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: 8 | ARCHIVED on 30-Dec-2018 | ISR35381 | 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 Promotion of hotel investments and Investment Climate: TA to EDBM in investment promotion linked to Hotels has resulted in visible results. Four projects with international hotel brands are currently being negotiated between local investors and international operators. According 12/30/2018 Page 1 of 7 The World Bank Implementation Status & Results Report Integrated Growth Poles and Corridor Project 2 (P113971) to conservative estimates, the planned investments are in the order of US $ 15 million per project. There has been limited significant progress in the investment climate agenda. The DB 2019 report published in November 2018 Madagascar ranks slightly better at 161 on the ease of doing business, compared to 162 in last year’s report. On the absolute metric, Madagascar’s ease of doing business score improved from 47.67 in Doing Business 2018 to 48.89 in Doing Business 2019 DB 2019 recognized this year as an important reform that made enforcing contracts easier the introduction of an automated system that randomly assigns cases to judges and allows the latter to manage cases electronically. Improvements were also made in dealing with construction permit, getting credit and enforcing contracts. Madagascar Business and Investment Facility (MBIF) and Entrepreneurship: The PIC has established strong youth entrepreneurship networks in the 3 poles with 120 sub-projects approved for financing, of which 83% start- ups and 41% women lead project, for a total amount of $ 1.18 million. Despite progress in disbursements (61% on average), there are delays due to the cash flow problems faced by the PIU, which directly affect the implementation of the projects (difficulties in honoring the payment of suppliers and financing the training of entrepreneurs), impacting the achievement of business creation and employment objectives. PPP: Despite a slow start, and challenges in coordination between the MFB PPP center and the PPP Unit located within the Ministry of Public Work, the PPP activities have progressed. TA activities, support by a PPIAF Grant, have resulted in the production of a comprehensive pipeline of potential PPP projects and the drafting of the last two remaining decrees related to the PPP law – Decree on competitive dialogue and the Decree 2 on “small” PPPs. The TA has also produced an innovative FCCL calculation tool, which has been missing as a practical complement to PFRAM, and which is expected to improve the ability of the Ministry of Finance and Budget (MFB) to anticipate and effectively measure the fiscal commitment and contingent liabilities impact of prospective PPP projects on the State finance. Component 2: Sector Based Growth in the Atsimo-Andrefana, Anosy and Diana Regions Agribusiness: Recommendations for the end of PIC 2.1 are to consolidate the achieved results in terms of organization of the sectors and professional structuring of the supported value chains to ensure continued improved productivity and product quality. Studies for further diversification of the value chains to be supported as part of PIC2-2 (i.e. vanilla, honey, lychee, cashew) and the best mechanisms to do so have been completed and have informed PIC2.2 design. The cotton sector has continued to face significant difficulties, particularly because of two successive years of drought. The production of the 2017/18 season did not exceed 2,691 tons of cotton with 3,109 producers, greatly impacting project export indicators. The Aquaculture partnerships with private sector operators has after one year expanded the value chain to 706 new farmers and generated additional exports of 123 tons of dried sea cucumbers (trepang) and 210 tons of algae. The average revenue generated per aquaculture farmer was estimated at 1.924 million annual MGA for sea cucumber farming and MGA 275,000 for seaweed farming. The support of PIC2.1 has enabled the volume of the production of pink pepper in the Anosy region to double, which now represents 70% of the total national production.Improvement of services and shared infrastructures: Overall, the rehabilitation of urban roads and water supply is progressing well, and most civil works activities have been delivered. The ongoing construction of the 900m3 reservoir for the city of Tulear is expected to be fully delivered by February 2019. The complementary urban roads rehabilitation in Diego is expected to be finalized by January 2019. All civil works related indicators will be reached or surpassed by the project end. Component 3: Project Implementation, M&E, Safeguards, Impact Evaluation Generally, the project’s performance is satisfactory, with actual disbursement of 85% to the end of November 2018, and a commitment rate of 95% of the total Loan. Financial Management: Timeliness of replenishment of project accounts remains a serious concern for PIC2. Despite Withdrawal Applications (WA) having been submitted in a timely manner by the PIU and processed by the Bank, the project continues to encounter significant delays in the mobilization of funds available at the level of the Ministry of Finance and Budget (MFB) exposing the project to cash flow problems and significant delays in payment of suppliers. Procurement: Most of the main recommendations of the last mission are being implemented, including the updating of the Project manual for migration to the Bank's Procurement Regulations. The latest mission highlighted however that the PIU procurement team is not yet fully involved in taking delivery of contracts/works, as previously recommended. Safeguards: The overall implementation of the project's environmental and social Safeguards remains satisfactory. The implementation of the project activities is in line with the principles and measures described in the approved safeguard documents (ESMP and RAP) and no major incident has been identified. The review of the environmental and social monitoring report of the subprojects financed by the OCAI and MBFI funds shows a good appropriation of the measures and the Hygiene Safety and Environment (HSE) guide by the grant recipients. Given the specific needs of PIC 2.1 and PIC2.2 in terms of safeguards, an additional Safeguards specialist will be hired to support both the environmental and social project 12/30/2018 Page 2 of 7 The World Bank Implementation Status & Results Report Integrated Growth Poles and Corridor Project 2 (P113971) portfolio but will act as the focal point for all social safeguards aspects of the operations. The TORs for the recruitment has been cleared and recruiting is in progress. Grievance Redress Mechanism (GRM): The project should ensure that sufficient information and awareness is available to project stakeholders and beneficiaries regarding the existence and operationalization of the project's grievance management mechanism. The project has been reminded that bi-annual reports must be prepared, and a consolidated report was submitted for review in November 2018. It was agreed that moving forward the project will integrate and submit the consolidated report of the complaints and grievances as part of the quarterly FMR. Monitoring Evaluation: The results framework following the project restructuring appeared clear and more appropriate for monitoring project performance. A review of the PDO shows that the objectives of overall performance were achieved and often exceeded. As for intermediate indicators, although the strong dynamism in the main supported agribusiness value chains allowed the project to exceed the performance indicator relating to the increase of producers' incomes, this has not been fully reflected in terms of volume of exports which registers a negative cumulative increase of exports of US$4.1 million. This is attributed to the fact that data at the level of customs in Atsimo Andrefana, in particular as it relates to the cotton, aquaculture and black-eyed peas are not available beyond July 2018. Additionally, despite recent recovery, the international cocoa prices remain lower than the reference point chosen at the start of the project. 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 -- Moderate Moderate Fiduciary -- Moderate Moderate Environment and Social -- Substantial 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 IN00602849 ►Number of formal jobs created in the targeted poles (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target 12/30/2018 Page 3 of 7 The World Bank Implementation Status & Results Report Integrated Growth Poles and Corridor Project 2 (P113971) Value 4,346.00 -- 30,851.00 39,346.00 Date 31-Dec-2014 -- 30-Nov-2018 30-Sep-2019 IN00603031 Of which in tourism (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 690.00 4,062.00 4,043.00 4,985.00 Date 31-Dec-2014 31-Mar-2018 30-Nov-2018 30-Sep-2019 IN00603032 Of which in agribusiness (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 1,089.00 6,964.00 7,715.00 7,589.00 Date 31-Dec-2014 31-Mar-2018 30-Nov-2018 30-Sep-2019 IN00603021 ►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 21,000.00 Date 31-Dec-2014 -- 30-Nov-2018 30-Sep-2019 IN00603033 Of which in tourism (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 620.00 2,591.00 3,102.00 4,020.00 Date 31-Dec-2014 30-May-2018 30-Nov-2018 30-Sep-2019 IN00603034 of which in agribusiness (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 420.00 986.00 1,068.00 1,460.00 Date 31-Dec-2014 30-May-2018 30-Nov-2018 30-Sep-2019 Intermediate Results Indicators by Components COMPONENT 2:SECTOR BASED GROWTH IN THE ATSIMO-ANDREFANA, ANOSY AND DIANA REGIONS IN00603022 ►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 7.30 Date 31-Dec-2014 -- 31-Oct-2018 31-Dec-2019 12/30/2018 Page 4 of 7 The World Bank Implementation Status & Results Report Integrated Growth Poles and Corridor Project 2 (P113971) IN00603035 Of which urban municipalities (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 3.75 4.10 4.88 Date 31-Dec-2014 31-May-2018 31-Oct-2018 31-Dec-2019 IN00603036 Of which rural municipalities (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1.97 1.81 2.42 Date 31-Dec-2015 31-May-2018 31-Oct-2018 31-Dec-2019 IN00603028 ►Percentage of municipal budgets executed for investment by targeted municipalities (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 8.60 15.00 15.00 Date 31-Dec-2014 31-May-2018 31-Oct-2018 31-Dec-2019 IN00603023 ►Roads Rehabilitated (Kilometers, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 9.85 12.00 Date 31-Dec-2014 -- 30-Nov-2018 30-Sep-2019 IN00603029 ►Number of people provided with access to solid waste collection: (Number (Thousand), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 150.80 193.60 162.00 Date 31-Dec-2014 31-May-2018 31-Oct-2018 30-Sep-2019 IN00603030 ►Number of people provided with access to improved water sources (Number (Thousand), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 306.40 250.00 Date 31-Dec-2014 31-May-2018 31-Dec-2018 30-Sep-2019 IN00603024 ►Passengers traffic by air per annum (Number (Thousand), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1,144.00 -- 1,170.00 1,576.00 Date 31-Dec-2014 -- 31-Oct-2018 31-Dec-2019 IN00603026 12/30/2018 Page 5 of 7 The World Bank Implementation Status & Results Report Integrated Growth Poles and Corridor Project 2 (P113971) ►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 4.40 Date 31-Dec-2013 -- 30-Sep-2018 30-Sep-2019 Measured increase in annual exports of supported crops in US$ million Comments: IN00603025 ►Hotel rooms for establishments in the target poles (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 4,694.00 -- 5,566.00 5,150.00 Date 31-Dec-2013 -- 30-Nov-2018 31-Dec-2018 IN00603027 ►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 16.00 Date 31-Dec-2013 -- 30-Nov-2018 30-Sep-2019 COMPONENT 1: STRENGTHENING THE ENABLING ENVIRONMENT FOR ENTREPRENEURSHIP AND INVESTMENT IN00602850 ►Number of recommended reforms or policies adopted (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 17.00 18.00 Date 31-Dec-2014 -- 30-Nov-2018 30-Sep-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 40.00 6.93 85% 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 12/30/2018 Page 6 of 7 The World Bank Implementation Status & Results Report Integrated Growth Poles and Corridor Project 2 (P113971) Cumulative Disbursements Restructuring History Level 2 Approved on 17-May-2018 Related Project(s) There are no related projects. 12/30/2018 Page 7 of 7