Public Disclosure Copy The World Bank Implementation Status & Results Report AFCC2/RI-Central African Backbone SOP5 (P132821) AFCC2/RI-Central African Backbone SOP5 (P132821) AFRICA | Africa | Transport & Digital Development Global Practice | IBRD/IDA | Investment Project Financing | FY 2015 | Seq No: 7 | ARCHIVED on 13-May-2018 | ISR32319 | Implementing Agencies: Democratic Republic of Congo, SOCOF - Société Congolaise de Fibre Optique Key Dates Key Project Dates Bank Approval Date:16-Jul-2014 Effectiveness Date:22-Jan-2015 Planned Mid Term Review Date:18-Jan-2018 Actual Mid-Term Review Date:19-Mar-2018 Original Closing Date:31-Dec-2019 Revised Closing Date:31-Dec-2019 Project Development Objectives Project Development Objective (from Project Appraisal Document) The development objective of the proposed project is to contribute to increase the geographical reach and usage of regional broadband infrastructure and to reduce the price of services so that more people in the DRC can access information and communication technology (ICT) services. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Component A - Emergence of an Inclusive Digital Economy:(Cost $13.20 M) Component B - Construction, Management and Commercialization of the CAB5 Infrastructure through a PPP Scheme:(Cost $71.60 M) Component C - Enabling Environment and Regulatory Effectiveness:(Cost $7.30 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Moderately Satisfactory  Moderately Unsatisfactory Overall Implementation Progress (IP)  Moderately Satisfactory  Moderately Unsatisfactory Overall Risk Rating  Substantial  Substantial 5/13/2018 Page 1 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report AFCC2/RI-Central African Backbone SOP5 (P132821) Implementation Status and Key Decisions This ISR is related to the midterm review mission conducted between March 18 and March 19, 2018. No progress in project execution has been noted since the latest ISR. After 38 months of implementation (effectiveness = January 2015) the project has met only one of the three disbursement conditions : the signature of the cooperation agreement between SOCOF and the Government. The performance of the project is currently moderately unsatisfactory due to a low disbursement rate of 13% at midterm versus an engagement rate of 30%. The reasons being: • Only 1 out of of the 4 disbursement conditions linked to project components was met • Component B (Construction, Management and Commercialization of the CAB5 Infrastructure through a PPP Scheme), constituting 78% of project cost, is conditioned to the adoption a legal and regulatory framework that promotes competition and is acceptable to the Bank. • A new law, in this regard, was drafted by the Government and adopted by the National Assembly at the September 2017 session. However, to be in effect, the law remains to be adopted article by article in a plenary session by the Assembly. A new parliamentary session is starting in March, however, given the upcoming elections and the political instability in DRC, it is unlikely that the new law would be adopted in the next three months. A contract with Taihan Fiberoptics has, however, been signed on September 1rst, 2017 to undertake the construction of the west cluster (Muanda- Kinshasa) of the works under category 3, which explains the difference between the disbursement rate of 13% and the engagement rate of 30%. The delay in the start of the works under this cluster by more than three months entails a possible readjustment of the contract value to consider inflation and additional costs incurred by the company while waiting for the start of execution (as stipulated in the contract with Taihan Fiberoptics -CONTRACT N ° 001 T / CAB5 / SOCOF / DG / 01 / 09/2017). Although the Government has presented the Bank with an acceptable draft Law, the Bank considers that a draft law cannot be considered as meeting the disbursement condition of a new legal and regulatory framework to be adopted by the beneficiary, and does not offer the legal guarantee that this draft will be adopted and effective. The implementation of a legal framework that spurs competition, transparency and private sector investment remains crucial to the achievement of CAB5 project development objectives. There are nonetheless, some positive improvements in the enabling environment, such as the provision of a license to SOCOF and liquid telecom (published in Official Gazette on February 15, 2018) other operators, that highlight the willingness of the government to open the market for competition. Considering the slow implementation status, the importance of a Kinshasa-Muanda fiber optic network as well as of a conducive legal and regulatory environment, the team proposes a level two restructuring of the project as describe below. 1 . Splitting the expenditure of category 3, into category 3a (construction of the western cluster Kinshasa-Muanda Region) and category 3b (construction of the Eastern and Southern clusters in Lubumbashi and Goma Regions); 2 . Readjusting the disbursement condition linked to categories 3a and 3b and amendment of the legal agreement, 3 . extension of the closing date by 18 months, 4 . rebalancing of costs and reallocation of the remaining PPA funds, 5 . and improvement in the M&E framework The Government has already sent a request for restructuring dated March 29, 2018. Next steps consists of finalizing the restructuring package and amending the financial agreement accordingly. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Substantial  Substantial Macroeconomic  --  Substantial  Substantial Sector Strategies and Policies  --  High  High Technical Design of Project or Program  --  Substantial  Substantial Institutional Capacity for Implementation and Sustainability  --  High  High 5/13/2018 Page 2 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report AFCC2/RI-Central African Backbone SOP5 (P132821) Fiduciary  --  High  High Environment and Social  --  Substantial  Substantial Stakeholders  --  Substantial  Substantial Other  --  Substantial  Substantial Overall  --  Substantial  Substantial Results Project Development Objective Indicators PHINDPDOTBL  Impact on Telecom sector of World Bank Technical Assistance (composite score: 1- low impact to 5-high impact) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 2.00 2.00 4.00 Date 24-Feb-2014 31-Oct-2017 25-Apr-2018 14-Mar-2019 PHINDPDOTBL  Access to Internet Services (number of subscribers per 100 people) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.00 8.50 16.00 20.00 Date 24-Feb-2014 31-Oct-2017 25-Apr-2018 14-Mar-2019 PHINDPDOTBL  Retail Price of Internet Services (per Mbit/s per Month, in US$) (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2,000.00 2,000.00 15.00 200.00 Date 24-Feb-2014 01-Jun-2016 25-Apr-2018 14-Mar-2019 PHINDPDOTBL  Geographical reach of mobile services (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target 5/13/2018 Page 3 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report AFCC2/RI-Central African Backbone SOP5 (P132821) Value 25.00 49.10 49.10 50.00 Date 24-Feb-2014 31-Oct-2017 25-Apr-2018 14-Mar-2019 PHINDPDOTBL  Direct project beneficiaries (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 5,000,000.00 Date 24-Feb-2014 31-Oct-2017 25-Apr-2018 14-Mar-2019 PHINDPDOTBL  Female beneficiaries (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 2,500,000.00 Overall Comments Regarding the results framework, indicators shows very limited progress toward the PDO achievement. This is primarily because the main component of the project, i.e. the construction of the backbone network has not started yet. The mid-term review mission shed the light on potential improvements to the results indicators and intermediate results. Changes will thus be included in the restructuring to align indicators and targets with market trends, country circumstances, and new practices since the conception of the project in 2014. Intermediate Results Indicators PHINDIRITBL  Length of Fiber Optic Network Built (km) (Kilometers, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 600.00 600.00 0.00 3,400.00 Date 24-Feb-2014 01-Jun-2016 25-Apr-2018 14-Mar-2019 5/13/2018 Page 4 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report AFCC2/RI-Central African Backbone SOP5 (P132821) PHINDIRITBL  Private Capital Mobilized (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 20,000,000.00 Date 24-Feb-2014 01-Jun-2016 25-Apr-2018 14-Mar-2019 PHINDIRITBL  Number of Manpower Trained under the Project (number of people) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 141.00 100.00 Date 24-Feb-2014 01-Jun-2016 25-Apr-2018 14-Mar-2019 PHINDIRITBL  Impact on IT/ITES Sector of World Bank Technical Assistance (composite score: 1 # low impact to 5 # high impact) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 3.00 4.00 Date 24-Feb-2014 01-Jun-2016 25-Apr-2018 14-Mar-2019 PHINDIRITBL  Number of MoUs reached between DRC and neighboring countries to implement of a regional interconnection Regime (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 5.00 Date 24-Feb-2014 01-Jun-2016 25-Apr-2018 14-Mar-2019 Overall Comments 5/13/2018 Page 5 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report AFCC2/RI-Central African Backbone SOP5 (P132821) Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P132821 IDA-H9810 Effective USD 92.10 92.10 0.00 11.53 74.84 13% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P132821 IDA-H9810 Effective 16-Jul-2014 25-Jul-2014 22-Jan-2015 31-Dec-2019 31-Dec-2019 Cumulative Disbursements Restructuring History There has been no restructuring to date. Related Project(s) 5/13/2018 Page 6 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report AFCC2/RI-Central African Backbone SOP5 (P132821) There are no related projects. 5/13/2018 Page 7 of 7 Public Disclosure Copy