The World Bank Implementation Status & Results Report Integrated Growth Poles and Corridor Project 2 (P113971) Integrated Growth Poles and Corridor Project 2 (P113971) AFRICA | Madagascar | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2015 | Seq No: 9 | ARCHIVED on 30-Jun-2019 | ISR37801 | Implementing Agencies: Ministry of Finance and Budget (MFB), National Project Secretariat Key Dates Key Project Dates Bank Approval Date: 18-Dec-2014 Effectiveness Date: 09-Mar-2015 Planned Mid Term Review Date: 14-Apr-2017 Actual Mid-Term Review Date: 20-Mar-2017 Original Closing Date: 30-Sep-2019 Revised Closing Date: 30-Sep-2019 pdoTable Project Development Objectives 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 Components Table Name COMPONENT 1: STRENGTHENING THE ENABLING ENVIRONMENT FOR ENTREPRENEURSHIP AND INVESTMENT:(Cost $6.00 M) COMPONENT 2:SECTOR BASED GROWTH IN THE ATSIMO-ANDREFANA, ANOSY AND DIANA REGIONS:(Cost $36.80 M) COMPONENT 3:PROJECT IMPLEMENTATION, M&E, SAFEGUARDS, IMPACT EVALUATION:(Cost $4.85 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions Component 1: Strengthening the Enabling Environment for Entrepreneurship and Investment  Investment climate: Despite the progress of commercial justice reforms and targeted sectoral reforms linked to agribusiness sector the overall progress of the investment climate agenda is still of concern. The new government's vision and the priority given to a business climate conducive to investment, has not yet reflected on a clear and enforceable reforms agenda, validated at the higher levels of 6/30/2019 Page 1 of 7 The World Bank Implementation Status & Results Report Integrated Growth Poles and Corridor Project 2 (P113971) government (i.e Council of Ministers). While technically reinforced in the past six months by a strong Director General and a technically solid team, the Economic Development Board of Madagascar (EDBM), which is the agency that has been in the past charged with leading the reforms agenda, is seeking clarity regarding its mandate. It is recommended that a mechanism is put in place that will ensure full support at the higher instances of government for a robust Investment Climate Reforms Agenda.  Entrepreneurship Promotion: Implementation of the "youth" window of the Madagascar Business Investment Facility (MBIF or MIARY) is progressing satisfactorily with 119 business plans approved and signed for total funding amounting to US$ 1.05 million with a disbursement rate of 92%. The mission notes that 77% of beneficiary companies generated a turnover (total turnover of US$0.96 million), with 44% of women's participation. The mission also noted that 15% of the beneficiary companies have also benefited from complementary financing from commercial banks and microfinance institutions following the granting of the MBIF conventions. An audit of the implementation MBIF by the independent Fund manager is underway. Component 2: Sector Based Growth in the Atsimo-Andrefana, Anosy and Diana Regions  Agribusiness: The results achieved by the PIC2.1 project in terms of strengthening the environment conducive to the development of sectors and strengthening coordination in the sectors are satisfactory. They are reflected in increases in supported producers' incomes of 14 045 Million Ariary (as of December 2018) as well as production and export volumes increase for priority value chains: 19% increase of cocoa export last year, almost 90% increase in pink pepper production in Anosy region and a tripling of aquaculture (sea cucumber and seaweed) export values from Atsimo Andrefana. Despite the structured support of the project to the cotton value chain, recurrent drought in the Atsimo Andrefana region and lack of appropriate seeds are limiting performance improvements: export volume and values decreased by 40% in the last two years. PIC will continue to support FOFIFA to finalize the seed production plan that will help stakeholders identify locally-adapted cotton seeds by project’s end in September. The Government counterparts have agreed that under PIC2.2 the activities will focus on diversification value chains, and no longer support the development of the cotton value chain.  Tourism: Activities are progressing satisfactorily, reflecting the positive number of jobs and businesses created in the sector Tourism and the increase in the number of air passengers at the PIC poles. The project has facilitated the development of a private tourism roadmap validated by private tourism stakeholders and operators. In terms of hotel investments, a call for expression of interest in the hotel project development support program has been launched, 49 projects have been shortlisted, and 18 private projects will be presented at the Ministry of Transport, Tourism, and Meteorology (MTTA) Investment Forum in September 2019. As part of an agreement with the MTTA, Civil Aviation of Madagascar (ACM) and Madagascar Airport (ADEMA), the PIC project financed safety equipment, final delivery of equipment is scheduled for July 2019, linked to safety compliance and certification of Tulear and Fort Dauphin airports. Full compliance of additional financing commitments from ADEMA and MTTA is still not ensured.  Improvement of services and shared infrastructures: Overall, the rehabilitation of urban roads and water supply is progressing well, and all civil works activities have been delivered. Overall, the rehabilitation of urban roads and water supply has been carried out satisfactorily. For access to water, the remaining work concerns the construction of the 900m3 reservoir for the city of Tulear which was received in January 2019. The complementary works on the rehabilitation in Diego was provisionally received in April 2019.  Governance activities have made satisfactory progress. An overall improvement in the average Local Governance Index score is observed (from 2.96 in 2015 to 5.35 at the end of 2018). Compared to 2015, revenues in the 7 urban municipalities increased by 88 per cent and those in rural municipalities by 234 per cent. Three pilot inter-communal grants are currently underway. They are linked to tourism (rural road from Ampasindava to Diana), agribusiness sectors (rip118 rural road in Anosy) and (Anakao rural road in Atsimo Andrefana), and benefit 160,000 inhabitants Component 3: Project Implementation, M&E, Safeguards, Impact Evaluation Overall, the project's performance (PIC 2.1) is currently rated as satisfactory, with an effective disbursement rate of 95% at June 15th, 2019, and a commitment rate of 98% of the total budget.  Safeguards: the overall performance of the implementation of the environmental and social management of the project remains satisfactory. All of the work requiring special monitoring in the pic 2.1 projects were carried out in accordance with the provisions of the developed safeguard documents (ESPM/RAP) and that no major problems with negative social impacts were raised.  Financial Management: Performance is satisfactory and in accordance with established arrangements. However, given the approach of the project closing date the project is recommended to comply with the plan established to ensure a regular closure of ICP 2.1 and to submit by June 25th a plan to follow up on external auditors recommendation.  Procurement: All the main recommendations of the last mission have been implemented and the performance of this component remains satisfactory.  Grievance Redress Mechanism (GRM): The project's Grievance Redressal mechanism is operational with small complaints reported, of which most have been resolved primarily at the community level through use of traditional dispute resolution mechanisms. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating 6/30/2019 Page 2 of 7 The World Bank Implementation Status & Results Report Integrated Growth Poles and Corridor Project 2 (P113971) 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 -- Moderate Moderate Fiduciary -- Moderate Moderate Environment and Social -- Moderate Moderate Stakeholders -- Low Low Other -- -- -- Overall -- Moderate Moderate Results PDO Indicators by Objectives / Outcomes Contribute to increased economic opportunities and access to enabling infrastructure services IN00721289 ►Number of formal jobs created in the targeted poles (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 4,346.00 30,851.00 31,987.00 39,346.00 Date 31-Dec-2014 30-Nov-2018 31-May-2019 31-Dec-2019 IN00721290 Of which in tourism (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 690.00 4,043.00 4,369.00 4,985.00 Date 31-Dec-2014 30-Nov-2018 31-May-2019 31-Dec-2019 IN00721326 Of which in agribusiness (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 1,089.00 7,715.00 7,739.00 7,589.00 Date 31-Dec-2014 30-Nov-2018 31-May-2019 31-Dec-2019 IN00721327 ►Number of formal businesses newly registered in the targeted poles (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 3,259.00 18,018.00 20,986.00 21,000.00 Date 31-Dec-2014 30-Nov-2018 31-May-2019 30-Sep-2019 IN00721328 6/30/2019 Page 3 of 7 The World Bank Implementation Status & Results Report Integrated Growth Poles and Corridor Project 2 (P113971) Of which in tourism (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 620.00 3,102.00 3,031.00 4,020.00 Date 31-Dec-2014 30-Nov-2018 31-May-2019 31-Dec-2019 IN00721329 of which in agribusiness (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 420.00 1,068.00 1,066.00 1,460.00 Date 31-Dec-2014 30-Nov-2018 31-May-2019 31-Dec-2019 Overall Comments PDO PDO indicator data as of June 2019 represent achievements of first trimester of 2019. Slow trend in creation of formal jobs in first trimester of 2019 reflects slowdown of first few months following political transition. Jobs trend remains positive and should allow for final targets of PDO indicator “number of formal jobs created” to be achieved by end 2019. Intermediate Results Indicators by Components COMPONENT 1: STRENGTHENING THE ENABLING ENVIRONMENT FOR ENTREPRENEURSHIP AND INVESTMENT IN00721330 ►Number of recommended reforms or policies adopted (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 17.00 17.00 18.00 Date 31-Dec-2014 30-Nov-2018 31-May-2019 30-Sep-2019 COMPONENT 2:SECTOR BASED GROWTH IN THE ATSIMO-ANDREFANA, ANOSY AND DIANA REGIONS IN00721331 ►Increase in annual municipal revenues collected in the target poles (MGA billion) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 5.91 8.36 7.30 Date 31-Dec-2014 31-Oct-2018 31-May-2019 31-Dec-2019 IN00721332 Of which urban municipalities (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 4.10 5.48 4.88 6/30/2019 Page 4 of 7 The World Bank Implementation Status & Results Report Integrated Growth Poles and Corridor Project 2 (P113971) Date 31-Dec-2014 31-Oct-2018 31-May-2019 31-Dec-2019 IN00721333 Of which rural municipalities (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1.81 2.88 2.42 Date 31-Dec-2015 31-Oct-2018 31-May-2019 31-Dec-2019 IN00721334 ►Percentage of municipal budgets executed for investment by targeted municipalities (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 15.00 15.00 15.00 Date 31-Dec-2014 31-Oct-2018 31-Dec-2018 31-Dec-2019 IN00721335 ►Roads Rehabilitated (Kilometers, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 9.85 13.45 12.00 Date 31-Dec-2014 30-Nov-2018 31-May-2019 30-Sep-2019 IN00721336 ►Number of people provided with access to solid waste collection: (Number (Thousand), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 193.60 193.60 162.00 Date 31-Dec-2014 31-Oct-2018 31-May-2019 30-Sep-2019 IN00721337 ►Number of people provided with access to improved water sources (Number (Thousand), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 306.40 306.40 250.00 Date 31-Dec-2014 31-Dec-2018 31-May-2019 30-Sep-2019 IN00721338 ►Passengers traffic by air per annum (Number (Thousand), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1,144.00 1,170.00 193.00 1,576.00 Date 31-Dec-2014 31-Oct-2018 31-Mar-2019 31-Dec-2019 IN00721340 ►Hotel rooms for establishments in the target poles (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 4,694.00 5,566.00 5,566.00 5,150.00 6/30/2019 Page 5 of 7 The World Bank Implementation Status & Results Report Integrated Growth Poles and Corridor Project 2 (P113971) Date 31-Dec-2013 30-Nov-2018 31-May-2019 31-Dec-2018 IN00721339 ►Increase in export value for the selected crops in the targeted poles (In US$ Million) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -4.10 0.20 4.40 Date 31-Dec-2013 30-Sep-2018 31-Dec-2018 31-Dec-2019 Measured increase in annual exports of supported crops in US$ million Comments: IN00721341 ►Increase in revenues from target cash crop production for smallholders in the target corridors in the target poles (MGA billion) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 12.55 16.67 16.00 Date 31-Dec-2013 30-Nov-2018 31-Dec-2018 31-Dec-2019 Overall Comments IR Intermediate indicator data as of June 2019 represent achievements of first trimester of 2019. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P113971 IDA-55640 Effective USD 50.00 50.00 0.00 44.82 2.12 95% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P113971 IDA-55640 Effective 18-Dec-2014 18-Dec-2014 09-Mar-2015 30-Sep-2019 30-Sep-2019 Cumulative Disbursements 6/30/2019 Page 6 of 7 The World Bank Implementation Status & Results Report Integrated Growth Poles and Corridor Project 2 (P113971) Restructuring History Level 2 Approved on 17-May-2018 Related Project(s) There are no related projects. 6/30/2019 Page 7 of 7