Developing Resilient Environments and Advancing Municipal Services in Punjab Project The project will support inclusive, resilient, and sustainable urban infrastructure and services in two rapidly growing cities in Punjab Province---Rawalpindi and Bahawalpur---by (i) expanding and modernizing urban water supply systems in Rawalpindi and solid waste collection, treatment, and disposal in Bahawalpur; and (ii) strengthening institutional capacity in service delivery to improve the quality, coverage, efficiency, and reliability of these services, as well as the financial sustainability of the utilities. The project will benefit up to 1.5 million urban dwellers in Punjab, the most populous province of the country.The project is aligned with the following impacts: urban environment, health, and living conditions improved; natural ecosystems protected; and climate change impacts mitigated. The project will have the following outcome: sustainable, inclusive, resilient, and low-carbon municipal services in the cities of Rawalpindi and Bahawalpur in Punjab achieved. Output 1: Climate-resilient water supply infrastructure and services provided in Rawalpindi. This output will establish new water supply systems using surface water resources. It will include (i) the construction of new surface water intakes and a water treatment plant of 54 million liters per day (MLD) at Chahan Dam, transmission main and distribution pipes to serve continuous water to 82,000 households with metered connections in eight new union councils in the southwest part of Rawalpindi, powered by renewable energy from 20 megawatts of solar panels (NRW will be managed under 20%); (ii) the upgrading of water pumps and transmission mains to augment surface water supply to the city from Rawal (22 MLD) and Khanpur dams (39 MLD) (NRW will be reduced through network improvement and more paying customers to R-WASA); and (iii) the establishment of three pilot district metering areas with a supervisory control and data acquisition (SCADA) system to ensure continuous and pressurized water supply with metered connections to the Khayaban-e-Sir Syed area, comprising 11,000 households in three union councils (NRW will be reduced to 30%). To mitigate pollution from the discharge of untreated sewage, the output will also include an update of the sector master plan for wastewater and drainage systems of the city, feasibility study preparation, and engineering designs for future intervention in the sanitation sector.Output 2: Low-carbon, integrated solid waste management services implemented in Bahawalpur. The output will upgrade the SWM system in Bahawalpur through a holistic approach, including (i) procuring waste collection equipment and new fleet to expand the service to complete city coverage; (ii) pilot-testing a prepaid trash bag scheme in at least one union council to partially cover waste management fees; (iii) establishing a combined transfer station and material recovery facility for processing recyclable materials; (iv) constructing a new flood-proof engineered landfill (3.4 million cubic meters), with engineering measures and onsite operations to mitigate emissions of GHG and leachate; (v) closing and remediating the existing dump site; (vi) providing personal protective equipment to informal sector workers; and (vii) procuring a fleet management information system based on a geographic information system and the global positioning system. Output 3: Institutional and capacity development for climate resilience, gender inclusiveness, and sustainability improved. This output will carry forward the adoption of the business models of R-WASA and B-WMC, prepared under the PRF, to improve operational efficiency, inclusivity, and financial sustainability. The utilities' operation and service performance standards will be developed and monitored through an independent performance monitoring system. The implementation of a road map for institutional reform will also be supported, including (i) developing and institutionalizing a gender-responsive SWM policy and water, sanitation, and hygiene (WASH) policy to align with the National Water Policy (2018) and the Punjab Water Act, 2019; and (ii) examining Punjab's legal framework on municipal service delivery and tariff reform, including volumetric billing. A capacity development program will improve the knowledge of R-WASA and B-WMC on planning and O&M, financial and asset management, procurement, engaging the private sector and increasing women's participation in municipal services. Output 3 will be supported by an institutional development consultant, as well as complementary behavioral change and communication campaigns by the United Nations Children's Fund (UNICEF). R-WASA will receive trainings on NRW management and benefit from water operator partnerships, to be supported by the attached TA. With the additional water supplied and improved quality of service, a targeted awareness-raising program will aim to attract more paying customers and reduce commercial losses (illegal connections) and groundwater abstraction (pumping from own tube wells).