The World Bank Integrated Growth Poles and Corridor Project 2 (P113971)
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1 Public Disclosure Authorized AFRICA Madagascar Trade & Competitiveness Global Practice IBRD/IDA Investment Project Financing FY 2015 Seq No: 6 ARCHIVED on 27-Dec-2017 ISR30958 Implementing Agencies: Ministry of Finance and Budget (MFB), National Project Secretariat Public Disclosure Authorized Key Dates Key Project Dates Bank Approval Date:18-Dec-2014 Planned Mid Term Review Date:14-Apr-2017 Original Closing Date:30-Sep-2019 Project Development Objectives Effectiveness Date:09-Mar-2015 Actual Mid-Term Review Date:20-Mar-2017 Revised Closing Date:30-Sep-2019 Public Disclosure Authorized Project Development Objective (from Project Appraisal Document) The Project Development Objective is to contribute to increased economic opportunities and access to enabling infrastructure services, as measured by an increase in jobs and formal firms, in Targeted Regions. The Program objective of the Series of Projects (SOP) is the same as the PDO of this Project. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name COMPONENT 1: STRENGTHENING THE ENABLING ENVIRONMENT FOR ENTREPRENEURSHIP AND INVESTMENT:(Cost $11.00 M) Public Disclosure Authorized COMPONENT 2:SECTOR BASED GROWTH IN THE ATSIMO-ANDREFANA, ANOSY AND DIANA REGIONS:(Cost $35.50 M) COMPONENT 3:PROJECT IMPLEMENTATION, M&E, SAFEGUARDS, IMPACT EVALUATION:(Cost $3.50 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Moderate Moderate 12/27/2017 Page 1 of 16
2 Implementation Status and Key Decisions Component 1: Strengthening the Enabling Environment for Entrepreneurship and Investment Investment Climate and Investment Promotion Recent mission confirmed that despite some progress in the 2018 ranking, Madagascar remains at the 162nd place out of the 190 economies evaluated in terms of "facilitation of doing business". The Investment Climate (IC)/ Doing Business (DB) reform program has progressed though EDBM, which is the main platform for coordinating and implementing investment climate reforms in Madagascar. EDBM has confirmed interest in developing a more structured reform strategy reflected in its action plan that would allow for more substantial results in the future as well as to present its annual action plans for validation by the Council of Ministers to allow for legitimacy and ownership of the agenda of reforms it coordinates by the higher hierarchy of Government. In the latest version 2018 of the report, Madagascar is recognized for its improvement of the process of starting a business, and an increase in the number of individuals covered by the credit information registry and scores 47.67/100 points on the overall distance to frontier (DTF). Madagascar showed an improvement of 3.05 points, moving up from points last year to this year. Public Private Partnerships (PPPs): s Public-Private Infrastructure Advisory Facility (PPIAF) supported the development of an economic model for ADEMA s 10, outside of the two main airports (Antananarivo and Nosy Be concessioned to the private sector in July 2017). A first analysis of the individual financial contribution of each airport was undertaken but awaits final results of studies financed by PIC in terms of revised investment needs (CAPEX) for the airports finalized in November Secondary analysis involving the final identification of the airports that could be included under a PPP program are under way and the presentation of options for structuring a PPP scheme will be delivered in January Madagascar Business and Investment Facility (MBIF) and Entrepreneurship: The implementation of Window one investment under MBIF is progressing. 104 business plans, out of 450 proposals have been approved for funding in for the amount of US$ 1.02 million. Grants agreements have been singed totaling US$ 743,000 of which 111,000 were disbursed by November 30th All agreements of this current call for proposals are expected to be signed by December Business support services infrastructure linked to the support to implementation of grant activities has also progressed. Completion of the rehabilitation the Tulear regional business center (Centre d Affaires Régional or CAR) finalized in August Works for the CAR in Diego are anticipated for February Two Technical assistants for Tulear will initiate in December 2017 and for Diego in first trimester 2018 following delivery of the respective CARs. The CAR for Anosy (called CARA and based in Fort Dauphin) has set up its incubator and accompanies nearly 30 entrepreneurs (RIO TINTO and MBIF beneficiaries). Specific call for proposal will be launched to additional business plans in Fort Dauphin. Investment promotion: The support of PIC 2 to EDBM in terms of Hotel investment promotion has yielded very positive results with formal expression of interest from 19 international hotel groups, site visit of nine international Hotel Groups and anticipated visit of another seven international hotel groups in February Most international hotel operators have focused on development of properties in Antananarivo and Nosy Be. Branded Hotel investments are currently being negotiated for four properties in Nosy Be and Antananarivo. Special Economic Zones (SEZ): Rio Tinto, who operates the Ehoala mine but also the Ehoala port facilities and the adjacent Industrial Park, has held public consultations to discuss the possibility for an improved management of the both the port and Park to increase their use for non-mining activities. In parallel the PIC2 Project has initiated a demand study for private investment in the park, initial results will be presented to the government in January Concerns had been raised regarding the coexistence and duplication of regimes outside of the tax code, and distortion of competition, from the sometimes overlapping, sometimes contradictory multiple zone and investment laws, however the law creating the Zones Economiques Spéciales or ZES was adopted by parliament on November 8, 2017 without amendment. Component 2 : Sector Based Growth in the Atsimo-Andrefana, Anosy and Diana Regions Tourism and Air transport sector: The Project continues to engage in successful support of the Tourism and Air Transport sectors. The project has successfully supported the Board of Air Madagascar in establishing a strategic Partnership with Austral and Air Madagascar on October 9th The Financial close was signed on November 30th The project has also financed the assessment of priority investment needs in 09 airports, including DIE, TLE and FTU, which has been validate by the Ministry of Transport, Airports of Madagascar (ADEMA) and Madagascar Civil Aviation (ACM). In terms of product development in the poles, the sites Montagne des Français (Diégo) et Jardin de la Mer (Tuléar) have been finalized and the management structures are operational. Productions of marketing materials and new internet sites have been delivered to the Tourism Boards of Diégo, Tuléar, Nosy Be. Support which lead to improvements in the Air Transport sector linked to active project support to promotion of Madagascar in key markets (France, Germany and UK) had yielded results as reflected by a 10.5% increase visitors to Madagascar from these key Markets between January and September 2017[1]. The German market showed the largest increase in arrivals of 31% in the same period. The target of visitors for 2017 will be however hard to reach given the pest epidemics that has hit Madagascar in the last few months. Actual impact of the Plague to the tourism sector is still being assessed. Governance. Following the mid-term review, the project s support for cross-cutting governance activities has focused on strengthening sectoral and economic governance, mainly as support to the sectors and value chains of the project. While the project will continue to monitor the Local Governance Index (IGL), the focus of the support will be on improving local revenues and increase local investments. By October 2017, revenues of the 07 urban 12/27/2017 Page 2 of 16
3 communes supported by the project increased by + 53%, as compared to the achievements in The 70 rural communes registered an increase of + 141%. Infrastructure: Works linked to water supply in Diego and Tulear are progressing well. The production capacity connecting new boreholes to the existing system and 30 Km of distribution mains in Tulear are anticipated to be delivered in February 2018 with an anticipated additional production of 4000 m3/day. The finalization of the works in Diego for construction of a water treatment plant with a capacity of m3/day and water tank for 2500m3 to be delivered in March 2018 will ensure that existing distribution system is able to provide water to 80% of the population. Due to savings in the water supply works contract, the project was able to further support the construction of a new 1500m3 reservoir for the city of Tulear for at Andranomena with an additional 10 km of distribution mains. Additional works are anticipated to be finalized in June Component 3: Project Implementation, M&E, Safeguards, Impact Evaluation This ISR reflects outcomes of technical missions related to Investment support and technical desk review of project component progress. A thorough review of the fiduciary and safeguard aspects of the project will be conducted in the January 2018 mission and will be reflected in a follow up ISR. Implementation and disbursement: Project overall Implementation is well advanced, with actual project disbursement at 55 % and commitments of more than 78% on November 30, Procurement: execution of project procurement activities presented no major problems, and there is constant improvement of the management of the process of procurement and management of contracts. Financial Management: Based on desk review, the ratings remain the same. Interim Financial Reports are submitted timely and are deemed satisfactory as they comply with agreed template and provide relevant information to appreciate the financial status of the project. The disbursement schedule as well as the budget are generally respected. The transactions review will be undertaken during the mission of January Safeguards: The overall performance of the implementation of the environmental and social management of the project remains satisfactory as adequate safeguards instruments have been developed and approved for the already completed and ongoing infrastructure works in Antsiranana and Toliary. The team has however has noted recent delay in submission of final safeguards document for review and clearance for additional works planned for Diana (water supply) and in Anosy and Atsimo-Andrefana regions (energy investments, financed by OPEC funds but subject to WB Safeguard guidelines for being a linked project), which will likely imply the (temporary) resettlement of some families and some land acquisition. The project is currently preparing those key safeguards instruments and once they are declared to the satisfaction of the World Bank, works will proceed. The mission also noted the need for documenting environmental training plans in the context of MBIF and establishment of a consolidated monitoring database of training results in integrated management of Pests and Pesticides for the cotton sector. The team will follow up closely on these items in the coming months. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- Substantial Substantial Macroeconomic -- Moderate Moderate Sector Strategies and Policies -- Moderate Moderate Technical Design of Project or Program -- Moderate Moderate Institutional Capacity for Implementation and Sustainability -- Low Low Fiduciary -- Moderate Moderate Environment and Social -- Moderate Substantial Stakeholders -- Low Low Other Overall -- Moderate Moderate 12/27/2017 Page 3 of 16
4 Results Project Development Objective Indicators Number of formal jobs created in the targeted poles (Number, Custom) Value 3, , , , Of which in the Diana region (Number, Custom Breakdown) Value 1, , , Of which in tourism (Number, Custom Breakdown) Value Of which in Atsimo-Andrefana region (Number, Custom Breakdown) Value , /27/2017 Page 4 of 16
5 In which in tourism (Number, Custom Breakdown) Value Of which in Anosy region (Number, Custom Breakdown) Value 1, , Number of formal businesses newly registered in the target poles (Number, Custom) Value 1, , , , Date 31-Dec Oct Dec Dec-2018 Of which in Atsimo-Andrefana region (Number, Custom Breakdown) Value , Of which in Anosy region (Number, Custom Breakdown) Value /27/2017 Page 5 of 16
6 Of which in Diana region (Number, Custom Breakdown) Value 1, , , , Direct project beneficiaries (Number, Custom) Value , , Date 31-Dec Dec Dec-2018 Comments The rehabilitation works for water supply just started end 2016 and will last 12 months in Tuléar and 18 months in Diana. Impact will be seen in calendar year Of which people provided with improved water sources under the project (Number, Custom Breakdown) Value , Date 31-Dec May Dec Dec-2018 Of which people provided with access to regular solid waste collection under the project (Number, Custom Breakdown) 12/27/2017 Page 6 of 16
7 Value , , Date 31-Dec Nov Dec Dec-2018 Female beneficiaries (Percentage, Custom Supplement) Value Overall Comments Intermediate Results Indicators Number of reforms (Number, Custom) Value Date 31-Dec Dec Dec-2018 Of which reforms related to tax simplification (Number, Custom Breakdown) Value Date 31-Dec May Dec Dec /27/2017 Page 7 of 16
8 Of which reforms related to commercial disputes (Number, Custom Breakdown) Value Date 31-Dec Dec Dec-2018 Of which IC reforms (Number, Custom Breakdown) Value Date 31-Dec Dec Dec-2018 Increase in the number of wage jobs in the target corridors in the target poles (Percentage, Custom) Value Date 31-Dec Dec Dec-2018 Of which in Atsimo-Andrefana region (Percentage, Custom Breakdown) Value Date 31-Dec Nov Dec Dec /27/2017 Page 8 of 16
9 Of which in the Diana region (Percentage, Custom Breakdown) Value Date 31-Dec Jun Dec Dec-2018 Of which in Anosy Region (Percentage, Custom Supplement) Value Annual municipal revenues collected in the target poles (Amount(USD), Custom) Value 3, , , Date 31-Dec Dec Dec-2018 Of which in Anosy region (Amount(USD), Custom Breakdown) Value /27/2017 Page 9 of 16
10 Of which in Atsimo-Andrefana region (Amount(USD), Custom Breakdown) Value , , Of which in the Diana region (Amount(USD), Custom Breakdown) Value 1, , , Roads Rehabilitated (Kilometers, Custom) Value Date 31-Dec May Dec Dec-2018 Of which non rural (Kilometers, Custom Breakdown) Value Date 31-Dec May Dec Dec /27/2017 Page 10 of 16
11 Passengers traffic, including tourists by air or sea per annum in target poles (Number, Custom) Value 262, , , , Of which in Atsimo-Andrefana region (Number, Custom Breakdown) Value 58, , , , Of which in the Diana region (Number, Custom Breakdown) Value 204, , , , Hotel rooms for establishments in the target poles (Number, Custom) Value 4, , , , /27/2017 Page 11 of 16
12 Of which in Atsimo-Andrefana region (Number, Custom Breakdown) Value 1, , , , Date 31-Dec Nov Dec Dec-2018 Of which in the Diana region (Number, Custom Breakdown) Value 3, , , , Export value for the selected crops in the target poles (Amount(USD), Custom) Value 30,600, ,000, ,940, ,000, Date 31-Dec May Dec Dec-2018 Of which in Atsimo-Andrefana region (cotton and sea cucumber) (Amount(USD), Custom Breakdown) Value 9,000, ,000, ,170, ,000, /27/2017 Page 12 of 16
13 Of which in the Diana region (cocoa, cashew, ylang ylang) (Amount(USD), Custom Breakdown) Value 21,600, ,770, ,000, Increase in revenues from target cash crop production for smallholders in the target corridors in the target poles (Percentage, Custom) Value Local Governance Index in the targeted municipalities (Number, Custom) Value Of which in Anosy region (Number, Custom Breakdown) Value /27/2017 Page 13 of 16
14 Of which in Atsimo-Andrefana region (Number, Custom Breakdown) Value Of which in the Diana region (Number, Custom Breakdown) Value Date 31-Dec Oct Dec Dec-2018 Enterprises directly benefiting from the project (Number, Custom) Value Date 31-Dec Oct Dec Dec-2018 Annual additional sales value of firms supported by the MBIF (Amount(USD), Custom) Value , Date 31-Dec Dec Dec /27/2017 Page 14 of 16
15 People provided with Business Development Services and training programs (Number, Custom) Value , , , Date 31-Dec Oct Dec Dec-2018 Farmers provided with improved inputs and equipment (Number, Custom) Value , Date 31-Dec Dec Dec-2018 Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P IDA Effective USD % Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P IDA Effective 18-Dec Dec Mar Sep Sep-2019 Cumulative Disbursements 12/27/2017 Page 15 of 16
16 Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 12/27/2017 Page 16 of 16
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