The World Bank Implementation Status & Results Report Second Municipal Services Improvement Project (P154464) Second Municipal Services Improvement Project (P154464) EUROPE AND CENTRAL ASIA | North Macedonia | Urban, Resilience and Land Global Practice | IBRD/IDA | Investment Project Financing | FY 2016 | Seq No: 8 | ARCHIVED on 11-Oct-2019 | ISR38766 | Implementing Agencies: Project Management Unit, Ministry of Finance Key Dates Key Project Dates Bank Approval Date: 11-Jan-2016 Effectiveness Date: 14-Jul-2016 Planned Mid Term Review Date: 15-Sep-2019 Actual Mid-Term Review Date: 16-Sep-2019 Original Closing Date: 31-Mar-2021 Revised Closing Date: 31-Mar-2021 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective of MSIP2 Project (PDO) is to improve transparency, financial sustainability and inclusive delivery of targeted municipal services in the participating municipalities. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Municipal Investments Sub-loans:(Cost $20.76 M) Poverty/Social Inclusion Investment Grants:(Cost $5.53 M) Project Management, Monitoring and Evaluation, and Capacity Building:(Cost $1.68 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO ►Moderately Satisfactory ►Moderately Satisfactory Overall Implementation Progress (IP) ►Moderately Satisfactory ►Moderately Satisfactory Overall Risk Rating ►Moderate ►Moderate Implementation Status and Key Decisions 10/11/2019 Page 1 of 7 The World Bank Implementation Status & Results Report Second Municipal Services Improvement Project (P154464) The loan for the Second Municipal Services Improvement Project (MSIP2) in the amount of EUR25 million was approved by the World Bank Board of Executive Directors on January 11, 2016; the loan agreement was signed on January 14, 2016, and the Project was declared effective on July 14, 2016. The Project development objective is to improve transparency, financial sustainability, and inclusive delivery of municipal services across the country. All municipalities are eligible and were encouraged to participate in the MSIP2, including through outreach workshops organized in each of the country’s planning regions in September-October 2016 before 1st Call for Proposals and outreach activities preceding the 2nd Call for Proposals. Project implementation has been significantly affected by the political cycle in the country, including multiple delays in organizing elections in 2016, delays in forming the government after December 2016 elections, and local elections in 2017. In spite of these delays, the Project implementation is ongoing, though slower than expected. The project development objectives remain relevant and the Government is committed to implement the project and achieve the set results. MSIP2 will provide sub-loans to municipalities for infrastructure investments such as water supply, sewerage, solid waste management, local roads, energy efficiency improvements to municipal buildings, and other high priority municipal infrastructure investments with clear impact on welfare of citizens and efficiency of services. The Project also introduces a grant component to enhance service delivery and infrastructure for poorer and marginalized communities within municipalities throughout the country. The identification of these communities will be done on the basis of urban audits launched in the project participating municipalities with support of independent UPP consultant hired by the MSIP Project Implementation Unit. Urban audits are expected to determine the poorest settlements and communities in the municipality’s area and their priority investments which will be financed from the grants. As of end of September 2019, the MOF signed sub-loan agreements with 15 municipalities. 6 of these municipalities have the contracts for civil works already signed, 5 are the stage of procurement procedures, and the remaining 4 are preparing tender documentation. Out of six municipalities with signed civil work contracts, one municipality has all civil works completed and is to execute a final payment to the contractor, two municipalities have up to 80% of the civil works completed, while the remaining three are at different stages of the contracts implementation. The first social inclusion grants are expected to be signed by the end of November 2019 to unlock the implementation of this component. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance ►Moderate ►Moderate ►Moderate Macroeconomic ►Moderate ►Moderate ►Moderate Sector Strategies and Policies ►Low ►Low ►Low Technical Design of Project or Program ►Low ►Low ►Low Institutional Capacity for Implementation and Sustainability ►Moderate ►Moderate ►Moderate Fiduciary ►Moderate ►Moderate ►Moderate Environment and Social ►Low ►Low ►Low Stakeholders ►Low ►Low ►Low Other -- ►Low ►Low Overall ►Moderate ►Moderate ►Moderate Results PDO Indicators by Objectives / Outcomes 10/11/2019 Page 2 of 7 The World Bank Implementation Status & Results Report Second Municipal Services Improvement Project (P154464) Improve transparency of targeted municipal services in the participating municipalities IN00749855 ►Number of participating municipalities (i.e. the municipalities which signed sub-loan agreements) that regularly publish sub-project progress information on their official websites or elsewhere (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 8.00 6.00 20.00 Date 31-Dec-2015 31-Dec-2018 30-Sep-2019 31-Mar-2021 PMU will follow up with the project participating municipalities with signed sub-loan agreements to ensure that all of them Comments: are publishing sub-project progress information on their websites or facebook, or elsewhere Improve financial sustainability of targeted municipal services in the participating municipalities IN00750066 ►Percentage of completed subprojects that generated improved financial performance, including through increased revenue earnings or cost savings (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 90.00 Date 31-Dec-2015 31-Dec-2018 30-Sep-2019 31-Mar-2021 First data to be reported after completion of first sub-loan financed subprojects that is expected in October-November 2019 Comments: Improve inclusive delivery of targeted municipal services in the participating municipalities IN00750067 ►Number of the completed sub-projects that focus on social inclusion (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 17.00 Date 31-Dec-2015 31-Dec-2018 30-Sep-2019 31-Mar-2021 IN00750068 ►Direct project beneficiaries (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 100,000.00 Date 31-Dec-2015 31-Dec-2018 30-Sep-2019 31-Mar-2021 Number of beneficiaries will start to be reported after successful completion of first civil work contracts - expected in Comments: October-November 2019 IN00750069 ►Female beneficiaries (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target 10/11/2019 Page 3 of 7 The World Bank Implementation Status & Results Report Second Municipal Services Improvement Project (P154464) Value 0.00 0.00 0.00 50.00 IN00750070 ►Vulnerable/marginalized people with marginalized measured as the number of unemployed, social assistance receiving or in other ways vulnerable population that benefits from the project intervention (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 10.00 Intermediate Results Indicators by Components Municipal Investments Sub-loans IN00750071 ►Number of sub-loans signed (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 8.00 15.00 20.00 Date 31-Dec-2015 31-Dec-2018 30-Sep-2019 31-Mar-2021 IN00750073 ►Number of jobs generated, measured as the number of employees of contractors and engineering companies that perform works under the sub- projects (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 370.00 1,500.00 Date 31-Dec-2015 31-Dec-2018 30-Sep-2019 31-Mar-2021 Number of employees of contractors and engineering companies under ongoing contracts Comments: IN00750075 ►Number of visits to websites that publish sub-project progress information (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 80,000.00 500,000.00 Date 31-Dec-2015 31-Dec-2018 30-Sep-2019 31-Mar-2021 The value of indicators include number of visits to the websites and municipal facebook Comments: IN00750077 ►Piped household water connections that are benefiting from rehabilitation works undertaken by the project (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 600.00 Date 31-Dec-2015 31-Dec-2018 30-Sep-2019 31-Mar-2021 IN00750079 10/11/2019 Page 4 of 7 The World Bank Implementation Status & Results Report Second Municipal Services Improvement Project (P154464) ►Roads rehabilitated, Rural (Kilometers, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 6.90 30.00 Date 31-Dec-2015 31-Dec-2018 30-Sep-2019 31-Mar-2021 IN00750080 ►Roads rehabilitated, Non-rural (Kilometers, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 20.00 Date 31-Dec-2015 31-Dec-2018 31-Dec-2018 31-Mar-2021 Poverty/Social Inclusion Investment Grants IN00750072 ►Number poverty/social inclusion investment grants signed (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 17.00 Date 31-Dec-2015 31-Dec-2018 30-Sep-2019 31-Mar-2021 IN00750074 ►Number of sub-projects, financed by sub-loans or grants, successfully completed (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 37.00 Date 31-Dec-2015 31-Dec-2018 30-Sep-2019 31-Mar-2021 IN00750076 ►Number of participants in consultation activities during sub-projects preparation (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 224.00 763.00 400.00 Date 31-Dec-2015 31-Dec-2018 30-Sep-2019 31-Mar-2021 The sub-projects financed from MSIP2 are selected by the local governments from their infrastructure pipelines. The pipelines in the participating municipalities were developed through different mechanisms such as proactive consultations within neighborhood units, public hearings organized for the budgeting purposes, as well as specific consultations held particularly for the Project related activities or activities sponsored by other programs, such as budget forums. As part of the local governments dialogue with the communities under MSIP2, PMU is recording and collecting data for the public Comments: meetings organized for the needs of the sub-project matters. The information is part of the sub-project appraisal documents. It should be noted that a number of women participating in the consultation activities is rather small (by tradition, the households are often represented by men who are participating in the meetings and represent the interests of their families in the consultation activities). In order to increase and encourage the women participation, the municipalities will need to do extra customized activities to outreach women. As part of last Bank mission, the Bank team and the PMU agreed that the project manager, who was appointed by the local government to act as a municipal counterpart for the PMU, will liaison 10/11/2019 Page 5 of 7 The World Bank Implementation Status & Results Report Second Municipal Services Improvement Project (P154464) with the local government gender focal point and PMU staff to get support to increase the women participation during the project implementation. Given the interest of use of the social networks to communicate with citizens on local public affairs, the PMU and Bank team also discussed how to also utilize social networks both in engagement of the citizens during the subprojects implementation and increasing the women participation. Furthermore, the PMU will start with the social inclusion component which will finance a sub-project in the poorest neighborhood as selected by the communities. The PMU will include the municipal gender focal point in addition to the municipal project manager in the selection and preparation activities for respective municipalities for the social inclusion component. IN00750078 ►Number of participants in consultation activities during sub-projects preparation - female (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 43.00 90.00 120.00 Date 31-Dec-2015 31-Dec-2018 30-Sep-2019 31-Mar-2021 Overall Comments IR The sub-projects financed from MSIP2 are selected by the local governments from their infrastructure pipelines. The pipelines in the participating municipalities were developed through different mechanisms such as proactive consultations within neighborhood units, public hearings organized for the budgeting purposes, as well as specific consultations held particularly for the Project related activities or activities sponsored by other programs, such as budget forums. For example, Kisela Voda held specific Project related public hearings, while sewerage sub-project in Jurumleri village of Gazi Baba municipality was selected as a result of the application of the urban audit. As part of the local governments dialogue with the communities under MSIP2, PMU is recording and collecting data for the public meetings organized for the needs of the sub-project matters. The information is part of the sub-project appraisal documents. While selection of the projects was mostly done through regular neighborhood meetings, as the most frequent format of the citizens participation in the project selection for the budgeting cycle, there are also cases whereby sub-projects were selected by the list of the projects generated by the community forums. The forums were institutionalized by the SDC and represent series of public meetings, whereby citizens groups in interest base and/or geographically and/or age and/or gender defend and vote their project proposals. Recently there are cases of the beneficiary municipalities when the social networks were used for the project selection. It should be noted that a number of women participating in all these activities is so far small (as the households are often traditionally presented by men, and men are participating in the meetings and present their families at the public consultations). In order to increase and encourage the women participation, the municipalities will need to do extra customized activities to outreach women. As part of last Bank mission, the Bank team and the PMU agreed that the project manager, who was appointed by the local government to act as a municipal counterpart for the PMU, will liaison with the local government gender focal point and PMU staff to get support to increase the women participation during the project implementation. Given the interest of use of the social networks to communicate with citizens on local public affairs, the PMU and Bank team also discussed how to also utilize social networks both in engagement of the citizens during the subprojects implementation and increasing the women participation. Furthermore, the PMU will start with the social inclusion component which will finance a sub-project in the poorest neighborhood as selected by the communities. The PIU will include the municipal gender focal point in addition to the municipal project manager in the selection and preparation activities for respective municipalities for the social inclusion component. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed 10/11/2019 Page 6 of 7 The World Bank Implementation Status & Results Report Second Municipal Services Improvement Project (P154464) P154464 IBRD-85610 Effective USD 28.04 28.04 0.00 3.08 24.97 11% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P154464 IBRD-85610 Effective 11-Jan-2016 14-Jan-2016 14-Jul-2016 31-Mar-2021 31-Mar-2021 Cumulative Disbursements Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 10/11/2019 Page 7 of 7