Review of PHRD TA Grants Closed in Fiscal Year 2008

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Policy and Human Resources Development Fund (PHRD) Technical Assistance (TA) Program Review of PHRD TA Grants Closed in Fiscal Year April 2009 Public Disclosure Authorized The World Bank Global Partnership and Trust Fund Operations Concessional Finance and Global Partnerships Vice Presidency

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3 Table of Contents Summary...v 1. Background and Purpose Methodology and Scope of the Review Characteristics of Closed Grants Performance of Closed Grants Lessons Learned...18 ANNEX 1: LIST OF PHRD TA GRANTS CLOSED IN FY ANNEX 2: SUMMARIES OF GRANT COMPLETION REPORTS...26 AFRICA REGION...27 Africa: West Africa Road Transport Angola: Market-Led Smallholder Development Angola: Market-Oriented Small-Holder Development Cameroon: Health Sector Support Investment (SWAP) Cameroon: Transparency And Accountability Capacity Development (TACD) Gambia: Climate Change Development Program Ghana: Agricultural Services Subsector Investment II Guinea: Village Communities Support Programs 2 (VCSP2) Kenya: Poverty Reduction Support Credit (PRSC Kenya: Western Kenya Flood Mitigation And Community Driven Development Madagascar: Health SWAP Madagascar: Poverty Reduction Support Credit Madagascar: Poverty Reduction Support Credit Malawi: Agriculture Sector Development Nigeria: Fadama III Rwanda: Poverty Reduction Support Grant IV Rwanda: Second Rural Sector Support (RSSP II) SaoTome, Principe: Development Policy Credit II Senegal: Development of Carbon Finance Contracts Sierra Leone: Rural and Private Sector Development Sierra Leone: Rural and Private Sector Development Southern Africa: Multi-Country Agricultural Productivity Program (MAPP) Uganda: Capacity Building to Support Carbon Finance Transactions Zambia: Increased Access to Energy Services EAST ASIA AND PACIFIC REGION...52 China: Rural Health Lao PDR: Financial Management Capacity Building Credit Lao PDR: Poverty Reduction Support Operations Lao PDR: Xeibangfai Rural Livelihoods Mongolia: Poverty Reduction Support Credit II Papua New Guinea: Smallholder Agriculture Development (SADP) Philippines: Comprehensive Agrarian Reform Communities Development Philippines: National Roads Improvement and Management Program-Phase Philippines: Participatory Irrigation Development Solomon Islands: Rural Development Timor-Leste: Energy Services Delivery Vietnam: Health Fund for the Poor Vietnam: Livestock Competitiveness and Food Safety i

4 Vietnam: Multi-Sectoral Ha Long Corridor (Northern Delta Infrastructure Development ) Vietnam: Priority Infrastructure Development Vietnam: Tax Administration Modernization (TAMP) EUROPE AND CENTRAL ASIA REGION...69 Albania: Community-Based Carbon Sequestration Albania: Energy Community Of South Eastern Europe (Ecsee) Energy Apl 4 - Albania Armenia: Armenia Fourth Poverty Reduction Support Credit (PRSC 4)...72 Azerbaijan: Corporate and Public Sector Accountability (CAPSAP)...73 Azerbaijan: Flared Gas Utlization from Guneshli Oil Field Azerbaijan: Real Estate Registration Azerbaijan: Trade and Transport Facilitation Belarus: Social Infrastructure Retrofitting Bulgaria: Municipal Infrastructure Development Croatia: Croatia Inland Waters Georgia: East-West Highway Improvement - Phase Kazakhstan: Irrigation And Drainage Improvement Phase-II Kyrgyz Republic: Bishkek And Osh Urban Infrastructure Moldova: Community Forest Development Moldova: Poverty Reduction Support Credit Moldova: Primary Health Care Moldova: Road Network Recovery Romania: Public Outreach and Support Program For Climate Change Mitigation through Afforestation Serbia and Montenegro: Rural Business Environment Serbia and Montenegro: Second Programmatic Private And Financial Development Policy Loan Turkey: Second Programmatic Public Sector Development Policy Loan (PDDPL2) Ukraine: Reforestation Biocarbon Fund Ukraine: Second Development Policy Loan Uzbekistan: Rural Enterprise Support LATIN AMERICA AND CARIBBEAN REGION...94 Bolivia: Secondary Education Brazil: Enhancing Municipal Governance and Quality of Life Brazil: Health Quality Improvement (Qualisus) Brazil: Municipal Lending Program I: São Luís Urban Upgrading, Environmental Management And Social Inclusion Brazil: Rio Grande Do Sul Municipal Development Colombia: Acces II Colombia: Bogota Urban Services II Colombia: Integrated National Adaptation Plan: High Mountain Ecosystems, Colombia's Caribbean Insular Areas & Human Health Colombia: Judicial Sector Development Colombia: Monitoring and Evaluation Ecuador: Chimborazo Development Ecuador: Justice Services for Economic and Social Development El Salvador: Development Policy Loan (DPL) III Guatemala: Development Policy Loan III Guatemala: Education Quality and Secondary Education Guatemala: Third Integrated Financial Management Technical Assistance Honduras: Community-Based Education Honduras: Pico Bonito Forest Regeneration And Sustainable Livelihoods Jamaica: Early Childhood Development Mexico: Decentralized Infrastructure Reform And Development II (Guerrero Decentralized Infrastructure) Mexico: Integrated Renewable Energy Services for Rural Mexico Mexico: Water Resources Management II Nicaragua: Third Phase of the Health Services Extension And Modernization Program Panama: Social Protection Panama: Water Supply And Sanitation For Low-Income Communities ii

5 Paraguay: Rural Sustainable Development Peru: Sierra Area Development St Vincent and Grenadines and the Commonwealth of Dominica: Implementation of Adaptation Measures to Climate Change Impact Trinidad and Tobago: Nariva Wetland Carbon Sequestration and Carbon Mitigation MIDDLE EAST AND NORTH AFRICA REGION Egypt: Of Natural Gas Connections Iraq: Emergency Electricity Reconstruction Iraq: Second Emergency Water Supply And Sanitation Jordan: Employer-Driven Skills Development Jordan: Sustainable Development of Renewable Resources and Promotion of Energy Efficiency Morocco: Support for the Social Development Agency (ADS) Yemen: Girls' Secondary Education (SEDGAP) SOUTH ASIA REGION Bhutan: Second Urban Development India: Bihar Rural Livelihood Development India: Biodiversity Conservation and Rural Livelihoods Improvement India: Orissa Community Tank Management Nepal: Agricultural Commercialization and Trade Sri Lanka: National Water Management Improvement (Nawam) List of Boxes Box 1: Features of Closed PHRD TA Grants Rated Highly Satisfactory for Achievement of Development Objectives.. 9 Box 2: Examples of Impact of the Closed Climate Change Initiatives Grants Box 3: Key Lessons from Grant Implementation Performance List of Figures Figure 1: Regional Share of Total Value of Closed PHRD TA Grants by Region from FY06-08 (in %)... 5 Figure 2: Top Ten Countries with Highest Approved Amount of PHRD TA Grants (in US$ million)... 5 Figure 3: Distribution of the Value of Closed PHRD TA Grants by Sector (US$m, as percentage of total value)... 7 Figure 4: Ratings of Grant Development Objectives, by Region... 8 Figure 5: Ratings of Grant Development Objective, by Sector... 9 Figure 6: Ratings of Grant Implementation Performance, by Region Figure 7: Disbursement Performance of Closed PHRD TA Grants as % of Total Approved Grant Amount, by Region 11 Figure 8: Fully Disbursed Closed Grants as Percentage of Total Number of Grants, by Region Figure 9: Ratio of Approved Operations Prepared with PP Grants to the Total Number of PP Grants, by Region Figure 10: Coordination with Japanese Organizations regarding Grant Implementation, by Region Figure11: GRMs for Closed Grants Reviewed by the Sector Managers (as percent of total number of GRMs) List of Tables Table 1: Number of Closed PHRD Grants... 3 Table 2: PHRD TA Grants Closed in FY08 by Grant Type and Region... 4 Table 3: Distribution of Closed PHRD TA Grants in Value Range by Region... 6 Table 4: Sources of Financing of Operations Associated with Closed PHRD TA Grants... 7 Table 5: Time Lapse between Grant Approval and Signing by Region (number of grants in months) iii

6 Abbreviations and Acronyms AFR APL CCIG CDM CFP CFPTO CoF DPL DO EAP ECA FY GEF CoF GoJ GRM HS HUS IBRD ICM IDA IP JBIC JICA JJ/WBGSP LCR M&E MNA MS MUS PHRD PI PP PSL PRSC S SAD SAL SAP SAR SIL SIM TA TF TTL Africa (Sub-Saharan) Region Adaptable Program Loan Climate Change Initiative Grants Clean Development Mechanism Concessional Finance and Global Partnerships Vice-Presidency Global Partnership and Trust Fund Operations Department Co-financing Development Policy Lending Development Objectives East Asia and Pacific Region Europe and Central Asia Region Fiscal Year Global Environment Facility Cofinancing Government of Japan Grant Reporting and Monitoring Highly Satisfactory Highly Unsatisfactory International Bank for Reconstruction and Development Implementation Completion Memorandum International Development Association Implementation Performance Japan Bank for International Cooperation Japan International Cooperation Agency Joint Japan/World Bank Graduate Scholarship Program Latin America and Caribbean Region Monitoring and Evaluation Middle East and North Africa Region Moderately Satisfactory Moderately Unsatisfactory Japan Policy and Human Resources Development Fund Implementation Programmatic Structural Adjustment Loan Poverty Reduction Support Credit Satisfactory Sector Adjustment Loan Structural Adjustment Loan Systems, Applications and Products South Asia Region Specific Investment Loan Sector Investment and Maintenance Loan Technical Assistance Trust Fund Task Team Leader iv

7 Summary The purpose of the review of the 106 Policy and Human Resources Development (PHRD) Technical Assistance (TA) grants, which closed in Fiscal Year (FY) 2008, is to provide feedback from grant implementation for the purpose of program improvements and to allow for extended reporting to the donor on the results of the completed grants. The review found that overall performance of the FY08 closed grants was quite positive. Performance of about 91 percent of the grants were rated as Moderately Satisfactory or Better in terms of achieving the development objectives and implementation performance; About 88 percent of the operations prepared with PHRD grants were approved by the World Bank for financing. Grant disbursement performance was better than previous years. The closed grants disbursed about 79 percent of the total approved grant amount in FY08. Grant management has improved. The time gap between grant approval and signing had reduced. More Managers reviewed the grant monitoring reports and consultations between Bank staff and the local Japanese officials also improved significantly from previous years. Bank staff cited important lessons from grant implementation experiences with regard to ownership; consensus building; and realism. There were also key lessons learnt from the Climate Change grants, such as, small pilot projects have a positive demonstration effect on decision makers and community; small Clean Development Mechanism projects are difficult and expensive to prepare. The main features and performance of the closed grants are provided below: Of the total number and value of the closed grants, grants comprised more than 80 percent; Climate Change Initiatives around 13 percent; and Implementation grants less than 5 percent. Latin America and Caribbean Region accounted for the highest share of closed grants in terms of number and value in the past three years (FY06-08). Africa Region s share grew significantly from 16 percent in FY06 to 23 percent in FY08. Vietnam accounted for the highest amount of the closed grants for the past two years. Sixteen Asian countries 1 received about 29 percent of the closed grants in value terms (US$19.03 million). Of this amount, about half were for countries in the East Asia and Pacific Region. The average size of the grants which closed in FY08 was smaller compared to FY07 grants. Nearly half of the closed grants were for Agriculture and Public Administration sectors. About 52 percent of the operations associated with closed PHRD TA grants are linked to International Development Association financing and 36 percent to International Bank for Reconstruction and Development financing. Almost half of the closed grants were associated with investment lending operations. About 14 percent of the closed grants were to prepare operations for budget support. The overall Bank-wide performance of closed PHRD TA grants achieving the stated Development Objectives and Implementation Performance that were rated Moderately Satisfactory or Better is 91 percent. About 88 percent of the projects associated with project preparation grants were approved by the World Bank for financing. World Bank s lending for all projects prepared with closed PP 1 The PHRD TA guidelines refer to all countries in the East Asia and Pacific region, South Asia region, and Central Asian countries in the ECA region as Asian countries. Asian countries in Europe and Central Asia included in this review include: Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan. v

8 grants in ECA, MNA and SAR were approved, thus reaching 100 percent grant objectives achievement rate. Among other achievements, the Climate Change Initiatives grants helped to: o o design Jordan s first commercial wind power project in the private sector; strengthen Senegal s institutional framework and capacity to prepare Clean Development projects; and o enhance Albania s capacity to implement pilot sequestration activities and improved forest cover in formally degraded areas. Disbursement performance of the closed grants was 79 percent of the total approved grant amount in FY08 which is higher than the FY07 level. About 19 percent of the closed grants disbursed fully in FY08 compared to only 9 percent in FY07. Overall quality of the grant management process was satisfactory. o o The time lapse between approval and signing of the closed grants improved from previous years. Interactions between World Bank staff and officials of Japanese organizations, such as, Embassy of Japan, Japan International Cooperation Agency (JICA), and Japan Bank for International Cooperation (JBIC) in the country continue to improve. Bank staff coordinated with Japanese organizations regarding 56 percent of the closed grants during implementation. o More Managers reviewed and commented on the reports in the Grant Reporting and Monitoring system than before. About 42 percent of the grant completion reports were reviewed and commented on by the Managers compared to one third in FY07. Key lessons from grant implementation are: Local ownership of grant financed studies is more effective than setting external conditionalities or financing incentives (in case of Development Policy Loans) as evident from a Recipient who continued to implement some of the reforms designed with PHRD TA grants even though the Bank s expected loan did not materialize; Resources to interact with stakeholders help to improve the knowledge base required for good project design; PHRD TA grants can be a very effective tool to develop consensus on sector strategy and project design; Ownership is enhanced when municipality representatives take the responsibility for grant implementation rather than working through a centralized and consultant based project preparation team; Government managed trust funds can support increased planning and design capacity of the implementing Ministries, and improved integration between project and overall sector development plans; Detailed capacity assessment of the proposed grant implementing agency should be undertaken before taking a final decision on the implementation arrangement; Strong political support is needed to adopt a decentralized approach to project management; Need to be realistic about the country s political situation and its track record regarding carrying out reform programs to avoid designing an ambitious operation; When grants are implemented in an environment with governance issues, fiduciary setbacks should be anticipated at the design phase, and potential delays factored into the implementation strategy and schedule. vi

9 1. Background and Purpose 1.1 The Japan Policy and Human Resources Development (PHRD) Fund was established in 1990 as a partnership between the Government of Japan (GoJ) and the World Bank (WB). Over the past eighteen years the PHRD Fund has supported a wide range of poverty alleviation and capacity building activities. Between FY00-08, the total contribution to the PHRD Fund was US$670 million. It is one of the largest trust funds managed by the WB. 1.2 The PHRD Fund supports technical assistance, human resources development and capacity building, Japanese staff and consultants, and Japan-World Bank partnership initiatives through the following programs: Technical Assistance: The PHRD Technical Assistance (TA) Program provides grants primarily to assist the World Bank s borrowing member countries with the preparation and implementation of operations to be financed through International Bank for Reconstruction and Development (IBRD) loans and International Development Association (IDA) credits and grants. In addition, the PHRD TA Program supports a range of climate change-related activities Human Resources Development and Capacity Building: The Joint Japan/World Bank Graduate Scholarship Program (JJ/WBGSP) provides scholarships to support post-graduate training at Master s degree level for member country nationals. The Japan Indonesia Presidential Scholarship Program, established in 2008, to support studies in fields related to development; The PHRD-World Bank Institute (WBI) Capacity Development Grants Program supports WBI s capacity development activities, with a particular focus on activities in East, South and Central Asia Japanese Staff and Consultants: The Japan PHRD Staff and Extended-Term Consultant (ETC) Program supports part of the costs of Japanese nationals recruited to work within the World Bank Partnership Initiative: The Japan-World Bank Partnership Program supports activities, such as research programs, workshops, and seminars that promote partnership between Japan and the World Bank. 1.3 The PHRD TA program is committed to supporting poverty reduction efforts. Consistent with this commitment, the program s focus is on countries in Asia, including East, South and Central Asia where the majority of the poor live. The PHRD TA program disbursed US$65.79 million in FY08 which amounted to 79 percent of the total disbursement of US$83.7 million from the PHRD Fund. 1

10 1.4 Performance of on-going PHRD TA grants is reported through the Grant Reporting and Monitoring (GRM) system. On average, about 150 to 170 PHRD TA grants close every year. Reporting on these is generally done in one of the following two forms in the GRM system: (a) an Implementation Completion Memorandum (ICM) is prepared for grants exceeding US$1 million in value; or (b) Grant Completion Reports (GCR) are prepared for grants below US$1 million in value. 1.5 The purpose of this internal review of completed grants is to: (a) learn from the experiences and apply the lessons for program improvements; and (b) allow for more extended reporting on the results of completed grants in the PHRD Annual Reports. 2 Methodology and Scope of the Review 2.1 This review was carried out by the PHRD Unit in collaboration with the Trust Funds Accounting Unit in Chennai. 2 The two main sources of information for the review are: (a) the Completion Reports submitted in the GRM system; and (b) data from SAP. The GRM Completion Reports are prepared by the WB s Task Team Leader (TTL) responsible for supervision of the respective grant, and approved by the respective Sector Manager before final submission in the GRM system. 2.2 One of the key features of reporting in the GRM system is an assessment of the performance of the grants by the TTLs in terms of achieving the grant DO and IP through a six point rating system. This feature is consistent with the reporting on closed loans and credits financed by the World Bank. The ratings for DO are based on the following definitions: Highly Satisfactory (HS) Grant objectives achieved; good practice; Satisfactory (S) Grant objectives achieved with no shortcomings; Moderately Satisfactory (MS) Grant objectives achieved with moderate shortcomings; Moderately Unsatisfactory (MUS) Significant deficiencies in few key areas which impeded achievement of objectives; Unsatisfactory (US) Significant shortcomings in several key areas which impeded achievement of objectives; and Highly Unsatisfactory (HUS) Severe shortcomings in the achievement of the grant objectives. 2.3 The ratings for the grant IP are based on the following definitions: Highly Satisfactory (HS) Grant achieved or exceeded all of the major expected outputs; Satisfactory (S) Grant achieved almost all major outputs with only minor shortcomings; Moderately Satisfactory (MS) Some shortcomings which could have jeopardized achievement of one or more outputs, but problems were resolved; Moderately Unsatisfactory (MUS) Significant deficiencies in few key areas which could have jeopardized grant objectives and/or undermine the Bank s fiduciary role; Unsatisfactory (U) Significant shortcomings which could not be resolved, and one or more outputs could not be achieved; and Highly Unsatisfactory (HUS) Significant deficiencies that limited or jeopardized the achievement of grant outputs. 2 This report has been prepared by Wahida Huq (CFPPM) with the assistance of Bermet Sydygalieva, Augustina Nikolova, Milagros Reyes (CFPPM), Jyoti Dhingra and Birama Nayagam Subramanian (ACCTN). 2

11 2.4 The scope of this review covers 106 PHRD TA grants which had closing dates in FY08 as stipulated in the Grant Agreement. 3 The total number of PHRD grants which closed in FY08 was This number includes: PHRD TA grants, PHRD grants for World Bank Institute, Japan PHRD Staff/ETC Program Grants, and Japan-World Bank Partnership Program grants (Table 1). Table 1: Number of Closed PHRD Grants Number of PHRD Grants which closed in FY08 Number 173 Of these the following were not included in the overall assessment: - WBI Grants 33 - Japan PHRD Staff/ETC Program Grants 20 - Japan-WB Partnership Program Grants 5 - Other grants (Human Resources Development) 5 67 Total number of closed PHRD TA grants included in this review The PHRD TA program included four types of grants: (PP); Implementation (PI); Climate Change Initiative Grants (CCIG); and Co-financing (CoF). The objective of the PP grants is to assist Recipient countries in preparing operations for financing from the World Bank. The PI grants aim at assisting the implementing agency of World Bank-financed operations in the Recipient country in addressing newly emerged implementation issues which could not be foreseen at the time of preparation of the operation. The aim of CCIG is to assist the Recipient to promote reduction of greenhouse gas emissions while promoting growth and poverty reduction. The objective of the CoF grants is to support institutional capacity building components of the World Bank-financed operations The review focuses on the following: characteristics of the closed grants (grant types; regional and sector share of the grant funds by grant type; countries which received the largest share of the closed grants; distribution of grants in value range by regions; and unutilized grants); status of World Bank s approval of the operations prepared with the closed PP grants; characteristics of associated operations by sources of financing, sector, and lending instruments; grant performance by region, sector, and type (in terms of achieving the development objectives and implementation performance); 3 According to the PHRD TA guidelines, four months after the closing date of the grant are allowed to complete all disbursement and accounting transactions. 4 The number also includes grants which had closing dates in previous years, but formally closed in FY08. 5 PI, CCIG and CoF grants were introduced in FY2000, 2002, and 2004, respectively. 3

12 overall grant management process, including reporting on closed grants (average lag between grant approval and signing to assess the on-time availability of funds by the Recipient and supervision of the grant by the Bank); and lessons from grant management and implementation experience. 2.7 The remaining part of the report is organized as follows: Section 3 discusses the characteristics of the closed PHRD TA grants. Section 4 discusses the performance and management of the closed grants. Section 5 discusses the lessons learned from grant implementation performance. 3 Characteristics of Closed Grants 3.1 grants comprised the bulk of the 106 closed grants in number (82 percent) as well as value (84 percent). These are slightly lower than FY07 shares (91 percent in number and 93 percent in value). CCI grants comprised 13 percent in number and 12 percent in value of the total. About 3 percent (in value terms) of the closed grants were approved to support project implementation in the area of capacity building. Table 2 below provides information on the grants by number, amount, type, and regional distribution. Further details of the closed grants are provided in Annex 1. 6 Table 2: PHRD TA Grants Closed in FY08 by Grant Type and Region Implementation Climate Change Total Region Number Value Number Value Number Value Number Value AFR 21 14,112, ,425, ,538,213 EAP 15 10,280, , ,579,200 ECA 17 11,421, , ,799, ,737,809 LCR 23 14,971, ,066, ,822, ,860,483 MNA 5 2,645, , ,000, ,997,100 SAR 6 2,947, ,947,450 Bank wide Total 87 56,3777, ,234, ,047, ,660, For the past three consecutive years, Latin America and Caribbean Region (LCR) had the highest share of the closed grants, by number and value. The share of Africa Region (AFR) grew significantly from the FY06 level, and in FY08 occupied third position and was comparable to Europe and Central Asia (ECA) region. (Figure 1). 6 None of the approved CoF grants closed in FY08. 4

13 Figure 1: Regional Share of Total Value of Closed PHRD TA Grants by Region from FY06-08 (in %) 35 % Share of Total Value AFR EAP ECA LCR MNA SAR Regions FY08 FY07 FY About 29 percent of the closed PHRD TA grants in value terms (US$19.3 million) were approved for 18 Asian countries. Of this amount, about 16 percent were for countries in the EAP region. 3.4 Two countries from EAP and three from LCR were among the top ten countries that had the highest value of approved grants (Figure 2). Vietnam had the largest amount of closed grants in FY08 as was its position in FY07. Brazil held that position in FY06. Figure 2: Top Ten Countries with Highest Approved Amount of PHRD TA Grants (in US$ million) Kenya 1.58 Mexico 1.75 Philippines 1.87 S.Africa Multi-Country 1.94 Madagascar 2.00 Azerbaijan 2.58 Brazil 2.75 Moldova 2.91 Colombia 3.15 Vietnam US$ million 5

14 3.5 The average size of the grants which closed in FY08 was smaller compared to the FY07 closed grants. The values of about 28 percent of the FY08 closed grants were in the US$750,000 to US$1.00 million range compared to 37 percent in FY07. AFR and ECA had the largest number of grants in this range in FY08. LCR and EAP had the largest number of grants in this range in FY07. The one grant valued above US$1.0 million was an old grant and approved at the time when the US$1.0 million ceiling was not in effect (Table 3). Table 3: Distribution of Closed PHRD TA Grants in Value Range by Region Value of Closed Grants (US$ million AFR EAP ECA LCR MNA SAR Bank wide > Total Number of Closed Grants The closed grants covered the following broadly categorized sectors: agriculture (including crops, forestry, fisheries, extension, animal production, and irrigation and drainage); education (including pre- and primary education, adult literacy/non-formal education, secondary, tertiary education, vocational training); energy and mining (including district heating and energy efficient services, mining, oil and gas, power, renewable energy); finance (including banking, housing finance and real estate markets, non-compulsory pensions, micro- and small and medium enterprise finance, payments systems, capital markets, non-compulsory health finance); health and other social services; industry and trade (including agricultural marketing and trade, agro-industry, housing construction, other domestic and international trade, other industry, petrochemicals and fertilizers, general industry and trade); public administration, law, and justice (including central government administration, sub-national administration, law and justice, compulsory payments and unemployment insurance); water/sanitation/flood protection (including flood protection, sanitation, solid waste management, water supply, sewerage, flood protection); and transportation. 3.7 Forty-nine percent of the grants were focused on Agriculture, and Public Administration and Law sectors. All the grants which were associated with Development Policy Lending (DPL) were categorized into Public Administration and Law sector. About fifty percent of the grants (in value terms) categorized in the Energy sector were Climate Change grants focused on renewable energy (Figure 3). 6

15 Figure 3: Distribution of the Value of Closed PHRD TA Grants by Sector (US$m, as percentage of total value) Public Administration, Law and Justice, $14.1, 21% Infrastructure, $2.6, 4% Water, Sanitation and Flood Protection, $5.0, 7% Transportation, $4.6, 7% Health & Other Social Services, $5.6, 8% Agriculture, Fishing and Forestry, $18.9, 28% Education, $3.9, 6% Energy and Mining, $7.2, 11% Finance, $4.7, 7% 3.8 About fifty one percent of the operations associated with closed PHRD TA grants are expected to be financed by IDA and thirty-six percent by IBRD. Table 4 provides information on 94 grants with associated operations which have not been dropped from the lending program. LCR had the highest number of closed grants associated with operations to be financed by IBRD loans in FY07 and FY08. The total number of grants associated with Global Environment Facility operations is more in FY08 compared to FY07. The Other sources of financing include Carbon Offset. Table 4 provides details on the sources of financing by region. Region Table 4: Sources of Financing of Operations Associated with Closed PHRD TA Grants # of Grants Sources of Financing (US$ million) IDA IBRD Blend (IDA+IBRD) GEF Other Grant Amount # of Grants Grant Amount # of Grants Grant Amount # of Grants Grant Amount # of Grants Grant Amount AFR EAP ECA LCR MNA SAR Total Forty-six percent of the operations associated with the closed PHRD TA grants in FY08 applied the Specific Investment Loan (SIL) lending instrument. Another 14 percent applied DPL, and 11 percent Adaptable Program Loan (APL) financing instruments. 7 SILs support the creation, rehabilitation, and maintenance of economic, 7 Operations which have been supported by PHRD TA grants have been financed through various types of lending instruments. Broadly, there are two types: investment loan and financing to support the budget of the Recipient countries. These are defined into several categories. Adaptable Program Loan (APL), Specific Investment Loan (SIL) and Sector Investment and Maintenance Loan (SIM) are investment loans. 7

16 social, and institutional infrastructure. APL financing is applied to support long-term development programs. DPLs provide quick-disbursing external financing to support policy and institutional reforms. There were three grants associated with Emergency Recovery Loans (ERL), of which two were for Iraq and one for Timor Leste. 4 Performance of Closed Grants 4.1 Assessment of Grants achieving the Development Objectives (DO) and Implementation Progress (IP) The assessment of grant performance in terms of achieving the DO and IP is based mainly on the ratings provided in the closed grants reports in the GRM system. Assessment of performance is based on 106 grants for which grant completion reports were submitted in the GRM system. For the purpose of this review, the top three ratings (HS, S and MS) have been aggregated into Moderately Satisfactory or Better (MS+), and the bottom three (MUS, US, and HUS) into Less than Moderately Satisfactory (MS-) to set a cut-off line to assess whether grant performance is above or below the line The overall Bank-wide performance of closed PHRD TA grants achieving the stated DO that were rated MS+ is 91 percent which is slightly above the FY07 rating. All the 22 closed grants in ECA and 6 in SAR were rated MS+ in terms of achieving the DO. The regional performance is presented in Figure 4. Figure 4: Ratings of Grant Development Objectives, by Region 100% 87% 94% 100% 93% 86% 100% 80% 60% 40% 20% 0% 13% 14% 6% 7% 0% 0% AFR EAP ECA LCR MNA SAR Regions Moderately Satisfactory or Better Less than Moderately Satisfactory Poverty Reduction Support Credit (PRSC), Development Policy Loan (DPL) Programmatic Structural Adjustment Loan (PSL), Sector Adjustment Loan (SAD), Structural Adjustment Loan (SAL). In addition, there are Technical Assistance and Financial Intermediary Loans. 8

17 4.1.3 In FY08 only one grant, compared to six in FY07, was rated HS and this was in SAR. Box 1 provides some of the features of highly satisfactory DO rating for the grant. Box 1: Features of Closed PHRD TA Grants Rated Highly Satisfactory for Achievement of Development Objectives Grant Rated Highly Satisfactory PHRD: SRI LANKA - NATIONAL WATER MANAGEMENT IMPROVEMENT PROJECT The PHRD grant funding helped the Government of Sri Lanka with the preparation of the Sri Lanka Dam Safety and Water Resources Planning leading to its approval by the Bank in March The most important outcome of the grant funding is its contribution to capacity building of the Recipient's staff on issues/areas related to dam/public safety, hydro-meteorological information network and water resources planning, which are the three major components identified and developed as the components of the project. The Recipients appointed three Technical Working Groups (TWGs) for each of the above three components and the TWGs worked handin-hand with international cconsultants preparing the project. Each of the TWGs included senior national technical specialists of the project implementing agencies and agencies mandated to address the above three core areas. As a result, the TWGs gained significant exposure and experience to global practices and techniques that can be used. The same TWGs would continue to engage in the implementation phase of the project. Therefore, the capacity enhancement impact of the PHRD grant is substantial. The grant was fully disbursed Two sectors Transportation and Finance and Private Sector Development have been the best performing with 100 percent of the grants rated MS+ for achieving DO (Figure 5). Grants for Transportation and Finance sectors comprised about 7 percent of the total value of closed grants. Agriculture and Public Administration comprising nearly 46 percent of the grant value also performed well. All the grants which closed in FY07 in the Transportation sector were also rated MS+ for achieving their DO. In FY07 all the closed grants in Information and Communication, Education and Industry and Trade were also rate MS+ in terms of DO. Figure 5: Ratings of Grant Development Objective, by Sector Water Supply, Sanitation & Flood Control 78% 22% Transportation 100% 0% Public Administration and Law Health & Other Social Services 91% 88% 9% 12% Finance & Private Sector Development 100% 0% Sector Energy & Mining Education 88% 86% 12% 14% Agriculture 94% 6% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percentage of Total Moderately Satisfactory of Better Less than Moderately Satisfactory 9

18 4.1.5 Implementation performance of the closed grants has been rated 91 percent MS+ Bank-wide (Figure 6). This rating is three percentage points higher than in FY07. Figure 6: Ratings of Grant Implementation Performance, by Region 100% 80% 78% 94% 100% 93% 86% 100% 60% 40% 20% 0% 22% 14% 6% 7% 0% 0% AFR EAP ECA LCR MNA SAR Regions Moderately Satisfactory or Better Less than Moderately Satisfactory There were two closed grants which were rated HS for implementation performance. One was in ECA and another was in SAR. In comparison, there was only one closed grant in FY07 and four in FY06 that were rated HS. The main characteristics of the grants with the HS rating are: Almost fully disbursed (>99 percent); High degree of diligence and professionalism in grant management; and Excellent management of the grant-financed activities resulting in timely completion of preparation activities Grants in AFR and MNA had the lowest ratings. The main reasons for less than moderately satisfactory rating for implementation performance are: (a) slow pace of implementation; (b) lack of capacity in the grant implementing agency; and (c) delayed submission of statement of expenditures. 4.2 Disbursement Performance of PHRD TA grants closed in FY Overall disbursement of the FY08 closed PHRD TA grants was 79 percent of the total approved amount Bank-wide. In FY07, the overall percentage was 72. Closed grants in Asian countries had a higher disbursement percentage (87.4 percent) compared to Bankwide performance. Performance of SAR improved from last year making this region the 10

19 best performer in FY08. AFR s performance declined from last year by about 18 percentage points (Figure 7). Figure 7: Disbursement Performance of Closed PHRD TA Grants as % of Total Approved Grant Amount, by Region U$2.7m (90%) U$9.0m (85%) U$13.1m (83%) U$14.1m (79%) U$3.3m (84%) U$10.2m (66%) 10 0 AFR EAP ECA LCR MNA SAR Region Disbursement percentage of closed grants improved in FY08 from FY07. Compared to 9 percent in FY07, about 19 percent of the closed grants disbursed fully in FY08. Nearly half of the six closed grants in MNA disbursed fully. (Figure 8) Figure 8: Fully Disbursed Closed Grants as Percentage of Total Number of Grants, by Region Percentage AFR EAP ECA LCR MNA SAR Region 11

20 4.2.3 There were only five grants with zero or very negligible (less than 4%) disbursements in FY08 compared to thirteen in FY07. The main reasons for non-utilization of these grants were: (a) change in government s strategy; (b) delayed availability of grant money and the associated operation went to the Board for approval; or (c) changes in government and management of the grant implementing agency. Three grants with zero disbursements were for project preparation activities and two for Climate Change Initiatives. Of these grants, one was from LCR, two each from AFR and ECA. 4.3 Performance of Closed PP grants Eighty-one percent of the projects prepared with FY08 closed PP grants were approved by the World Bank. An additional 10 percent are expected to be approved in FY09 and FY10. All projects prepared with the closed PP grants in ECA, MNA and SAR was approved In FY08, 87 PP grants closed and these were associated with the preparation of 87 lending operations. Two associated operations were dropped from the lending program and the related PP grants closed with zero disbursements. One grant closed with only 3% disbursements and it can be assumed that the grant did not assist with the preparation of the associated operation, though lending for that project was approved by the Bank. Therefore, this grant has been dropped from the calculation of the ratio of approved Bank operations to the number of closed grants. The calculation includes 84 operations that should have been prepared with 84 PHRD closed PP grants and for which lending ultimately should have been approved by the World Bank s Board of Executive Directors. Of the 84 operations, 68 (or 81 percent) were actually prepared with these PP grants, and approved by the World Bank s Board of Executive Directors. An additional nine PP grant associated operations are expected to be approved during the period FY09 and FY10. Seven of the 84 PP grant associated operations were dropped from the lending program. The regional breakdown of approved and expected to be approved operations prepared by the closed PP grants is presented below in Figure 9. 12

21 Figure 9: Ratio of Approved Operations Prepared with PP Grants to the Total Number of PP Grants, by Region Number % 93% % % 100% 100% 100% 90% 80% 70% 60% 50% 40% 30% % 10% 0 AFR EAP ECA LCR MNA SAR 0% Approved grant associated operations as of March 24, 2009 (includes some operations expected to be approved in the next fiscal year) Total PP grants that should have resulted in an approved associated operation Percentage of PP grants that resulted in an approved associated operation as of March 24, 2009 (includes some operations expected to be approved in the next fiscal year) All PP grants were rated MS+ in terms of achieving DO and IP. One grant was assessed as HS with regard to substantial knowledge transfer from international experts to the Recipient country and high quality outputs. All the closed PP grants disbursed fully PP grants have been generally utilized for a range of activities. These include: (a) preparation of documents to support the proposed Bank operation, such as social and environmental assessments, procurement plans, resettlement action plans, tribal or ethnic development plans to comply with the World Bank s requirements on procurement, financial management, safeguard and social aspects and ensure eligibility for loans, credits and grants; (b) workshops for stakeholder consultations and information dissemination; (c) engineering feasibility studies; (d) detailed analytical studies on development policy issues; and (e) designing M&E systems About 8 percent of the total PP grant associated operations were dropped from the lending program. LCR had the highest number (5) of operations associated with PP grants dropped from the lending program. In FY07, LCR also had the highest number (5) of dropped operations. In terms of share of PP grant associated operations which were dropped to total number of PP grants in the region in FY08, LCR had the highest (23%), followed by EAP (7%) and AFR (5%). In comparison, in FY07, EAP, LCR, and MNA had the highest percentage of dropped operations (17%), followed by ECA (10%) and AFR 13

22 (9%), so the trend is quite similar, with the exception of MNA, which did not have any dropped operations in FY The following are the reasons provided in the GRM reports for dropped grant associated operations: Bank s unwillingness to lend due to country governance issues (Mongolia); Recipient and the Bank unable to reach agreement on issues relating to the particular sector (Mexico); Bank s unwillingness to lend due to issues with country s portfolio (Kenya); Political instability (El Salvador); Lack of government ownership and commitment (Ecuador, Colombia, Mexico). 4.4 Performance of Closed CCI grants About 11 percent of the total value of closed grants was for CCI grants and performance of all but one CCI grants was rated MS+ in terms of achieving the DO, and all but two for IP. Fourteen CCI grants closed in FY08. Of these, two grants were dropped with zero disbursements and therefore have been excluded from the analysis. The remaining twelve CCI grants were implemented by four Regions: AFR (2 grants), ECA (5 grants), LCR (4 grants) and MNA (1 grant). In terms of value, ECA was the largest recipient, accounting for about half of the total value of CCI grants which closed in FY08. Four grants representing 35 percent of the total grant amount benefited IDA countries The disbursement performance of the CCI grants which closed in FY08 has been close to 100 percent for all regions, except for AFR which disbursed only 39 percent of the approved grant amount. The overall disbursement performance for all regions, including AFR, is 89 percent. Four of the closed grants disbursed almost the full amount of the grant. The disbursement of CCI grants to IDA countries (two of which are in AFR) was 75 percent. 14

23 Box 2: Examples of Impact of the Closed Climate Change Initiatives Grants The grant has increased the knowledge of successful and economic ways to use local fuels in Belarus. An Energy Efficiency was prepared based on the implementation experience of the pilot project. The grant contributed to the mainstreaming of adequate pasture management techniques, forestry management practices and reducing gas emissions through sequestration of carbon. Local authorities experienced significant learning through participating in competitive grant schemes, mobilization of technical and financial resources, fiduciary accountability, and community managed program. The community contributed 20 percent of the cost of the sub-projects in Moldova. The grant financed studies formed the basis of the design of the Jordan s first commercial wind power project in the private sector. The grant has financed the preparation of the Renewable Energy Promotion Law. The grant helped strengthen Senegal s institutional framework and capacity to prepare Clean Development projects. The administrative process for approval of Clean Development Mechanism of the Kyoto Protocol (CDM) projects has been prepared and officially adopted. The main outcome of the grant was the increased capacity of the Albanian government and the local communities to undertake pilot sequestration activities and improved forest cover in formerly degraded areas. The long term outcome is an increase in carbon sequestration by 160,000 ton of CO2 in the Bio Carbon Fund sites. The grant assisted in obtaining baseline data and trends required to assess climate change impacts in high mountain eco-systems in Colombia and to provide the basis for the implementation of specific adaptation measures. The grant financed the development of twoo very relevant tools: (a) reduction of the uncertainty in Climate Change models to provide relevant information to improve the quality of vulnerability assessment that enable a better decision making process for the selection of adaptation activities in the Caribbean; and (b) development of an economic assessment tool for adaptation activities. 4.5 Performance of Closed PI grants The overall performance of three out of the five closed PI grants was reported to be MS+. The grants were used to finance activities in agriculture, public administration, education and finance and private sector development sectors. The grants helped to: (a) improve management of the irrigation and drainage systems through training and consultant services to strengthen Water Users Association; (b) develop monitoring and evaluation indicators; and (c) strengthen capacities at the Ministry of Finance in areas related to public debt management both at the central and local levels. The overall grant disbursement performance was satisfactory (65%). 4.6 Grant Approval, Consultations and Management Oversight Most of the closed grants were signed within three months of the approval date (Table 5). This is an improvement from previous years and mainly due to the close monitoring carried out by the PHRD unit. 15

24 Table 5: Time Lapse between Grant Approval and Signing by Region (number of grants in months) "1-3" "3-6" "6-9" "9-12%" ">12" AFR EAP ECA LCR MNA SAR The following were noted as the main reasons for delayed signing: Recipient government s lengthy procedures; Recipient s apparent lack of commitment to the associated operation; Possible lack of continuity of the Bank staff which may have affected follow-up The financial implication of delayed signing is that funds allocated for the approved grants are not available for other requests, and cannot be utilized until the grant agreement is signed by the Recipient. In some cases, it was reported that due to non-availability of funds on time, other sources of funding from bilateral and multi-lateral donors were utilized to carry out project preparatory activities. When the PHRD TA funds were finally available, project preparation was well ahead, and the grant could not be fully utilized. 4.7 Interactions between Bank staff and officials of Japanese organizations (such as Embassy of Japan, JICA, and JBIC) in the country have marginally improved since FY07. Overall, Bank staff coordinated with Japanese organizations regarding 56 percent of the closed grants during implementation. This is much higher than reported last year. Bank staff working in MNA and ECA regions reported higher levels of consultation (Figure 10). Consultation with Japanese organizations prior to proposal submission is now 100 percent. Bank staff interacted with Japanese organizations during grant implementation in the following ways: (a) discussing the reports financed by the PHRD TA grants in workshops where Japanese officials were invited; (b) sharing Aide Memoires of the Bank s missions; and (c) inviting Japanese officials to project launching ceremonies. 16