The World Bank Ghana Commercial Agriculture (P114264) REPORT NO.: RES36009 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF GHANA COMMERCIAL AGRICULTURE APPROVED ON MARCH 22, 2012 TO MINISTRY OF FINANCE AGRICULTURE AFRICA Regional Vice President: Hafez M. H. Ghanem Country Director: Pierre Frank Laporte Regional Director: Simeon Kacou Ehui Practice Manager/Manager: Marianne Grosclaude Task Team Leader: Sheu Salau, Hardwick Tchale The World Bank Ghana Commercial Agriculture (P114264) I. BASIC DATA Product Information Project ID Financing Instrument P114264 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 22-Mar-2012 31-Dec-2020 Organizations Borrower Responsible Agency Ghana Irrigation Development Authority,Lands MINISTRY OF FINANCE Commission,Irrigation Company of the Upper Region,Ministry of Food and Agriculture Project Development Objective (PDO) Original PDO The project development objective (PDO) is: increased access to land, private sector finance, input- and output- marketsbysmallholder farms from private-public partnerships in commercial agriculture in Accra Plains and SADA zone. Current PDO The objective of the Project is to improve agricultural productivity and production of both smallholder and nucleus farms in selected project intervention areas of the Recipient s territory. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-62540 31-May-2018 10-Oct-2018 31-Dec-2020 50.00 0 47.96 IDA-50770 22-Mar-2012 25-Sep-2012 08-Apr-2013 31-Dec-2020 100.00 77.95 14.34 TF-A9432 05-Dec-2018 11-Jan-2019 11-Jan-2019 31-Jan-2019 10.97 10.97 0 TF-14170 13-Mar-2013 13-Mar-2013 08-Apr-2013 31-Jan-2019 5.98 5.98 0 The World Bank Ghana Commercial Agriculture (P114264) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES 1. Project Status. The project performance is rated Moderately Satisfactory for progress towards the achievement of the Project Development Objectives (PDO) and Satisfactory for overall Implementation Progress (IP). The project is making good progress towards the achievement of PDO targets. The project has exceeded targets for rice yields both under the rainfed areas (SADA one) and irrigated areas (Accra Plains) while the target for maize yields is 76 percent achieved. In addition, targets for gross margin of rice and maize have been surpassed. Cumulative disbursement of the original credit is 55.58 percent as of June 25, 2019. Progress was also recorded in facilitating horizontal and vertical coordination for 4,419 hectares cultivated by out-growers from a total 5,222 hectares under cultivation in the SADA zone. The total number of project beneficiaries to-date stands at 9,234 (representing about 66 percent of the target of 14,000 beneficiaries) of which 3,648 are women (39.5 percent of beneficiaries). With respect to safeguard performance, the project is rated Moderately Satisfactory (MS) because of improved safeguard performance. The mission conducted in April 24-25, 2019 observed that the contractor at Tono had addressed most of the issues identified during the February 2019 mission. Also, the mission noted major improvements in the level of compliance and capacity of the supervising consultant and contractor to Environment & Social safeguard policies issues. Following the April 2019 mission, all safeguards instruments required for the rehabilitation works at Tono and KIS were cleared by the Bank and disclosed by the client, both in country and at infoshop. In addition to the disclosure of safeguard instruments, the replanting of the Nasia and Nabogo tree off set, that has been pending, has now taken off and is expected to be completed on or before July 30, 2019. The project was financed by an IDA credit and a USAID Trust Fund (TF14170). This TF (referred to as Original TF014170) co-finances component 1,3 and 4 of the project covering rehabilitation of irrigation infrastructure, and facilitation of access to land and vertical coordination with private sector agribusiness in Accra Plains and SADA zone.The Trust Fund TF014170 has been restructured three times. The first and the second restructuring were done to amend the TF Administration Agreement (AA) following some changes to the co-financing percentage when the IDA project was restructured in November 20, 2015 and February 16, 2018, respectively. The third restructuring of the TF014170 was processed to retroactively extend its closing date from May 31, 2018 to January 31, 2019 and to change the disbursement percentages in order to access the US$ 2.05 million from the trustee account. At the same time, a new contribution in the amount of $12 million received from the donor was processed as Trust Fund Additional Financing with TF No. TFA9432. In addition to the original IDA credit, an Additional Financing to the Ghana Commercial Agriculture Project (Cr. No. 62540) was approved in May 2018 and the Financing Agreement for the AF was signed on October 10, 2018 and was declared effective on December 4, 2018. In all, the project is financed from four sources namely: (i) IDA original credit with Cr. No 50770; (ii) IDA Additional Financing with Cr. No 62540; (iii) Original Trust Fund (TF014170); and (iv) an Additional Trust Fund (TF A9432). 2. Rationale and Proposed Changes: The restructuring of the Trust Fund (TF014170) Grant Agreement and the new Trust Fund (TFA9432) was processed without changing the corresponding financing percentage for the IDA original credit (50770) and Additional Financing (AF- 62540) which were co-financing same activities at the time of restructuring on December 5, 2018 The restructuring of the Financing Agreement is therefore deemed necessary to The World Bank Ghana Commercial Agriculture (P114264) correct this discrepancy and align financing percentages across legal documents. In this context, the proposed changes include the following: a. For IDA Original Credit 50770; (i) a new category 17 will be created and funds in the amount of SDR 7.19 million will be reallocated from Category 15, while SDR 11.99 will be deducted from category 17 to cover the difference between actual disbursement and the figure captured in the Financing Agreement for category 6; (ii) revise the description of categories 11,13, 14, 15 and 16 to reflect the changes to parts description of the project; (iii) for categories 11, 13, 14, 15 and 16, change the financing percentage from 100 percent to become “such percentage as the Association may determine until TF014170 and TF0A9432 are fully exhausted, thereafter 100percent”; and (iv) “To change the retroactive clause of the Financing Agreement, under schedule 2, section IV, part B 1 (a) to reflect the following: “Notwithstanding the provisions of Section IV.A above no withdrawal shall be made for (a) "payments made prior to the date Original Financing Agreement except that withdrawals up to an aggregate amount not to exceed SDR 5 million may be made for payments made prior to this date but on or after September 1, 2015, for Eligible Expenditures under Categories (9B), (10B), (11) an d (12), provided that no Severance Payments under Category (11) shall be Eligible Expenditure for retroactive financing under this subparagraph unless the requirements under Section I.G.5 of Schedule 2 to this Agreement have been complied with”. b. For IDA AF 62540: for category (1), revise the financing percentage from 100 percent to become “zero percent until category (17) under the original credit (IDA 5077) is fully exhausted, thereafter 100 percent”. II. DETAILED CHANGES REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Current Current Actuals + Proposed Disbursement % Ln/Cr/TF Expenditure Allocation Committed Allocation (Type Total) Category Current Proposed IDA-50770- Wks Prt C 001 2b,Gds,NCS,CS, 3,484,594.15 3,484,594.15 3,484,594.15 35.00 35.00 Currency: Oc Prt A XDR The World Bank Ghana Commercial Agriculture (P114264) Wks Pts E.3 0.00 0.00 0.00 25.00 25.00 Gds,NonCS,CS Pt 160,560.66 160,560.66 160,560.66 25.00 25.00 E.3 Severance Payments PT C.2 3,300,000.00 2,422,638.26 3,300,000.00 100.00 100.00 (a) and C.2(b) Gds,Wks,NonCS, CS,Trg Pt F.3,4 139,145.87 139,145.87 139,145.87 100.00 100.00 G1&2 Gds,NCS,CS, Trg, 533,907.08 533,907.08 533,907.08 100.00 100.00 OC Prt B.1 to B.3 Viable Fund for Gds,Wks, Ser Prt 0.00 0.00 0.00 0.10 0.10 B4 Wks, Gds, 296,688.34 296,688.34 296,688.34 1.00 1.00 NCS,CS Prt C3 Mtch Grts Prt A3(d) C1(b) C 2 4,172,512.30 4,172,512.30 4,172,512.30 50.00 50.00 (a) Agri Bus Serv 376.76 376.76 380.00 50.00 50.00 Grts Part C 4 Gds, CS, Trg and 8,381,982.60 8,381,982.60 8,381,982.60 67.00 67.00 OC Part D Refund of Preparation 691,348.00 691,347.82 691,348.00 Advance Wks Pt E.1,E2 0.00 0.00 0.00 100.00 100.00 and E4 Gds,NonCS,CS Pt 1,805,581.07 1,805,581.07 1,805,581.07 100.00 100.00 E.1,E2 and E4 WK,GD,NCS,CS, OC-PT A,B ( 7,420,627.53 0.00 7,420,627.53 100.00 100.00 except PT B.3(b) and D) Matching Grants-PT A3d,B2a, B2b& 195,771.69 0.00 195,771.69 100.00 100.00 Agribusiness PT B.2(d) The World Bank Ghana Commercial Agriculture (P114264) WK,GD,NCS,CS- PT B3b &C 29,783,505.57 0.00 22,593,514.32 100.00 100.00 (except PT C.1(a) & C.1(c)) Seed Grants 4,133,398.38 0.00 4,133,398.38 100.00 100.00 under Part B3(a) GD,WK, OC, NCS,CS-PT C.1a 0.00 0.00 7,189,988.01 100 & C.1c Total 64,500,000.00 22,089,334.91 64,500,000.00