The World Bank Implementation Status & Results Report MW: Mining Governance and Growth Support Project (P120825) MW: Mining Governance and Growth Support Project (P120825) AFRICA | Malawi | Energy & Extractives Global Practice | IBRD/IDA | Investment Project Financing | FY 2011 | Seq No: 11 | ARCHIVED on 19-Nov-2018 | ISR34394 | Implementing Agencies: Republic of Malawi, Ministry Of Natural Resources Energy and Mining Key Dates Key Project Dates Bank Approval Date: 31-Mar-2011 Effectiveness Date: 23-Aug-2012 Planned Mid Term Review Date: 01-Dec-2014 Actual Mid-Term Review Date: 05-Dec-2014 Original Closing Date: 30-Sep-2016 Revised Closing Date: 31-Jul-2018 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) To improve the efficiency, transparency and sustainability of mining sector management Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Managing Mineral Rights and Operations:(Cost $6.50 M) Generating and Managing Mineral Revenue:(Cost $1.55 M) Promoting the Mining Sector:(Cost $17.00 M) Project Management:(Cost $2.72 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions The MGGSP has been effective since August 23, 2012, with a final disbursement rate of 99% of the funds made available from the World Bank’s IDA lending, and grant-based financing.Overall project implementation is rated as Satisfactory. Progress toward achievement of the Project Development Objective is satisfactory. The PDO was to improve the efficiency, transparency and sustainability of mining sector management. The project has been consistent with the national objective of increasing the contribution of mining to sustainable growth and development which stretches beyond the scope and timeline of this project. Project Management was overall effective. Most of the project activities were delivered on time and several Intermediate Results Indicators and Project Development Indicators were satisfied by the project. However, a few of the project activities have been dropped- these being the hosting and maintenance of the Cadaster System through cloud-based services and the development of a Local Area Network (LAN) for the mining 11/19/2018 Page 1 of 7 The World Bank Implementation Status & Results Report MW: Mining Governance and Growth Support Project (P120825) cadaster offices. Consideration of alternative sources of support by the Government of Malawi, to implement dropped project activities, has been recommended. The overall procurement rating was ‘Moderately Satisfactory’ as there were delays leading to some activities not completed by the project closing date. In addition, Procurement Plan Monitoring was not adequate, and this led to committing contracts above the project financing.The project, during implementation, generally followed the procurement procedures as stipulated in the Procurement Guidelines, Project Appraisal Document (PAD), Financing Agreement and Project Implementation Manual. The project had a dedicated Procurement Specialist and oversight from the Ministry’s Internal Procurement Committee, which assisted to fast-track procurement processes with due regard to agreed procedures. As such, during the course of project implementation, there was no case of mis-procurement that was declared. Project implementation experienced some delays which led to some activities being incomplete at the time of project closing. The implication is that either the outputs of the activities will not be achieved or that Government of Malawi would have to finance such remaining activities to reach their planned completion. The Ministry of Natural Resources, Energy and Mining (MoNREM) is also requested to make alternate arrangements to finance certain over-commitments under the project. The project is up to date with reporting requirements for both IFRs and audited financial statements. 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 -- Substantial Substantial Fiduciary -- Moderate Moderate Environment and Social -- Moderate Moderate Stakeholders -- Moderate Moderate Other -- -- -- Overall -- Moderate Moderate Results PDO Indicators by Objectives / Outcomes Increased efficiency in allocation of mineral rights IN00514807 ►Efficiency- weighted average number of days taken to issue mineral rights each year (Exclusive Prospecting License, Reconnaissance License, and Mining License) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 102.32 74.00 63.95 45.00 Date 23-Aug-2012 10-Nov-2017 02-Nov-2018 23-Aug-2017 11/19/2018 Page 2 of 7 The World Bank Implementation Status & Results Report MW: Mining Governance and Growth Support Project (P120825) The PDO indicator on 'Efficiency- weighted average number of days taken to issue mineral rights each year ' measures the weighted average number of days taken to issue Exclusive Prospecting Licenses, Reconnaissance Licenses, and Mining Licenses. While not fully achieving the original ambitious target of Comments: 45 days, the project nevertheless achieved a target of 63.95, from a baseline of 102.32 days. This reflects an efficiency improvement in the issuance of mineral rights of more than 35%. Increased transaprency in governance of the mineral sector IN00514809 ►Transparency- Annual Public Reporting of Mineral Sector tax revenues (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No -- Yes Yes Date 23-Aug-2012 10-Nov-2017 10-Nov-2017 30-Mar-2018 This indicator refers to whether mineral sector revenues are being reported on an annual basis or not. Malawi is now implementing EITI, and through the process, has disclosed its mineral sector revenues on Comments: an annual basis through EITI Reports, which have been published in 2017 and 2018 respectively. Increased sustainability in the operation of mines IN00514810 ►Sustainability - Percentage of mining operations subjected to environmental certification (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 50.00 100.00 90.00 90.00 Date 23-Aug-2012 10-Nov-2017 31-Oct-2018 30-Mar-2018 This indicator refers to the percentage of mining operations that were found compliant, subsequent to environmental compliance audits by the Environmental Affairs Department (EAD). The baseline data Comments: refers to the compliance percentage as of August, 2012, while the actuals and targets refer to average compliance percentages over the project lifetime of 6 years. Intermediate Results Indicators by Components Managing Mineral Rights and Operations IN00514806 ►Modern mining legislation in place (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The Mines and Minerals The draft Mining Bill Act has been reviewed was drafted and Mining Policy in place but and the Bill and approved by the new mining act and associated regulations Cabinet Committee on regulations, amended have been finalized. The legal affairs, as well as New mining Value mineral taxation activity suffered a the Cabinet itself. It is regulations submitted legislation and model number of delays and is to be tabled in to relevant authorities. mining agreement still now expected to be Parliament during the under development tabled in the February November 2018 2018 seating of sitting. Target Parliament. achieved. 11/19/2018 Page 3 of 7 The World Bank Implementation Status & Results Report MW: Mining Governance and Growth Support Project (P120825) Date 23-Aug-2012 10-Nov-2017 02-Nov-2018 30-Mar-2018 IN00514817 ►Number of public service personnel trained in sector-relevant fields (with breakdown by gender) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 199.00 179.00 115.00 Date 23-Aug-2012 10-Nov-2017 02-Nov-2018 30-Mar-2018 Fact finding during the final project closing mission revealed that the number of public service personnel trained in sector-relevant fields were in fact 179, and not 199 as reported in the previous ISR. The Comments: comprise of 32 women, and 147 men. IN00514808 ►Modern computerized mining cadastre in use (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The computer- based cadastre system went New cadaster office is live in April 2017, and about to be completed. is updated in real time. Regulations for All licence data from transitioning from 2009 to date has been Minerals licensing previous manual to captured into the Computerized Value conducted using slow computerized cadaster database, and all cadastre in use and paper based system are being drafting, licence applications including regulations for are being processed the mining cadaster through the system by committee a trained team of meetings.commenced. officers. Target achieved. Date 23-Aug-2012 10-Nov-2017 02-Nov-2018 30-Mar-2018 IN00514812 ►Health, safety, environmental and social management policies and monitoring systems completed (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target New tools and systems have been Gaps exist in policy New tools for developed to Policy framework framework and implementing the Policy implement health, complete and Value monitoring systems are Framework and safety, environmental monitoring system in in need of significant monitoring systems are and social place strengthening being drafted. management policies and monitoring. Date 23-Aug-2012 10-Nov-2017 02-Nov-2018 30-Mar-2018 Generating and Managing Mineral Revenue IN00514814 ►Mineral tax administration and revenue management developed (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The cabinet has finally A study was No specialized Policies to address finalized the draft bill and conducted, which Value arrangements for revenue volatility and will be sent to the provided options on minerals tax savings introduced parliament. The next improving mineral tax 11/19/2018 Page 4 of 7 The World Bank Implementation Status & Results Report MW: Mining Governance and Growth Support Project (P120825) administration and session of parliament administration and revenue management now is February 2018 revenue management, and a study tour was conducted on the subject. However, the study noted that the low levels of current revenue collections, coupled with Malawi’s macro-economic considerations for the foreseeable future, do not warrant the establishment of a separate sovereign wealth fund (Mineral Revenue Fund). The Government of Malawi is now informed on the actions required to address revenue volatility and savings. Date 23-Aug-2012 10-Nov-2017 02-Nov-2018 30-Mar-2018 IN00514813 ►Standardized fiscal regime (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Standardized royalty and Standardized royalty tax laws and regulations and tax laws and Royalty and tax terms Standardized royalty drafted. regulations drafted. Value open to negotiation and and tax laws and Target Achieved. Target Achieved. selective concession regulations drafted Date 23-Aug-2012 10-Nov-2017 02-Nov-2018 30-Mar-2018 Promoting the Mining Sector IN00514816 ►Number of students newly enrolled in mining-related tertiary education programs in Malawi (with breakdown by gender) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 42.00 262.00 149.00 150.00 Date 31-Dec-2010 10-Nov-2017 02-Nov-2018 30-Mar-2018 Fact-finding during the project completion mission indicated that 149 students were newly enrolled (61 Comments: women, and 88 men), and not 262 as reported in the previous ISR. IN00514811 ►Multi-stakeholder forum on mining sector established with civil society participation (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The EITI Multi The EITI Multi Stakeholder Group Ad hoc and reactive Stakeholder Group Regular meetings of (MSG), consisting of Value arrangements for released and multi-stakeholder industry, government stakeholder dialogue disseminated the first forum taking place and civil society report in April 2017.The representatives, has 11/19/2018 Page 5 of 7 The World Bank Implementation Status & Results Report MW: Mining Governance and Growth Support Project (P120825) MSG continues to meet been established and on a quarterly basis. meets on a quarterly basis. The MSG released and disseminated the first EITI report in April 2017, and the second EITI Report in June 2018. Target achieved. Date 23-Aug-2012 10-Nov-2017 02-Nov-2018 30-Mar-2018 IN00514815 ►Geo-data management center providing online access (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Geo-database management The Geo- data Information System management Centre is (GDMIS) has been Geo-data Only old and insufficient now in operation and installed and is management centre in Value geo-data available accessible online. operational; actions operation and Digitization of old are currently being accessible on-line information is ongoing. taken to ensure provision of online access. Date 30-Aug-2012 10-Nov-2017 02-Nov-2018 30-Mar-2018 Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P120825 IDA-49010 Closed USD 25.00 25.00 0.00 23.32 0.02 100% P120825 TF-12935 Closed USD 4.83 4.72 0.10 4.68 0.00 100% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P120825 IDA-49010 Closed 31-Mar-2011 02-Nov-2011 23-Aug-2012 30-Sep-2016 31-Jul-2018 P120825 TF-12935 Closed 13-Aug-2012 22-Aug-2012 23-Aug-2012 17-Nov-2015 15-Dec-2017 Cumulative Disbursements 11/19/2018 Page 6 of 7 The World Bank Implementation Status & Results Report MW: Mining Governance and Growth Support Project (P120825) Restructuring History Level Approved on 04-May-2012 ,Level 2 Approved on 11-May-2016 ,Level 2 Approved on 03-May-2017 ,Level 2 Approved on 17-Aug-2017 ,Level 2 Approved on 10-Oct-2017 ,Level 2 Approved on 29-Mar-2018 Related Project(s) There are no related projects. 11/19/2018 Page 7 of 7