indicator receives a score of 1 (100 percent), the worst-performing region receives a score of zero, and the rest fall in between. Calculate the score of each opportunity or barrier as the weighted average of the scores of its respective sub-indicators. Without loss of generality, set the partial weights of the sub-indicators to = 1/Ni (where Ni is the number of indicators describing the opportunity or barrier). Repeat this procedure for all administrative units across the Sahel. Next, calculate the total score of any administrative unit by summing the individual barrier and opportunity scores multiplied by their respective weights wi (provided in Table 1.2). Consider the administrative units that receive the highest score among their peers as priority areas for implementing investments in rural accessibility and logistics. Admin level 3 refers to the third tier of administrative division, positioned below the national (level 0), regional (level 1), and 27 district or provincial (level 2) levels. While the terminology varies across Sahelian countries—communes in Burkina Faso, Niger, and Mali; sub-prefectures in Chad; districts in Mauritania; and arrondissements in Senegal—these divisions generally serve the same purpose. They function as localized government units, acting as intermediaries between higher regional authorities and local populations, managing issues such as land use, civil services, and local development. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 42 O1 Primary and Manufacturing Sectors Decision Environment Dimension Indicators Data Rich Data Poor Use any option: • Agriculture, forestry, and fishing, value added: % of GDP Primary Sector • Ratio of regional production Contribution of the (agricultural/fishing) over the primary sector in the country’s total: (%) local economy Primary Sector % of regional GDP (RGDP) Annual growth rate of primary sector (%): 5-year average % of cultivated area: [cultivated area]/ [total area] Agricultural Land and Productivity % of irrigated area (over total cultivated) Availability of arable land and vegetation Use both options: changes • Cropland changes (net gain or net loss) • Land productivity dynamic (LPD): % Share of the labor force employed in agriculture (%) Use either option: Employment in Primary Sector • Women employed in primary sector: With an emphasis on % of total labor force youth and women • Share of female landowners Young people employed in primary sector: % of total labor force Manufacturing, value added: % of GDP Manufacturing Sector Manufacturing, value added (annual % growth) Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 43 O2 Entrepreneurship and Job Creation Decision Environment Dimension Indicators Data Rich Data Poor Economy and Growth Use either option: (regional economic • GDP growth (% annual) activity and growth potential) • GDP per capita growth (% annual) Population density (regional estimates) Population growth rates: National/ Regional estimates Employment to population ratio by sex Human Capital and age: National estimates and opportunities for employment growth Employment to population ratio by sex and age: Regional estimates Employment growth projections (% annual) Enterprises birth rate (3-year average) Commercial bank branches (per 100,000 adults) - proxy for easier access to finance O3 Services and Trade Decision Environment Dimension Indicators/Assessment Variable Data Rich Data Poor • Ratio of domestically traded agricultural products: % of total regional production Trade Intensity (exports/imports and • Intra-regional trade of agricultural intra-regional trade) products: % of total (regional) production • Number of markets (per 100,000 adults): regional estimates Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 44 Calculations performed at Admin level 3: Transportation Hubs • 1/Distance from main market to (proximity to nearest transit hub transportation hubs offering potential for Transit volume of major ports: intra-regional trade) Freight traffic of airport capacity of transit hubs O4 Financing Opportunities Decision Environment Dimension Indicators Data Rich Data Poor MDB Financing in Commitment amount in transport projects Transport MDB Financing in Agriculture, Fishing, Commitment amount in the sector and Forestry O5 Penetration of Renewables and E-Mobility Decision Environment Dimension Indicators/Assessment Variable Data Rich Data Poor CO2 transport emissions/Number of registered vehicles: tons/car E-Mobility (existence of motorized traffic and availability of GDP growth - used as a proxy for electricity) estimating future vehicle ownership status Average age of vehicle (by vehicle type) Density of electrical grid: regional calculations Renewable Energy Solar (theoretical) potential measured by the solar global horizontal irradiation of a region (kWh/kWp)28 28 Source: ESMAP. “Global Photovoltaic Potential by Country.” Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 45 Submitted/Updated NDC pledges Reduction in transport-related GHG Climate Policies emissions by 2050 Reduction in production-related GHG emissions by 2050 B1 Connectivity and Accessibility Decision Environment Dimension Indicators/Assessment Variable Data Rich Data Poor Road Density - Total network/Land area (1/km2): Regional estimates Use either option • Rural Accessibility Index (RAI) - Percentage of population living within a 2-km distance from all-season roads • Percentage of population living within a 5-km distance from all-season roads Accessibility Use either option (access to all-season • RAI - Percentage of population living roads) within a 2-km distance from any road infrastructure* • Percentage of population living within a 5-km distance from any road infrastructure* * Primary, secondary, or tertiary Average distance between major settlements* and nearest health/ education center * with >1,000 inhabitants Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 46 B1 Connectivity and Accessibility Decision Environment Dimension Indicators/Assessment Variable Data Rich Data Poor Percentage of primary network (to total*) - proxy of connectivity** (in lieu of a more robust measure). * Total network = (primary + secondary + tertiary) network ** Primary network carries higher traffic and provides easy and more reliable access Connectivity - Network to important services. Efficiency Eta (ƞ) connectivity index29 Number of markets having a distance <2 km from the primary/secondary road network Average travel time from major markets to the nearest primary network B1 Connectivity and Accessibility Decision Environment Dimension Indicators/Assessment Variable Data Rich Data Poor Use either option • Percentage of all-season roads (to total*): Regional calculations • Percentage of paved roads (to total*): Road Infrastructure Regional calculations (quality and * Total network = (primary + secondary + characteristics) tertiary) network Road fatalities per 100,000 people (World Health Organization [WHO] country estimates)30 29 The Eta index (ƞ) measures the average link length within a network, calculated as ƞ = M/e, where M represents the total length of the network and e is the number of its edges. As transport networks expand and improve, new nodes are introduced to the network, thereby increasing connectivity and reducing the average link length, resulting in a lower ƞ index. 30 Source: https://www.roadsafetyfacility.org Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 47 B2 Logistics Infrastructure and Services Decision Environment Dimension Indicators Data Rich Data Poor Truck speed in the region (measured in key routes)31 Number of collection points/Total Trade Routes and cultivated area: 1/ha Logistic Hubs (lack of storage, Number of central storage facilities/Total processing units, and cultivated area): 1/ha connections) Agricultural production of non-perishable goods/Total storage capacity: regional estimates Logistics Performance Index (LPI) Estimate the efficiency/availability of transport services using either option • Number of motorized vehicles/Total agricultural production: regional estimates • Total fleet* × Capacity/[Motorized fleet] × Capacity Measure the use of motorized vehicles in trade using either option • Percentage of trade carried by Fleet and Transport motorized vehicles Services • Percentage of trips delivered by (fragmentation of motorized vehicles logistics services, lack of reliable fleet, poor Percentage of informal trade/logistics: fleet management) national estimates Measure fleet reliability using either • Annual average repair cost/purchase cost • Average number of unscheduled repairs per year Average age of fleet (by category) Average payload by truck type/nom. capacity (%) In lieu of updated data, refer to https://dlca.logcluster.org 31 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 48 B3 Climate Risks Decision Environment Dimension Indicators/Assessment Variable Data Rich Data Poor Number of flood-affected households from past events Flood Risk (effects of previous Population residing in flood plains (defined events, population as areas with distance <2 km from water exposure, vulnerability bodies) of assets, climate projections) Ratio of unpaved roads over total roads (%) - indication of increased vulnerability User either option High Temperatures, • Water Poverty Index (WPI): National Drought, and Water estimates Scarcity • Water Stress Index: National estimates Number of heat waves per year: National estimates • Projected rate of increase of mean temperature for a given climate scenario - used as a proxy for increased drought conditions • Annual precipitation anomaly (for a given time horizon) SDS Annual Index (https://maps.unccd. Sand and Dust Storms int/sds/) Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 49 B4 FCV Risks and Food Insecurity Decision Environment Dimension Indicators Data Rich Data Poor Number of political violence events per year: Regional estimates Number of terrorist attacks per year: Regional estimates Number of criminal events per year: Regional estimates Rate of change of the above over a period of 5 years FCV Risks32 Fatalities induced by political violence events in a region. Use either option • Average number of fatalities per year (5-year average) • Average number of fatalities per year/capita Number of Internally Displaced Population due to Conflict and Violence (5-year average): Country estimates Multi-Dimensional Poverty Indicator (developed by the United Nations [UN]) Food Insecurity measuring health, education, and living standards ACLED (Armed Conflict Location and Event Data) is a useful open-source tool for assessing FCV risks, offering near real-time data 32 on political violence and protests across the globe: https://acleddata.com/data/#explore Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 50 B5 Institutional Capacity Decision Environment Dimension Indicators Data Rich Data Poor Corruption Index: Country estimates Regulatory Framework (needs for policy reforms) Advancements in National Transport Strategy/ Transport Masterplan Efficiency of budget oversight procedures for public works • Budget (for maintenance and emergency reconstruction) transparency • Frequency of cost overrun in public works Compliance with specific engineering standards for the construction/maintenance of primary, secondary, and tertiary roads Policy Instruments Performance of past investments in the region Use either option: • Percentage of abandoned projects (to total) • Average delay time in construction projects • Average time to procurement (by project size) • Local trained personnel in the construction sector: Regional estimates Uptake of New Population having access to the internet (%) - Technologies proxy for the potential for e-commerce uptake Submitted/Updated NDC33 pledges, NAPs34 and LTS35 National strategy to decarbonize transport (specifying reduction target and implementation horizon) Climate Policies Ongoing or planned climate policy frameworks/ instruments including • Fleet renewal programs • Fuel subsidy schemes • Subsidies for EVs 33 Nationally Determined Contributions. 34 National Adaptation Plans. 35 Long-term Strategies. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 51 2.4 Decision-making Framework The decision to prioritize regions depends on each country’s development strategy. The current strategic framework is a powerful tool that allows decision-makers to assess the development opportunities in different sectors using the indicators outlined above in conjunction with appropriate geospatial data for their calculation. Similarly, decision-makers will be able to identify specific development barriers so they can direct improvement efforts depending on their strategic priorities and availability of resources. A decision-making strategy may consist of concentrating efforts on combatting individual burdens which receive high scores in the respective indicators (for example, focusing on investments in fleet renewal), while an alternative one may focus on distributing resources to improve multiple indicators incrementally. As a general principle, it is recommended that decisions on the prioritization of regions are only made following a stakeholder consultation and a detailed evaluation of all scenarios. This will ensure that all parameters have been appropriately considered in the process. For example, the decision to prioritize a road construction to support transportation of crops in a rural area may not deliver the assumed results if the region is FCV-dominated and no protection measures have been designed. Therefore, it is recommended that a multi-criteria decision-making process is followed. Weighting Each barrier and opportunity receive a weight representing its relative importance for accomplishing the specific strategic objectives. Depending on the strategic variables prioritized, the weight (wij) of the same indicator may differ substantially. The weights can be calibrated in several ways: using machine-based weights, calculated by an algorithm, or directly assigned to reflect stakeholders’ preferences. The type of calibration shall depend on the institutional capacity and resources of the team performing the assessment. The partial weights for the barriers and opportunities (that were used for the subnational prioritization of regions) were calculated using a robust algorithmic approach that evaluated (i) the impact of the examined parameter on the efficiency of investment; (ii) its relevance to the assignment; (iii) the quality/consistence of relevant data sources; (iv) its interdependence with other parameters; and (v) its variability among regions in the Sahel. The weights are presented in Table 2.1, along with a short justification for their selection. Weights are expressed in percentages summing up to 100 percent. Hence, if equal weights were adopted for all indicators, each one would receive a weight of 10 percent. To avoid biasing results, weights were not allowed to deviate more than ±50 percent of their median value (that is, weights lie within the 5–15 percent margin). The outcome of the prioritization process, based on the barrier and opportunity indicators and corresponding weight factors outlined above, is presented by country in Appendix 2. Due to the lack of reliable data at the Admin level 3 across all countries and indicators, results are uniformly presented at the Admin level 2 to ensure consistency. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 52 Figure 2.2 A woman carrying water Source: USAID Mercy Corps https://creativecommons.org/licenses/by-nc/2.0/ some rights reserved Table 2.1 Assignment of weight factors to indicators used for the subnational prioritization Indicator Weight (%) Rationale O1: Primary and 15 This is the main indicator of economic growth Manufacturing Sectors potential and is a prerequisite for the success of (0: none | 1: high potential) investments. Besides, there is high confidence regarding the quality and reliability of data used for its evaluation. O2: Employment and 7 It is important to prioritize regions where a large Entrepreneurship workforce exists, but internal migration can (0: none | 1: large) partially alleviate this. O3: Services and Trade 7 It is important to prioritize regions where trade (0: none | 1: high activity) activity exists and can catalyze the uptake of investments; the indicator is receiving a lower weight than O1 and O4 as it partially also depends on them. O4: Financing Opportunities 10 Investments in regions with additional MDB- (0: none | 1: many) financed projects can build synergies and increase their impact. There is high confidence regarding such data. The weight is lower than O1 to highlight the relative importance between the two indicators when it comes to rural growth potential. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 53 Indicator Weight (%) Rationale O5: Penetration of 5 It is important to channel low-carbon Renewables and e-Mobility investments to regions with proven potential; (0: none | 1: good the lower relative weight reflects that solar penetration) potential is quite high Sahel-wide. B1: Connectivity and 12 Investments need to be prioritized in regions Accessibility suffering from limited connectivity and (0: very good | 1: no) accessibility, as this is one of the most relevant goals of the assignment. The indicator receives a somewhat lower weight than B2 as it is usually associated with higher costs and because the project's focus is on B2. B2: Logistics Infrastructure 15 This is apparently one of the most important and Services and relevant indicators; hence, it receives the (0: very good | 1: none) maximum weight. B3: Climate Risks 15 Similarly, combatting climate risks is an (0: no | 1: high) overarching goal of the project. And while the need for resilience is unquestionable, priority must be given to regions suffering the most. B4: FCV and Food Insecurity 7 Prioritizing investments to address food (0: very fragile | 1: very safe) insecurity and FCV is an overall goal of the project; however, there is low confidence in the data sources while there is a temporal fluctuation of risk levels among regions; hence, the weight is lower than the median value. B5: Institutional Capacity 7 Investments need to be prioritized in regions (0: none | 1: full) lacking institutional capacity; the relative weight is lower than the median due to limited confidence in the data (in data-poor environments). Total 100 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 54 Note: Data refinement upon deep dive area selection While the macro-level, index-based assessment is well-suited for the subnational prioritization of rural regions in the Sahel, a more granular and localized approach is recommended once a specific deep dive area for intervention has been selected. This refined analysis should focus on development barriers within regional localities that concentrate economic activity (production, trade, services), to ensure that interventions in rural accessibility and logistics are better targeted to the specific needs of the local population. The analysis may be guided by the main categories of barriers and opportunities outlined earlier, while deepening the level of data granularity in each category, potentially through consultations or surveys with local stakeholders. A few examples are provided here. • When analyzing the contribution of the primary sector (for example, agriculture) to the local economy (O1), the assessment should go beyond broad metrics such as the sector’s GDP share or the percentage of cultivated land. It should delve into detailed information on the types of crops cultivated and their geographic extent, whether the products undergo processing, their retail prices, and so on, to better understand the specific challenges associated with each product value chain (for instance, the challenges faced by cereal production may differ from those affecting perishable products such as tropical fruits). • In assessing regional trade opportunities (O3), users should not only consider the ratio of domestically and intra-regionally traded agricultural products or the number of available markets, but also map the locations of these markets and key collection points, as well as the specific product trade flows, to propose a logistics infrastructure solution that better aligns with regional demand. • When evaluating regional connectivity and accessibility (B1), users would greatly benefit from gathering input from local stakeholders on the actual condition and maintenance of the regional road network. Instead of solely relying on generalized, open-source data (for example, road surface type from OpenStreetMap), stakeholder insights will provide a more accurate picture of the all-weather characteristics of specific road segments, leading to more effective investment planning. FRAMEWORK Module - 3 Potential Solutions to Barriers and Classification of Investments Overview The module discusses various investment options to overcome development barriers in the rural regions of the Sahel. It outlines different classes of investments such as logistics nodes, logistics fleet, road infrastructure, and institutional capacity. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 57 3.1 Potential Solutions to Barriers and Classification of Investments Applicable investment options Module 3 lists the investment classes that can, in principle, be materialized in the Sahel region. These may be adopted to achieve development benefits, duly noting that an investment may simultaneously help to partially materialize the objectives of more than one solution. Each investment class includes several options and considerations: • Investments in Logistics Nodes, covering ports, storage facilities, processing units, distribution centers, transport depots, multi-purpose facilities (MPFs), local or peri-urban nodes, grid or self-powered facilities, with or without security measures. • Investments in Logistics Fleet, covering bicycles, intermediary modes of transport (IMTs), cars and commercial vehicles, light/heavy trucks and buses, rail and water infrastructure, examining conventional or electric vehicles, as well as new or second-hand ones. • Investments in Road Infrastructure, which is an enabler for any investment in the previous two categories to deliver its full potential. This category examines micro- and meso-level interventions, construction methods, the target of interventions, new sections or improvements of the existing ones, and road quality. • Interventions in Institutional Capacity cover trade practices and agreements, logistics governance, legislative reforms, capacity building, risk transfer mechanisms, and investments in technology. Although these interventions may, in some cases, be also associated with costs, they are nonetheless considered to be no-regret options. The interconnections between solutions and investment categories are illustrated in Figure 3.1. Depending on the specific barriers identified in the area under investigation, multiple solutions may be appropriate. To strategically guide the investment strategy toward one or a combination of solutions/investment options, it is essential to assess the impact and efficiency of each option within the outlined categories as thoroughly as possible, given the available data at the time of the assessment. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 58 Figure 3.1 From solutions to investment options. Interventions in rural accessibility and logistics described in Module 3 SOLUTIONS #2 Improvin sust in bl mobilit of p opl nd r li bilit of lo istics SOLUTIONS #1 SOLUTIONS #3 Buildin n ffici nt Enh ncin tr nsport tion Suppl -Ch in n twork comp titiv n ss Logistics Logistics Road Institutional Nodes Fleet Infrastructure Capacity Storage Bicycles & ITMs Micro over Trade Practices & Processing units Cars & Commercial Meso-level Agreements Distribution Centers Vehicles interventions Logistics Transport Depots Light Trucks & Buses Targets: Governance Multi-Purpose Heavy Trucks Road density; Facilities Water & rail Legislative Reforms Connectivity; transport Local/Peri-urban Travel time Capacity Building Nodes BEVs/ICE New sections/ Risk-Transfer Gid-connected over New over Second- Improvements Mechanisms Self-powered handed Vehicles Engineering specs Investments in With/Without Fiscal Policy & Gov-tech Construction Surveillance Subsidies Method Source: World Bank. FRAMEWORK Module - 4 Logistics Nodes: Evaluation of Investment Options Overview This module focuses on appraising the cost efficiency of various interventions related to logistics nodes, which may take the form of local collection points or larger utility-scale hubs, as described in the following sections. Whereas the creation of logistics nodes is widely accepted as a robust strategy for achieving increased efficiency in the rural supply chain, the rationalization of the investment and its potential can vary substantially depending on the specific needs and constraints of the local context. Outlined next are some key considerations that should be considered when planning logistics nodes including (i) their geographical location and level of hierarchy in the supply-chain model, (ii) the activities they perform, and (iii) the infrastructure/assets they comprise. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 61 4.1 Location and Hierarchy36 The first set of considerations refers to the to the location and hierarchy of the nodes to be implemented as part of the investment. Tables 4.1 and 4.2 summarize the evaluation results. They present a non-exhaustive analysis of the advantages and weaknesses of local logistics nodes (located close to the villages or production areas) versus peri-urban logistics nodes (situated in the rural-urban transition zone). Figure 4.1 Traditional storage structure for maize and groundnut in Burkina Faso Source: International Institute of Tropical Agriculture on Flickr. Since the focus of the assignment is on rural logistics, this analysis does not consider investments in urban nodes (that is, nodes 36 located close to city centers or between important cities and have immediate access proximity to the primary road network). Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 62 Investments in logistic nodes Deciding on Location and Hierarchy Table 4.1 Evaluation of investments in logistic nodes: Decision considerations for investing in local nodes Local Nodes - Located in the village or at the farmers’ gate. Pros Reduced transport burden Rural communities are overwhelmed by the huge burden of having to travel long distances on foot while carrying loads to/from the markets.37 Collection points installed at the village level will help save time for other revenue-generating activities. Risk diversification Implementing a logistics structure with multiple collection points (instead of a central one) creates a geographic spread of the risk of harvest loss (due to climate-related incidents or FCV) at a community or regional level and creates redundancies. Less dependence on intermediaries The installation of logistic nodes near the production fields is expected to reduce the need for intermediaries, as farmers become increasingly able to transport goods using their own resources at their discretion. Cons Cost inefficiency For handling perishable crops like fruits and vegetables, the required capital expense for installing expensive post-harvest loss prevention facilities at the village level may not be justified (depending on the geographical spread and number of villages). Limited access to resources To perform their intended functions, logistic nodes may require reliable and consistent access to fresh water and electricity. Such a condition cannot be met for most Sahelian countries where domestic water supply is unreliable today. Moreover, on average, across the Sahel, 80 percent of the rural population (except Senegal) has limited access to electricity.38 https://www.ssatp.org/sites/ssatp/files/publication/TP525.pdf 37 https://www.iea.org/reports/clean-energy-transitions-in-the-sahel/executive-summary 38 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 63 Investments in logistic nodes Deciding on Location and Hierarchy Table 4.2 Evaluation of Investments in logistic nodes: Decision considerations for investing in peri-urban nodes Peri-Urban Nodes - Located at the rural-urban transition zone where urban and rural uses and functions are mixed. Pros Integration into existing network Peri-urban nodes are better integrated into the national transport system and show good accessibility and connectivity figures. Expansion potential If properly supported by efficient logistics services and other strategic investments (for example, development of wholesale markets), they can transform into important interregional growth poles. Decentralization and efficiency By strategically positioning logistics nodes in peri-urban locations, it is possible to optimize the decentralization of shipment management and achieve increased efficiency in the delivery process (that is, collect/send out products from the closest facility as opposed to a single central urban facility). Redundancy of operations Given their geographic dispersion, peri-urban nodes increase the redundancy of the logistics operations, thereby enhancing climate resilience and food security.39 Cons Reliance on transporters Access to peri-urban nodes will likely require motorized transportation of goods and people, which limits the autonomy of individual producers and may increase the need for some sort of intermediaries. Construction cost Peri-urban hubs are meant to handle larger volumes of incoming/outcoming trade, creating additional construction and operational requirements and increasing costs. Barrier to entry of new players The expertise and resources required to enter the market make this solution less attractive for new players and may favor organized service providers. https://data.unicef.org/wp-content/uploads/2023/07/SOFI-2023.pdf 39 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 64 4.2 Type of Facility The second level of considerations refers to the selection of the type of storage facilities. Tables 4.3 to 4.7 summarize the evaluation results for a variety of options, including post-harvest storage facilities, processing units, distribution centers, depots, and multi-purpose facilities. Table 4.3 Evaluation of investments in logistic nodes: Decision considerations for investing in post-harvest storage facilities Post-Harvest Storage Facilities and Warehouses Pros Reduced post-harvest loss The importance of properly storing and processing fish and agricultural production for improving food security cannot be overstated. Studies reveal that post-harvest losses can be reduced by up to 98 percent if modern hermetic storage practices40 are adopted. Food preservation The ability to preserve the quality of the produce for a longer time (that is, until prices rise during the lean season) may drastically improve farmers’ income. Previous studies41 on the African continent conducted by the Massachusetts Institute of Technology (MIT) and the World Food Program (WFP) have estimated an average twofold income increase for smallholder farmers if proper post- harvest storage is implemented. Cons Higher cost Construction and maintenance of such facilities entail higher costs. However, the cost of capital associated with the adoption of such innovative storage technologies can be lower than the cost of subsidies for harvest-loss compensations. Inefficient in small scale The efficiency of such facilities is questionable if implemented at a local scale. However, opportunities for more considerable savings may arise if a reliable market line could be established (that is, via community buying groups that can purchase larger quantities at lower prices). 40 Hermetic storage is a method of using sealed, airtight units to control moisture and prevent insects in stored dry agricultural commodities. 41 “Post-Harvest Storage Evaluation.” MIT and World Food Program. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 65 Investments in logistic nodes Deciding on Type of Facility Table 4.4 Evaluation of Investments in logistic nodes: Decision considerations for investing in processing units Processing Units - May encompass a range of activities, including sorting, grading, and packaging. Pros Profitability The most significant benefit of agro-processing is increased profit margins for producers, who can command higher product prices. Indicatively, in Chad, the market price of raw maize is XAF 220 per kg, while maize flour (excluding packaging) is priced at over XAF 300 per kg—an increase of more than 30 percent.42 Increased shelf life of produce Processing contributes to the reduction of post-harvest losses by increasing the shelf life of foods. For example, fish that has been salted for a day can be preserved for a few days; when steeped in salt, it may be conserved for about a year or more,43 and canned fish can be consumed within several months or years. Diversification of economy Operation of such units is accompanied by the creation of new jobs across the various stages of the processing chain, the development of nutritious products, the creation of new trade opportunities, and the diversification of exports. Market opportunity Sahelian countries demonstrate comparative advantages for categories of processed products. For example, PwC44 reports that Nigeria’s demand gap for cassava derivatives and by-products is as high as 290,000 MT for cassava starch and 485,000 MT for High-Quality Cassava Flour (HQCF). Cons Penetration in the Sahelian context Currently, across the Sahel, only 15 percent of the primary sector produce is processed, which is indicative of the vast unexploited potential and the difficulties associated with establishing such units in the region. 42 Source: Non-structured interviews with local sellers. 43 https://www.fao.org/faolex/results/details/en/c/LEX-FAOC047963/ 44 PwC. 2020. “Harnessing the Economic Potential of Cassava production in Nigeria.” Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 66 Cons New investment requirements Despite the undeniable benefits, replacing manual processes with specialized machinery may be economically unaffordable for most smallholder farmers. Collaborative farming arrangements and resource sharing can be pursued to increase the economic attractiveness of the investment. Carbon-intensive equipment In many cases, processing requires high-consumption equipment and several consumables whose use is associated with increased GHG emissions. Investments in logistic nodes Deciding on Type of Facility Table 4.5 Evaluation of investments in logistic nodes: Decision considerations for investing in distribution centers Distribution Centers and trans-shipment facilities Pros Ability to support multi-modal delivery Significant supply-chain efficiency and flexibility can be achieved if a multi- level hierarchical structure (including peri-urban and urban distribution centers) is combined with multi-modal delivery. For example, intermediate modes of transport for the transportation of goods until a peri-urban distribution center, combined with larger-capacity trucks from that point onwards (supported by a better network). Applicability in the Sahel Multi-level hierarchical structures can be particularly suitable for the Sahelian context where distances among cities are long, and the quality of the transportation network is highly discontinuous. Cons Need for integration They can deliver significant benefits if access to basic logistic infrastructure and services can be guaranteed (for example, proximity to high-capacity roads, competent fleet, multiple trade routes). Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 67 Table 4.6 Appraisal of investments in logistic nodes: Decision considerations for investing in transport/freight depots Transport/Freight Depots Pros Support multi-modal transport Accommodating multiple modes of transport (for example, smaller and bigger trucks) may be more efficient in eliminating the empty mile distance by better- coordinating routes and schedules. In practice, this can be accomplished by allocating smaller pickup trucks for the collection of goods from/to villages and bigger trucks for inter-city trips between major collection points. Rough estimates indicate savings of operational cost of the order of 15 percent. Creation of economies of scale Depot construction can benefit from certain economies of scale. For example, the requirement for office accommodation or fuel tanks and pumps does not increase proportionately to the number of vehicles allocated to a depot. The space required per vehicle decreases as the number of vehicles in the depot increases. Benefitting from synergies Cost savings can be achieved by exploiting synergies with externally available facilities for the operations of the center (for example, small depots could use commercial gas stations that are in close distance to eliminate the cost of installing dedicated fuel tanks and pumping equipment). Cons Need to optimize location Minimizing dead mileage is critical in the selection of the depot location. Moreover, the depot site is a major cost function in the selection process (that is, assuming that transport costs are proportional to the quantity and distance covered, the optimal depot location is the one that minimizes ton-mileage). Up-front investment cost The capital cost increases with the functions performed in-house. All but the smallest depots will require storage accommodation for spare parts and office accommodation for staff. Larger depots will require more comprehensive workshop facilities. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 68 Table 4.7 Evaluation of investments in logistic nodes: Decision considerations for investing in multi-purpose facilities Multi-Purpose Facilities (MPF) - Where the storage and processing of goods are accommodated within the same facility or cluster of facilities. Pros Reduction of transport cost and lead time For moving goods from the storage to the processing unit (when storage takes place outside the production area). Better exploitation of space This can compensate for the increased unit cost of the construction. Better use of equipment For performing multiple tasks within the same facility. For example, one refrigerator unit can be used in different processes, which is more cost-efficient than having separate refrigerators for each unit. • Note: There might also be economies of scale in constructing an MPF, which, however, are difficult to quantify. Cons Need for detailed design The type of MPF (for example, low-tech or high-tech facilities) will affect the unit construction cost; hence, a detailed mapping of needs and requirements and consideration of future projections must be performed at the design stage. Efficiency threshold There is a minimum production level that justifies the economic viability of the investment. Small-scale MPFs (processing the production of a village or village cluster) are expected to be less competitive than bigger MPFs having higher production capacity. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 69 4.3 Infrastructure and Capacities This category of considerations is particularly important in the Sahelian context, given the challenges in the operation of hubs in limited grid-capacity regions often encountering FCV-related threats. Tables 4.8 and 4.9 summarize the evaluation results for grid-connected and renewable- powered facilities and the cost efficiency of installing passive security systems. Table 4.8 Evaluation of investments in logistic nodes: Decision considerations for investing in grid-connected, solar-powered, or zero-carbon facilities Grid-Connected or Renewable-Powered Facilities Pros Independent of grid coverage Many sites that could host facilities in several Sahelian countries suffer from limited or no grid coverage. In these cases, autonomous, renewable energy solutions, particularly solar, could offer better value for money than relocation or grid expansion. Climate mitigation potential Solar-powered facilities also offer a variety of environmental benefits and could unlock significant liquidity pools, which could tip the balance in their favor when assessing their costs and benefits over the entire lifetime of the facility. Convertible to mini-grids Solar-powered logistic facilities can also function as mini-grids, converting solar energy to electricity for isolated communities if properly designed. Applicable in several locations Solar-powered facilities are endowed with a higher degree of flexibility in terms of site selection (that is, they are not restricted by the geographical coverage of the existing electricity network). Consistency of sunshine The Sahel is blessed with immense solar power potential — utility-scale and off-grid solar45— rendering solar-powered facilities both practical and forward- looking. https://www.un.org/africarenewal/sahel 45 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 70 Cons High-cost premiums Capital cost premiums associated with solar-powered facilities are higher than those of traditional grid-connected alternatives, but their operational cost is significantly lower.46 Dependence on subsidies Without donors’ support or subsidies, the affordability of solar-powered facilities is expected to remain at very low levels, favoring traditional grid-connected installations. Limited market penetration The lack of experience (including in installation and operation and maintenance [O&M] of solar-powered facilities) and the competition with conventional solutions are expected to be significant barriers to their uptake, especially in low-income countries. Table 4.9 Evaluation of investments in logistic nodes: Decision considerations for investing in security and surveillance systems Security and Surveillance The net benefit of a security measure is expressed as follows: Net Benefit = P(attack) × C(loss) × ΔR − C (Security), where: P(attack): Probability of a Successful Attack C(loss): The losses in the successful attack ΔR: Percentage reduction of risk due to implementation of the surveillance system C (Security): Cost of security measures. Pros Protection against theft and vandalism Passive security systems are necessary in regions characterized by large geographic spread and high criminality rates where law enforcement personnel cannot always be present. Preventive action The existence of surveillance equipment usually has a deterrent effect, preventing criminal actions. Market uptake Latest trends indicate a constant increase in imports of foreign-technology surveillance equipment across Africa (supported by soft loans, primarily from China). https://www.iea.org/articles/the-cost-of-capital-in-clean-energy-transitions 46 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 71 Cons Efficiency considerations Using the above definition, it may be directly deduced that investing in surveillance equipment may be particularly cost efficient for high-value assets (for example, depot terminals, large storage facilities, multi-purpose units) located in high-criminality areas. For smaller facilities (that is, local storage), the cost of surveillance equipment may not always be justifiable. Market barriers Application of surveillance systems in the Sahel is limited by (i) the low penetration of internet in Africa (below 20 percent across Sahelian countries), (ii) low availability of spare parts, (iii) increased import taxes for cameras, monitors, video recorders, (iv) lack of trained personnel for handling/maintaining the equipment. Fear of misuse There is a growing concern that the introduction of surveillance technologies in public facilities without institutional checks will render citizens more vulnerable to political surveillance and suppression. FRAMEWORK Module - 5 Road Infrastructure: Evaluation of Investment Options Overview The module discusses the complexities in planning and investing in rural road infrastructure, emphasizing the importance of cost efficiency and long-term sustainability. The following aspects are considered: • Importance of Road Infrastructure • Evaluation of The Scale of Interventions • Factors Determining Cost Efficiency Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 74 Road infrastructure is the backbone of rural logistics. It provides assurance for the supply of agricultural inputs and facilitates the delivery of the farm outputs to the processing units and markets. Yet delivering a rural road network that optimizes traffic flows while addressing social priorities is a hard exercise for which ‘no-one-size-fits-all’ solution exists. Planning decisions should carefully examine whether the objectives are appropriate in scale and size and prioritize investments that ensure cost efficiency and long-term sustainability. The extent of the intervention, and hence the level of investment, depends on the planning objective. This objective can be (i) a physical target, for example, minimum road density; (ii) a community- based target, for example, RAI, number of connected settlements with a population above a minimum threshold; (iii) a traffic-based or travel cost-based approach, for example, maximum travel time; or (iv) a hybrid criterion combining traffic and socioeconomic indicators in a cost-efficiency framework. The physical target approach works well where there is ample funding for rural roads but is considered unsuitable in countries with scarce financial resources. A good practice example is that of India in 1981, when a target density of 0.19 miles per sq. mile was set for all its developing regions. The community-based target is more people centered, but its implementation can be very expensive and unpredictable. For example, in India’s revised rural-urban transportation plan (Pradhan Mantri Gram Sadak Yojana - PMGSY), an ambitious target was set, describing that all settlements above 500 inhabitants will be connected by 2015 and all settlements above 250 by 2022. This resulted in a total expenditure of $56.6 billion (far surpassing the initial estimate of $16.6 billion). A traffic-based criterion is more suitable for densely populated regions when basic accessibility is established, and traffic levels are moderate to high. For instance, Ethiopia’s Universal Rural Road Access Program (URRAP) used both population and traffic criteria to prioritize road infrastructure investments, successfully reducing average travel times between ~4,000 rural communities and nearby towns by about 30 minutes from 2010 to 2014.47 In sparsely populated rural areas, where basic vehicle access is the main issue (as for all Sahelian countries), the application of a cost-effectiveness criterion is more appropriate. The World Bank’s Sub-Saharan Africa Transport Policy Program (SSATP) has hence endorsed the latter. The following two sections outline the main considerations determining the cost efficiency of investments in road networks as part of an integrated rural accessibility and logistics plan focusing on (i) the level of intervention and (ii) the road construction decision. Nakamura, S., T. Bundervoet, and M. Nuru. 2020. “Rural Roads, Poverty, and Resilience: Evidence from Ethiopia.” The Journal of 47 Development Studies 56 (10): 1838–1855. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 75 Figure 5.1 Aerial view of the Route Nationale 14 from Dosso to Loga, Niger Source: NigerTZai on Wikimedia commons. 5.1 Level of Intervention At the planning stage, decision-makers will need to evaluate the scale of necessary interventions, ranging from local to interregional, considering the requirements of logistics operations in light of the state and availability of the existing network. Tables 5.1 and 5.2 outline the results of the appraisal of investments at either the micro-level or the meso-level network,48 noting that the investment plan could include interventions at both levels. As this assignment focuses on rural access and logistics, interventions at the macro level are not examined. 48 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 76 Table 5.1 Evaluation of investments in road infrastructure: Decision considerations for investing in micro-level interventions Interventions at the micro-level network Pros First-mile connectivity Micro-level interventions take place in the vicinity of villages (that is, on average, within a radius R of 10 km). Their purpose is to establish ‘first-mile connectivity’ between the village and the existing secondary/tertiary network. Reduced cost of travel of goods They can increase farmers’ income by reducing the travel time/cost for the first stage crop movement, from the farmer gate to the roadside, house, village, or to the local market (which is the most expensive per kilometer and can represent a major constraint to agricultural production).49 Easier cost estimation The geographical spread of the interventions is contained, and the incurred cost is easier to estimate ex ante. Cons Costly construction in sparsely populated areas Micro-level interventions generally incur higher costs in cases where (i) the density of the existing network is particularly low; (ii) the population is highly dispersed (that is, a large number of very small villages); (iii) the number of isolated villages is relatively high. Benefit depends on the number of users Such interventions are most beneficial when there is a demand for motorized transport. Otherwise, the mobility of the population will be constrained by the lack of transportation means regardless of the road investments. This risk is particularly relevant in the Sahel, where only 15 percent of the rural population uses motorized vehicles. SSATP. 2009. “Planning Infrastructure and Services - Good Policies and Practices on Rural Transport in Africa.” 49 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 77 Investments in rural infrastructure Deciding on Level of Intervention Table 5.2 Evaluation of investments in road infrastructure: Decision considerations for investing in meso-level interventions Interventions at the meso-level network Pros Extroversion Meso-level interventions take place outside the immediate vicinity of villages (that is, 50 km > R >10 km), emphasizing the ‘rural-to-main-network’ connectivity. Social benefits Connecting villages with the broader ecosystem facilitates the population’s access to essential services (education, health care facilities) and bigger markets, generating ‘wider’ socioeconomic benefits. In Ethiopia, for example, it was estimated that the rural road developments that took place between 1994 and 2004 reduced rural poverty by 6.9 percent and increased consumption by 16.3 percent. Improved regional connectivity They provide a safe and reliable track for the bus service operation, supporting the vision for public transport development (vividly stated in the National Transportation Plans of most Sahelian countries). Synergies When synergies with other infrastructure developments are exploited in parallel (for example, energy grid, development of agricultural growth poles and markets), the impact of meso-level interventions may increase exponentially.50 Cons Significant network length Given that the existing population and road network density in the Sahel is low, materialization of meso-level interventions entails the construction of new road segments of significant length, which will necessitate an optimization at the planning phase to justify its cost efficiency. FCV-related threats As these parts of the network are neither urban nor local, traveling along them increases the vulnerability to FCV threats, especially in the parts of the network crossing deserted or unpopulated regions, which facilitate the operation of criminal groups. 50 World Bank. 2006. Rural Infrastructure in Peru: Effectively Underpinning Local Development and Fostering Complementarities. Report No. 34598-PE, Washington, D.C. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 78 Dependence on interregional traffic These interventions are beneficial under the condition that there is current or projected demand for traffic between villages, either in the form of freight or passenger transportation. Hence, they should be designed where existing relations between villages exist or where these may be established as part of a development plan (for example, transferring products from a region to a hub). 5.2 Road Construction Interventions on the rural network may include (i) improvements to an existing earth road or track for passage of motorized and non-motorized vehicles, particularly in wet seasons; (ii) construction of an earth road; (iii) construction or rehabilitation of a gravel road (using materials with specific engineering standard; (iv) construction or rehabilitation of a paved road; (v) resurfacing of a gravel or paved road; (vii) supplementary works on existing or new sections (for example, drainage, embankment stabilization); (viii) construction of major structures (for example, bridge or culvert). This section discusses the considerations related to investments in road segments as part of an integrated investment plan on rural accessibility and logistics. It includes a comprehensive appraisal of the main factors determining the cost efficiency of all-weather roads materialized through the construction or rehabilitation of gravel or paved road segments. Figure 5.2 Paved road in Ouaga District, Burkina Faso Source: Jeff Attaway (Wikimedia Commons). Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 79 Investments in road infrastructure Deciding on Road Construction Table 5.3 Evaluation of investments in road infrastructure: Decision considerations for investing in all-weather road construction All-weather Rural Roads Pros Climate resilience All-weather rural roads with proper adaptation measures drastically enhance the resilience of the transportation system (and hence of the dependent communities) by ensuring endurance and the ability to quickly recover functionality following extreme events. Impact on rural growth The returns (in terms of growth) on investments in rural roads are higher than those on the primary network. Data from China indicate a ratio of 6 for rural roads compared to 1.45 for urban networks.51 The BCR of rural investments varies significantly among countries. Efficiency of logistics A good-quality all-weather network decreases travel time, wearing, and risk of vehicle damage while increasing security and reliability of operations. An efficient logistics system will, in turn, increase the attractiveness of the sector to new players and augment competitiveness and long-term sustainability. Access to new markets While the transportation cost is only a fraction of the market price of the primary- sector products, the provision of first-time access to producers can greatly affect their revenues. Indicatively, data suggest that the impact of upgrading a footpath to a basic access motorized road is multiple times greater (of the order of 100) than improving an existing road of the same length. Poverty reduction Echoing IFPRI’s calculations, a $10,000 investment on rural roads can lift 30 people out of poverty across Asia on average. The same amount of investment can save 170 people in Tanzania and 260 in Uganda. 51 According to the study of the International Food Policy Research Institute (IFPRI) on the impact of rural roads. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 80 Engagement of locals for the construction of low-capacity roads Labor-based methods (LBMs) use the local workforce for road construction. Compared to conventional equipment-based methods (EBM), LBMs were found to be 50 percent less expensive.52 They instill a higher sense of ownership in local communities. Cons Necessity to prioritize While improving existing road segments is cost efficient, their impact on economic growth is dwarfed53 by first-access roads. Hence, when resources are limited, providing basic vehicle access for key arteries shall be prioritized before funds are allocated to upgrading roads to a higher gravel class or paved sections. Selection of materials Roads in the Sahel will have to operate under harsh climatic conditions, usually significantly accelerating deterioration of quality and capacity. The selection of the paving material considers the cost of construction, the road deterioration rate, the maintenance requirements, and the vehicle operating cost over the project lifetime. Significant cost implications New road construction is costly, and the costs increase (almost linearly) with increasing the length of the interventions. When technical complexities are added (for example, the need for engineered assets such as bridges or culverts), the increase may be exponential, while this is further exacerbated when considering the need for surveillance and security equipment. Hence, when road network expansion is considered as part of an integrated investment plan on rural accessibility and logistics, decisions must be based on meticulous value-chain modeling to optimize costs, or they may risk the feasibility of the plan altogether. Generation of GHG emissions Road construction is a major GHG emitter. As roads generate mobility, GHG emissions from traffic will also rise. Most interestingly, the rise is proportional to the number of registered vehicles and the spread of the road network: the higher the network spread, the longer the distances to travel, and the higher the GHG emissions. An illustrative example:54 Barcelona spreads over an area about 3.8 percent of the size of Atlanta, while both cities have the same number of registered cars. Yet they are not equivalent in terms of normalized GHG emissions per unit area. Barcelona emits about 0.7 tons of CO2/ha from transport usage, which is one-tenth of the 7 tons of CO2/ha that Atlanta emits. 52 Kassahun, A., E. T. Quezon, and E. C. Agon. 2011. “Comparative Study of Labor-Based and Machine-Based Method on Rural Road Construction and Maintenance in Jimma Zone, Ethiopia.” 53 Hine, J., J. Riverson, and E. Kwakye. 1983. “Accessibility and Agricultural Development in the Ashanti Region of Ghana.” TRRL Report SR 791, Transport and Road Research Laboratory, Crowthorne. 54 Source: Bertaud and Richardson. 2004. “Transit and Density: Atlanta, the United States and Western Europe.” FRAMEWORK Module - 6 Logistics Fleet and Services: Evaluation of Investment Options Overview Logistics efficiency in rural Africa is hindered by limited transport options, low purchasing power, cultural issues, and low population density. Areas with consistent demand can support diverse transport options, while sparsely populated areas struggle. Investment strategies must consider these factors and the potential benefits of electric mobility within specific country contexts. With the help of this module, users can: • Assess the impact of limited transport options on logistics. • Evaluate population purchasing power and cultural factors. • Analyze challenges posed by low population density. • Develop investment strategies to improve rural logistics and mobility. • Appraise the benefits of electric mobility adoption. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 83 6.1 Fleet Composition The major considerations when referring to investments in a logistics fleet are related to the optimal mix of vehicles comprising the fleet as well as the timing of investment—for example, short or long term. This is important in the rural areas of the Sahel, where motorized means of transportation are not reliable. Tables 6.1 to 6.7 summarize the results of the evaluation performed for all vehicle options, including walking, bicycles, two- and three-wheelers, cars, mini trucks and vans, buses, large-capacity trucks, rail, and water transport. In most cases, the investment decision will likely include more than one means of transportation. Figure 6.1 Overloaded truck on a rural paved road in Niger Source: NigerTZai -wikimedia commons. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 84 Investments in fleet and services Deciding on Fleet Composition Table 6.1 Evaluation of investments in logistics fleet: Decision considerations for Investing in non-motorized transport Non-Motorized Transport Pros Cheap and accessible Compared to their motorized alternatives, bicycles are cheaper and equally accessible to women and men. Moreover, there is a growing interest in empowering women and girls in Sub-Saharan Africa by providing them access to affordable transportation via bicycle. One such initiative was taken by World Bicycle Relief, providing more than 200,000 women and girls in Africa with heavy- duty bicycles that can carry up to 0.2 tons of cargo per trip (UN Chronicle). Zero emissions Non-motorized transport produces no emissions and should, therefore, be included as part of any sustainable rural logistics system. Cons Limited load-carrying capacity Self-carrying of loads is a common mode of transport (especially among women) in most rural regions of the African continent, where reliable and cheap motorized transportation is scarce. However, it is obviously inefficient for large loads and long distances. Not applicable for covering long distances Bicycle is not a reliable means for covering long distances, although this mode of transportation is on the rise in most African regions, representing 50 percent of total vehicles on average. Security and safety concerns Neither option can be considered safe when used in a region dominated by FCV issues, as options to avoid attacks are very limited. Vulnerable to climate threats Walking or bicycle riding (especially when accompanied by carrying loads) will be severely hampered by climate-related incidents such as flooding (especially when riding dirt roads) or dust storms. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 85 Investments in fleet and services Deciding on Fleet Composition Table 6.2 Evaluation of investments in logistics fleet: Decision considerations for Investing in IMTs Intermediary Modes of Transport - Two-wheelers, three-wheelers Pros Affordability The main reason for their expansion is their significantly lower capital cost (compared to privately owned cars), which makes them a relatively affordable solution even for low-income populations. Independent mobility Like cars, intermediary modes of transport (IMTs) offer the ability to travel to any destination at any time, provided the weather and network conditions allow it. Low operating costs In terms of transportation efficiency, results show that IMTs have the lowest operating costs compared to motorized competition for distances below 10 km when the carrying load is below 10 tons per year or lower. For higher loads (and for the same 10-km trip), animal carts appear more cost-efficient for loads in the range of 10–250 tons, while farm vehicles operate more efficiently when carrying loads between 250 and 1,500 tons per year. Low emissions IMTs produce the lowest emissions among motorized transportation alternatives and could be used during the transition period toward sustainable logistics. Cons Not usable during the wet season Conditions worsen significantly during the wet season, and studies55 across Africa have shown that traffic volumes for all types of motorized vehicles (including IMTs) fall, on average, to around 60 to 70 percent of the dry season totals, with non-motorized traffic increasing to over 100 percent of the dry season totals. The reason is the poor quality of rural roads, which become inundated or impassable (when travelling on wheels) if waterlogged, leading to increased road accidents. Ellis, S., and J. Hine. 1997. “Rapid Appraisal Techniques for Identifying Maintenance on Low Volume Roads.” Project Report PR/ 55 OSC/122/97, Transport Research Laboratory, Crowthorne. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 86 Investments in fleet and services Deciding on Fleet Composition Table 6.3 Evaluation of investments in logistics fleet: Decision considerations for investing in private cars Private Cars Pros Unlimited mobility Cars offer the ability to travel to any destination at any time, provided there is an adequate road network of sufficient quality. Load carrying capacity Cars may be used to transfer considerable volumes of load reducing the need to rely on professional transporters or intermediaries. Security and safety Most studies suggest that people feel safer when using their own car instead of any other means of transportation. Cons Low penetration The number of private cars in most Sahelian countries remains low and mainly concentrated in urban centers. The example of Niger can be considered representative of the situation in most of the Sahel G5 territories: Niger’s capital, Niamey, concentrates more than 70 percent of the total registered vehicles in the country, which in absolute numbers is 20,000 cars (a mere 0.08 percent cars per capita). Affordability The main reason for low penetration is the consumers’ limited purchasing power. According to the International Monetary Fund (IMF), in 2022, the GDP (PPP) per capita56 for most Sahelian countries was well below the African average. As a result, the capital cost premium for four-wheeler drivers can be prohibitively high. Rough estimates: 15–30 percent of gross national income per capita The gross domestic product based on purchasing power parity. 56 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 87 Cons Operating costs The transport cost can be high, especially for old vehicles operating in very poor road conditions. The cost is a function of (i) load and distance; (ii) the vehicle technology (that is, old vehicles consume more fuel); (iii) the alignment, type, and quality of the road surface, which affects the travel speed, fuel consumption, and vehicle maintenance costs; (iv) the fuel price. Fuel availability and cost The cost of fuel may vary substantially across countries. The differences are not only attributed to the different fiscal policies of each country but also to fuel trafficking that is on the rise across the Sahel. Criminal networks benefit from the heavily subsidized gas prices in Algeria, Libya, and Nigeria, making extraordinary profits by selling gas at much higher prices just across the Sahel border: according to the United Nations Office on Drugs and Crime (UNODC), Libyan gas stations charge 11 cents/liter, when in Mali the average price of gas is $1.94 (that is, a 90 percent increase). GHG emissions Conventional cars are associated with increased traffic and GHG emissions, although the latter improve when low-emission vehicles are considered. Investments in fleet and services Deciding on Fleet Composition Table 6.4 Evaluation of investments in logistics fleet: Decision considerations for investing in light and medium commercial vehicles Light Trucks and Buses - Small trucks and minibuses are currently the most common means of transport for commercial transport operators in the rural areas of Africa (also in the Sahel). The fleet is predominantly composed of second-hand vehicles that may be purchased from local markets at low prices. Pros Low operational cost The cost of transport by trucks and buses is the lowest among the different transport modes for intermediate trips (between 10 and 50 km). Compared to head carrying of loads (which until today remains a popular option), their cost- efficiency ratio explodes to 1057 (that is, it is ten times more costly to move 1 ton of product for 1 km on foot than by truck or minibus). According to calculations by Lebo and Schelling (2001) in their work Design and Appraisal of Rural Transport Infrastructure: 57 Ensuring Basic Access for Rural Communities (Vol. 23, World Bank Publications), it takes two person-days to move 1 ton-km. Assuming a minimum wage (and African averages), this amounted to some $2 to $2.5 per ton-km, when the cost of trucking on rural roads was estimated at $0.2 per ton-km. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 88 Able to support last-mile connectivity Last-mile connectivity continues to be one of the biggest challenges for delivering products and people across the Sahel. Moreover, surveys58 in Ghana and Malawi found that 30–40 percent of the rural population have to walk more than 4 km and sometimes up to 20 km until they reach a bus stop, from where they can be transported to a more distant location (that is, a major market, or the nearest town). Great demand for service The availability/frequency of commercial transport services is very limited. A regular daily service will generally be available on major routes, but on village routes, the frequency of service can decline dramatically (once/twice per week).59 Cons Competition from IMTs As a result of low supply, public buses have strong competition from other IMTs (mostly operating informally), which are preferred by the population to reach remote locations away from conventional bus routes, even at the expense of a much higher fare. The figures from a case study in Tanzania60 are remarkable: the fare of a passenger IMT was between $0.17 and $0.34 per km; in comparison, the rural bus fares were 5 to 10 times lower (between $0.035 and $0.047 per km). The situation across the Sahel is similar. Long implementation horizon Expanding the bus network to deliver last-mile connectivity (‘one bus stop for every village’) would require significant time and investment resources just for building the road infrastructure (that is, excluding the cost of procuring the bus fleet and services). Low-profit margin in rural areas Low-density rural areas generate small revenues for bus operators, not justifying the level of required public expenditure to provide an extensive bus network. 58 Hine, J., and J. Rutter. 2000. “Transport and Poverty Alleviation Workshop.” 59 Source: Unregulated interviews with locals in several countries of the Sahel. 60 Starkey, P., Njenga, P., Kemtsop, G., Willilo, S., Opiyo, R., and Hine, J. (2013). Rural transport service indicators. In Final Report. International Forum for Rural Transport and Development (IFRTD), for African Community Access Programme. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 89 Investments in fleet and services Deciding on Fleet Composition Table 6.5 Evaluation of investments in logistics fleet: Decision considerations for investing in heavy trucks Heavy Trucks Pros Cost-efficient for large distances Large buses and big trucks have the advantage of heavy loads and long-distance transport, providing the lowest costs per ton/km for long-distance travel. In general, vehicle operating costs range between $1.22 and $1.83 per km for African countries. Duties and surtaxes on tires and spare parts may also be a non-trivial portion of vehicle operating costs. Cons Very low demand Several landlocked countries have larger truck fleets than they need to meet their import and export demand.61 The situation in Niger is representative. The Nigerien fleet comprises approximately 4,500 trucks. Assuming that one-third of the fleet is not in service, the operational fleet would still be three times larger than needed (its ideal size should be about 900 trucks when the active current fleet is 3,000). Aged fleet and lack of relevant regulatory framework Truck operators in West Africa use their vehicles at lower rates (sometimes as low as 2,000 km per month) than in other African countries. To increase their profit margin, operators buy low-cost and old vehicles. On average, the trucking fleet in Western Africa is >15 years old, while in South Africa, the fleet age is between 5–10 years old. The lack of a framework (for example, imposing mandatory truck retirement age) further worsens the situation. Truck overloading This practice is commonly followed to increase profitability, negatively affecting travel speeds and logistics efficiency. Moreover, the overuse of overloading practices accelerates the deterioration of road infrastructure and generates higher emissions. Word Bank Group. 2009. “Transport Prices and Costs in Africa.” 61 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 90 Investments in fleet and services Deciding on Fleet Composition Table 6.6 Evaluation of investments in logistics fleet: Decision considerations for investing in rail transport Rail Transport - Railcars Pros High capacity and lower long-distance costs Railcars can transport large volumes of goods in a single trip, making them highly efficient for bulk freight movement (for example, in the case of agropastoral products that need to be moved in large quantities). Moreover, rail transport becomes more cost efficient than road transport over long distances,62 as fuel consumption and maintenance costs are spread over many railcars and kilometers, thereby reducing shipping costs per ton of transferred product. Environmental sustainability Rail transport emits fewer GHG per ton-km compared to trucks, contributing to the low-carbon economic development objective of the Sahelian countries. Safer and more regulated transport mode Rail transport can provide a safer and more regulated alternative to road transport in the Sahel. Unlike trucks that may encounter numerous informal checkpoints and roadblocks, leading to delays, bribery, or theft, rail systems generally operate on fixed routes with fewer opportunities for unsanctioned interruptions. This makes rail transport more reliable for long-distance freight, reducing the risk of loss or damage to goods, and ensuring better adherence to regulations. Cons Limited flexibility Even when a rail line exists in the area of interest (which is not the case for the majority of regions in the Sahel), rail transport is fixed to specific routes, and setting up new tracks or altering routes to meet demand can be slow and expensive, which limits the rail’s ability to provide last-mile connectivity compared to road transport. Incompatibility with small volumes For small-scale operators (for example, smallholder farmers or local SMEs), rail may be impractical due to the need for large volumes of goods to justify the cost. This makes rail less accessible for many smaller players in the Sahel’s economy. https://www.rsilogistics.com/blog/comparing-the-costs-of-rail-shipping-vs-truck/ 62 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 91 Cons Need for ongoing maintenance Rail networks require ongoing maintenance, which can be complicated by harsh weather conditions (for example, flooding, sandstorms) in the Sahel. Delays or disruptions in service due to lack of proper maintenance can slow down supply chains, affecting industries dependent on the timely delivery of goods. Investments in fleet and services Deciding on Fleet Composition Table 6.7 Evaluation of investments in logistics fleet: Decision considerations for investing in water transport Water Transport - Motorized lake/river boats; ferry services Pros Boost of local fishing activity Lake/river boats (or pirogues) play a critical role in supporting fishing communities along major water bodies in the Sahel, such as the Senegal River or Lake Chad, allowing fishers to access more distant and productive fishing grounds, transport larger catches back to the shore, and reach markets more efficiently. Alas, many rural fishing communities rely on non-motorized boats. Their upgrade to motorization would reduce travel times and enhance the profitability of fishing operations, while contributing to food security in the region. Utilization of natural infrastructure Rivers and lakes provide natural transport corridors that require little infrastructure investment (mainly docking infrastructure) compared to building and maintaining roads or railways. Investing in motorized boats or ferry services takes advantage of existing waterways to increase connectivity, reducing the need for costly infrastructure development. Lower environmental impact Similar to rail, water transport typically has a smaller carbon footprint compared to road transport. Boats and ferries are fuel-efficient over long distances, contributing to reduced GHG emissions, especially if using modern, more eco-friendly engines. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 92 Cons Seasonal dependence Rivers and lakes in the Sahel are highly dependent on seasonal water levels. During dry seasons or periods of drought, water transport routes may become impassable due to low water levels, limiting the reliability of this mode of transport year-round. Slower speeds Water transport is generally slower than road or rail transport. This makes it less suitable for time-sensitive goods, especially perishable products, unless cold chain solutions are implemented onboard, or the travelled distances are short. 6.2 Transition to e-Mobility A major decision regarding fleet renewal in the Sahelian countries is whether investing in e-mobility is cost-efficient, especially considering the obvious environmental benefits and the strategic vision for a low-carbon future. These benefits are, however, questioned by several considerations related to the cost and the technical feasibility of such an initiative. Table 6.8 presents the appraisal of these parameters for a variety of vehicles that may need to be included in an investment plan. Figure 6.2 Solar panels in Malika, Dakar, Senegal Source: Fratelli dell’Uomo Onlus, Elena Pisano via Wikimedia commons. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 93 Investments in fleet and services Deciding on Fleet Composition Table 6.8 Evaluation of investments in logistics fleet: Decision considerations for investing in e-mobility E-Mobility Pros Lower purchase price and total cost of ownership (TCO) for two- and three-wheelers Supported by some kind of consumer financing, the affordability prospects for electric two- and three-wheelers can be substantially improved (outperforming those of four-wheelers). Moreover, according to a World Bank study,63 electric two- and three-wheelers generally offer similar or better value in the long run compared to conventional internal combustion engine vehicles (ICEVs). Competitive pricing of electric buses The capital cost premium of electric buses can be substantially reduced. International experience shows that a significant reduction (of the order of 35 percent) can be accomplished if collaborative action is taken at a national or regional scale to permit much larger procurement packages and optimize the operation of bus routes (for example, via the adoption of demand pooling mechanisms). Moreover, emerging African-based start-ups in Rwanda, Uganda, and Kenya have been exploring lower-cost electric bus and truck options. Low operation costs EVs are significantly cheaper to operate. In terms of energy consumption, the EVs are far more efficient than their ICE counterparts. Whereas EVs consume only 0.70 to 1.00 MJ per vehicle-km, ICEVs powered by liquid fuels consume between 3.00 and 5.00 MJ per vehicle-km, depending on the vintage and fuel efficiency standards of the vehicle fleet. Even though electricity is a more expensive form of energy than that produced from fossil fuels (that is, due to the higher processing cost involved), its additional cost can be compensated by the greater energy efficiency of EVs. The financial savings can be further accentuated by the fact that gasoline is taxed while electricity is subsidized.64 World Bank. 2021. “Pathways to Electric Mobility to Sahel. Two and three-wheelers in Bamako and Ouagadougou.” 63 Taxes on gasoline are typically in the 40–140 percent range, whereas subsidies to the electricity sector are typically between 64 40 and 80 percent. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 94 Better air quality When choosing between EVs and ICEVs, the environmental benefits of reduced local air pollutants can be important (especially when comparing old-technology inefficient second-hand vehicles). Almost uniformly across countries, gasoline emits far more pollution per unit of energy produced (0.15 to 0.25 grams PM10 [PM less than 10 microns in diameter] per MJ) than any of the electricity systems (no more than 0.05 grams PM10 per MJ), even for power systems still heavily based on fossil fuels. Potential for additional environmental benefits As a rule of thumb, the greener a country’s power generation mix, the larger the environmental benefits associated with the adoption of electric mobility. The benefits are expected to be particularly high for Senegal, which has accomplished a 36.6 percent composition of renewable sources in total energy consumption, and lower for Burkina Faso, where low carbon resources contribute by 16 percent to the energy mix. Cost optimization options The more intensive the vehicle use (that is, the more passenger vehicle kilometers a vehicle accumulates throughout its life), the sooner electric mobility is likely to become attractive. Because of their public service nature and nearly continuous operation, buses can achieve higher lifetime mileage than private vehicles. Additional cost savings can materialize through an optimized design and operation of bus routes, which could be large enough even to revert the economic balance in favor of electric buses. 65 Another economically viable strategy would be prioritizing e-mobility within the most popular fleet sections associated with more intensive usage. For instance, IMTs and other commercial four-wheel fleets may become suitable for electrification before less-intensively used private family cars. Controllable increase in electricity demand Adopting electric mobility at a moderate 30×30 scenario66 is expected to increase electricity demand by less than 1 percent—a small increase that can be typically absorbed by existing power systems or by modest capacity increases. Tax incentives The country’s tax and subsidy regime can substantially alter the cost of the benefit of EVs.67 In Ethiopia, for example, the tax wedge is large enough to completely offset the capital cost premium associated with purchasing EVs so that, on average, they appear to be cheaper financially to consumers. Another example is Uruguay, which stands out for having electric buses that are $10,000 cheaper than conventional ones in financial terms, thanks to a taxation policy that hugely favors electric buses with a 6 percent vehicle purchase tax versus 23 percent for diesel buses. 65 World Bank Group. 2023. “The Economics of Electric Vehicles for Passenger Transportation.” 66 A 30x30 scenario assumes a 30 percent share of sales for electric cars and buses, and a 70 percent share for electric two- and three-wheelers by the year 2030. 67 World Bank. 2021. “Pathways to Electric Mobility in the Sahel.” Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 95 Fiscal regime The country’s taxation policy can be a critical factor when assessing the lifelong savings of e-mobility. Many low-income countries tax gasoline and subsidize electricity, which further improves the outlook of the investment. Cons High cost of acquisition EVs are significantly more expensive to purchase than conventional internal combustion engine vehicles. The magnitude of the capital cost premium varies according to the type of electric vehicle. The highest premiums of about 80 percent are associated with four-wheel and slightly lower premiums of about 60 percent with electric buses and two-wheel EVs. Limited room for subsidies Subsidies for EVs are creating capital demand for governments and hence may not be a good fit for Sahelian countries. What may prove more cost-effective and scalable is the establishment of financing mechanisms to allow consumers to spread the higher capital costs of EVs over time. The latter can be in the form of consumer credit lines or the adoption of vehicle (or battery) leasing models. Limited grid capacity In countries with severe power generation constraints, such as the Sahelian countries, even this small increase may not be feasible in the short term, requiring a substantial increase in national electricity production. Under these conditions, penetration of e-mobility should follow the rate of increase in the country’s electricity production.68 Cost and availability of charging infrastructure Charging electric two-wheelers requires minimum infrastructure (can be charged from regular power sockets), but as of today, on average, 70 percent of the Sahelian population in rural areas has limited access to electricity. A solution could be to invest in the development of charging infrastructure for public use, which, however, introduces an additional capital cost on the public expenditure. Batteries disposal and recycling Although e-mobility is promoted internationally, concerns are raised regarding the treatment of batteries beyond their life cycle. Unregulated disposal of batteries poses a serious environmental threat, while recycling will necessitate the establishment of appropriate facilities and a regulatory framework. World Bank. 2021. “Pathways to Electric Mobility in the Sahel.” 68 FRAMEWORK Module - 7 Recommended Investments in Institutional Capacity and Technology Overview The module outlines recommended investments to strengthen institutional capacity and modernize procedures in the Sahel region, emphasizing trade practices, logistics governance, legislative reforms, capacity building, risk transfer mechanisms, and technology investments. • Institutional Capacity and Technology • Trade Practices and Agreements • Logistics Sector Governance • Legislative Reforms • Capacity Building • Risk Transfer Mechanisms • Technology and Govtech • Agreements with Manufacturers • Appraise the Benefits of Electric Mobility Adoption Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 98 Interventions to strengthen institutional capacity and modernize procedures are often regarded as no-regret interventions, although non-negligible costs may accompany some of them. This is because these types of interventions are often facilitators for multiple benefits—including several quite intangible ones, such as building trust and reputation. In this context, these interventions are considered particularly applicable to the Sahelian context based on the institutional baseline assessment and stakeholder consultations performed as part of the assignment. They are expected to enable the interventions in road infrastructure and rural logistics described previously or allow them to fully unfold and maximize their potential benefits. At the same time, they are also expected to further support regional development in the areas where they will be applied. Trade Practices and Agreements Establishing city or village clusters can catalyze multi-regional development, serving as both a multiplier of the potential beneficiaries of investments in rural accessibility and logistics and as a risk-sharing mechanism. Indicatively, such clusters may be set up between villages, serving as discrete nodes of a value chain (for example, production in village A and processing in village B), or among villages to enhance the resilience of a single node (for example, two or more villages contributing to the production thereby ensuring continuity and stock availability in case of climate-related disruptions as a result of their geographical dispersion). Recent (2022) findings of a comprehensive study conducted by the Organisation for Economic Co-operation and Development (OECD)69 have highlighted city clusters as an opportunity for urban development in Africa, showcasing how they can be used to offer an opportunity to support more balanced territorial development by benefitting from AfCFTA. Farming partnerships at the local level allow cost sharing through the build-up of economies of scale, risk sharing among individual partners, better negotiating power against wholesalers, intermediaries, or distributors, and enhanced protection against individual production loss. Such partnering is especially beneficial in the region to enhance the existing weak investment/processing capacity available at the individual level and reduce individual producers' risks against FCV and climate threats. Agreements with manufacturers and vehicle retailers to facilitate imports of spare parts. To facilitate the transition to a greener economy and encourage the modernization of fleet and processing equipment, the government and local administration units should enter into agreements with the relevant international industry (for example, vehicle retailers, manufacturers of equipment) to allow imports of spare parts and know-how so that business continuity can be ensured in case of damages/malfunctioning and to cater for provision of O&M services of fleet and equipment. https://www.oecd-ilibrary.org/sites/46c952e3-en/index.html?itemId=/content/component/46c952e3-en 69 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 99 Governance of the Logistics Sector A transparent tariff policy (for example, in the form of a standard cost per volume/ km) by all official logistics service providers will be necessary to offer visibility to businesses (both operators and users of logistics services) so they can prepare informed business plans and operate within a healthy environment. In some cases, it may also be necessary to provide cost subsidies to licensed providers to support them in establishing their competitiveness against informal operators—especially considering the informality in this sector may exceed 70 percent of the operations in some Sahelian countries. A recent study by McKinsey (2020)70 highlights best practices that can be applied to streamline the operations of logistics companies, leading to a rationalization of the cost model and, hence, the competitiveness of fares. A regulatory framework for logistics operators will be necessary to establish a healthy market environment governed by specific rules (rights and obligations of operators). This is required to attract entrepreneurship and allow an organized business model to prevail over the informal sector. Such a framework could include provisions for mandatory retirement age of trucks, training requirements for drivers, and truck loading limits. Similarly, tax incentives may be necessary for investments in low-carbon, more efficient fleets that can offer reliable services and guarantee faster connections between villages and urban centers and faster transportation of goods and freight. Such incentives may also attract international logistics operators who may not need fleet renewal (or may have access to financing to support it) but may be reluctant to enter the market due to FCV risks and political instability. Given that tax incentives are a relatively well-known instrument in countries of Sub-Saharan Africa (as evidenced by IMF71), it is estimated that the governments may already possess the institutional maturity required to apply them in the logistics sector as well. For example, Burkina Faso's Decree 2023-0961 under law 010-2023, signed on July 18, 2023, exonerates payment of value-added tax (VAT), rights, and importation taxes for vehicles under ten years of manufacturing age for SMEs. 70 https://www.mckinsey.com/industries/travel-logistics-and-infrastructure/our-insights/getting-the-price-right-in-logistics https://www.elibrary.imf.org/display/book/9781557750815/ch007.xml 71 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 100 Legislative Reforms Law enforcement is perhaps the most urgent among the several reforms necessary to create a regulated business environment and maintain the competitiveness of licensed, quality-assured operators against informal servicers. Given that this may be a lengthy process until it is applied country-wide, especially when considering the vast geographic spread of the Sahelian countries, it would be beneficial to first enforce the law in critical nodes of the value chain (for example, by establishing exclusive high-speed traffic lanes inaccessible by informal operators) and gradually expand geographically as acceptance grows and law-breaking diminishes. Border friction removal is one of the most widely discussed non-tariff measures (NTMs) to facilitate trade and logistics in the Sahel and one of the main priorities of ECOWAS (Economic Community of West African States) and WAEMU (West African Economic and Monetary Union). This does not apply only to major international trade arteries but also to trade corridors between rural areas of neighboring countries or to corridors supporting the clusters discussed above. For instance, the World Bank’s 2016 Global Economic Prospects report72 highlighted the existence of strong informal cross-border trade links between Nigeria and neighboring countries that are only partially captured in official statistics. Estimates of informal cross-border trade in West Africa show that it could represent 20 percent of Nigeria's GDP and can be significantly higher for the Sahelian countries. The benefits of NTMs for West African countries are discussed widely in a 2018 study73 published by the UN Conference on Trade and Development, highlighting the need for strong political will to implement them. The establishment of special economic zones in regions neighboring country borders could offer an intermediate means of supporting trade modernization, enhancing direct foreign investments (DFIs), and removing non-tariff barriers for cross-country logistics. According to the ‘African Economic Zones Outlook Report’74 published by the Africa Economic Zones Organization, with infrastructure and institutional weaknesses widely recognized as major factors hampering economic development in Africa, the creation of zones that allow governments to concentrate administrative resources and infrastructure provision in confined areas is often seen as a pragmatic solution to structural limitations, while the African Union75 supports them as an engine for resilience and sustainable growth. 72 https://www.worldbank.org/content/dam/Worldbank/GEP/GEP2016a/Global-Economic-Prospects-January-2016-Spillovers- amid-weak-growth.pdf 73 z 74 https://www.africaeconomiczones.com/wp-content/uploads/2021/12/AFRICAN-ECONOMIC-ZONES-OUTLOOK-2021-1.pdf 75 https://au.int/en/pressreleases/20221201/african-special-economic-zones-engine-resilience-and-accelerator- sustainable#:~:text=African%20Special%20Economic%20Zones%20are,accelerate%20industrialization%20across%20the%20 continent. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 101 Capacity Building Capacity-building activities may be regarded as investments in human capital, which would be fair to consider as one of the major assets in the Sahelian countries. Such activities are mostly no-regret initiatives that can boost the efficiency of investments in rural accessibility and logistics and may be materialized in collaboration with non-governmental organizations (NGOs) taking into consideration local best practices (for example, rainwater harvesting76). They may be grouped into multiple categories depending on the beneficiaries: Primary sector: Training local populations on methods to intensify production, fight diseases of cattle and agricultural production, and familiarize them with best practices to apply small-scale water preservation techniques. Services and manufacturing: All countries in the Sahel benefit from a relatively young workforce that may be employed in sectors other than the primary one. Capacity building should emphasize women’s transition from the household economy to business activities such as trade (for example, through farming partnerships) or processing (for example, fish canneries around Lake Chad). Recent international initiatives (for example, the partnership77 in 2022 between the luxury goods company LVMH with the International Rescue Committee [IRC] and the Circular Bioeconomy Alliance [CBA] to support sustainable cotton production in Lake Chad) showcase the significant potential for added value that is inherent in such capacity-building initiatives. Infrastructure O&M: Infrastructure resilience (especially in a region hit disproportionally by the effects of climate change, such as the Sahel) relies a lot on proper and adequate maintenance. High temperatures and irregular rain patterns may hamper infrastructure functionality and could, in extreme cases, even lead to strength deterioration, rendering them vulnerable to potential extreme events. To this end, proper training of the local population can prepare task forces to undertake community-based O&M of logistics infrastructure, including rural corridors. Although this is a relatively new concept in the African context, its application in rural road maintenance is currently being investigated by the World Bank in Morocco,78 while best practices may also be explored in its application in Asia (for example, the Yunan Province in China,79 where trained women’s groups undertake the tasks) or elsewhere. 76 https://www.ungeneva.org/en/news-media/news/2022/01/71225/bringing-dry-land-sahel-back-life 77 https://reliefweb.int/report/chad/irc-partners-circular-bioeconomy-alliance-and-lvmh-implement-new-cotton-production-and- land-restoration-project-chad 78 https://documents.worldbank.org/en/publication/documents-reports/documentdetail/099090823103541838/ p16541107f41b507309bda0718601531e69 79 https://www.adb.org/publications/community-based-routine-maintenance-roads-womens-groups-manual-maintenance-groups Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 102 Capacity Building Logistics operations staff (drivers and technicians): Providing high-quality logistics services requires that the fleet operators and staff responsible for fleet maintenance receive proper training and acquire in-depth technical knowledge of the vehicles and relevant equipment. Although international contractors may provide such services, the acquisition of these skills by the local population gradually leads to operational independence, cost and time savings, and empowerment of the local labor force. Risk Transfer Mechanisms The existence of risk transfer mechanisms, such as the policies described below, not only enhances the resilience of rural logistics and infrastructure but also builds the confidence necessary for private sector investments in services around the logistics ecosystem (for example, fleet operators, e-commerce providers, importers/exporters) as it functions as a form of guarantee for business continuity. Such guarantees are even more important in the Sahel where access to commercial insurance providers is practically unavailable and states' institutional and financial capacity to support recovery works is questionable. The main recommended options include: A core target of resilience planning at the regional level is obviously the capacity to secure financing for immediate recovery actions in case a climate disaster occurs. Thus, together with investments in infrastructure and services, it is advisable that countries explore the option of securing such financing, which, in the case of Emerging Markets and Developing Economies (EMDEs), cannot be secured directly through commercial banks. To address this reality, the World Bank supports countries by means of Development Policy Loans with a Catastrophe Deferred Drawdown Option (Cat DDO)80. The latter is a contingent financing line that provides immediate liquidity to countries to address shocks related to natural disasters and/or health-related events. It serves as early financing while funds from other sources, such as bilateral aid or reconstruction loans, are mobilized. The World Bank Group’s Multilateral Investment Guarantee Agency (MIGA81) is a mechanism that potential foreign investors can use to obtain political risk insurance and credit enhancement for investments in the Sahelian countries, which are obviously among those suffering the most from FCV issues. This could allow countries to import knowledge, best practices, and technology (in infrastructure and logistics fleet and services) from cross-border countries in the form of investments supporting economic growth without adding to the countries’ sovereign debt. 80 https://thedocs.worldbank.org/en/doc/563361507314948638-0340022017/original/productnotecatddoidaenglish2018.pdf Although these instruments are primarily designed for ‘crucial infrastructure facilities’, their structure can be followed for the introduction of similar options in the context described herein. 81 https://www.miga.org/ Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 103 Risk Transfer Mechanisms Cargo/product liability insurance policies will also need to be developed since the risks associated with FCV and political instability will affect the confidence of potential trade partners, given that the risks associated with loss or damage to goods are undoubtedly high. Insurance availability in the region is negligible;82 on the other hand, accompanying investments in the entire supply by the essential policy reforms that aim to formalize the transportation and logistics sector, as discussed above, has the potential to accelerate the establishment of the insurance market if proper support is provided by international aid organizations or institutions such as the ECOWAS and the West Africa Coastal Areas Management Program (WACA). Additionally, it would be beneficial to explore options to offer liability insurance coverage to drivers of commercial vehicles. The latter may be developed along the lines of the existing ECOWAS Brown Card insurance model,83 which aims to ensure prompt and fair compensation for the victims of road accidents. Investments in Technology and Govtech Investments in technology are crucial growth accelerators and may act as enablers for a series of characteristics that multiply the benefits of investing in rural logistics. Countries should simultaneously plan investments in information and communication technology (ICT) infrastructure and services to unlock the potential for a series of internet-enabled applications. ICT infrastructure requires considerable resources. Given the almost negligible penetration of the internet in the Sahel,84 it is considered reasonable that governments first explore the possibility of obtaining satellite internet connection which minimizes the need for deployment of terrestrial equipment (for example, antennas, power stations, wired connections). Acquiring such connections is currently considered quite costly for individuals; however, it is estimated that when acquired by the state to support specific services, the value for money and the time to market vastly favor satellite connections. E-commerce may be pursued by local or international entrepreneurs owing to a sustainable logistics model (including storage capacity and reliability of stock) and safer and more efficient transport services. To this end, it is recommended that efforts are aligned with the findings of the UN’s Food and Agriculture Organization’s (FAO) Hand-in-Hand Initiative,85 which aims to facilitate commercially oriented value chains, including e-commerce and digital services in agrifood systems. 82 https://www.mckinsey.com/featured-insights/middle-east-and-africa/africas-insurance-market-is-set-for-takeoff 83 https://www.browncard.org/ 84 https://www.oecd.org/countries/nigeria/42-internet-access-west-africa.pdf 85 https://www.fao.org/hand-in-hand/investment-forum-2022/the-sahel/en Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 104 Investments in Technology and Govtech Early warning systems may be considered a ‘soft-engineering’ solution, aiming to protect infrastructure users in cases of upcoming extreme events that could damage operations or cause loss of production. Such solutions are not aimed at increasing the structural robustness of infrastructure assets, but rather at alleviating the impacts of a disaster in case it strikes1; hence, their implementation may lower the cost of adaptation measures while building on the resilience of operations. Invaluable insights on the installation as well as the costs and benefits of an early warning system, may be obtained by studying the Pastoral Early Warning System (PEWS86), initially launched in 2007 by the ‘Action Against Hunger’87 initiative. Passive security systems may be installed to allow remote surveillance of assets and corridors or enforce legal utilization of exclusive logistics lanes as described in the previous sections, especially considering that manned law-enforcement missions cannot be deployed country-wide. Additionally, internet availability along the corridors may enable immediate automated, geospatially informed incident reporting and initiate dispatch of service crews (for example, in case of a vehicle failure), first responders, or security forces (in case of an accident or a violent attack). Freight tracking may also be a valuable technology-enabled feature that can minimize deliberate cargo loss and potentially minimize transit time at border crossings. A recent (2019) study88 by the African Tax and Customs Review focusing on East African countries has shown that the transit time can be reduced by more than 50 percent as a result of electronic monitoring systems. Similarly, digital freight matching platforms, used by both transporters and shippers, could further optimize transport routes and reduce empty return hauls by better matching supply and demand. This would not only reduce the need for additional freight vehicles due to underutilization but also lower the regional carbon footprint of the industry. 86 https://www.livestockdata.org/member-spotlight/how-early-warning-system-helping-pastoralists-sahel-adapt-climate-and- covid-19#:~:text=The%20Pastoral%20Early%20Warning%20System,employed%20in%20the%20agricultural%20sector. 87 https://www.actionagainsthunger.org/ 88 https://atcr.kra.go.ke/index.php/atcr/article/view/60 FRAMEWORK Module - 8 Assessment of the Impact of Investments Overview This module discusses investment options to overcome development barriers in the rural regions of the Sahel. It outlines different classes of investments including logistics nodes, logistics fleet, road infrastructure, and institutional capacity. The module emphasizes the need for a strategic assessment of the impact and efficiency of each investment option to guide the investment strategy effectively. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 107 8.1 Assessment of the Impact of Investments The investments are qualitatively appraised based on their potential to have a measurable impact on the following major dimensions: (i) Connectivity and accessibility; (ii) Rural logistics infrastructure and services; (iii) Climate risk reduction; (iv) FCV protection; (v) Institutional capacity; (vi) Agropastoral economy; (vii) Employment and entrepreneurship; (viii) Trade; (ix) Food security; and (x) Low-carbon economic development. Each dimension is decomposed into one or more objectives describing specific areas of improvement as outlined in Table 8.1 The outcome of the assessment is presented in Table 8.2 The top row of the table is the decision objective (21 in total), and the rows are the different investment categories (26 in total). The outlook of the assessment is a table of [26 × 21] colored cells. The saturation of the color represents the size of the expected impact. Darker colors signify a strong ‘investment- objective’ pairing (that is, cases where the investment targets a very specific objective), while lighter colors indicate situations where an investment has a small or even zero impact (case of black cells) in the specified direction. How to use the assessment table The assessment table can be used to guide decisions on these aspects: • To formulate an investment strategy by combining investment categories that score higher (than their peers) in key priority objectives. For example, if a development priority is to enhance employment and entrepreneurship and the specific objective is to increase women's employment rates, priority should be given to investments that support non-motorized mobility or public transport instead of IMTs. Similarly, if a key priority is to increase the intensity of trade in local markets, priority should be given in installing local logistics nodes (instead of peri-urban), improving the local road network by implementing micro-level investments or by providing motorized vehicles to villagers and farmers (instead of investing in regional transport services). • To compare alternative investment options with respect to their potential to address a specific priority. For example, the food security priority is better served by investments in a bus fleet than in privately owned IMTs, while both investments are equally successful in connecting the rural population to the local markets. • To prioritize investments that can serve multiple objectives and identify positive spillover effects worth pursuing (usually indicated by a lighter color shade). For example, investments in a logistics fleet of light trucks will boost trade intensity and increase logistics’ efficiency (as evidenced by the dark-colored cells of the table), but they can also have a measurable (though indirect) impact on enhancing the agricultural production. For example, a by-product of their offering better connectivity conditions with the markets for the supply of essential farming inputs. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 108 • To track progress toward the accomplishment of the objectives of the investment strategy. For this, each objective is tied to a KPI, which monitors progress toward accomplishing the intended objective by comparing it to a pre-determined target. For the definition of targets, it is essential to have a good understanding of the enabling environment in which the initiative is pursued and the local-specific constraints that may impede the accomplishment of its goals to define realistic targets for the resources available and the time frame of the investment. A non-exhaustive list of example KPIs that have been regularly used in the assessment of rural development initiatives is provided in Table 8.1 without, however, prescribing target values. Table 8.1 Definition of decision variables, objectives, and example KPIs Variable Objective Proposed KPIS  onnectivity and 1. C 1.1 Increase access of the • Road density - Total network/Land accessibility population to roads Area (1/km2): • Rural Accessibility Index (RAI) – Percentage of the population living within a 2-km distance from all- season roads 1.2 Reduce travel time • Average travel time to/from market between settlements, • Average travel time to/from farm farms, and markets • Use of motorized transport: % of total annual trips 1.3 Improve the quality of • Percentage of paved roads the rural road network 2. Logistics 2.1 Increase availability of • Number of new low-carbon facilities infrastructure storage, warehouses, and • % increase of storage/warehousing and services processing units space in the region 2.2 Increase the • Number of logistic service providers penetration of logistic • Size of fleet (light, medium, and heavy services trucks) 2.3 Increase the mobility • Frequency of public bus services of the population • % of the population owning a motorized vehicle Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 109 Variable Objective Proposed KPIS 3. Climate risks 3.1 Reduce flood risk • Annual harvest loss (caused by flood events) • Number of households affected (annually) by flood events 3.2 Protect people from • Number of public buildings with AC high temperatures and infrastructure dust storms • % of public transport with air conditioning (AC) • % of roads with dust-protection measures 3.3 Protect agriculture • % of irrigated/rainfed cropland (and aquaculture) from • Application of deficit irrigation drought and water practices scarcity • Polluted water discharge in aquaculture systems FCV and food 4.  4.1 Protect logistics • % of logistics units with surveillance insecurity services from thefts and equipment armed robbery • Household income increase 5. Institutional 5.1 Establish government • Number of farming partnerships capacity regulations to support trade activity and transparency of logistics services 5.2 Increase efficiency • % change in the number of road injury of operations through accidents legislative reforms • % change in the number of driving violations (measured in key road arteries) 5.3 Undertake capacity- • % trained population in modern building activities agricultural practices • change in the % of the population employed in logistic services • Number of road projects (or total length of roads or total budget) undertaken by local road contractors Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 110 Variable Objective Proposed KPIS Primary and 6.  6.1 Increase crop, • % of GDP of each sector manufacturing livestock, fish production, sectors and manufacturing 6.2 Increase employment • % of the population employed in rates in agropastoral agropastoral/ fisheries activities, fisheries, and • % of women employed in the above manufacturing activities • Change in average annual income of farmers and fishermen Employment and 7.  7.1 Increase employment • Number of active population of entrepreneurship rates, empower women enterprises and the young, and boost • Change in the % of employed economic growth population • Change in the % of employed women • Change in the % of employed youth • Number of new SMEs Services and 8.  8.1 Increase local and • Volume of traded products in local trade regional trade activity markets • Number of trade associations • Volume of processed products 8.2 Increase efficiency in • Average travel time of products food transportation (from production/processing units to markets; production units to distribution center) • Number of daily shipments in distribution centers • Average transportation tariff/ [volume × km] • % of transported goods/total production • Dead mileage of trucks and buses Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 111 Variable Objective Proposed KPIS 9. Financing 9.1 Build synergies with • % increase of beneficiaries when opportunities existing projects considering the combined project • % savings in the project costs when considering complementarities with existing opportunities Penetration of 10.  10.1 Increase penetration • % of EVs over total registered vehicles renewables and of renewables and EVs • % of renewables in the country’ s e-mobility energy mix 10.2 Promote sustainable • Number of energy-efficient logistic logistics practices hubs • % energy savings in logistic hubs Agropastoral Connectivity & Accessibility Logistics Infra & Services Climate Risk Reduction FCV Institutional Capacity Jobs Trade Financing Renewables Investment Category Economy 1.1 1.2 1.3 2.1 2.2 2.3 3.1 3.2 3.3 4.1 5.1 5.2 5.3 6.1 6.2 7.1 8.1 8.2 9.1 10.1 10.2 Local Nodes > Nodes Peri-Urban Nodes > Nodes development Storages > Nodes Processing Units > Nodes Distribution Centers > Nodes Transport Depots > Nodes Multi-purpose Facilities> Nodes Grid-connected Units > Nodes Solar-powered Units > Nodes the darker the color, the stronger the impact). Zero-carbon Units > Nodes Security & Surveillance > Nodes Non-motorized transport > Fleet & Services IMTs > Fleet & Services Cars > Fleet & Services Light Trucks & Buses > Fleet & Services Heavy Trucks > Fleet & Services E-mobility > Fleet & Services Micro-level Network > Road Infrastructure Meso-level Network > Road Infrastructure All-weather roads > Road Infrastructure Trade Practices> Institutional Capacity Governance > Institutional Capacity Legislative Reforms > Institutional Capacity Capacity Building > Institutional Capacity Table 8.2 Evaluation of the potential impact of different investment categories on rural Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning Risk Transfer > Institutional Note: Blank cells denote neutral or negligible effects. The color saturation indicates the intensity of the impact (that is, Capacity Technology & Gov-tech> Instit. Capacity 112 FRAMEWORK Module - 9 Investment Strategy: Assessment of Costs and Benefits Overview This module outlines an investment strategy for rural accessibility and logistics in the Sahel, emphasizing the importance of designing interventions within the specific regional socioeconomic context to maximize their developmental impact. It covers these aspects: • Using a Strategic Framework for Investments • Short-Term and Long-Term Interventions • Challenges in Rural Areas • Logistics Fleet and Nodes • Investment in Road Infrastructure • Economic Benefits • Costs • Enhancing Supply Chain Competitiveness • Adaptable Framework Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 115 9.1 Investment Strategy: Assessment of Costs and Benefits Main characteristics The assessment performed so far indicates that the developmental impact of interventions in rural accessibility and logistics can only be maximized if these are designed within the specific regional socioeconomic context. This includes considering regional characteristics and limitations such as: i. topographic relief, ii. access to electricity, iii. climate and FCV risks, iv. opportunities and burdens to rural socioeconomic growth, v. the ratio of benefits over the cost of interventions (BCR), vi. the current capacity of local populations, vii. the implementation horizon of interventions, and viii. the institutional capacity of the administration required to support the growth vision. Investment decisions made as part of a broader development plan should ensure that the interventions promoted in one sector are also well suited to serve and complement those performed in another sector. The preceding evaluation of interventions (Modules 4 to 7) indicates that, in most cases, there may be more than one solution to overcome a specific barrier. Thus, the strategic framework for investments in rural accessibility and logistics in the Sahel constitutes an integrated approach developed within the EASI conceptual framework (Enable - Avoid/Reduce - Shift/Maintain - Improve),89 which covers the entire supply chain to achieve: • Low-carbon sustainable growth • Reliable rural accessibility and logistics • Food security and resilience against climate change and FCV • Empowerment of local populations and encouragement of private sector participation (PSP) The recommended investment strategy, outlined in Figure 9.1, builds upon the evaluation of interventions performed in the previous chapter and includes interventions in logistics nodes and hubs, all-season roads, low-carbon or electric vehicles, and a series of institutional and business practice reforms, aiming to create a fertile ecosystem for the growth of sustainable and enduring value chains supporting rural development in the Sahel. 89 https://www.ssatp.org/news-events/mobility-and-accessibility-urban-areas-africa Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 116 The framework is to be applied at a regional scale in rural areas characterized as ‘Deep Dive’ areas in the context of the present assignment (refer to Appendix 2 and the section ‘Deep Dives in the Sahel’). Common characteristics of such areas, based on the geospatial assessment performed for the G5+Senegal countries of the Sahel, include: i. poor connectivity, ii. limited accessibility of the (limited) road network, iii. lack of reliable access to basic resources (for example, electricity, clean water), iv. sparse population distribution, and v. large distances between settlements and major markets or basic service areas. Most areas score well below the African average in indexes such as the Rural Accessibility Index (RAI) and the Logistics Performance Index (LPI). The relatively young rural population is characterized by extreme poverty and is mainly employed in the primary sector, that is, agropastoral activities or fisheries (for example, in Senegal, around Lake Chad, or along the rivers). Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 117 Figure 9.1 Outline of the proposed investment strategy Lo istics Nod s Low-c rbon v hicl s Loc l coll ction points loc t d t short dist nc s A fl t of (mostl li ht) pick-up trucks, v ns (<10 km) from s ttl m nts nd production fi lds. nd bus s op r tin lon n twork of ll Short t rm, th dist nc from th st rtin point w th r ro ds will off r s f nd r li bl to coll ction points c n b tr v ll d usin tr nsport tion of fr i ht & p opl r sp ctiv l non-motori d tr nsport, or if loc l b tw n loc l conn ction points nd hubs on infr structur p rmits, IMTs. P ri-urb n hubs, p -p r rid b sis. sol r-pow r d or rid-conn ct d, d p ndin on c p cit , m b loc t d in th vicinit of m in corridors for product r tion. Hubs will b off rin prot ct d stor nd pot nti ll r fri r tin nd/or proc ssin c p biliti s. Lon t rm, hubs could volv El ctric v hicl s could pr v il to m jor r ion l m rk ts in th m dium to lon t rm nd/or mini- rid nod s provid d nou h ch r in 4 providin l ctricit to c p cit c n b nsur d. n rb vill s. Compon nts Inv stm nt Str t Institution l & Busin ss Pr ctic R forms All-s son ro ds To support sust in bilit of inv stm nts nd Providin short to m dium dist nc (~10-50km) ttr ct PSP. Short-t rm int rv ntions includ rur l conn ctions b tw n coll ction points nd f rmin p rtn rships to support coll ctiv lo istics hubs, b m ns of fl t of m n m nt of production nd tr d s w ll s fr i ht/p opl c rri rs. inc ntiv s to st blish form lit in th s ctor. Lon -t rm th n twork m b r du ll Lon -t rm ctions m compris xp nd d to lso support l st-mil clust rs b tw n r ions or -comm rc conn ctivit . nd fr i ht-m tchin s rvic s. An int r t d ppro ch cov rin th ntir rur l lo istics v lu -ch in. Source: World Bank. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 118 The investment strategy (Figure 9.2) includes short-term investments in a network of all-weather roads. These roads follow existing tracks where possible to connect product collection points with logistics hubs. The collection points are local logistics nodes established at the village or settlement level and within a short distance from most production fields. The logistics hubs are solar-powered or grid-connected storage or processing units near the primary road network. They are served by a fleet of low-carbon or electric public transport vehicles, such as pickup trucks for freight transportation and minivans or buses for carrying people. This is supported by a series of interventions in the business model aiming to increase its competitiveness and enhance food security in the region. These could comprise farming partnerships for the handling and marketing of products, institutional reforms in the governance of the logistics sector to open it up to new players, and provision of motives for entrepreneurship and enhanced private sector participation. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 119 Figure 9.2 Conceptual outline of the main short- and long-term interventions C ntr l M rk t Vill A F rml nd Town r = 10 km Loc l M rk t Prim r Ro d r = 10 km Foot p ths T rti r Ro d Foot p ths F rml nd Loc l coll ction point Sol r p n ls N w ro d s m nt P ri-urb n hub & El ctric 2-3 wh l rs 'All-w th rin ' proc ssin f cilit of xistin ro ds Low- missions trucks Ch r in infr structur Loc l ro d Low- missions mini-v ns F rmin p rtn rships Lon -t rm pl n Short-t rm pl n Source: World Bank. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 120 A key attribute of the framework is that it allows expandability: it has been designed to support long-term interventions to follow and serve the economic development of the regions in which it will be applied. Such long-term interventions include a denser road network as demand for capacity increases and gradual expansion to cover last-mile connectivity. This is provided the poverty indices reduce, and people gradually obtain the purchasing power to acquire IMTs or low-carbon vehicles. Assuming a low-carbon scenario, the main logistics hubs may evolve into mini-grid nodes also housing Battery Energy Storage Systems (BESS) units, thereby providing electricity to nearby villages. Additionally, the framework envisions the creation of clusters between villages to enhance the resilience of the value chains against climate-related threats and FCV. It also has the potential to foster the adoption of e-commerce and freight matching services, driven by a sustainable logistics model that ensures reliable storage, inventory management, and more efficient, safer transport services. Figure 9.3 illustrates how these short- and long-term interventions help address the goals of the EASI framework. Figure 9.3 Compatibility of the investment strategy with the four pillars of the EASI framework Addr ssin th T r ts of th EASI Fr m work En bl Avoid E1. For s s n Int r t d ppro ch A1. Throu h th propos d coll ction E2. Propos s A cl r ov rn nc mod l mod l, th str t promot s E6. Cr t s ntr points for th public tr nsport limin tin th civil soci t 01 02 n d for individu l motori d tr v l E7. En bl s priv t s ctor A2. Th xp nd bl n twork mod l p rticip tion llows for r du l d plo m nt E5. S cur s th fin nc bilit promotin sound l nd us of th pl n EASI Fr m work Shift S1. Includ s multimod l ppro ch Improv S3. R lics on n ffici nt public l1. For s s optim l pl nnin of tr nsport s st m fl t nd op r tions b s d on S4. Op r t s on n w, s f , xclusiv 03 04 ctu l n ds infr structur l2. Minimi s missions nd ims S5. It m int r t s rvic s b to sol l r l on r n w bl priv t p rti s off rin p r tr nsit n r sourc s op r tions (in th lon -t rm) Source: World Bank. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 121 9.2 Features and Categories of Interventions This discussion highlights the main features and scale of the proposed interventions. Where applicable, it differentiates between short- and long-term actions and between business as usual (BAU)90/low-carbon scenarios,91 to illustrate each feature's rationale and estimated cost efficiency. The framework should be adjusted to the specific regional context in which it is implemented. For example, in some rural areas, actions classified as 'long-term' may be feasible for earlier implementation, while certain short-term solutions may not be directly relevant for the region of interest (refer to the framework's application in the chapter ‘Deep Dives in the Sahel’ for more examples of such adjustments). Logistics fleet92 and nodes The proposed short-term investment strategy covered in Module 9 prioritizes investments in an expandable fleet of pickup trucks or vans for transporting goods over intermediate distances—that is, products coming from agropastoral or fishing activities, rather than investing in larger vehicles (for example, heavy-duty trucks). While large-capacity trucks managed by existing operators could provide an economically efficient solution for intermediate routes in the short term, this approach is unlikely to resolve the established informality in the sector or modernize logistics operations in the region. Moreover, existing conventional trucks are outdated, prone to frequent engine failures, and are significant GHG emitters. To resolve these shortcomings, the strategic framework promotes the use of modern low-carbon vehicles (freight or people carriers) that could be owned and operated by the state or by a special purpose vehicle (SPV). It would potentially involve a private entity, which will offer a pay-per-ride or pay-per-volume services at affordable prices. This approach is particularly suitable where formal transport services in the region are virtually non-existent, supporting the decision to acquire a new fleet of low-emission freight vehicles. In regions where truck transport services already exist but use older vehicles, a fleet renewal program, including subsidies to modernize part of the fleet with newer, low-emission trucks, might be more appropriate. Given the current production levels and mobility patterns in rural areas of the Sahel, it is estimated that, in most cases, a small number of potentially refrigerated vehicles covering several routes with multiple itineraries per day would suffice. This would reduce the required investment, particularly when utilization rates are optimized to minimize empty return hauls. Still, this solution may be costlier in terms of capital expenditure (CAPEX) than the option of using the existing logistics market (despite its being fragmented and unreliable). However, it offers multiple benefits that should 90 The BAU scenario assumes that the existing logistics market and regional value chains continue along their established growth path, with interventions focusing on improving reliability, sustainability, efficiency, and formalization, without radically altering the market structure. 91 The ‘low-carbon’ scenario envisions more transformative investments in logistics services, prioritizing sustainability and promoting the transition to renewable energy sources and the adoption of e-mobility solutions. 92 In its generalized format, the strategy does not include investments in water or rail transport, as these are less commonly applicable in the context of Sahelian rural regions. However, such investments may be addressed in the Deep Dives presented in Appendix 3. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 122 be accounted for, including formality, reliability, efficiency, and climate mitigation. Additionally, minivans or buses (which may need to be air-conditioned to cope with extreme heat) can provide secure transportation options for individuals, especially women and vulnerable groups At this stage, the strategy does not prioritize large-scale investments in IMTs. Although two- and three-wheelers are popular in urban centers across the Sahel, they are sporadically available in most of the rural areas under consideration. Providing incentives (mainly in the form of subsidies, given that tax incentives are not applicable in the regional context) for local populations to acquire them in the short term would be very costly, given the large number of potentially eligible beneficiaries. Most importantly, affordability constraints would likely drive most beneficiaries to purchase second- hand, outdated, high-emission vehicles, critically undermining the vision for low-carbon development in the logistics sector. Similarly, promoting electric IMTs (given their lower cost compared to cars) in the short term is constrained by affordability issues, alongside limited power grid coverage, and insufficient electricity generation capacities in the Sahelian countries. However, in certain rural areas with a precedent in IMT usage, targeted investments in a small fleet of potentially off-road tricycles (offering greater capacity than two-wheelers) could prove economically viable. These vehicles could be strategically subsidized for producers’ cooperatives or integrated into the capital expenditures of local logistics nodes and offered on a pay-per-ride basis. This approach would support short-distance transport of goods—particularly in areas with low-capacity roads and modest transport demand—while keeping operational costs low and aligning with low-carbon objectives. In the long term, the fleet may be enhanced by more and (depending on the demand) higher capacity vehicles, which could be exclusively electric93 in the low-carbon scenario. Adopting leasing schemes for the acquisition of low-emission vehicles in the short term would better support the transition to a low-carbon future, as it prevents carbon lock-in that may skew the pathway to e-mobility. At the same time, it provides long-term visibility, enabling new private sector players to enter the logistics market, fostering innovation and increasing competition to the benefit of end-users. Road infrastructure The vast geography, low population density, and the large distances between points of interest in most rural areas in the countries examined, coupled with the limited road network coverage (Figure 9.4), render investments in last-mile connectivity extremely resource-demanding. At the same time, even if constructed, a dense road network would not generate short-term benefits given that the vehicle ownership rates of potential users can be as low as 2 percent in some regions. Most do not possess the purchasing power to acquire them. Hence, the potentially increased capacity would not be justified by the existing (or projected in the short-term) demand. On the other hand, traversing long distances on foot while carrying loads on their heads and shoulders (or aided by animal carts) is inefficient and unsafe in the FCV-dominated regions of interest. The strategy foresees the construction or improvement of a network of all-weather roads able to serve intermediate destinations (that is, >10 km from origin points) by means of pickup trucks, vans, or buses. A successful application example of solar-powered tricycles in rural Zimbabwe can be found in the following article, available 93 online: Solar-Powered Tricycles Offer Solution to Transport Problems in Rural Zimbabwe. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 123 Figure 9.4 Road network map of the Sahel revealing the very low accessibility characterizing most rural areas in the region Source: (OpenStreetMap data). Generally, this network is meant to connect local logistics nodes to central hubs, providing access to the main corridors. This offers safe, reliable, and fast access to the primary transportation network. Compared to a dense road network (that is, accessible on foot within 2 km from all settlements), the proposed solution may achieve 60 to 80 percent savings in terms of total road length constructed or improved. This will have implications on the cost and carbon footprint associated with the construction of the roads and required adaptation measures (without accounting for the cost of measures required to deliver some level of safety for lonely travelers—and especially the most fragile population). The long-term strategy includes expanding the road network to support the demand (which is projected to increase due to economic development). In the BAU scenario, such increased demand may stem from the increase of conventional two-wheelers or three-wheelers, thus prioritizing the need for last-mile connectivity through all-weather corridors designed for smaller, lighter vehicles. In the low-carbon scenario, and accepting a considerable penetration of public transportation, it is reasonable to assume that short to intermediate distances will still be served by larger trucks. They could support the need for higher-load motorized transportation, with passenger routes served by bus rapid transit (BRT) operating on the same network. They could potentially expand to serve more routes. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 124 Institutional capacity and technology To create a healthy business environment in the logistics sector, it will be necessary to reduce the widespread informality in the sector. To this end, a transparent regulatory framework will be necessary so that licensed operators can be aware of their rights and obligations, including safety precautions and quality standards. Additionally, it is proposed that licensed operators are also given the privilege of driving on exclusive (high-speed) lanes along the all-weather network, and so, offer faster service. This will increase their competitiveness against informal operators, hence rendering the market more attractive for new players. Apart from logistics, business efficiency would benefit from a legal framework for establishing farming partnerships to promote the advantages of a sharing economy while enhancing the resilience and security of operations and supply chain. Instead of retaining the independent producer model, partnerships will allow better negotiation of prices, redundancies in case of loss of production, and price (for example, for transportation of production) and risk sharing among partners. Moreover, partnerships will provide a sustainable business environment that offers new employment opportunities especially empowering women in trade activities. In the long term, such partnerships can transform into major economic growth poles, creating new entrepreneurship opportunities, provided the appropriate regulatory framework is developed.94 In the same context, policies for establishing trade and broader economic relations between villages with complementary economic activity are a prerequisite for creating village clusters that offer the benefits discussed in Module 7. Governments should invest in capacity building in prioritized areas to ensure a trained workforce for the construction sector, logistics, paratransit operations, long-term trade, e-commerce, and export activities. When rural trade involves direct exports to neighboring regions, training should be prioritized and supported by policies to reduce border friction and promote international trade. For a successful transition to e-mobility, governments need to establish legal frameworks and commercial agreements with equipment and spare parts manufacturers to ensure domestic availability of supporting infrastructure. Finally, it is highly recommended that the investment strategy is aligned with the countries’ strategic objectives related to investments in technology—especially with regard to internet connectivity. This could enable a variety of opportunities (including e-commerce solutions, freight tracking, early warning systems) that would boost the growth potential of investments. A strong example of how producer partnerships in the Sahel region can leverage collective action to access international 94 markets, benefit from economies of scale, and promote sustainable agricultural practices is the Union des Producteurs de Mangues Biologiques (UPROMABIO) in Burkina Faso—a cooperative that focuses on organic mango production and has become a well-known mango exporter, particularly to European markets. UPROMABIO helps its members by providing capacity-building programs to improve farming techniques and post-harvest handling, while aggregating production and ensuring that post- harvest processes meet international export standards—a collective approach that enables smallholder farmers to access global markets and boosts economic opportunities for the affiliated rural communities. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 125 9.3 Benefits of an Adjustable Investment Strategy Framework The investment strategy has been designed to include short- and long-term actions aiming to boost rural growth by optimizing investments in rural accessibility and logistics in accordance with a value chain analysis. It provides a framework that is meant to be adjusted to the regional context of the area where it will be applied. For example, road construction may not be necessary in one region but could be essential in another. However, its overall structure may be retained. This provides decision- makers with one single framework. This approach could potentially eliminate the risk of prioritizing sporadic interventions that don’t belong to a broader development plan. There are several benefits to this approach. • It facilitates procurement and exploits economies of scale, thereby optimizing the spending needs: countries will be able to standardize road design, equipment, and fleet and ensure they are compatible with the investment strategy, thereby accelerating the procurement process and inserting modularity in the design process. Where acquisition through imports is necessary (for example, for minivans or trucks), it will be easier to purchase larger quantities, hence increasing competition and interest by suppliers who may otherwise be reluctant to bid due to the political uncertainties in the Sahelian countries. • It paves the way for a multi-dimensional growth of employment in various sectors: farming, processing, packaging, distribution, handling, construction, operation, fleet management, energy production. This helps diversify the economic development patterns of the region. • It is expandable, which makes it possible to follow the growth patterns of a region. The proposed short-term interventions consider the potential longer-term needs—in fact, in some cases, they are designed to lay the foundations for them. • It may be applied in the vast majority of rural regions in the Sahel. • It encourages private sector participation in all links of the value chains. • It proves that, under certain conditions (present in many regions in the Sahel), low-carbon development is not a luxury but can be a necessity. • Its execution can be audited by setting strategic goals and monitoring their implementation using the Impact Assessment structure presented in Module 8. 9.4 Appraisal of Investment Costs and Benefits Formulating an efficient investment strategy to address key development barriers in rural regions of the Sahel can yield significant benefits for local economic growth. However, before moving to implementation, the economic soundness of the strategy must be thoroughly evaluated, by examining various solution structures and identifying the relevant life-cycle costs and benefits of its components to optimize financial viability. This final section of Module 9 outlines the principles that users should follow to assess the costs and benefits of the investment solutions discussed in earlier parts of the framework. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 126 Build an efficient transportation network Solutions to overcome the major development barrier of connectivity and accessibility include hard infrastructure options such as an improved network of all-weather roads. These solutions result in tangible and quantifiable benefits or intangible and longer-term ones. While the benefits of new infrastructure are rarely disputed and, most of the time, positively correlated with usage and demand, such infrastructure must be designed and delivered with the appropriate commercial and financing structure to be viable. Benefits Reach and access With higher accessibility, a significantly larger percentage of people will have quicker and easier access to the main transport routes and linked markets. This will allow for improved connectivity between supply chain stakeholders (production, packaging and re-packaging, transport, warehousing, markets, and social infrastructure) and for more efficient alternative travel routes to be developed, thereby optimizing travel. Reduced travel time Improved roads and the replacement of dirt and mud roads will allow for faster transport of goods between connection points and the diversion of the resulting surplus capacity toward additional resources, more production, or more value-creating activities. Travel efficiency An upgraded road network will allow for existing vehicles to travel more efficiently, more vehicles to be active on the network, and new vehicles that would not otherwise be operational. This could lead to an overall reduction of travel costs such as petrol and vehicle maintenance costs, and increased load per mile traveled. Fewer or limited The all-weather properties of new or rehabilitated infrastructure network disruptions will lead to significantly lower number of disruptions due to extreme climate events and also faster reinstatement of activities following such an event, with knock-on effects across the supply chain, better planning and budgeting, and higher cost avoidance as compared to the existing status quo. Higher network Typically, when a new road enhances the accessibility of an existing usage route or extends an existing network by providing a new connection, users increase significantly. This leads to many economic benefits for the associated regions and countries, including workforce mobility, consumer access and reach, and regional development, among others. Social benefits Improved accessibility and travel across the road network will allow for better mobility of the work force where required. Better connections of the population to central markets, villages, and towns, lead to improved access to social infrastructure, new employment opportunities, and ultimately improved living conditions. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 127 Note Although there are studies associated with the economic benefits of the new infrastructure and specific country analyses, quantifying the above benefits is not always straightforward, given the variety of circumstances and country-specific characteristics. For this assessment, in-country analysis, commonly accepted metrics, and precedents from countries with similar characteristics will be used to quantify the above benefits to the extent possible. In any case, the ‘weight’ of the benefits is more important, particularly in a country with a rudimentary infrastructure, compared to the associated costs, whereby the benefits will most of the time outweigh the associated costs, provided such costs can be met. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 128 Costs Preparation costs Such costs refer to the design of projects and procurement of the contracts. More specifically, these costs include but are not limited to, government and consultant costs, land, social, and environmental studies, licensing as required, setting up of procurement and monitoring entities, legal counsels, and tender documentation. Capital expenditure A major cost category is the capital for the construction of the road network, typically through an Engineering, Procurement, and Construction (EPC) contract. Another category is the associated climate adaptation measures, whether in the form of all-weather solutions up-front or through adaptive longer-term capital work add-ons. These costs will also include, among others, i) a number of service stations depending on intended usage and density; ii) vehicle charging stations; iii) signaling; iv) anti-flood measures and associated tarmac materials; v) any security and insurance measures to protect the infrastructure and materials during construction and beyond; vi) road monitoring infrastructure (such as IT and cameras); and vii) to the extent relevant and applicable, mechanisms to protect or enhance biodiversity, irrigation, and connectivity during climate-induced disruptions. Road operating and Such costs are typically incurred through an O&M contract. This maintenance costs includes i) road facility management; ii) ongoing security where required; iii) cleaning services; iv) reinstatement costs following weather events; v) road assistance and associated fleet; vi) energy costs for signaling and lights; vii) the maintenance of service and resting stations; and viii) road, operation of any traffic and key junction monitoring facilities. A degree of ongoing driver and road usage training and professionalization may be required. Capital raising They refer to the expenses and ongoing costs associated with securing costs funding for the roads, which may be covered in part by the private sector through the procurement contract. These costs will mainly include associated interest on any debt facilities, cover or guarantee costs provided by the relevant institutions, and any associated consultant costs. Note that such costs may be relevant for the whole network or only for those parts of the network that could be bankable under appropriate procurement structures. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 129 Note Identify and calculate the majority of the costs during the preparation phase, specifically during feasibility, incorporating appropriate levels of contingency. Consider and apply a combination of precedent and market costs for road building and operation, including sourcing and transport of required materials and local capability and requirements, when assessing the outlined costs. Undertake local and, to the extent possible, international contractor consultation to confirm cost levels and required contingency levels. Divide solutions and associated costs into categories or solution options to allow for either (i) gradual installments of road components (main all-weather roads first with stations, monitoring, and feeder roads later, versus full network at once with adaptation measures added later) or (ii) identification of deliverable solutions under a ‘must-have’/ acceptable/ optimal solution categorization, depending on the availability of required capital and contracting capacity in the country (an ‘acceptable’ solution may address most considerations or lead to 75 percent of benefits realization, compared to what an optimal solution may offer incrementally). Identify these break-even points, which show that a solution’s benefits outweigh the associated costs and, to the extent possible, optimize and build on that solution based on capacity. Improve sustainable mobility of people and reliability of logistics The interventions in this class, individually or in combination with other solutions and in any form and structure, aim to upgrade, enrich, and optimize the midstream logistics and supply chain infrastructure. Benefits Reduction of travel An upgraded or new fleet, including trucks, buses, IMTs, and even rail times and increase or water transport will reduce overall transport time of goods and of productivity people from origin to final destination, thereby also increasing the productivity of local workforce. Travel times will be further reduced by (i) the introduction of ‘collection points’ in storage and warehouse facilities in locations closer to production and (ii) the disruptions avoided due to adverse weather conditions or existing fleet downtime due to maintenance requirements. Increased volumes The ability to transport and store larger volumes of goods will both transported increase the absorption of larger production levels and limit the number of trips required for the same volumes, leading to higher economic activity and overall transport cost reduction. Reduction of With more energy-efficient and, where applicable, electric or low-carbon transport costs vehicles, in combination with reduced travel times from origin to final destination, transport costs will gradually become more competitive. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 130 Benefits Optimization of the With warehouses and appropriate storage facilities, transport hubs will supply chain be formed with options given to producers, packagers, transporters, traders, and consumers to optimize their access to goods and complete the trade activity. Inevitably the supply chain will be continually calibrated based on such new infrastructure and be optimized via more competitive options, alternative faster travel routes, and access to new end markets. Reduction/ New fleets and vehicles, particularly the introduction of IMTs, elimination of load will ultimately significantly reduce the distance traveled on foot while carrying on the carrying loads. Moreover, the introduction of a publicly accessible heads and hands (for example, for a fee) fleet will drastically benefit people, especially women who cannot afford to acquire vehicles and have to travel long distances carrying goods on their heads. Reduction of post- Storage facilities and warehouses will enable the preservation of goods harvest losses and for longer periods in areas that would otherwise have to dispatch all increased food goods to main markets or be unable to preserve them at all. This will security ensure food availability during times of distress in remote locations without access to main markets, while also directly increasing producers' and traders' income by reducing product losses. New employment The new fleet and hubs may introduce various new employment opportunities opportunities, including drivers, repair and maintenance engineers, warehouse operators, workers at processing units, and associated security personnel. This will help decrease the unemployment rate in regions facing such issues, particularly as unemployed people will also can access and transfer to other areas and regions quickly and on a daily basis. Note Such benefits can be further enhanced when the suggested solution is combined with the other solutions presented in this section. For example, a new fleet and the installation of storage facilities will be enhanced and optimized if an appropriate road network is available. Quantifying such benefits will include a combination of (i) using market metrics for the cost of travel time; (ii) assessing the impact of increased transported volumes on economic activity and, to the extent possible, on the GDP; (iii) assessing reduced transport costs; (iv) assessing the impact of lower unemployment rates on the economy; and (v) evaluating the intangible benefits to the relevant population. Assumptions will have to be made and will have to be considered in light of the associated costs. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 131 Costs Acquisition of Depending on the type of vehicles to be introduced, their availability, vehicles the required associated infrastructure (for example, repair points, parking, storage, and protection), and the access to capital or financing solutions to complete the acquisition, such costs will vary and come in different forms and with important timing implications. For example, while introducing solar-powered IMTs may appear cheaper up front, the required infrastructure associated with their operation, such as charging, renewable power, storage, repair and protection from floods, may result in significantly higher costs. Vehicle operating The life-cycle costs of vehicles include the costs for fuel (or electricity), costs periodic maintenance, spare parts in case of accidents or failures, and the foreseen renewal of components within the investment horizon (for example, battery replacement for EVs). Additionally, any costs (such as state taxes) associated with vehicle ownership in the country should be considered. Such costs may be exacerbated in case of new equipment for which the market for spare parts and auxiliary services has not yet been developed or when energy prices fluctuate significantly. Storage facility/ Building and maintaining such facilities, particularly when these distribution center include refrigerating capacity, is an important cost. These costs may installation be mitigated if combined with ancillary services, such as charging for vehicles, repair services, and parking, rather than simply as a warehousing facility, and by developing them as a cluster of warehouses across regions, thereby benefiting from synergies at the developer level. Processing facility The life-cycle costs of processing units include capital expenses for installation land acquisition, facility construction (which can increase substantially for units with refrigeration capacity), and necessary mechanical equipment, while operational expenses include electricity costs, periodic maintenance, labor, and the cost of inputs for facility operations. Charging stations Assuming that best efforts will be made to ensure that the new fleet and availability of and storage facilities promote green transition, the electricity demand electricity will increase. This will require electricity availability in the relevant locations, implying a central grid connection or renewable energy generation near or at those sites. Climate adaptation To protect both the fleet and the storage facilities from climate events, measures adaptation measures will have to be installed, either separately or as part of the building contracts. These will increase the overall costs for warehouses and any infrastructure supporting the new fleet of vehicles. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 132 Costs Security In regions exposed to vandalism, thefts, and attacks, security measures will have to be put in place to protect the fleet, the storage facilities, and the stored goods. Such costs may be significant and may, in part, be covered through insurance, if at all available, but remain an important cost consideration. Procurement costs For all the above, procurement costs will be incurred for the feasibility studies, design, required counsel, and setting-up of required monitoring government entities. There are synergies to be realized when any of the above solutions are combined under fewer contracts or procurement processes. Note These costs will be assessed in light of the resulting benefits of various solution structures and options and the whole life-cycle costs to allow for the right and most viable implementation and funding schedules. The total costs will be assessed using a combination of market costs for the fleet: local contractor costs for developing and delivering the required infrastructure and associated adaptation measures, costs of security measures and ongoing surveillance and protection, costs of connection to electricity grid versus development of power generation near or at the relevant sites. Such assessment will include a base cost with a set of ramp-up or add-on costs associated with more advanced solutions depending on capital and procuring capacity. For example, the base cost for a storage facility followed by the cost for renewable energy generation on-site, followed by add-on facilities such as vehicle charging and fleet repair section, followed by adaptation and security measures. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 133 Enhance supply chain competitiveness The final class of interventions relates to enhancing supply chain competitiveness and renewing or establishing advanced market practices and associated governance where appropriate. Benefits Supply chain Identifying and promoting the use of advanced practices across efficiency the supply chain, as and where applicable and relevant, including in production, processing, and trade processes, will result in several cost-reduction and reliability benefits. More specifically, automated production and warehousing processes will decrease processing times and reduce lost goods. In addition, the application of developed market- tested and proven supply chain market practices, such as the location, size, and number of storage units of warehousing infrastructure in consideration of the size and type of the fleet and of the products processed, may lead to several cost, time and reliability advantages, not to mention the gathering and processing of associated trade data. Economic The more the number of processes that are normalized and reach levels competitiveness of consistency and uniformity when producing, transporting, storing, and diversification and selling goods, the more the market will become more competitive. Then the focus of resources will be on value-add activities and processes, such as optimizing costs, reducing transport time, promoting higher value-add products, establishing new and more rewarding partnerships, reaching more markets and improving production overall. These will result in gradually establishing appropriate pricing models, limiting arbitrage, promoting competition, and developing market comfort for new players, such as financiers and funding institutions, to participate. Improved The establishment of processes associated with market visibility and governance and monitoring through trade associations or local and national government market oversight entities in combination with the renewal of associated regulation will result in more effective decision-making at the government level in relation to the economy and to the internal and external trade. It will also lead to setting the right frameworks within which market players will be incentivized to conduct their business activities. Governance and oversight at the government level will ultimately result in more effective governance at the business level. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 134 Note The quantification of the outlined benefits will be based on a combination of (i) studies and commonly accepted relations linking governance at the government and business levels to growth at the business and national levels, (ii) assumptions of production growth and improved processing efficiency as a result of automated and more advanced processes, and (iii) assumptions in relation to the benefits of a more competitive economy. Any assumptions will be based on the results of similar practices pursued in countries facing similar challenges. They could also be based on conservative estimations of impacts on the supply chain because improved governance and business frameworks, combined with advanced processing methods, always lead to economic and business benefits or, at the very least, incentivize the market as a whole and attract new and more competitive market participants. Costs Process upgrading These include costs associated with acquiring, installing, and maintaining specialized equipment and processing units that will replace outdated ones or be added to the existing processes. Prior to such acquisitions and installments, costs will also be incurred to design and plan improvements and identify the right solutions, as applicable in the various supply chain components Workforce training The workforce and market participants must be prepared and trained to operate new machinery, whether in actual processing or maintenance. Such costs can occasionally be part of the acquisition costs. Otherwise, they can be borne by the business employing the workforce or the trading associations, especially as it is unlikely for the workforce itself to be able to assume such costs, especially at the early stages of the overall upgrading process. Security Similar to other solutions, new equipment and assets of value will be susceptible to theft and damage, especially in areas suffering from conflicts. Therefore, costs will be incurred in association with protecting and reinstating new assets, possibly through insurance, if at all available, or through ongoing security measures. Governance and Starting at the government level, the design and application of the monitoring right governance and monitoring mechanisms bear costs associated with appropriate counseling, engagement, and consultations with market players, IT and monitoring infrastructure, the setting-up of proper entities to audit and regulate the market and the training of the relevant personnel to undertake these operations on an ongoing basis. Such costs may be significant; however, a gradual approach will act to spread such costs over the long term and, with appropriate planning, ensure synergies, economies of scale, and cost-sharing, particularly when solutions have a cross-country reach. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 135 Note These costs will be quantified based on the relevant market prices with underlying assumptions in relation to economies of scale and cost sharing. However, costs related to the design phase of this solution, whether in its entirety or for parts of it, will be based on the assumptions for setting up and maintaining relevant teams and associated counsel. To the extent possible, cost profiles will be spread out over the targeted time scales of the solution and, to the extent required, be adjusted for the deliverability of the solution. For instance, new machinery installation requires a trained workforce and a specific size of workforce. To the extent that such a workforce is not available or is available in part, new machinery or upgrades will have to be installed based on that workforce availability. It is expected that there will be a ramp-up and phasing of the costs associated with this solution, particularly as the targeted benefits are longer term. E. Deep Dives in the Sahel Lake Chad, Chad: Enhancing connectivity and logistics to unlock value chain growth and climate resilience SKBo Triangle, Burkina Faso: Expanding infrastructure and logistics to elevate cross-border integration and reduce food insecurity Maradi-Zinder & Diffa: Increasing connectivity and accessibility to decrease high transportation costs and trade inefficiencies Deep Dive 1. Lake Chad, Chad Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 138 Deep Dives in the Sahel Deep Dive 1. Lake Chad, Chad The deep dive area spans approximately 120 km in width and 200 km in length, surrounding Lake Chad and stretching from Rig-Rig to Mani along the north-south axis, and from Mao to Baga (Nigeria) along the east-west axis. This area encompasses a diverse range of characteristics, including the main water body of Lake Chad, parts of the Chari River's endpoint in the southwest, and the arid lands of Kanem around the city of Mao in the northeast. The area covers three administrative regions—Kanem, Lac, and Hadjer-Lamis—and is home to approximately 2.1 million people (as of 2022), representing about 12 percent of the country’s total population. A field mission was conducted in the area in December 2023, to collect data on key regional value chains, the location and features of production areas and markets, the pricing structure of main goods and services, regional trade flows, mobility patterns, and potential climate-related and FCV risks. The collected data have been used to identify regional and value-chain-specific development barriers and shape the proposed investments in rural accessibility and logistics. This guided the preparation of the Chad Connectivity and Integration Project (P180915). Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 139 Major value chains examined Agriculture: Agriculture is the main economic activity in the region. In the Chadian part of the lake, the agricultural focus is predominantly on cereal crops, namely maize (86,000 tons/year) and millet (72,000 tons/year), less than 10 percent of which is exported. Livestock trading: Chad is one of Sahel’s main producers of livestock, with a significant portion being raised in the deep dive area (~~30 million heads, out of ~120 million country-wide). Approximately 60–70 percent of traded livestock is exported to Nigeria for processing. Fisheries: Lake Chad produces 50,000 tons of fish per year (that is, more than 50 percent of country-wide fish catches), providing significant opportunities for economic growth and increase of regional food security. Exports account for 5–20 percent of the total production and are highly informal. Spirulina: Lake Chad and the Ouadis in the Kanem region offer a fertile environment for the cultivation of the protein-rich spirulina algae, a superfood with high added value. Approximately 1,500 to 3,000 local women are involved in the sector, producing ~300 tons of spirulina per year. Approximately 5 percent is exported to countries like Nigeria and France. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 140 Insights on regional development barriers (Module 2) Cross-cutting barriers Connectivity and accessibility Issues • The road network along the periphery of Lake Chad is highly discontinuous and fragmented. • Many roads become impassable on rainy days, causing high transport costs. • Kanem's pastoralists are isolated from the more industrialized south (near the capital, N'Djamena) due to the lack of sufficient road infrastructure. • North-south (Bol-Kinasserom) trade routes via the lake rely on unsafe, low-capacity pirogues. Inadequate logistics infrastructure • While survey respondents prioritize trucks for product transport to distant markets, they acknowledge that the existing logistics services are inefficient, unreliable, and costly. • Inconsistent pickup volumes due to annual production variabilities make planning unreliable, increasing transport and storage costs. • Informal logistics, with irregular fees and checkpoints, raises transport costs for intraregional trips. Climate and FCV risks • Survey respondents in several areas around the lake (Mani, Bol, Bagasola, Kouloudia, Mao, Ngouri) report flood-related damage to crops and the road network. • East-west export trade routes (from Chad to Nigeria) via the lake are blocked by insurgent attacks. Lack of institutional capacity • Producers lack familiarity with partnerships, missing out on benefits like joint investments and cost-sharing. • Trade is hindered by uncoordinated institutions and stakeholders with varying capacities. • Capacity building happens sporadically through local initiatives and is not centrally organized by authorities. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 141 Value chain-specific barriers Disconnected value chains • Trade of agricultural produce is primarily local (limited within 30 km of production fields), while trade flows reveal a clear divide between the south and north of Lake Chad. • The nomads of Kanem travel long distances on foot to trade animals in local markets, and occasionally undertake inefficient and risky transfers to major southern terminals (N'Djamena, Mandoul). • Fish trade is local in the lake’s north, but more efficient in the south, where trade routes to domestic urban markets have been established. Despite strong demand, the export potential to Nigeria is underexploited. Lack of storage facilities • Over half of agricultural production is stored on-site, making it vulnerable to pests and extreme weather events. The use of community silos is limited by long travel distances, inefficient transport, and high storage costs due to limited availability, reaching up to 30 percent of product market prices. Elementary processing • Millet and maize are often sold unprocessed or are processed by hand, resulting in low-volume flour production and making trade difficult and vulnerable to market issues. • Despite a regional cattle population of 8 million, value addition is constrained by a lack of industrial facilities, cold-chain distribution, and poor connectivity. Dairy production remains mostly limited to family consumption, while a significant portion of the livestock (60–70 percent) is traded live in Nigeria (for prices between $200 and $300), rather than undergoing processing within the country. • About 85 percent of fish catches are smoked or dried using traditional methods, resulting in minimal added value and low local prices ($3–4 per kg) compared to neighboring Nigeria ($6 per kg). • Spirulina processing is labor-intensive, with low commercialization and efficiency, reflected in the low market price of spirulina powder ($0.035 per g). Seasonality and low productivity • Fishers face seasonal water variations, with catches halving in June-July, causing fish prices to rise by up to 60 percent during shortages. Aquaculture potential remains untapped despite government efforts to promote it. • Spirulina’s revenue potential is underutilized, with limited, local-scale cultivation. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 142 Evaluation of investment options (Modules 3–8) Two development pathways (investment plans) with different objectives are explored. BAU Plan The ‘short-term’ business-as-usual (BAU) plan assumes that local value chains will maintain their current growth trajectory and identifies targeted investment options to enhance regional accessibility and logistics in this context: • Road infrastructure investments address both the ‘meso-level’ and ‘micro-level’ networks, aiming to reduce climate-related risks and improve access to markets and services. At the meso level, all-weather paved roads will connect markets north and south of the lake, as well as Mao to Bol and the south markets. At the micro level, feeder earth roads will improve 'rural- to-main-network' connectivity, linking product collection points to central logistics hubs. • Logistics nodes are strategically located in peri-urban areas (Bol, Mao, Ngouri, and Guitte) and have feature grid-connected, storage facilities that aim to reduce post-harvest product losses, increase regional trade activity, and improve transport efficiency. • Investments in logistics fleet and services encompass (i) a fleet of light-emissions trucks and pickup vans optimized to manage the flow of products from rural collection points to central hubs, with the objective to reduce travel times and improve the penetration of logistic services in the region; (ii) a fleet of passenger buses to enhance mobility and reduce commuting time for the local population; and (iii) a fleet of modern lake boats to support fishing activities and facilitate north-south trade routes across the lake. • The plan is complemented by investments in institutional capacity, including producers’ partnerships to improve product handling and marketing, thereby boosting competitiveness and expanding market reach, capacity-building activities for key stakeholders in the primary sector, as well as regulatory reforms in the governance of the logistics sector to open it up to new players and provide the necessary long-term visibility to potential investors and operators. LC Plan The ‘long-term’ low-carbon (LC) plan aims to accelerate value chain growth through targeted investments in low-carbon logistics nodes that enhance productivity and expand processing capacity, while promoting sustainable logistics and supporting the adoption of renewable energy and e-mobility in the region. In comparison to the BAU plan, the LC plan introduces additional investments, including: i. Local nodes that enhance primary sector productivity. ii. Peri-urban nodes featuring renewable-powered processing facilities aimed at diversifying the product offering in value chains such as spirulina, fish, meat, and dairy.  full transition to electric road vehicles and lake boats, supported by charging iii. A infrastructure and photovoltaic plants.  bout 250 km of feeder roads around Mao (part of the ‘micro-level’ network) to support iv. A local milk collection operations. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 143 Proposed investment strategy: assessment of costs and benefits (Module 9) The investment strategy components are graphically illustrated in Figure E.1 and briefly analyzed in the tables. To derive the associated costs and benefits, each plan is appraised against two climate futures: RCP4.5 and RCP8.5. Figure E.1 Overview of proposed investment strategy in Lake Chad Source: World Bank. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 144 CAPEX OPEXRCP4.5* OPEXRCP8.5* BAU Plan ($, millions) ($, millions/year) ($, millions/year) 460 km Road Infrastructure 64.4 4.2 8.2 Construction/Rehabilitation 6 New Logistics Nodes 9.6 0.3 0.4 3 Cereal storage facilities in Bol, Guitte, and Mao 2 Fish cold storage facilities in Bol and Guitte (Dimensions: 250 m2 per facility) 1 Spirulina farming/drying, packaging, and storage unit in Ngouri (area: 0.5 ha) 234 Diesel Vehicles to cover Logistics 19.1 3.2 3.6 Fleet Requirements 2 Pickup vans (1–3 tons capacity), 48 semi-trailers (up to 20 tons capacity), 32 refrigerated trucks (5–15 tons capacity), 27 passenger buses (up to 50 pax), 100 fishing boats with outboard engines Partnerships 6.4 3.4 3.3 Farmers’ partnership to secure better market prices and establish a supply cluster with existing processing units. Fishers’ partnership to achieve better market prices and help establish international trade of smoked fish. Partnership to facilitate the direct trade of spirulina powder to international markets. Note: *Average values for a 20-year investment horizon. OPEX: Operational Expenditure. Total: 99.5 11.1 15.5 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 145 CAPEX OPEXRCP4.5* OPEXRCP8.5* LC Plan ($, millions) ($, millions/year) ($, millions/year) 710 km Road Infrastructure 86.9 5.2 9.2 Construction/ Rehabilitation 10 Renewable-powered Logistics Nodes 40.8 5.0 5.1 1 Refrigerated meat processing unit in Ngouri (Capacity: 7,800 tons of beef per year) 1 Refrigerated dairy processing unit in Mao (150,000 liters of milk per day) supported by 60 milk collection points 2 Fish farms in Bol and Guitte (Area: 2,000 ha/farm, Annual production: 10,000 tons of fish/farm) 6 Storage/processing facilities for cereals, fish, and spirulina as described in the BL Plan 3.1 MW photovoltaic (PV) capacity to support the facilities’ energy requirements 279 EVs to cover Logistics Fleet 47.8 0.9 0.9 Requirements 102 Refrigerated trucks and vans, 2 pickup vans, 48 semi-trailers, 27 passenger buses, 100 fishing boats with outboard engines powered by mounted solar panels 4 Renewable-powered EV charging 21 1.1 1.1 stations 90 EV high-power Level 3 DC fast chargers, distributed across charging stations in Liwa, Bol, Mao, and Guitte 12.5 MW PV capacity to support charging operations Partnerships 6.4 4.1 4.0 Total 203 16.3 20.3 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 146 Assuming a 20-year investment horizon (2030–2050), a 3-year implementation period, and a 12 percent discount rate (aligned with the development context of the Sahel), the investment strategy appraisal yields the following: Present Value of Present Value of Costs BCR Benefits (in $, millions) (in $, millions)** RCP4.5 RCP8.5 RCP4.5 RCP8.5 RCP4.5 RCP8.5 BAU Plan 658 727 197 248 3.3 2.9 LC Plan 1,873 1,978 342 395 5.5 5.0 ** Including capital and operational expenses, and the shadow cost of carbon. Investment Benefits: Highlights Agriculture VC: The majority of benefits in the agriculture VC stem from improved market access for smallholder producers, enabling better access to inputs and easier product delivery to consumers. Increased productivity accounts for 60 percent of total logistics benefits, with the rest split between reduced product loss (20 percent) and lower transportation costs. Partnerships significantly boost revenues, with an LCB of ~$22 million (RCP4.5), assuming a 20 percent increase in retail prices. Under RCP8.5, logistics and storage benefits rise by ~30 percent and 50 percent, respectively. Fisheries VC: Benefits are primarily driven by access to new and international markets via improved logistics, which unlock significant value across the entire supply chain. While the immediate benefits of aquaculture facilities are modest (life cycle benefit [LCB] of $3.8 million under RCP4.5], the added cold storage capacity and reliable product supply exponentially increase the sector’s growth through market expansion, higher pricing, and reduced product loss (LCB from efficient logistics services equals $770 million under RCP4.5), while increasing regional food security. The existence of partnerships further amplifies this value, facilitating market entry and contributing an additional benefit of $89 million under RCP4.5. Under more adverse climatic conditions (RCP8.5), benefits are further increased due to loss avoidance, with LCB from cold storage rising from $46 million (RCP4.5) to $53 million (RCP8.5), accompanied by only minor cost increases. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 147 Livestock VC: The key value driver in the livestock VC is investment in processing units, which significantly increases profit margins compared to traditional livestock trading. The dairy processing and storage unit generates an estimated $141 million in LCB from increased local milk sales, plus $264 million from expanding into new markets (RCP4.5). The refrigerated meat processing unit adds ~$212 million (RCP4.5), primarily from accessing remote markets previously unreached by meat products. The differences in benefits between RCP4.5 and RCP8.5 are minimal for both facilities. Spirulina VC: The total LCB of about $29 million in the spirulina value chain is primarily driven by the existence of partnerships (benefit of $24 million in RCP4.5), which enable international market access and favorable spirulina pricing (about six times higher than domestic prices). The remaining value is attributed to domestic sales and product loss avoidance. The benefits remain stable across climate scenarios, with only a 3 percent decrease from RCP4.5 to RCP8.5. The observed difference reflects two opposing effects: while adverse climate conditions increase risk reduction benefits through efficient storage and logistics, they also reduce production and projected sales. Deep Dive 2. SKBo Triangle, Burkina Faso Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 149 E.2 Deep Dive 2. SKBo Triangle, Burkina Faso Located at the crossroads of Côte d’Ivoire, Mali, and Burkina Faso, the Sikasso-Korhogo-Bobo Dioulasso (SKBo) triangle offers significant potential for cross-border integration and reduction of food insecurity. The area is characterized by its dense population, shared water resources, agricultural production zones, transhumance routes, and common languages. The deep dive focuses on the Burkina Faso portion of the SKBo region, which includes four provinces with a combined population of ~3 million: Kénédougou and Houet in the Hauts-Bassins region and Léraba and Comoé in the Cascades region. The local economy is largely agropastoral, employing over 75 percent of the predominantly rural population. In the Hauts-Bassins region, Bobo-Dioulasso stands out as a commercial and economic hub, followed by Banfora, the capital of the Cascades region. Both cities are home to major urban markets and industrial players, particularly in agrifood and textiles, benefiting from the region's rich supply of raw materials. Strategically positioned at the heart of the SKBo triangle, the Cascades region plays a crucial role as a cross-border trade zone, with strong connectivity to the port of Abidjan in Côte d'Ivoire via two major routes: the railway and the national road RN7. In April 2024, a field survey was conducted with 130 local value chain actors, including stakeholders from the transport sector. The survey aimed at collecting data on regional VC dynamics, including processing and storage methods, transportation practices, market prices and market structure, trade patterns, and climate-related or FCV risks. This information has been instrumental in identifying regional development barriers and shaping the proposed investment strategy, which informed the preparation of the Sikasso- Korhogo-Bobo-Dioulasso (SKBo) Basin of Integration - Burkina Faso Project (P181499). Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 150 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 151 Major value chains examined Agriculture: The Hauts-Bassins and Cascades regions are the powerhouse of the country's agricultural sector, producing substantial volumes of cash (cotton, mangoes, cowpeas) and staple crops (maize, sorghum, rice). Annual yields include 160,000 tons of cotton (over 95 percent of which is exported), 140,000 tons of mangoes (~35 percent exported fresh or dried), and 80,000 tons of cowpeas (10–20 percent exported to West African markets). Burkina Faso is actively working to diversify its agricultural output, aiming to reduce reliance on cotton as its primary cash crop. Agro-industries: Several processing facilities are concentrated around Bobo- Dioulasso and Banfora. In the cotton sector, key operations include ginning factories, spinning and textile companies, and cottonseed crushing plants, while the mango sector has driven the growth of numerous SMEs and large-scale industrial operators, producing mango purée, nectar, and dried fruit. Livestock: The region boasts a population of >2 million cattle and ~2 million small ruminants, with livestock trading being the primary activity for producers (~50,000 cattle are exported to Côte d’Ivoire each year). Despite the potential for value addition through processing, the relevant industry is underdeveloped. Insights on regional development barriers (Module 2) Cross-cutting barriers Connectivity and accessibility issues • Many regional roads are in poor condition due to inadequate maintenance, substandard construction, aging infrastructure, and heavy truckloads. While rehabilitation of certain key national arteries is under way, rural accessibility remains a challenge: during the wet season, many roads become inaccessible, isolating villages and production fields from markets. Inadequate logistics services • Transportation costs fluctuate significantly, ranging from $0.07 to 0.9 per ton-km depending on the type of road network and logistics carrier, increasing up to 60 percent during the rainy season, according to survey data. • The average age of the logistics fleet was 26.1 years for trucks and 24 years for semi-trailers in 2021, implying trucks with increased CO2 emissions and higher susceptibility to damage. • While formal freight trucking companies exist in the region’s urban centers, rural municipalities are mainly served by a network of informal transporters. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 152 Cross-cutting barriers Climate and FCV risks • Drought episodes during the dry season and the variability in precipitation seem to have a serious impact on the sustainability of production, which primarily relies on rainfed crops (less than 1 percent of agricultural land is under irrigation). Lack of knowledge, institutional capacity and regulation • Limited technical skills among smallholder farmers, hindering efforts to improve value addition in agricultural production. • Absence of effective regulatory mechanisms to control overloaded trucks, discourage the acquisition of outdated, high-emission vehicles, and ensure transparent transportation costs. • Inadequate adoption of ICT in agropastoral activities and logistics services, restricting efficiency and innovation. Value chain-specific barriers Lack of storage facilities • The scarcity of cold storage severely limits trade in high-value perishable products like fresh mangos, milk, and meat, with post-harvest losses for mango producers and retailers reaching up to 50 percent of the marketed production due to insufficient preservation capacity. • Inadequate storage for non-perishable goods, with most agricultural production informally stored at producers' homes or in the field, leaving it vulnerable to weather and pests and causing losses of up to 20 percent. Lack of processing capacity • The dairy VC is dominated by small-scale dairy processing units (DPUs) in Bobo-Dioulasso and Banfora, which cover only ~10 percent of local demand. • Mango drying facilities are operating at full capacity. Expanding them could assist in the reduction of post-harvest losses, extend product shelf life, and boost exports to Europe. • The region lacks modern industrial meat processing plants. Recognizing the opportunity for value addition, the government has invested in a large-capacity slaughterhouse in Bobo-Dioulasso, set for completion in 2029 with support from the African Development Bank. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 153 Value chain-specific barriers Underperforming VCs • Livestock producers rely only on basic veterinary services, while the limited reach of milk collection centers (MCCs) and the constrained transport capacity of milk collectors (who rely on bicycles and outdated motorcycles) result in minimal milk volumes reaching DPUs, which currently rely 90 percent on imported milk powder. • Agricultural crop yields remain suboptimal due to traditional practices, poor-quality inputs, and limited access to fertilizers and pesticides. Pre-harvest mango losses can reach 75 percent, while average cowpea yields correspond to 10–20 percent of their potential, due to the lack of recommended inputs and improved crop management practices. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 154 Evaluation of investment options (Modules 3–8) Two development pathways (investment plans) with different objectives are explored. BAU Plan The ‘short-term’ BAU plan focuses on strengthening existing VCs through targeted investments in logistics and infrastructure, aligned with the region's current development trajectory. Key components include the following: • Investments in (i) local logistics nodes, featuring an extended network of fully equipped rural service points (agricultural hubs) that provide refrigerated and non-refrigerated storage for collected milk, mangoes, and cowpeas, along with veterinary services, inputs, and advisory support and (ii) peri-urban logistics nodes, featuring grid-connected processing facilities and cold storage infrastructure in Banfora, Orodara, and Bobo Dioulasso (including the city’s dry port), to support the mango, dairy, and meat VCs. • Road infrastructure investments at the ‘meso-level’ network, that will complement the ongoing rehabilitation of three regional highways (RN8, RN7, RN11) by enhancing regional rural accessibility. Three all-weather paved road segments in the Kenedougou and Comoe provinces will improve access in high agricultural output areas with limited asphalt coverage. The remaining segments include lower-capacity feeder roads linking remote production zones to the main network. • Investment in logistics fleet and services featuring (i) a pay-per-ride fleet of three-wheelers available at agricultural hubs to boost small-scale rural logistics and scale up milk collection operations; (ii) a fleet of refrigerated trucks and railcars for transporting perishable products (milk, meat, mangoes), with the latter aiming to leverage the existing railway line for exports; (iii) a heavy-duty truck fleet renewal program to modernize large-scale regional transport. • The plan is complemented by investments in capacity-building activities and regulatory reforms in the logistics sector, that will promote transparency in tariff policies, introduce vehicle emissions standards and age limits, and improve law enforcement practices to foster a competitive, regulated business environment. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 155 LC Plan The ‘longer-term’ LC plan mirrors the BAU plan with respect to the type of proposed investments, yet: i. It proposes the transition to a fleet of EVs, supplemented by battery swap facilities and charging stations, to advance regional logistics services toward a practically zero operational carbon footprint. In this case, agreements with international manufacturers should be established in the medium term to streamline the import of spare parts and batteries for EVs. Such agreements will support the development of a local assembly industry for light EVs (three-wheelers), facilitating a cost-effective transition to greener transportation options. ii. It leverages local solar power generation capabilities to electrify infrastructure with renewable energy. iii. It leverages ICT infrastructure and usage expansion in the region to improve efficiency of the milk collection process. Proposed investment strategy: assessment of costs and benefits (Module 9) The investment strategy components are graphically illustrated in Figure E.2 and briefly analyzed in an accompanying table. To derive the associated costs and benefits, each plan is appraised against two climate futures: RCP4.5 and RCP8.5. BAU Plan LC Plan CAPEX OPEX95 CAPEX OPEX111 ($, millions) ($, millions/year) ($, millions) ($, millions/year) 540 km in road infrastructure 63 3.6/5.9 63 3.6/5.9 45 Agricultural hubs [local] 31.3 ~ 2.0 31.3 ~ 2.0 Energy independent facilities due to their off-grid location: Cowpea crops and inputs storage warehouses [450 tons/unit], Mango cold-storage facilities [180 tons/ unit], MCCs [2,500 liters/day/unit] Average values for a 20-year investment horizon. The value range across multiple inserts is due to differing assumptions under 95 scenarios RCP4.5 and RCP8.5, which reflect contrasting effects: higher electricity and maintenance costs under RCP8.5, lower labor costs driven by slower GDP per capita growth, and reduced production output leading to lower input costs for several facilities. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 156 BAU Plan LC Plan CAPEX OPEX95 CAPEX OPEX111 ($, millions) ($, millions/year) ($, millions) ($, millions/year) 10 Small-scale mango drying 1.2 ~ 0.24 1.4 ~ 0.20 units [peri-urban]96 in Bobo-Dioulasso, Banfora, and Orodara [Combined capacity: 12,500 tons of fresh mango per year] Expansion of dairy processing 6.8 ~ 4.2 7.9 ~ 4.0 capacity [peri-urban]112 in Bobo-Dioulasso and Banfora (additional 15,000 tons per year) 2 Milk powder processing plants 1.4 ~ 0.3 2.0 ~ 0.1 [peri-urban]112 in Banfora and Bobo-Dioulasso [Total capacity: 55,000 liters/day] 4 Cold storage warehouses 7.8 ~ 0.7 8.5 ~ 0.5 [peri-urban]112   in the urban markets and the Bobo-Dioulasso dry port to assist rail-based logistics [Combined capacity: 3,100 tons] 100 Heavy-duty trucks renewal 15 2.8/3.398 22.5 0.6114 program97 450 Three-wheelers113 1.35 0.9/1.0 2.0 0.13114 17 Refrigerated trucks113 3.2 0.5/0.6 4.8 0.18 to support the transfer of increased milk volumes from MCCs to DPUs in Bobo-Dioulasso and Banfora 96 Grid-connected in the BAU plan, solar-powered in the LC plan. 97 Internal Combustion Engines (ICE) in the BAU plan, electric in the LC plan. 98 The reduction in OPEX compared to the outdated vehicles being replaced is considered a benefit of the investment, and as a result, this OPEX component is excluded from the total cost calculation. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 157 BAU Plan LC Plan CAPEX OPEX95 CAPEX OPEX111 ($, millions) ($, millions/year) ($, millions) ($, millions/year) 10 Refrigerated railcars 2.0 ~ 0.2 2.0 ~ 0.2 to support meat and mango exports from Bobo Dioulasso dry port to Côte d’Ivoire (equipped with solar panels) 1 Online application for milk - - 0.05 0.01 collection information exchange between producers, collectors, and DPUs 47 EV charging and battery swap - - 24.6 1.2 stations 2 Charging stations equipped - with 70 EV fast chargers to meet the electric truck fleet demands 45 Battery swap facilities across - three-wheeler parking lots in agricultural hubs equipped with 900 batteries 14 MW of PV capacity with - energy storage systems to support charging operations Total: 133 11.7/14 170 12– 13.3 Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 158 Figure E.2 Overview of the proposed investment strategy in the SKBo triangle, Burkina Faso A ricultur l Hubs Existin ro d n twork Prim r ro ds A ricultur l Hubs Cold stor rooms (milk & m n o) Cowp stor 3-wh l rs fl t B tt r sw p f ciliti s Sol r pl nts for n r suppl P ri-urb n nod s Cold stor f ciliti s M n o dr in units D ir production pl nts EV ch r in st tions for th l ctric truck fl t Sol r pl nts Truck Fl t (low- missions or l ctric) Cold stor rollin stock Source: World Bank. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 159 Assuming a 20-year investment horizon (2030–2050), a 3-year implementation period, and a 12 percent discount rate, the investment strategy appraisal yields the following: Present Value of Present Value of Costs BCR Benefits (in $, millions) (in $, millions)** RCP4.5 RCP8.5 RCP4.5 RCP8.5 RCP4.5 RCP8.5 BAU Plan 791 794 233 252 3.4 3.1 LC Plan 813 821 273 290 3.0 2.8 ** Including capital and operational expenses, and the shadow cost of carbon. Investment Benefits: Highlights Mango VC: Benefits are driven by an anticipated 10 percent post-investment increase in mango production—attributed to improved access to fertilizers, pesticides, and advisory services at collection points—and a projected decrease of 60–65 percent in post-harvest losses, due to the availability of cold storage facilities near mango orchards and urban markets, the presence of refrigerated trucks for product transport, as well as the expansion of drying capacity, which allows surplus mango production that cannot be absorbed fresh by markets, to be transformed and preserved. The generated LCB from enhanced cold storage and logistics services, reflected in the increased local and international mango sales, are estimated at $267 million under RCP4.5. Under more adverse climatic conditions (RCP8.5), the benefits rise to $271 million due to further loss avoidance. The VC investments are also expected to create ~600 new jobs, particularly empowering local female population through the establishment of drying units. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 160 Investment Benefits: Highlights Dairy VC: Investments in an expanded network of MCCs and the provision of transport means (three-wheelers) for milk collectors significantly scale up regional milk collection operations, increasing the number of farmers reached from 180 to approximately 2,750. This results in an additional 18,400 tons of local fresh milk collected annually, boosting profit margins for producers, collectors, and retailers. Simultaneously, the development of milk powder processing plants and the expansion of local DPU capacity eliminate the reliance on imported milk powder, ensuring year-round availability of dairy products at stable, lower prices, thereby enhancing regional food security. The total LCB from improved logistics services—estimated at $127 million under RCP4.5—reflects the growth of the entire VC, evident through increased domestic milk sales. Alongside these benefits, the investment is expected to create 32,000 new jobs in the DPUs alone. The benefits are expected to remain stable under RCP8.5, as dairy operations rely on only a fraction of the region's total livestock to meet milk collection needs, which ensures sufficient availability to sustain operations, even in the face of animal productivity declines. Cowpea VC: The investment in dedicated cowpea storage facilities within agricultural hubs, with a combined capacity of 20,000 tons and the provision of hermetic storage bags, is expected to reduce post-harvest losses by 20 percent. Additionally, the improved farmer access to essential inputs such as certified cowpea seeds, fertilizers, and effective pesticides, along with training on best practices, are projected to boost yields to 40 percent of their potential, up from the current 10–20 percent. Conservative estimates predict a significant increase in cowpea sales, with total LCB from improved storage ranging from $232 million to $241 million across all stakeholders, depending on the climate scenario (RCP4.5 or RCP8.5). Road infrastructure investments: The construction of all-weather roads provides substantial LCBs by reducing losses during severe weather events, both in terms of direct damage and business interruption. These benefits are estimated at $7.4 million under RCP4.5, increasing slightly to $7.7 million under RCP8.5 due to the anticipated rise in extreme weather events. At the same time, the investment generates significant co-benefits, including the creation of new employment opportunities from road construction and maintenance, as well as improved market and service access for rural populations, estimated at ~$6.5 million, while it reduces freight transportation costs across regional supply chains, with significant savings driven by enhanced vehicle efficiency under improved road conditions. These savings— resulting from better fuel efficiency, reduced maintenance, and improved speed and utilization—are estimated at a notable $37 million. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 161 Figure E.3 Examples of Geographic Information System (GIS) analysis mapping key product routes affected by the road upgrades and the volumes traded on each route to calculate the post-investment decrease in transportation costs Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 162 Source: World Bank. Deep Dive 3. Maradi-Zinder-Diffa, Niger Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 164 E.3 Deep Dive 3. Maradi-Zinder-Diffa, Niger The deep dive area explores a diverse environment, encompassing a total area of 110,000 km² and comprising two sections traversed by the National Road No. 1 (RN1) spanning Niamey to the Chadian border: (1) the Maradi–Zinder zone of the Eastern Plains and (2) the Diffa region. Often referred to as the ‘breadbasket’ of Niger, the Maradi–Zinder zone is highly productive in staple and cash crops. The agricultural output from the Eastern Plains supports local economies and contributes substantially to the national economy, reducing the need for food imports and bolstering the country’s agricultural market. The Diffa region—bordering Chad to the east and Nigeria to the south— is characterized by its proximity to cross-border water bodies (Lake Chad and the Komadougou-Yobe River) critical for water and food resources (fishing activities). In June 2024, a field survey involving 137 local stakeholders was conducted in the area of interest, aimed at collecting insights on regional VC dynamics, trade and mobility patterns within the rural border, market prices and structure, and climate-related or FCV risks. The collected data have been instrumental in identifying regional development barriers and shaping the proposed investment strategy, which informed the preparation of the Southern Niger Connectivity and Integration Project (P179770) and the Implementation of the Livestock and Agriculture Modernization Project (P179276). Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 165 Major value chains examined Agriculture: The Maradi-Zinder region is the country's top producer of cowpeas, contributing 1,245,000 tons per year (45 percent of the national output), 30 percent of which is exported. The deep dive area is also renowned for its export-driven onion production, with an annual yield of around 140,000 tons, the majority of which is exported to Nigeria. Livestock: The region has a substantial livestock population, with ~8.5 million cattle, and 18.5 million small ruminants. From the marketed livestock, 22 percent is slaughtered domestically and 42 percent is exported live to neighboring countries. The region produces 675,000 tons of milk annually, yet less than 1 percent of production is being marketed. Fisheries: The Diffa region contributes to the national production with 11,600 tons (24 percent) of fish per year. Exports—particularly smoked fish to Nigeria— contribute 70 percent to the revenues of regional authorities. Fishing in Diffa is a seasonal activity, depending on the inundation of the Komadougou River and Lake Chad. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 166 Insights on regional development barriers (Module 2) Cross-cutting barriers Connectivity and accessibility issues The country’s heavy dependence on a limited road network—due to the lack of railways and the poor navigability of its waterways—results in high transportation costs and trade inefficiencies. A recent assessment by Niger’s Ministry of Transport and Equipment highlighted several deteriorated sections along the major RN1 corridor in the deep dive area. The situation is even more critical across much of the secondary and tertiary road networks. Inadequate transport means and logistics services • Local producers and traders rely heavily on non-modernized transport (for example, donkeys, camels, carts for agropastoral producers, and non-motorized canoes or traditional 'gouras' for fishers). • Road vulnerability to climate impacts and restricted fuel access complicate route selection, further undermining the feasibility of motorized transport. • Survey respondents report limited, expensive transport options for medium distances and reliance on an outdated fleet for long-distance transport, where poor vehicle conditions and lack of ventilation lead to high spoilage rates. • The inadequate cold-chain infrastructure leads to high spoilage rates for perishable goods. Rural isolation further limits access to refrigerated transport, which is often too costly for small-scale producers, restricting access to larger, more profitable markets for meat, dairy, and fish products. • Transactions in the cowpea and onion VCs lack formal contracts and standardized methods. Around 40 percent of onion exports bypass the formal counter system established in 2007, due to the distance from production areas and logistical inefficiencies. Climate and FCV risks • Ongoing conflicts involving non-state armed groups have displaced over 250,000 people in the Diffa region. This insecurity, coupled with measures by the Nigerian government to counter it, has severely disrupted economic activity by limiting access to productive land, fisheries, transport, and cross-border trade. • The shrinking of Lake Chad, along with seasonal variations in the Komadougou River, reduces fish availability and undermines the reliability of production Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 167 Lack of knowledge and institutional capacity • Poor coordination between fishers and processors leads to inefficiencies and missed opportunities for collaboration. • Producers and market vendors lack awareness and technical knowledge regarding best practices for handling and storing perishable goods. Value chain-specific barriers Lack of storage facilities • Poor storage practices result in post-harvest losses of up to 30 percent in the cowpea and onion VCs. • Lack of cold storage facilities in slaughterhouses and livestock markets leads to high spoilage rates and reduced meat and milk quality. • Small-scale livestock and fish producers have limited access to cooling systems. The shortage of ice production facilities exacerbates the issue in the fish VC, hindering proper preservation and transport to domestic markets. Elementary processing capacity • Slaughterhouse infrastructure is outdated and insufficient, with limited cold storage and inadequate sanitary protocols, hindering export-oriented trade and limiting local value addition. • ‘Kilishi’ (dried beef) production relies on labor-intensive, traditional methods (taking two to three days or longer) and is currently confined to low-capacity micro-processing units. • The absence of modern dairy processing plants and the inadequate facilities used by small-scale artisanal producers limit value addition. The dairy sector suffers from dispersed, irregular production and poor sanitary conditions. • Traditional fish preservation methods, such as smoking and drying, are time- consuming and fail to meet modern market standards for quality maintenance. Underperforming VCs • Poor animal nutrition results in low milk yields (1.2 liters/day/lactating cow), while veterinary services meet only 10–25 percent of the demand, with inadequate vaccination and antiparasitic treatments. • Cowpeas and onions face significant input supply challenges (seeds/fertilizers/ pesticides), including high costs and limited availability. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 168 Evaluation of investment options (Modules 3–8) Two development pathways (investment plans) with different objectives are explored. BAU Plan The ‘short-term’ BAU plan focuses on strengthening existing VCs through targeted investments in logistics and infrastructure, aligned with the region's current development path. Key components include: • Investments in logistics nodes encompassing (i) a grid of collection and storage facilities for fish, milk, and agricultural products in key production areas (local) to reduce the distance producers travel by foot or carts to reach collection points or markets; (ii) a network of rural market and processing hubs across towns and villages (local), featuring small-scale processing units such as kilishi production facilities and refrigerated markets for perishable products; (iii) industrial-level processing and storage units in the urban centers of Maradi, Zinder, and Diffa (peri-urban), featuring large-scale cold storage facilities refrigerated abattoirs, export-oriented dairy and fish processing units; (iv) onion export counters along key export routes to Nigeria (peri-urban) to streamline the process through storage, sorting, and packaging services. The counters aim to incentivize producers to formally trade their produce through the provision of certified onion seeds. • Road infrastructure investments at the 'meso- and micro-level' networks (secondary and tertiary roads), complementing the rehabilitation efforts on RN1 (part of a parallel financing activity) with the goal to unlock the full potential of select products in the area by improving connectivity between producers, collection and storage hubs, and domestic and international markets. Paving is limited to a few key segments (of 20 km total length) crucial for facilitating exports to Nigeria, aiming to prevent rapid deterioration of the road surface due to anticipated heavy traffic from high-capacity trucks. The remaining sections involve the rehabilitation or construction of lower-capacity, all-weather earth roads. • Investment in logistics fleet and services featuring (i) refrigerated and non-refrigerated vehicles for medium- and long-distance transport; (ii) three-wheelers for rural haulage; (iii) a fleet of railcars to capitalize on the soon-to-be-constructed Maradi-to-Kano railway, offering a cost-effective alternative for exporting goods to Nigeria, and (iii) motorized boats for fishers in Diffa, aiming to boost fish production and relevant sector revenues. • The plan is complemented by investments in capacity-building activities and regulatory reforms, including, among others, the implementation of a transparency tariff policy, the establishment of a mandatory retirement age for trucks and enforcements of stricter emissions standards, as well as the improvement of law enforcement practices, especially for addressing security concerns in the Diffa region. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 169 LC plan The ‘longer-term’ LC plan mirrors the BAU plan with respect to the type of proposed investments, yet: i. It proposes the transition to a fleet of EVs, supplemented by battery swap facilities and charging stations, to advance regional logistics services toward a practically zero operational carbon footprint. ii. It leverages local solar power generation capabilities to electrify infrastructure with renewable energy. Proposed investment strategy: assessment of costs and benefits (Module 9) The investment strategy components are graphically illustrated in Figure E.3 and briefly analyzed in the accompanying table. To derive the associated costs and benefits, each plan is appraised against two climate futures: RCP4.5 and RCP8.5. Given Niger's economic constraints and the extensive scope of the proposed road improvements, road investments have been categorized into two priority classes, aiming to ensure that the most critical and impactful projects are implemented first, within available financial resources. Prioritization was guided by several key criteria, including (i) the expected volume of goods on each route and (ii) the criticality of each segment in connecting key VC nodes. In both cases, interventions were designed under the prism of road exposure to climate hazards, aiming to enhance the overall resilience of the transport network. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 170 Figure E.4 Overview of the proposed investment strategy in Niger’s Maradi, Zinder and Diffa regions A ri-hubs Fish sit s Rur l m rk t hubs S cur cowp stor Coll ctiv sol r-pow r d Proc ssin units (Kilis hi (Stor -hous s &PICS b s) cold stor f ciliti s f ctori s, Fish smokin units) Cold stor for milk Port bl insul t d cont in rs R fri r t d m rk ts coll ction (fr sh fish/m t r t il) 3-wh l rs fl t Crop r sidu crushin m chin s for conv rsion C ntr l m rk t hubs Export count rs into liv stock f d Industri l sc l proc ssin Tr d r forms (Pric s ttin , 3-wh l rs fl t (R fri r t d b ttoirs, D ir Stor nd P ck in , S rvic s (V t rin r & proc ssin units, Milk powd r Acc ss to c rtifi d inputs) ronomic l, dvisor & pl nts, Fish smokin units) c p cit buildin , fin nci l) Hi h-c p cit cold stor Rollin stock Truck Fl t (low- missions or l ctric) Source: World Bank. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 171 BAU Plan LC Plan CAPEX OPEX99 CAPEX OPEX113 ($, millions) ($, millions/year) ($, millions) ($, millions/year) 1st priority: 717 km in road 79 1.5/1.6 79 1.5/1.6 infrastructure 1st and 2nd priority: 955 km in 116 2.0/2.1 116 2.0/2.1 road infrastructure 45 Agricultural hubs [local] 25.1 11.1/8.8 25.1 11.1/8.8 Livestock feed storage/crop - residue processing [200 m2/unit] Cowpea crops and inputs storage - warehouses [450 tons/unit] Onion storage warehouses - [280 tons/unit] - MCCs [2,000 liters/day/unit] - Advisory services Energy independent due to their - off-grid location 10 Cold storage hubs in fish 0.5 ~ 0.025 0.5 ~ 0.025 landing sites [local] Solar-powered due to their off-grid location, equipped with portable insulated containers 3 DPUs [peri-urban]100 7.0 ~ 2.1 9.1 ~ 1.4 in Zinder, Maradi, Diffa [Total capacity: 70 tons/day] 2 Milk powder processing plants 0.9 ~ 0.2 1.5 ~ 0.17 [peri-urban]114 in Maradi and Dogo [Total capacity: 20 tons/day] 99 Average values for a 20-year investment horizon. The value range across multiple inserts is due to differing assumptions under scenarios RCP4.5 and RCP8.5, which reflect contrasting effects: higher electricity and maintenance costs under RCP8.5, lower labor costs driven by slower GDP per capita growth, and reduced production output leading to lower input costs for several facilities. 100 Grid-connected in the BAU plan, solar-powered in the LC plan. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 172 BAU Plan LC Plan CAPEX OPEX99 CAPEX OPEX113 ($, millions) ($, millions/year) ($, millions) ($, millions/year) 3 Refrigerated abattoirs 15.8 1.9/2.2 24.8 ~ 0.4 [peri-urban]114 in Zinder, Maradi, Diffa [Total capacity: 14,500 tons of meat/year] 10 Kilishi factories [local]114 12.6 ~ 0.14 13 ~ 0.06 Total capacity: 3,500 tons of dried meat/year 20 Cold-equipped meat 8.0 ~ 0.17 8.0 ~ 0.17 markets [local] with collective capacity 260 tons 4 Fish smoking units 1.25 ~ 1.0 2.2 ~ 0.9 [local and peri-urban]114 in Diffa, N’Guigmi, Toumour [Total capacity: 36 tons/day] 1,000 ha of aquaculture [local] 5.0 4.2/3.9 5.0 4.2/3.9 in the Komadougou Yobe River basin 1 Fish cold/frozen storage facility 0.45 ~ 0.03 0.75 ~ 0.05 [peri-urban]114 in Diffa [Capacity: 150 tons] 3 Onion export counters 0.9 ~ 1.0 1.8 1.0/0.9 [peri-urban]114 in Maradi, Magaria, and Maine Soroa [Total area: 400 m2] 100 Heavy-duty trucks renewal 15.0 3/3.7102 22.5 0.6114 program101 Internal Combustion Engines (ICE) in the BAU plan, electric in the LC plan. 101 The reduction in operational expenses compared to the outdated vehicles being replaced is considered a benefit of the investment, 102 and as a result, this OPEX component is excluded from the total cost calculation. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 173 BAU Plan LC Plan CAPEX OPEX99 CAPEX OPEX113 ($, millions) ($, millions/year) ($, millions) ($, millions/year) 800 three-wheelers115 2.4 1.3/1.5 3.6 ~0.6 subsidized to dairy farmer cooperatives for milk collection or available for lease on-demand at agricultural hubs and fish sites 17 Refrigerated trucks115 4.9 4.6/5.5 7.4 ~1.0 to serve the demands of the meat, dairy and fish industries 5 Railcars 1.0 ~ 0.1 1.0 ~ 0.1 for cowpea, onion, dairy product exports from Maradi dry port 500 Outboard motor lake/river 5.8 ~ 0.7 8.8 0.4 boats115,103 EV charging and battery swap — — 49.2 2.7 stations Charging stations with 95 EV - fast chargers for the truck fleet Battery swap facilities with - 1,600 batteries for three- wheelers 29 MW of PV capacity to - support operations Total (1st priority): 186 ~ 30 263 26/23 Total (1st & 2nd priority): 223 ~ 31 300 27/24 Source: World Bank. The success of such investment is contingent on several measures that need to be taken in advance: (i) Landing sites around 103 Lake Chad, where the majority of local fishers operate, need to be secured by defense and security forces (FDS) to prevent boat thefts. (ii) A trade agreement that secures a long-term lease of the boat fleet during the dry season, when regional water resources are not navigable and the fleet will be inactive, is considered essential. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 174 Assuming a 20-year investment horizon (2030–2050), a 3-year implementation period, and a 12 percent discount rate, the investment strategy appraisal yields the following: Present Value of Present Value of BCR Benefits Costs** (in $, millions) (in $, millions) RCP4.5 RCP8.5 RCP4.5 RCP8.5 RCP4.5 RCP8.5 BAU: 1st priority 1,120 1,109 409 421 2.7 2.6 BAU: 1st & 2nd 1,136 1,126 453 467 2.5 2.4 priority LC: 1st priority 1,145 1,139 451 452 2.5 2.5 LC: 1st & 2nd 1,160 1,156 495 499 2.3 2.3 priority ** Including capital and operational expenses, and the shadow cost of carbon. Investment Benefits: Highlights Agriculture VC: Benefits are driven by a projected 30 percent increase in cowpea production enabled by improved access to certified seeds and advisory services, along with an expected decrease by up to 25 percent in post-harvest losses due to the availability of storage facilities near production areas, along with better vehicle and road conditions for efficient transportation. Onion export counters are anticipated to reduce product losses by addressing safety concerns linked to informal trade, while boosting market prices via streamlined export procedures. The total generated LCB from enhanced storage and logistics services in the agriculture VC is estimated at ~$110 million under both RCP4.5 and RCP8.5 scenarios. Dairy VC: Benefits include the improved quality and marketability of diversified dairy products (milk and cheese) produced by the DPUs, leading to sector expansion into international markets (particularly Nigeria) and increased market prices. A key enabler of these gains is the establishment of an efficient logistics network, including refrigerated vehicles (trucks and railcars), cold-equipped MCCs, and dedicated milk collection vehicles (three-wheelers), which, in addition to improving distribution, generates employment opportunities for the region’s refugees. The total LCB from improved logistics, reflected in higher domestic and international sales, is estimated at $87 million under RCP4.5, with a slight 7 percent reduction under RCP8.5 due to climate-related declines in milk supply. Milk powder processing plants contribute ~$41 million RCP4.5, mainly by reducing the region's dependence on imported milk powder. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 175 Investment Benefits: Highlights Meat VC: The key value driver in the meat VC is investment in processing units, which—paired with efficient product transport—significantly boosts profit margins compared to traditional livestock trading. Refrigerated abattoirs and kilishi factories generate an impressive $580 million in LCB, driven by improved product quality and marketability in foreign markets. The difference in benefits between RCP4.5 and RCP8.5 is minimal. The establishment of cold-equipped meat markets contributes $20 million (RCP4.5) by reducing perishable meat losses, increased to $24 million under RCP8.5 due to further loss prevention. Fisheries VC: The increase in fish productivity, driven by the development of aquaculture facilities and the provision of motorized boats to local fishers, combined with the establishment of efficient cold storage, enhanced processing capacity, and motorized transport (three-wheelers) from landing sites to markets, lead to expanded market reach, increased prices, and product loss reduction, while also enhancing food security in the Diffa region. The total LCB from efficient storage/ logistics services are estimated at $110 million under RCP4.5, slightly reducing by 4 percent under RCP8.5 due to slower growth in fish farming productivity. Road infrastructure: The direct LCBs of road construction are primarily driven by the reduction in direct damage and business interruption caused by severe weather events, with estimated life-cycle savings of $40 million under RCP4.5, rising to $46 million under RCP8.5. Additionally, the investment generates new employment opportunities in road construction and maintenance (including numerous temporary jobs for refugees in the region), valued at ~$10 million, and increases the regional accessibility index by 12–25 percent. The reduction in freight transportation costs across regional supply chains contributes an estimated $19 million in the total value of LCB. Appendix 1 Indicator-Based Assessment of the Development Stage of Sahelian Countries Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 177 Table A1.1 An indicator-based assessment of the development stages of Sahelian countries African Burkina countries Chad Mali Mauritania Niger Senegal Faso (exe. North Africa Demographics Population 2.6 3.11 3.1 2.59 3.7 2.57 2.54 growth: annual % Rural population: 68.12 75.94 54.56 43.08 83.11 50.91 56.92 % of total population Population ages 43.72 47.51 47.19 41.6 48.84 41.45 41.93 (0–14 years): % of total population Rural Economy GDP per capita: $ 832.88 716.8 833.3 2190.0 533 1598.7 1701.04 Annual GDP 1.76 −2.19 −0.18 0.71 2.03 1.82 −0.4 growth (5-year average) Country’s Income Low Low Low Low-Middle Low- Low group (2021) Middle Manufacturing, 9.3 3.19 6.79 6 7.39 14.64 11.12 value added: % of GDP (2020) Agriculture, 20.4 22.59 36.421 19.20 36.48 15.74 17.71 forestry, and (2021) fishing, value added: % of GDP Employment to 62.05 58.79 66.05 36.37 72.78 48.77 61.81 population ratio, 15+: % to total (5- year average) Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 178 African Burkina countries Chad Mali Mauritania Niger Senegal Faso (exe. North Africa Human Welfare HDI (2021) 0.449 0.394 0.428 0.556 0.4 0.511 0.547 Poverty 41.4 42.3 44.6 31.8 40.8 — — headcount ratio: % of population Transport Corridors Road density: 6 3 11 1 1 8 10 km/100 km2 Total corridor 5.77 2.13 11.41 1.37 1.52 9.44 — density: km/100 km2 Percentage of 25 23 22 25 19 33 — population in 2 km distance from primary roads: % Trade Activity Logistics 2.3 2.42 2.6 2.3 2.07 2.25 2.542 Performance Index Imports of goods 31.05 39.57 39.76 77.70 28.71 55.39 27.35 and services: % (2019) GDP Exports of goods 27.62 51.19 29.06 46.47 10.05 25.25 24.82 and services: % (2019) GDP Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 179 African Burkina countries Chad Mali Mauritania Niger Senegal Faso (exe. North Africa Energy Production/ Consumption Electricity 1.75 0.31 3.39 1.88 0.45 5.62 15.54 generation: TWh (2021) Population 18.96 11.08 50.56 47.35 19.25 70.37 48.23 with access to electricity: % of total (2020) CO2 emissions per 0.26 0.11 0.19 0.89 0.17 0.81 1.04 capita (2021) Safety and Security Number of 6.67 1.95 1.52 0 1.084 0.049 0.087 internally displaced population by conflict and violence: % of total population: 3-year average Fragile and Medium Medium Medium — Medium — conflict-affected Intensity Intensity Intensity Intensity situation index Conflict Conflict Conflict Conflict Exposure to water High High High High High High scarcity Exposure to High High High High High High floods Exposure to High High High High High High extreme heat Note: The displayed values are subsequently normalized into a 0–1 range and aggregated into a single score describing the country’s performance to the corresponding development variable. Appendix 2 Results of the Subnational Priority Indexing for The G5+Senegal Countries Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 181 Figure A2.1 Results of the subnational priority indexing for the G5+Senegal countries: Priority regions are highlighted in darker colors NIGER Admin 2 bound ri s Prioriti tion Ind x 0.244 - 0.312 0.312 - 0.343 0.343 - 0.369 0.369 - 0.480 BURKINA FASO Admin 2 bound ri s Prioriti tion Ind x 0.2443 - 0.25 0.25 - 0.3 0.3 - 0.35 0.35 - 0.4 0.4 - 0.4391 Source: World Bank. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 182 Figure A2.1 Results of the subnational priority indexing for the G5+Senegal countries: Priority regions are highlighted in darker colors (cont.) CHAD Admin 2 bound ri s Prioriti tion Ind x 0.251 - 0.3 0.3 - 0.4 0.4 - 0.5 0.5 - 0.569 MALI Admin 2 bound ri s Prioriti tion Ind x 0.252 - 0.3 0.3 - 0.35 0.35 - 0.4 0.4 - 0.418 Source: World Bank. Low-Carbon and Climate-Resilient Rural Logistics in the Sahel: Strategic Framework for Investment Planning 183 Figure A2.1 Results of the subnational priority indexing for the G5+Senegal countries: Priority regions are highlighted in darker colors (cont.) MAURITANIA Admin 2 bound ri s Prioriti tion Ind x 0.301 - 0.366 0.366 - 0.431 0.431 - 0.521 0.521 - 0.575 SENEGAL Admin 2 bound ri s Prioriti tion Ind x 0.299 - 0.326 0.326 - 0.374 0.374 - 0.421 0.421 - 0.48 Source: World Bank. Image Credits Page No. Source Page No. Source Cover - 1 Sarah Farhat/World Bank 81 Adobe Stock Cover - 2 Gabon – Girard/World Bank NigerTZai 83 Nouakchott - Arne Hoel/ wikimedia commons 1 Fratelli dell’Uomo Onlus, World Bank Vincent Tremeau/ 92 Elena Pisano via Wikimedia 7 commons The World Bank 9 Adobe Stock 96 Chad-Tremeau/World Bank 12 Adobe Stock 105 Florio/World Bank Vincent Tremeau/ 111 Adobe Stock 14 World Bank 113 Adobe Stock 18 Adobe Stock 116 Adobe Stock Gambia-Florio/ 118 Adobe Stock 19 World Bank 127 Adobe Stock 21 Sam Phelps on Flickr 132 Adobe Stock Vincent Tremeau/ 25 136 Adobe Stock The World Bank 31 Adobe Stock 139 Adobe Stock Tanzania-Lombard/ 143 Adobe Stock 36 World Bank 147 Adobe Stock 40 Ferdinand Reus on Flickr 149 Adobe Stock 48 Adobe Stock 153 Adobe Stock 52 USAID Mercy Corps 158 Adobe Stock 55 Adobe Stock 159 Adobe Stock 57 Adobe Stock 161 Adobe Stock Vincent Tremeau/ 162 Adobe Stock 59 World Bank 165 Adobe Stock 61 Flickr 169 Adobe Stock 72 Adobe Stock 176 Adobe Stock NigerTZai on 75 180 Adobe Stock Wikimedia commons Jeff Attaway Back Cover Adobe Stock 78 Wikimedia Commons