For Official Use Only CLR Review Independent Evaluation Group 1. CAS/CPS Data Country: Paraguay CAS/CPS Year: FY15 CAS/CPS Period: FY15 – FY18 CLR Period: FY15 – FY18 Date of this review: January 10, 2019 2. Ratings CLR Rating IEG Rating Development Outcome: Moderately Satisfactory Moderately Satisfactory WBG Performance: Good Fair 3. Executive Summary i. This review of the World Bank Group’s (WBG) Completion and Learning Review (CLR) covers the period of the Country Partnership Strategy (CPS), FY15-18, and updated in the Performance and Learning Review (PLR) dated February 27, 2017. ii. Paraguay is an upper middle-income country with a population of 6.8 million (2017) and a GNI per capita (Atlas method) of $3,920 in 2017. The population is very young (60 percent under thirty years old) and the country is going through a rapid urbanization process from a low base. The country has over the last 15 years achieved solid economic growth (average GDP growth of 4.7 percent per annum) and improved shared prosperity, spurred by abundant natural resources. However, economic growth was not accompanied by significant social gains during 2013-16, when poverty rates stagnated, and shared prosperity turned slightly negative. The country’s Human Development Index rating (0.7 out of 1.0) and rank (around 110) have been stable in the CPS period (between 2015 and 2018). iii. The CPS for the World Bank Group (WBG) had three pillars (or focus areas): (i) resilience to risks and volatility; (ii) pro-poor delivery of public goods and services; and (iii) agricultural productivity and market integration. The CPS focus areas and objectives were broadly aligned with the government’s National Development Plan (NDP) 2014-30 and supported the NDP’s higher level objective to reduce extreme poverty and foster income growth of the bottom 40 percent. In the PLR, and in response to an economic slowdown the emphasis shifted to support the government’s program to maintain fiscal stability and manage public expenditures in an effort to preserve the gains in poverty reduction. At the same time, there was a drop in demand for IBRD lending in the run up to the election. iv. During the CPS period, the Bank approved two new operations for $100 million each, comprising one Investment Project Financing (IPF) and one Development Policy Financing (DPF). IFC made net commitments of $235 million in long-term loans and equity investments mainly in agriculture and forestry (50 percent of total) and financial markets (47 percent). The actual volume of commitments was lower than the projected overall financial support from the WBG that had been expected to be in the range of $0.9-1.1 billion, including an indicative IBRD program of $600- 700 million. CLR Reviewed by: Panel Reviewed by: CLR Review Manager/Coordinator Nils Fostvedt Mauricio Carrizosa Jeff Chelsky Consultant, IEGEC Consultant, IEGEC Manager, IEGEC Albert Martinez Lourdes Pagaran Consultant, IEGEC CLRR Coordinator, IEGEC For Official Use Only CLR Review 2 Independent Evaluation Group v. IEG rates the overall development outcome as Moderately Satisfactory. Of the eight objectives four are rated Achieved or Mostly Achieved, three Partially Achieved, and one Not Verified. Good progress was achieved in forest management, although it is not clear whether this has had much impact on the overall pace of deforestation in the country and on progress regarding agricultural risk management. There was also good progress on the number of adults with savings accounts, but no progress in increasing the micro and SME portfolio. There was good progress on improving access to quality public services and on institutional foundation for social accountability and transparency, but limited progress on increasing revenues and in the progressivity of fiscal policy. There was progress on smallholder productivity, and some increase in private investment in logistics projects. vi. On balance, IEG rates the WBG’s performance as Fair. The WBG’s program components were well aligned with the NDP and addressed important development issues. The program was selective with three focus areas and eight objectives (some of which, however, contained multiple sub-objectives). The Bank demonstrated flexibility by shifting to knowledge services when the demand for IBRD lending dropped in the run-up to the election. However, the results framework had significant shortcomings which were not fully addressed at the PLR stage. The expected program financing was quite ambitious, but without much specificity on the lending program. The joint analytical and advisory program with the government did not materialize as planned. The scaling up of ASA work (including RAS) responded to government demands; however, overall the ASA program was quite fragmented. vii. The program was implemented largely as planned in terms of objectives, but with some changes in results indicators. However, the program could have been adjusted more significantly at the PLR stage in light of this shift of in activities. Given the relatively small size of the WBG program in Paraguay, the PLR and the CLR could have discussed more explicitly the relationship between the Bank’s program and the activities of other development partners. The difficult implementation challenges identified in the previous CPS continue to persist as reflected by the number of projects at risk, and longer completion time of projects. During the CPS period, INT received seven complaints – two each for agriculture, energy and extractives, and water; and one for an IFC operation. INT launched one investigation that was closed as substantiated. viii. The CLR highlighted six lessons with which IEG concurs: (i) simplicity in project design helps speed up project implementation; (ii) investment projects may help to build governance and capacity; (iii) a realistic results framework is needed for timely achievement of objectives; (iv) a strong ASA program requires selectivity and government ownership; (v) RASs may help prioritize ASA demand and advance reforms during Paraguay’s long project preparation cycles; and (vi) the flexibility afforded by programmatic ASA helps respond to changes in client needs. ix. In addition, IEG has identified the following lessons: • A program’s likelihood of achieving its intended results may be impeded if it does not include specifics on planned interventions. In the case of Paraguay, the CPS envisaged broad financing of up to $1.1 billion for the WBG but provided little specificity on the lending and ASA instruments that it would use. Going forward, WBG could consider developing base and high case scenarios linking its assistance to specific scenarios. At the PLR stage, the review of country developments and context should firm up financing amounts and ASA activities in response to greater certainty on client demand. • A program’s results focus can be weakened if performance indicators are not adequately linked to interventions and objectives. In Paraguay’s case, some indicators were weakly linked to interventions and insufficient to measure progress to objectives; while data on others could not be verified. To help strengthen its results orientation, the WBG in Paraguay should use its suite of interventions to define the appropriate results chains and outcome indicators. For Official Use Only CLR Review 3 Independent Evaluation Group 4. Strategic Focus Relevance of the WBG Strategy: 1. Congruence with Country Context and Country Program. Paraguay is an upper-middle income country with a population of 6.8 million in 2017 and a GNI per capita (Atlas method) of $3,920 in 2017. The population is very young (60 percent under thirty years old) and the country is going through a rapid urbanization process from a low base. The 2018 SCD notes that the country has over the last 15 years achieved solid economic growth (average GDP growth of 4.7 percent per annum) and improved shared prosperity, spurred by abundant natural resources. Tax revenues are low, as is the efficiency of the bureaucracy. The country has a long history of under-investment in human capital and infrastructure. The country’s Human Development Index rating (0.7 out of 1.0) and rank (around 110) have been stable in the CPS period (between 2015 and 2018). 2. The CPS focus areas and objectives were broadly aligned with the government’s National Development Plan (NDP) for the period 2014-2030 and supported the NDP’s overall goals of eliminating extreme poverty and achieving growth in incomes for the bottom 40 percent. The NDP also included an ambitious agenda up to 2018 to create an inclusive society with an innovative and productive private sector, with improved targeting of social safety nets to the vulnerable groups. At the PLR and in response to a slowdown in economic and social progress and drop in demand for IBRD lending, the program’s emphasis shifted to supporting the government in maintaining fiscal stability and managing public expenditures to preserve the gains in poverty reduction. 3. Relevance of Design. The WBG’s program as laid out in the CPS and updated in the PLR was well aligned with the NDP and with the priorities identified in the subsequent SCD. At the PLR stage, there was a shift from lending to ASA, but there were no changes in program objectives. IFC contributed to efforts in agriculture, financial markets and PPPs, but there was no explicit discussion of modalities for WB-IFC collaboration. Neither the PLR nor the CLR discussed how the Bank leveraged its interventions with other donors such as Inter-American Development Bank (IDB). At the PLR stage, some indicators were adjusted to reflect implementation challenges, but the changes did not fully reflect the nature and extent of implementation delays and a decline in government ownership. Selectivity 4. The program was relatively selective with its three focus areas, and eight objectives (although some objectives contain multiple sub-objectives) that were appropriate given the country context and the Bank’s existing portfolio. However, the CPS did not explain why these priorities were selected over others where Paraguay needed investment and reform, such as to address lagging health and educational outcomes. 5. The ASA program both in the CPS and PLR was relatively unfocused, and the efforts to achieve greater concentration had not taken shape at the time of the PLR. Alignment 6. The overarching objective of the CPS was to promote shared prosperity and reduce poverty in a developmentally sustainable manner. This was an appropriate goal considering the country’s high rate of poverty, unequal income distribution and environmental challenges, and it was responsive to the Bank’s twin goals. Some specific objectives supported the twin goals, including for improved agricultural productivity for small-holder farmers, improved access to quality public services for the poor, and improved access to quality public services in selected sectors. However, the CLR notes that growth was not accompanied by significant social gains during 2013-16, when poverty rates stagnated and shared prosperity turned slightly negative. There was however a modest reduction in the poverty headcount in 2017. For Official Use Only CLR Review 4 Independent Evaluation Group 5. Development Outcome Overview of Achievement by Objective: 7. Following the IEG-OPCS Shared Approach (SA) for Country Engagement, the assessment of the development outcome is based on the updated results framework at the PLR stage. In line with the approach, this review applies the term “focus area” rather than “pillar" that was used in the CLR. Focus Area I: Resilience to Risks and Volatility. 8. Objective 1: Enhanced agricultural risk management. This objective was supported primarily by several ASAs, including Paraguay Agriculture Sector-Wide Risk Assessment (FY15), Agriculture Risk Policy Dialogue (FY15), Strengthening Paraguay’s Agriculture Risk Management System (FY16), and Development of the Agriculture Insurance (FY16). The objective had one indicator: (i) Agricultural insurance penetration rate increased 15 percent by 2018 from the baseline of 0.96 percent. Not Verified. This rate is originally calculated as the ratio between agricultural premiums and agricultural GDP. The baseline was revised at the PLR due to a change in data source. However, the CLR reverted to the original baseline due to a mistake in the calculations. The CLR reported an actual penetration rate of 0.41 percent in 2018. IEG was not able to independently verify the penetration rate due to data limitations. 9. IEG rates Objective 1 as Not Verified. In addition, the indicator is difficult to measure, and does not sufficiently reflect the stated objective of enhancing agricultural risk management. 10. Objective 2: Improved financial inclusion. This objective was supported by the Enhancing Fiscal Management, Social Protection and Financial Inclusion DPL (FY18) and by several ASAs including the Paraguay Finance and Markets Programmatic Approach TA (FY17), CPFL (Consumer Protection and Financial Literacy) Diagnostic (FY15), and by several IFC projects. This objective had two indicators: (i) Fifty percent of adults with savings accounts by 2018 (o/w half were women). Mostly Achieved. This indicator improved from 29 percent in 2013 to 49 percent in 2018, close to the target of 50 percent. Disaggregated by gender, the percent of women among savings accounts owners increased from 30 percent in 2013 to 46 percent in 2017. (ii) Outstanding micro and SME portfolio to reach $3.4 billion by 2018. Not Achieved. The baseline for this indicator was $2.9 billion (2014), and it stands at $2.9 billion now. 11. With one indicator Mostly Achieved and the other Not Achieved, IEG rates Objective 2 as Partially Achieved. 12. Objective 3: Improved forest management in selected areas. This objective was supported by the Conservation of Biodiversity and Sustainable Land Management in the Atlantic Forest GEF project (FY16), the PRODERS Sustainable Agriculture and Rural Development project (FY08) and its Additional Financing (FY14), and advisory services. The objective had one indicator: (i) Improved forest management and conservation practices introduced on an area equivalent to 18 percent of the current Alto Parana Atlantic Forest area by 2018. Achieved. An area equivalent to 18.3 percent of the forest area is under improved management. 13. The one indicator for this objective was Achieved. IEG rates Objective 3 as Achieved. 14. On balance, IEG rates Focus Area I as Moderately Unsatisfactory. Of the three objectives, one objective was Not Verified, one was Partially Achieved, and one was Achieved. Good progress was achieved in forest management, although it is not clear whether this has had much impact on the overall pace of deforestation in the country, while there was only limited progress regarding For Official Use Only CLR Review 5 Independent Evaluation Group agricultural risk management. There was good progress on increasing the percentage of adults with savings accounts, but no progress on increasing micro and SME portfolio. Focus Area II: Pro-Poor Delivery of Public Goods and Services. 15. Objective 4: Increased revenues and progressivity of fiscal management. This objective was supported primarily by the DPL-DDO Enhancing Fiscal Management, Social Protection and Financial Inclusion (FY18), and the ASA for Programmatic Fiscal Equity and Efficiency (FY18). This objective had two indicators: (i) Corporate tax on agricultural income. Partially Achieved. The target (2018) was 518.4 billion Gs (Guaranis) from a baseline of 71.8 billion Gs in 2013.The CLR reports receipts of 257.2 billion Gs for 2016 whereas information from the Ministry of Finance indicates receipts of 326.6 billion Gs for 2017, both figures were far short of the target. The CLR explains that there was a change in the tax system and a slow start in administration, together with a fall in the soy price that explain why the target was not achieved in the CPS period. (ii) Progressivity of the tax system and public expenditures, measured as the difference in the Gini coefficient before and after fiscal interventions (taxes, subsidies and transfers). Not verified. The CLR reports that updating with 2017 data was not feasible because of the time required to process the data after public release – a timing issue that should have been considered at the time this indicator was selected. 16. For this objective one indicator was Partially Achieved and one indicator Not Verified. The indicators reflect modest progress on revenues and unverified progress on progressivity. On this basis, IEG rates Objective 4 as Partially Achieved. 17. Objective 5: Improved and better access to quality public services in select sectors. This objective was primarily supported by the Water and Sanitation Sector Modernization project (FY09), the PRODERS Sustainable Agriculture and Rural Development project (FY08) and its Additional Financing (FY14), the Energy Sector Strengthening project (FY11), the Road Maintenance project (FY07), and Transport Connectivity (FY16), and by several ASAs. This objective had four indicators: (i) People provided with improved sanitation environment in urban areas. Achieved. 300,000 people in the urban areas had access to improved sanitation facilities as of October 2018, as targeted. (ii) Indigenous people provided with access to improved sanitation facilities. Mostly Achieved. The October 2018 ISR of the Water and Sanitation Sector Modernization project reports that 6,000 indigenous people in the rural areas had access to improved sanitation as of October 2018. There was also an expectation that 50 percent of beneficiaries would be women (presumably meaning females since children also benefit from improved sanitation). However, IEG could not find documentation reporting the gender of the beneficiaries. (iii) Increase in energy supply through the transmission network from 3,008,000 Megawatt hours (MWh) (2015) to 5,800,000 MWh (2018). Mostly Achieved. IEG could not verify the number used in the CLR. There were also problems not fully clarified with a change in the calculation methodology. However, the December 2017 ISR for the Energy Strengthening project reported an annual transmission of 4,949,000 MWh under the old methodology. (iv) Percentage of people reporting satisfaction with quality of roads (San Pedro, Caazapá and Caaguazú road segments). Achieved. The target was for 75 percent of respondents to a survey reporting “good” or “fair”, compared to 14 percent “good” and 35 percent “fair” in a 2009 survey. A 2017 survey found that 77 percent reported “good” and 17 percent “fair”. 18. For Objective 5 two indicators were Achieved and two Mostly Achieved. On balance, IEG rates Objective 5 as Mostly Achieved. The objective was however formulated in a loose manner as For Official Use Only CLR Review 6 Independent Evaluation Group it is not clear whether different aspects were meant to be addressed by “improved” and “better” access. 19. Objective 6: Improved institutional foundation for social accountability and transparency. This objective was supported primarily by the DPL-DDO Enhancing fiscal management, social protection and financial inclusion (FY18), the PRODERS Sustainable agriculture and rural development project (FY08) and its Additional Financing (FY14), and by several ASAs including Programmatic governance engagement (FY17), Paraguay transparency and accountability (FY18), Comprehensive education management information system (FY13), and Paraguay transparency and accountability. This objective had three indicators: (i) Open information law fully implemented by at least 20 percent of government agencies by 2018. Achieved. The CLR reports that by 2016, 14 percent of government agencies were in compliance. According to a June 2018 monitoring of compliance by SENATICS (La Secretaria Nacional de Tecnologias de la Informacion y Comunicacion - a government entity), 22.3 percent of agencies were in compliance with the law, with another 75.5 percent in intermediate compliance. (ii) At least ten new education sector information tools and 15 datasets available for internal management and public access by 2018. Mostly Achieved. The Ministry of Education and Culture shows that 47 databases (same as datasets) are available, but IEG has not been able to find any information validating the availability of ten new education sector information tools; hence IEG could not validate that part of the objective. (iii) At least two social accountability mechanisms under the Open Government initiative (such as the social auditing of the Tekopora conditional cash transfer program) successfully implemented by independent CSOs (Civil Society Organizations) by 2018. Partially Achieved. The Update policy and results matrix reported the implementation of the Open Information Law in 2014, and the May 2017 ISR reported one social accountability mechanism – the citizen scorecard for the Tekopora Program had been implemented. There is thus no information available to IEG on any other such CSO mechanisms than the Tekopora Program social audit 20. It is noted that indicator (ii) is vaguely formulated and does not sufficiently measure the stated objective. For Objective 6 one indicator was Achieved, one Mostly Achieved, and one Partially Achieved. Additional information indicates that the voice and accountability indicator of the Bank’s Worldwide Governance indicators shows no progress. On balance, Objective 6 is Mostly Achieved. 21. For Focus Area II, two objectives were Mostly Achieved and one Partially Achieved. Overall, IEG rates Focus Area II as Moderately Satisfactory. There was good progress on access to quality public services and on institutional foundation for social accountability and transparency, but limited progress on increasing revenues and progressivity of fiscal management. Focus Area III: Agricultural Productivity and Market Integration. 22. Objective 7: Improved agricultural productivity and enhanced socio-economic conditions for small-holder farmers in targeted areas. This objective was supported primarily by the PRODERS Sustainable Agriculture and Rural Development project (FY08) and its AF (FY14), and the Road maintenance project (FY16) and Transport Connectivity (FY17). Several IFC projects also contributed. This objective had three indicators: (i) 30,000 poor households (out of 130,000), including small-scale farmers and indigenous people in Concepcion, San Pedro, Canindeyú, Caaguazú and Caazapá, report increases in real incomes by 2018. Mostly Achieved. The January 2019 ISR for the PRODERS project reported an increase in income of 24,875 poor households, reaching 83 percent of target. The target of 40 percent of beneficiaries being female (with no baseline) was surpassed, as the May 2018 ISR reported. Half of the beneficiaries were female. For Official Use Only CLR Review 7 Independent Evaluation Group (ii) 130 additional indigenous communities (representing more than 50 percent of indigenous peoples in Paraguay) have prepared and are implementing socio-economic development plans by 2018. Achieved. 180 indigenous communities financed and implemented development plans as of September 2017. (iii) Maize yield increases 12 percent among project beneficiaries. Achieved. The January 2019 ISR for the PRODERS project reported that the maize yield increased to 2.9 t/ha in 2018, above the target for 2017 of 1.9 t/ha from a baseline of 1.7 t/ha in 2017). 23. For Objective 7, two indicators were Achieved and one Mostly Achieved. On this basis, IEG rates Objective 7 as Mostly Achieved. 24. Objective 8: Increased private investments in logistics project/initiatives. This objective was supported by several ASAs including Paraguay Institutional Strengthening of PPP. This objective had one indicator: (i) At least two public-private partnership transactions in transport/logistics by 2018. Partially Achieved. A PPP for the Asuncion airport was cancelled. The other PPP - a road upgrade project –was awarded to an international consortium in 2016, and work has now started after a contract renegotiation. 25. As the one indicator for Objective 8 was Partially Achieved, Objective 8 was also Partially Achieved. It would, however, have been preferable to use an indicator that reflected better the objective to increase investment initiatives. 26. Under Focus Area III one objective was Mostly Achieved (albeit a bit late) and one Partially Achieved. On this basis Focus Area III is rated Moderately Satisfactory. There was progress on improving agricultural productivity and some progress on increasing private investments in logistics. Overall Assessment and Rating 27. On balance, IEG rates the overall development outcome as Moderately Satisfactory. Of the eight objectives, four are rated Achieved or Mostly Achieved, three Partially Achieved, and one Not Verified. Focus Area I is Moderately Unsatisfactory. Good progress was achieved in forest management, although it is not clear whether this has had much impact on the overall pace of deforestation in the country, while there was only limited progress regarding agricultural risk management and financial inclusion. Focus Area II is Moderately Satisfactory. There was good progress on access to quality public services and on institutional foundation for social accountability and transparency, but limited progress on increased revenues and progressivity of fiscal management. Focus Area III is Moderately Satisfactory. There was progress on smallholder productivity and some on private investments in logistics projects. Objectives CLR Rating IEG Rating Focus Area I: Resilience to Risks and Volatility Moderately Satisfactory 1 Moderately Unsatisfactory Objective 1: Enhanced agricultural risk management Partially Achieved Not Verified Objective 2: Improved financial inclusion Partially Achieved Partially Achieved Objective 3: Improved forest management in selected Achieved Achieved areas. Focus Area II: Pro-poor Delivery of Public Goods Moderately Satisfactory Moderately Satisfactory and Service Objective 4: Increased revenues and progressivity of Partially Achieved Partially Achieved fiscal management Objective 5: Improved and better access to quality Mostly Achieved Mostly Achieved public services in selected sectors 1 It is not clear how the CLR can rate this Focus Area Moderately Satisfactory with two objectives only partially Achieved. This is not consistent with the Shared Approach. For Official Use Only CLR Review 8 Independent Evaluation Group Objective 6: Improved institutional foundation for Mostly Achieved Mostly Achieved social accountability and transparency Focus Area III: Agricultural Productivity and Moderately Satisfactory Moderately Satisfactory Market Integration Objective 7: Improved agricultural productivity and enhanced social-economic conditions for small- Mostly Achieved Mostly Achieved holder farmers in targeted areas Objective 8: Increased private investments in Partially Achieved Partially Achieved logistics projects/initiatives 6. WBG Performance Lending and Investments 28. At the beginning of the CPS period, the outstanding lending volume was $375.5 million for five IPF operations including Additional Financing in agriculture, energy, transport and water. Only one operation was closed during the CPS period, suggesting that the problem of slow implementation that was identified in the previous CPS period persists. The opening portfolio included two trust funds for $4.5 million. During the CPS period, the Bank approved two new operations – both planned – for $200 million, including one DPL-DDO and one Transport IPF. There was one new trust fund during the evaluation period – for $0.6 million in 2015. However, the amount of new lending was far below the $600-700 million expected in the CPS. The CLR notes limited demand for IBRD lending, and that a planned second development policy loan failed to materialize as client demand changed. 29. During the review period two projects were closed and validated by IEG, both rated Moderately Satisfactory, with one rated Significant and one rated Moderate on risk to development outcome. While two operations constitute a very small sample for comparative purposes, the average outcome rating (Moderately Satisfactory or higher) for Paraguay was 100 percent, compared to the average for LAC (71 percent) and Bank-wide (77 percent). The average risk to development outcome (Moderate or lower) was 50 percent for Paraguay, roughly on par with the average for the LAC region (40 percent) and the Bank worldwide (47 percent). 30. During the CPS period, 95 percent of the Paraguay portfolio was considered at risk, against 20 percent of the LAC portfolio by amount and 21 percent for the Bank’s world-wide portfolio. The CLR did not address directly this high-risk rating but noted that Paraguay’s portfolio faced significant challenges to implementation due to complex project design, safeguards and fiduciary issues, limited implementation capacity and high staff turnover. The disbursement ratio for the Paraguay portfolio has been relatively steady at 26 percent overall, compared to the average for the LAC region (21 percent) and Bank-wide (21 percent). 31. During the CPS period, IFC made net commitments of $235 million in long-term loans and equity investments mainly in agriculture and forestry (50 percent of total) and financial markets (47 percent). This was well below the $300-400 million expected in the CPS, due to reduced lending activity with existing clients. Average outstanding commitments under the short-term trade finance guarantee were $19 million. The investments in the agriculture sector were meant to help increase access to finance by farmers in less developed areas. The investments in financial markets supported SMEs and included participation in IFC’s global warehouse finance program, which benefits farmers. 32. During the review period, IEG prepared two Project Evaluation Summary (PES) and one validation (EvNote) of an IFC Expanded Project Supervision Report (XPSR) for IFC investment projects. IEG rated all three IFC projects – two in the financial sector and one in agriculture - Mostly Successful for Development Outcome. 33. MIGA did not underwrite any political risk guarantees during the review period. For Official Use Only CLR Review 9 Independent Evaluation Group Analytic and Advisory Activities and Services 34. During the CPS period, the Bank delivered four ESW and 30 TA products. The ESW covered service delivery by state owned enterprises, agriculture risks, food prices and poverty, and land policy. The TA covered finance, agriculture, governance, macroeconomics, infrastructure, social services, and poverty measurements and M&E. The ASA program contained several products relevant to the Bank’s program and government priorities, but the products were also quite dispersed, covering a wide range of subjects, and some of the tasks do not appear well focused. The PLR informed that the joint analytical and advisory program with the government that had been planned in the CPS had not been feasible for Paraguay (without explaining in any detail) and that as a result progress in prioritization had been slow. Six RASs were signed in the period FY16-18, most of which are still under implementation and their impact will only be observed in the next CPF period. 35. During the CPS period, IFC approved three AS projects – two in the financial sector and one in agriculture - amounting to $3 million. The AS projects in the financial sector aimed to strengthen the capacity of financial institutions to expand SME lending. The AS projects in agriculture supported sustainable cattle ranching practices and improvements in herd productivity. IEG did not validate any Project Completion Reports (PCRs) during the review period. Results Framework 36. The results framework as designed and implemented (and as modified in the PLR) broadly reflected the Bank Group’s interventions in Paraguay. However, it had several shortcomings: Some objectives were poorly formulated (for example, Objectives 4 and 5). Some indicators were not sufficient to measure the stated objectives (for example, Objective 1 had a complex indicator the data for which could not be verified). Most indicators had generally weak links between objectives and ASA products. For example, the revised results framework in the PLR does not show any actual or expected linkages between various knowledge activities and expected results. In addition, there was inadequate attention to the collection of and reporting on the progress of some indicators (as a result, two indicators under Objectives 1 and 4 are rated by IEG as Not Verified). Partnerships and Development Partner Coordination 37. The CLR did not provide evidence of coordination efforts. However, the CPS discussed partnerships, and stated that the WBG would seek to streamline its engagement and work closer with the legislative branch and other development partners. However, there are no indications in the CLR of any such efforts, which would be of some importance since information in the CPS indicates that some of the partners such as the Inter-American Development Bank (IDB), Corporacion Andino de Fomento (CAF) and the European Union (EU)) have substantial programs and some of them, in particular the IDB, may be as large or even larger than the Bank, at least in terms of gross financial flows. Safeguards and Fiduciary Issues 38. During the CPS period, safeguards policies were applied in two operations (transport and environment) that were closed and validated by IEG. The CLR mentions safeguards as one of the challenges during portfolio implementation; however, it did not provide any additional information. The ICRs and ICRRs for the two projects reported considerable delays related to the clearing of rights of way, community conflicts and issuance of environmental licenses, especially in the transport sector. Compliance with the applicable policies is only indicated in the environment sector project. It is also indicated that local capacity was improved during implementation. No inspection panel case was recorded during the CPS implementation period. 39. The CLR did not note any fiduciary issues, and fiduciary risks are rated Moderate. However, the country program documents (CPS and PLR) flagged the widespread limited institutional capacity in the country and the resulting need for strong Bank implementation support. During the CPS period, INT received seven complaints – two each for agriculture, energy and extractives, and water; and one for an IFC operation. INT launched one investigation that was closed as substantiated. In this regard, INT noted the need to ensure that roles, responsibilities and processes in operations For Official Use Only CLR Review 10 Independent Evaluation Group should be carefully outlined in a project’s Operations Manual to better ensure the security of confidential documentation, and to consider the need for additional training for members of bid evaluation committees. Ownership and Flexibility 40. The Bank demonstrated flexibility by shifting to ASA and moving to RASs when the demand for lending operations dropped. The degree of government ownership in the CPS program or its components is otherwise not clear, but the limited demand for IBRD lending and the typically long periods between approval and effectiveness (a problem identified already in the previous CPS period) suggest that ownership has been rather weak. The recent interest in paying for selected knowledge activities through RAS would however seem to indicate clear interest and ownership in some knowledge activities as RAS are inherently demand-driven. WBG Internal Cooperation 41. This was a limited program, with the Bank taking the lead inside the WBG. IFC contributed in some areas (mainly agriculture, financial markets and PPPs). The CPS mentioned IFC and MIGA involvement for some of the objectives, but there was no explicit discussion of the modalities for Bank-IFC collaboration. It appears that the two entities proceeded along separate tracks, consulting and coordinating where necessary, which is fine for such a modestly sized program. For example, on the PPPs, IFC signed a mandate for advisory services for the airport (which was later cancelled), with the Bank working on the legal and institutional framework, a good example of division of responsibilities. Risk Identification and Mitigation 42. The CPS identified the main risks as economic (economic management of volatility from agriculture), institutional capacity and implementation, governance risks and corruption, and risks from the political system. In the CPS, it was clearly recognized that due to public-sector capacity constraints and the limited number of technical staff in core ministries, enhanced implementation support would be needed to improve the quality of the portfolio. The CLR reports that this was carried out with positive effects (but these effects were not reflected in the 100 percent risk rating). There were mitigating measures against corruption to support initiatives aligned with the open government agenda of the NDP, to help build fiduciary capacity for better management of public investments, and to support institutional capacity through non-lending TA. But no explicit risks to the demand for lending were noted. Otherwise, risk management seems to have been adequate. Overall Assessment and Rating 43. On balance, IEG rates the WBG performance as Fair. Design 44. The WBG’s program components were well aligned with the NDP and addressed important development issues. The program was selective with three focus areas and eight objectives (although at least one of these objectives had multiple components). The Bank demonstrated flexibility by shifting to knowledge services when the demand for IBRD lending dropped in the run-up to the election. However, the results framework had significant shortcomings which were not fully addressed in the PLR. The expected program financing was quite ambitious, but without any specificity as to planned lending. The joint analytical and advisory program with the government did not materialize as planned. The scaling up of ASAs (including RASs) responded to government demands; however, overall the ASA program was fragmented. Implementation 45. The program was implemented largely as planned in terms of objectives, but with some changes in indicators. At the PLR, the program could have been adjusted more significantly considering the shift of emphasis from lending to ASA. Given the relatively modest size of the WBG program in Paraguay, the PLR and the CLR could have discussed more explicitly the relationship For Official Use Only CLR Review 11 Independent Evaluation Group between the Bank’s program and the activities of other development partners. The difficult implementation challenges identified in the previous CPS continue to persist as reflected by the number of projects at risk, and longer completion time of projects. During the CPS period, INT received seven complaints – two each for agriculture, energy and extractives, and water; and one for an IFC operation. INT launched one investigation that was closed as substantiated. 7. Assessment of CLR Completion Report 46. The CLR is well organized, concise, and clear. However, it does not explain fully the operational and/or political constraints on Bank operations in the country, including the reasons for the drastic shortfall in actual lending compared to the CPS expectations. There is not much discussion of relations with other development partners, or of the weaknesses in the monitoring of indicators demonstrated by the several indicators that IEG could not validate. Overall, this can give readers a somewhat rosy picture of the program and its implementation. 8. Findings and Lessons 47. The CLR highlighted six lessons with which IEG concurs. First, simplicity in project design helps speed up project implementation. Second, investment projects may help improve governance and build capacity. Third, a realistic results framework is needed for timely achievement of objectives. Fourth, a strong ASA program requires selectivity and ownership. Fifth, RAS may help prioritize ASA demand and advance reforms during a long project preparation cycle. Sixth, the flexibility afforded by programmatic ASA helps respond to changes in client needs. 48. In addition, IEG has the following lessons: • A program’s likelihood of achieving its intended results can be impeded if it does not include specific planned interventions. In the case of Paraguay, the CPS envisaged broad financing of up to $1.1 billion for the WBG but provided little specificity on the lending and ASA instruments that it would use. Going forward, WBG should consider developing base and high case scenarios linking its assistance to specific scenarios. At the PLR stage, the review of country developments and context could firm up financing amounts and ASA activities in response to greater certainty on client demand. • A program’s results focus can be weakened without verifiable performance indicators that are not adequately linked to interventions and objectives. In Paraguay’s case, some indicators were weakly linked to interventions and insufficient to measure objectives; while data on others could not be verified. To help strengthen its results orientation, the WBG in Paraguay should consider using its suite of interventions to define the appropriate results chains and outcome indicators. Annexes CLR Review 13 Independent Evaluation Group Annex Table 1: Summary of Achievements of CPS Objectives – Paraguay Annex Table 2: Planned and Actual Lending for Paraguay, FY15-FY18 (US$, millions) Annex Table 3: Advisory Services and Analytics Work for Paraguay, FY15-FY18 Annex Table 4: Paraguay Grants and Trust Funds Active in FY15-FY18 (US$, millions) Annex Table 5: IEG Project Ratings for Paraguay, FY15-FY18 (US$, millions) Annex Table 6: IEG Project Ratings for Paraguay and Comparators, FY15-FY18 Annex Table 7: Portfolio Status for Paraguay and Comparators, FY15-FY18 Annex Table 8: Disbursement Ratio for Paraguay, FY15-FY18 Annex Table 9: Net Disbursements and Charges for Paraguay, FY15-FY18 (US$, millions) Annex Table 10: Total Net Disbursements of Official Development Assistance for Paraguay (US$, millions) Annex Table 11: Economic and Social Indicators for Paraguay Annex Table 12: List of IFC Investments in Paraguay (US$, millions) Annex Table 13: List of IFC Advisory Services in Paraguay (US$, millions) Annex Table 14: IFC net commitment activity in Paraguay, FY15 - FY18 (US$, millions) Annex Table 15: List of MIGA Projects Active in Paraguay, 2015-2018 (US$, millions) Annexes CLR Review 15 Independent Evaluation Group Annex Table 1: Summary of Achievements of CPS Objectives – Paraguay CPS FY15-FY18: Focus Area I: Resilience to Risks and Actual Results IEG Comments Volatility 1. CPS Objective: Enhanced agricultural risk management Indicator 1: Agricultural The objective was supported by the At the PLR stage the baseline insurance penetration rate following Advisory Services and was revised from 0.39 percent increased 15 percent by 2018 Analytics (ASA): Paraguay Agriculture due to a change in data Sector-Wide Risk Assessment source. The original data Baseline: 0.96 percent (2013) (P149948, FY15), Agriculture Risk Policy source was a survey of Dialogue (P159719; FY15), insurance companies Strengthening Paraguay’s Agriculture conducted by the World Bank. Risk Management System (P145224, The new data source is based FY16), and Development of the on measurements conducted Agriculture Insurance (P159718, FY16). by the Central Bank. However, the CLR reverted to the The CLR reported that the penetration original baseline due to an rate was 0.41 for 2018 (source: Central error in calculation. Bank of Paraguay: Insurance data and Economic data). The CLR team also According to the CPS, the provided additional information to IEG penetration rate is calculated regarding the calculation of the indicator. as the ratio between However, IEG could still not agricultural premiums and the independently verify the penetration rate agricultural GDP of the same for agricultural insurance: 1) Premiums year. Premiums are reported are reported in current prices and, in fiscal years with FY18 hence, cannot be used with GDP which agricultural premium reported Major is measured in constant prices to at 52,872 Gs. million (Central Outcome calculate the penetration rate. The Bank). Measures additional information provided did not include the underlying data that was The programmatic ASA used to adjust premiums. 2) IEG could (P145224) supported the not validate the provided actual and Government in designing an adjusted premiums by the CLR team agriculture risk management with data from the Central Bank’s strategy through the following detailed account of incomes of activities (Completion Insurance companies (webpage). FY17 Summary Report, CSR)): premiums were reported to be 50,086 analysis to develop sector Gs. million (Central Bank). strategy (P149948), policy Not Verified dialogue to determine future actions for agricultural risk management (P159719), and a technical workshop to design agricultural insurance coverage for family farmers (P159718). 2. CPS Objective: Improved financial inclusion Indicator 1: 50 percent of adults The objective was supported by the The World Development with savings accounts by 2018 Development Policy Lending (DPL) Indicators (WDI) reports the Enhancing Fiscal Management, Social following data for account Baseline: 29 percent (2013) Protection and Financial Inclusion ownership at a financial project (P151007, FY18) and the institution or with a mobile- Gender disaggregation following ASA: Paraguay Finance and money-service provider: Baseline: 30% (2013) Markets Programmatic Approach Annexes CLR Review 16 Independent Evaluation Group CPS FY15-FY18: Focus Area I: Resilience to Risks and Actual Results IEG Comments Volatility Target: 50% (2018) (P147386, FY17), Paraguay CPFL • % of population aged 15+: Diagnostic (P150689,FY15), Insolvency 48.6 (2017) and Secured Transactions (P156369, • % of population aged 15+ FY17), Paraguay Finance and Markets (female): 46.0 (2017) (P161605, FY18), and FIRST • % of population aged Development of NSFI Strategy 25+:54.64 (2017) (P150452; FY17). In addition, several IFC projects The programmatic ASA supported this objective: Banco Regional (P147386) supported the (36572), Banco Itau Paraguay (37098), Government’s objective to Banco Continental (28777), and Global promote financial inclusion Warehouse Finance Program with with the following activities Sudameris Bank (35997). (see Program Completion Report, PCR): a detailed The CLR reported that based on the action plan to increase 2017 Findex Report of the World Bank, financial inclusion (P150452), 49% of adults have savings accounts identified gaps and provided (46% savings account ownership for recommendations to increase women). access to finance (P150689), policy recommendations to Prior action 9 of the DPL P151007 (see support use of movable assets Program Document) was to establish a as collateral (P156369). The simplified processes to open and ASA (P161605) supported the manage basic savings accounts.. implementation of the National However, this operation does not Strategy for Financial monitor and report on this indicator (see Inclusion (Activity Completion December 2017 ISR:S). Summary, ACS). Mostly Achieved Indicator 2: Outstanding micro The objective was supported by the At the PLR stage this indicator and SME portfolio to reach USD Banco Regional (36572), Banco Itau was modified from the original 3.4 billion by 2018 Paraguay (37098), Banco Continental indicator: 163,000 individuals (28777), and Global Warehouse Finance and microenterprises Baseline: US$2.9 billion (2014) Program with Sudameris Bank (35997). accessed to microfinance client services by 2018 The CLR reports that IFC’s DOTS Baseline: 125,000 (2012) database shows that the micro and SME portfolio of IFC stands at US$2.9 billion; which is the same level as the baseline. The aggregated DOTS database reports that the micro and SME portfolio to be US$3 billion as of CY16, the latest available data. Not Achieved 3. CPS Objective: Improved forest management in selected areas Indicator 1: Improved forest The objective was supported by the Two ASAs also contributed to management and conservation Conservation of biodiversity and this objective. P156288 practices introduced on an area sustainable land management in the assisted the government in equivalent to 18 percent of the Atlantic Forest (GEF) (P094335, FY16) updating and implementing Annexes CLR Review 17 Independent Evaluation Group CPS FY15-FY18: Focus Area I: Resilience to Risks and Actual Results IEG Comments Volatility current Alto Paraná Atlantic and the PRODERS Sustainable the National Reforestation Forest area by 2018 Agriculture & Rural Development project Plan (see Completion (P088799, FY08) and its Additional Summary); P161498 Baseline: 9 percent (2013) Financing (AF) (P148504, FY14). prepared a strategic specific The indicator was also supported by action plan for the San Rafael ASA: Forest Landscape Management Protected Area (see Progress (P156288, FY17), and Itaipú: Strategic Review). Support for the Development of the Atlantic Forest Corridor in Paraguay RAS (P161498, FY19). The CLR reported that there were 310,239 hectares that were under improved forest management which represents 18.2% of the Alto Paraná Atlantic Forest. However, IEG was not able to replicate this calculation. The ICRR IEG:MS of project P094335 reports that 233,353 hectares have been conserved and 36,254 hectares have been restored in the Mbaracayú–San Rafael Conservation Corridor as of April 2016 – this represents 13.7% and 2.1% of the Atlantic Forest of Alto Paraná’s total land area (1,702,000 hectares) (CPS, page 11), respectively. The ICR of P094335 also reports that 311,735 hectares were under enhanced biodiversity protection as of April 2016 or 18.3% of the target forest area. Finally, the May 2018 ISR: MS of project P088799 report that 6,684 hectares were under good forestry practices as of April 2018 or 0.4% of the target area. Achieved CPS FY15-FY18: Focus Area II: Pro-poor Delivery of Public Actual Results IEG Comments Goods and Service 4. CPS Objective: Increased Revenues and Progressivity of Fiscal Management Indicator 1: Corporate tax on The objective was supported by the At the PLR stage this indicator agriculture income (Gs. billion) DPL-DDO Enhancing Fiscal replaced the original: Total Major Management, Social Protection and tax/GDP ratio increased from Outcome Baseline: 71.8 (2013) Financial Inclusion (P151007, FY18). 11.5 percent (2013) to 14 Measures Target: 518.4 (2018) percent (2018) and the Prior action 3 of the DPL (P151007) (see progressivity of the tax system Program Document) was to establish an improved compared to the agricultural income tax. The December base year 2013. 2017 ISR: S, however, did not monitor Annexes CLR Review 18 Independent Evaluation Group CPS FY15-FY18: Focus Area II: Pro-poor Delivery of Public Actual Results IEG Comments Goods and Service this indicator. The Update Policy and Results Matrix for the DPL-DDO reports that 257.24 Gs. billion was collected as taxes as of 2016. Information (see website) from the Paraguay Ministry of Finance indicates that IRAGRO amounted to Gs million 326.55 as of 2017. Partially Achieved Indicator 2: Progressivity of the The objective was supported by the At the PLR stage this indicator tax system and public DPL-DDO Enhancing Fiscal was modified from the original: expenditures, measured as the Management, Social Protection and Progressivity of expenditures difference in the Gini coefficient Financial Inclusion (P151007, FY18) in social and infrastructure before and after fiscal and ASA Programmatic Fiscal Equity service delivery improved by interventions (taxes, subsidies and Efficiency (P156331, FY18). 2018 compared to baseline in and transfers) 2013. The CLR reported that data for 2017 have not yet been processed for use in A study (2017) prepared by Baseline: -1.77 (2014) a CEQ analysis. the Ministry of Finance in Target: -2.45 (2018) collaboration with the World The ASA P156331 (see Completion Bank and the Commitment to Report) carried out Commitment to Equity Institute reports that Equity (CEQ) analysis to assess using a the Kakwani Index (a progressivity of current fiscal system. measure of progressivity of Prior action 3 of the DPL (P151007) (see the tax system) the agricultural Program Document) was to establish an income tax (IRAGRO) and agricultural income tax. The agricultural personal income tax (IRP) are income tax is expected to have the most progressive taxes, progressive effects on tax incidence both with an index of 0.45 with (p26, Program Document) but this respect to market income plus assertion cannot be verified. pensions. Not Verified 5. CPS Objective: Improved and better access to quality public services in select sectors Indicator 1: People provided The objective was supported by the At the PLR stage this indicator with improved sanitation Water & Sanitation Sector Modernization was modified from the original: environment in urban areas project (P095235, FY09) and the 10 percent of urban extreme PRODERS Sustainable Agriculture & poor in Asunción metropolitan Baseline: 0 (2013) Rural Development project (P088799, area benefiting from improved Target: 300,000 (2018) FY08) and its AF (P148504, FY14). In environmental sanitation by addition, the following ASA supported 2018 the objective: Improved Services and Baseline: 0 (2014) Territorial Development (P156770; FY17) and Programmatic Governance Several ASA also supported Engagement (P151990, FY17). this indicator. The report of P1556770 analyzed the The October 2018 ISR: MS of project factors (key actors, laws, P095235 indicate that 300,000 people in financing) affecting the quality the urban areas had access to improved of service provision, including sanitation services as of October 2018. sanitation; P151990 undertook Annexes CLR Review 19 Independent Evaluation Group CPS FY15-FY18: Focus Area II: Pro-poor Delivery of Public Actual Results IEG Comments Goods and Service Achieved a study on the constraints and challenges for SOEs to deliver public services (see Completion Report). Indicator 2: Indigenous people The objective was supported by the At the PLR stage this indicator provided with access to improved Water & Sanitation Sector Modernization was modified from the original: sanitation facilities project (P095235, FY09) and the Indigenous peoples with PRODERS Sustainable Agriculture & access to sustainable water Baseline: 0 (2013) Rural Development project (P088799, increased from 2.5 percent Target: 6,000 (2018) FY08) and its AF (P148504, FY14). In (2013) to 6.5 percent (2018). addition, the following ASA supported Gender: 50 percent of the objective: Improved Services and The report P1556770 beneficiaries are women Territorial Development (P156770; analyzed the financial FY17) and sustainability of service PY Poverty and Equity (P151094, provision to indigenous FY18). people. P151990 undertook a study on the constraints and The CLR claims that 50% of the challenges for SOEs to deliver beneficiaries are women as reported by public services to both urban the Government’s Health Agency poor and indigenous peoples (SENASA). However, IEG could not find (see Completion Report). documentation regarding this gender indicator from SENASA. The October 2018 ISR: MS of project P095235 reports that 6,000 indigenous people in the rural areas had access to improved sanitation services as of October 2018. The ISR did not report the share of women beneficiaries of the project. Mostly Achieved Indicator 3: Increase in energy The objective was supported by the The September 2018 ISR: MS supply through the transmission Energy Sector Strengthening Project of project P114971 reports network from 3,008,000 (P114971, FY11) and the following ASA: that the calculation Megawatt hours (MWh) (2015) to Programmatic Governance Engagement methodology for this indicator 5,800,000 MWh (2018) (P151990, FY17) and Paraguay Energy was modified by the Sector Study (P161738, FY18) Administración Nacional de Electricidad (ANDE) – assets The CLR reported 5,176,000 MWh was from the project were supplied in 2018 using evidence deployed to different provided by the ANDE team. IEG could Transformation Stations (TS) not verify this evidence from available than originally planned. Thus, project documents. a different set of TS had to be used for calculations. The September 2018 ISR: MS of project P114971 reports that 4,343 MWhs were ASA P151990 undertook a transmitted in a year as of December study on the constraints and 2017. Given the change in the challenges for SOEs to deliver calculation methodology, IEG cannot public services, including the validate the current measurement of the energy sector (see Completion Annexes CLR Review 20 Independent Evaluation Group CPS FY15-FY18: Focus Area II: Pro-poor Delivery of Public Actual Results IEG Comments Goods and Service indicator (calculated using a new Report). Product P161738 methodology) and compare it with the conducted an energy sector target (calculated with the old diagnosis and identified methodology). However, the December opportunities for 2017 ISR: MS of project P11497 show improvements (see Progress that under the old methodology Review). 4,949,000 MWh were transmitted annually. Mostly Achieved Indicator 4: Percentage of The objective was supported by the people reporting satisfaction with Road Maintenance project (P082026, quality of roads (San Pedro, FY07), PRODERS Sustainable Caazapá and Caaguazú road Agriculture & Rural Development project segments) (P088799, FY08) and its AF (P148504, FY14), and Transport Connectivity Baseline: 14% good; 35% fair; (P147278, FY16). 51% bad (from a sample size of 270 road users) (2009) The ICRR IEG: MS of project P082026 Target: 75% reporting “good” or reports that road user satisfaction was “fair” (2018) the following: 77% good, 17% fair and 7% bad (sample size of 637 road users) as of June 2016. Achieved 6. CPS Objective: Improved institutional foundation for social accountability and transparency Indicator 1: Open Information The objective was supported by the ASA P151990 contributed to Law fully implemented by least following ASA: Programmatic the indicator by assessing the 20 percent of Government Governance Engagement (P151990, compliance and shortcomings agencies by 2018 FY17; P155793, FY16; P155801; FY16; of 2 State Owned Enterprises P155800, FY16; P156523, FY16), and with regards to the Open Baseline: 9 percent (2014) Paraguay Transparency and Information Law (see Accountability (P161686, FY18). Completion Report). ASA P161686 provided technical The CLR reported that as of 2016 there assistance in implementing were 14 percent of Government the Carter Center ATI agencies in compliance (source: Implementation Assessment National Secretariat of Information and Too (IAT) – a tool to help Communication Technologies diagnose capacity for (SENATICS)). information provision and request response (see ACS). According to the June 2018 monitoring The Open Data Readiness of compliance by SENATICS, 20.6% of Assessment report of project agencies were in compliance. By August P161686 stated that a 2018, the monitoring of the compliance diagnostic of the to the Open Information Law, 22.3% of implementation progress of agencies were in compliance to the law, the Access to Public with 75.5% in intermediate compliance Information Law was as of August 2018. conducted. Achieved Annexes CLR Review 21 Independent Evaluation Group CPS FY15-FY18: Focus Area II: Pro-poor Delivery of Public Actual Results IEG Comments Goods and Service Indicator 2: At least 10 new The objective was supported by the The Open Data Readiness education sector information following ASA: Comprehensive Assessment report P161686 tools and 15 datasets available Education Management Information identified datasets considered for internal management and System (P133419, FY13), School priorities in terms of feasibility public access by 2018 Infrastructure, the Teaching Profession, for their publication as Open and Basic School Supplies (P129179, Data. Baseline: 0 (2013) FY14), and Paraguay Transparency and Accountability (P161686, FY18). IEG could not find documents regarding ASA P133419. The CLR reported that 10 education sector information tools and 15 datasets have been made available as of 2016. The Open Data portal for the Ministry of Education and Culture show that there are 47 datasets available. IEG cannot locate additional project documents to validate the other indicator (10 new tools). The report P129179 indicates that the Systems Approach for Better Education Results (SABER) tool in analyzing Paraguay’s education sector was implemented. Partially Achieved Indicator 3: At least two social The objective was supported by the accountability mechanisms under Tekoporã Beneficiaries Empowered to the Open Government initiative Ensure Social Accountability Project (such as the social auditing of the (P150876, FY17). The indicator was Tekoporã program) successfully also supported by the ASA Paraguay implemented by independent Transparency and Accountability CSOs by 2018 (P161686). The CLR reports that two social accountability mechanisms have been implemented. However, IEG could not validate the information provided in the CLR. The May 2017 ISR: S of project P150876 reports that the citizen scorecard for the Cash Conditional Transfer Program Tekopora has been implemented in 2016. The ISR also indicates that by April 2017, a second social audit tool of the project – Community Reports – would produce results. Partially Achieved Annexes CLR Review 22 Independent Evaluation Group CPS FY15-FY18: Focus Area III: Agricultural productivity and Actual Results IEG Comments market integration 7. CPS Objective: Improved agricultural productivity and enhanced socio-economic conditions for small-holder farmers in targeted areas Indicator 1: 30,000 poor The objective was supported by the At the PLR stage this households (out of 130,000), PRODERS Sustainable Agriculture & indicator was modified from including small-scale farmers and Rural Development project (P088799, the original: Income of 15 indigenous people, in Concepción, FY08) and its AF (P148504, FY14), percent of poor households San Pedro, Canindeyú, Caaguazú Road Maintenance (P082026, FY16), (out of 130,000) in and Caazapá, report increase in Transport Connectivity (P147278, Concepción, San Pedro, real incomes by 2018 FY17), and FIRST Development of NSFI Canindeyú, Caaguazú and Annual income - G4 million (2013 Strategy (P150452, FY17). Caazapá increased by 30 baseline) and socio-economic In addition, several IFC projects percent by 2018 conditions (baseline 0) contributed to the objective: Global Baseline: annual income is Warehouse Finance Program with G4 million (2013). Gender: 40 percent of the Sudameris Bank (35997), Agrotec Ext & beneficiaries to be female III (34095 & 40605), and Agrofertil Ext The ISR also reports that (37602) 241,155 individuals were beneficiaries of the project The CLR reported that 24,875 (50% women). The 2017 households reported an increase in restructuring paper report income from a July 2018 report. that a farm/family includes However, IEG could not locate this 4 to 6 individuals, this report and verify the results. would imply at least 40,192 households. However, it is Major The January 2019 ISR: MS of project not clear if the beneficiaries Outcome P088799 reported that 24,875 poor experienced an increase in Measures households in Eastern Paraguay had income or if the gender experienced an increase in real indicator in the CPS agricultural income by 2018. The referred to female analysis was based on the RENABE household heads or (Registro Nacional de Beneficiarios del individuals. Ministerio de Agricultura) data and a survey of 1,029 households that According to the United benefited from P088799 from 2011- Nations (see UN 2017 2016. report), as of 2017 the Mostly Achieved average household size in Paraguay is 4.6 members, this would imply that on average, 52,425 household benefited from the project. Indicator 2: 130 additional The objective was supported by the indigenous communities’ PRODERS Sustainable Agriculture & (representing more than 50 Rural Development project (P088799, percent of Indigenous Peoples in FY08) and its AF (P148504, FY14). Paraguay) have prepared and are implementing socio-economic The January 2019 ISR: MS of project development plans by 2018 P088799 reports that 180 indigenous communities financed and implemented Baseline: 45 communities (2014) development plans as of December 2018. However, IEG could not verify Annexes CLR Review 23 Independent Evaluation Group CPS FY15-FY18: Focus Area III: Agricultural productivity and Actual Results IEG Comments market integration whether the 180 communities represented more than 50% percent of indigenous peoples. Achieved Indicator 3: Maize yield increases This objective was supported by the . 12% among project beneficiaries PRODERS Sustainable Agriculture & Rural Development project (P088799, FY08) and its AF (P148504, FY14). Baseline: 1.7 t/ha (2015) Target: 1.9 t/ha (2017) The CLR claimed maize yield increased to 2.9 t/ha in 2018. The January 2019 ISR: MS of project P088799 reported that the RENABE data suggested that maize yields increased from about 1.7 t/ha in 2014 to 2.9 t/ha in 2018 among target beneficiaries. However, it should be noted that the target year for the indicator is 2017. Achieved 8. CPS Objective: Increased private investments in logistics projects/initiatives Indicator 1: At least two public The objective was supported by the ASA P155856 organized a private partnership transactions in following ASA: Paraguay Institutional workshop on transport transport/logistics by 2018 Strengthening of PPP (P155856, FY16) infrastructure and a and Improve IC in Paraguay I & II knowledge exchange Baseline: 0 (2014) (P155012, FY17; P161575, FY19). session that facilitated knowledge sharing of The CLR reports that the first Public- lessons learned from Chile Private Partnership (PPP) pilot project and Peru (see Completion was awarded to an international Report). In particular, there consortium (Ruta 2 & 7) which would was a South-South facilitate regional integration. The project knowledge exchange has not yet reached financial closure session on help desk and has been restructured in December support on PPP strategic 2018. However, physical work has topics for Ruta 2&7 and the started for the Route 2&7 as of Airport of Asuncion. December 2017 (Secretaría Técnica de Planificación). A second PPP (modernization of the Asuncion airport) was cancelled in May 2017 (The Economist). Partially Achieved Annexes CLR Review 24 Independent Evaluation Group Annex Table 2: Planned and Actual Lending for Paraguay, FY15-FY18 (US$, millions) Approved Project Proposed Approval Closing Proposed Proposed Project name IBRD ID FY FY FY Amount Amount Amount CPS PLR Project Planned Under CPS/PLR P151007 PY DPL-DDO 2015 2015 2018 100 100.0 P147278 PY Transport Connectivity 2015 2017 2024 100 100.0 Total Planned 200.0 Approved Project Proposed Approval Closing Proposed Proposed Project name IBRD ID FY FY FY Amount Amount Amount CPS PLR Project Unplanned Under CPS/PLR Total Unplanned Approved Project Proposed Approval Closing Proposed Proposed Project name IBRD ID FY FY FY Amount Amount Amount CPS PLR On-going Projects During the CPS/PLR Period P082026 PY Road Maintenance 2007 2016 74.0 PY PRODERS - Sust. Agric. & Rur P088799 2008 2020 37.5 Dev. Prj PY Water & Sanit. Sector P095235 2009 2019 64.0 Modernization PY Energy Sector Strengthening P114971 2011 2019 100.0 Project AF Sustainable Agriculture and Rural P148504 2014 100.0 Dev Total On-going 375.5 Source: Paraguay CPS, WB Business Intelligence Table 2a.4, 2a.7, and 2b.1 as of 11/08/2018. Annex Table 3: Advisory Services and Analytics Work for Paraguay, FY15-FY18 Fiscal Project ID Economic and Sector Work Report Type Year Sector or Thematic P149948 Agriculture Sector-Wide Risk Assessment FY15 Study/Note Sector or Thematic P123711 PY Land Dialogue FY15 Study/Note Sector or Thematic P156523 Challenges of SOE Service Delivery FY16 Study/Note P154760 PY FOOD PRICES AND POVERTY FY18 Other Poverty Study Fiscal Project ID Technical Assistance Output Type Year P150689 Paraguay CPFL Diagnostic FY15 Technical Assistance P149659 Paraguay-Infrastructure Service Delivery FY15 Technical Assistance P144540 Paraguay#10259 Strengthening Pension Sup FY15 Technical Assistance Annexes CLR Review 25 Independent Evaluation Group P147079 PY Knowledge Diss. and Cap. Build. FY15 Technical Assistance P131567 PY Strengthening Pension System FY15 Technical Assistance P148234 Strengthening Tax Admin & SOE Corp. Gov. FY15 Technical Assistance P145224 Strengthening Paraguay’s Agriculture Risk Management System FY16 Technical Assistance P145360* LC7 Farm to Markets study FY16 Technical Assistance P159719 Agriculture Risk Policy Dialogue FY16 Technical Assistance P159718 Development of the Agriculture Insurance FY16 Technical Assistance P149744 Education Support for Teachers and Data FY16 Technical Assistance P151764 Paraguay #B016 Fin. Stab. Strength FY16 Technical Assistance P155856 PY Institutional Strengthening PPP FY16 Technical Assistance P155800 SSKE - Access to Information Law FY16 Technical Assistance P155793 State-Owned Enterprises TA FY16 Technical Assistance P156168 Support WTO Trade Facilitation Agreement FY16 Technical Assistance P155795 Tax Administration FY16 Technical Assistance P147386 Paraguay Finance and Markets Programmatic Approach FY17 Technical Assistance P151990 Programmatic Governance Engagement FY17 Technical Assistance P150452 FIRST Development of NSFI Strategy FY17 Technical Assistance P156288 Forest Landscape Management FY17 Technical Assistance P155012 Improve IC in Paraguay FY17 Technical Assistance P156770 Improved Serv and Terrirorial Devlpmnt FY17 Technical Assistance P156369 Insolvency and Secured Transactions FY17 Technical Assistance P158224 PY Health Dialogue - Child to PY Poverty FY17 Technical Assistance P156331 Fiscal equity, efficiency & macro resil. FY18 Technical Assistance P160568 Fiscal Equity FY18 Technical Assistance P160569 Fiscal Efficiency and Macro-Fiscal Resil FY18 Technical Assistance P154758 PY Poverty Measurement and M&E FY18 Technical Assistance Strengthening Transparency Systems to Improve Accountability P161686 FY18 Technical Assistance in Paraguay's Public Administration P161605 Paraguay Finance and Markets FY18 Technical Assistance P161738 Paraguay Energy Sector Study FY18 Technical Assistance P151094 PY Poverty and Equity FY18 Technical Assistance Paraguay #C002 Agriculture Commodities Exchange P154806 FY18 Technical Assistance Development PY BCP Technical Assistance to prepare transitioning to IFRS P161269** FY18 Technical Assistance and IFMIS Source: WB Business Intelligence as of 11/08/2018. * Regional Programmatic Approach; ** Reimbursable Advisory Services (RAS). Annexes CLR Review 26 Independent Evaluation Group Annex Table 4: Paraguay Grants and Trust Funds Active in FY15-FY18 (US$, millions) Project Approval Closing Approved Project name TF ID ID FY FY Amount TEKOPORÃ Beneficiaries Empowered to Ensure Social P150876 TF 18137 2015 2020 0.6 Accountability P094335 PY GEF Biodiversity Conservation TF 96758 2011 2016 4.5 Total 5.1 Source: WB Client Connection as of 11/08/2018. ** IEG validates RETF that are 5M and above. Annex Table 5: IEG Project Ratings for Paraguay, FY15-FY18 (US$, millions) Project Total Exit FY Project name ID Evaluated 2016 P082026 PY Road Maintenance 71.5 2016 P094335 PY GEF Biodiversity Conservation 4.5 Total 76.0 Source: WB Business Intelligence Key IEG Ratings as of 11/08/2018. Annex Table 6: IEG Project Ratings for Paraguay and Comparators, FY15-FY18 Total Total Outcome Outcome RDO % RDO % Region Evaluated Evaluated % Sat % Sat Moderate or Lower Moderate or Lower ($M) (No) ($M) (No) Sat ($) Sat (No) Paraguay 76 2 100 100 50 50 LCR 13,835 145 75 71 40 46 World 71,170 757 87 77 47 41 Source: WB Business Intelligence as of 11/08/2018 and IEG staff calculations. Annexes CLR Review 27 Independent Evaluation Group Annex Table 7: Portfolio Status for Paraguay and Comparators, FY15-FY18 Fiscal Year 2015 2016 2017 2018 Ave FY15-FY18 Paraguay # Proj 5 4 5 4 5 # Proj At Risk 4 4 5 4 4 % Proj At Risk 80 100 100 100 95 Net Comm Amt ($M) 476 402 502 402 445 Comm At Risk ($M) 376 402 502 402 420 % Commit at Risk 79 100 100 100 95 LCR # Proj 205 191 194 184 194 # Proj At Risk 58 53 50 59 55 % Proj At Risk 28 28 26 32 28 Net Comm Amt ($M) 27,003 28,766 28,402 28,154 28,081 Comm At Risk ($M) 5,700 5,419 5,078 5,544 5,435 % Commit at Risk 21 19 18 20 19 World # Proj 1402 1398 1459 1497 1439 # Proj At Risk 339 336 344 348 342 % Proj At Risk 24 24 24 23 24 Net Comm Amt ($M) 191,908 207,350 212,503 229,966 210,432 Comm At Risk ($M) 44,431 42,715 50,838 48,149 46,533 % Commit at Risk 23 21 24 21 22 Source: WB Business Intelligence as of 11/08/2018. Annex Table 8: Disbursement Ratio for Paraguay, FY15-FY18 Fiscal Year 2015 2016 2017 2018 Overall Result Paraguay Disbursement Ratio (%) 22 24 38 24 26 Inv Disb in FY ($M) 59 51 60 47 217 Inv Tot Undisb Begin FY ($M) 273 214 158 198 842 LCR Disbursement Ratio (%) 20.8 20.8 21.3 22.9 21.5 Inv Disb in FY ($M) 2,560.2 2,663.6 2,768.2 2,950.7 10,942.6 Inv Tot Undisb Begin FY ($M) 12,336.9 12,779.1 12,966.9 12,911.7 50,994.7 World Disbursement Ratio (%) 21.8 19.5 20.5 20.4 20.5 Inv Disb in FY ($M) 21,853.7 21,152.9 22,126.4 22,590.5 87,723.5 Inv Tot Undisb Begin FY ($M) 100,344.9 108,600.3 108,147.9 110,618.4 427,711.4 Source: WB Business Intelligence as of 11/08/2018. Annexes CLR Review 28 Independent Evaluation Group Annex Table 9: Net Disbursements and Charges for Paraguay, FY15-FY18 (US$, millions) Period Disb. Amt. Repay Amt. Net Amt. Charges Fees Net Transfers FY15 58.8 13.0 45.8 4.3 0.4 41.1 FY16 81.2 11.8 69.4 5.6 0.3 63.5 FY17 128.7 13.1 115.7 10.2 0.4 105.1 FY18 47.4 19.7 27.7 14.8 0.7 12.2 Report Total 316.2 57.7 258.5 34.9 1.8 221.9 Source: WB Business Intelligence as of 11/08/2018. Annex Table 10: Total Net Disbursements of Official Development Assistance for Paraguay (US$, millions) Development Partners 2015 2016 2017 Australia 0.32 0.11 .. Austria 0.22 0.18 0.23 Belgium 0 0.03 .. Canada 0.36 0.68 0.69 Czech Republic 0.02 0.02 .. Denmark .. .. .. Finland 0.31 0.25 .. France 0.73 0.68 .. Germany 3.54 2.57 .. Hungary .. 0 .. Ireland .. 0 .. Italy 0.83 0.58 .. Japan -6.26 -3.7 .. Korea 11.54 8.09 .. Luxembourg 0.11 0.12 0.11 Netherlands .. 0.03 .. New Zealand 0.47 0.1 .. Norway 0.83 0.7 .. Poland 0.02 0.01 .. Portugal .. .. .. Slovak Republic .. .. .. Spain 1.46 2.8 .. Sweden 1.42 1.72 .. Switzerland 0.51 0.55 .. United Kingdom 0.75 0.16 .. United States 16.39 12.73 .. DAC Countries, Total 33.57 28.41 1.03 Israel 0.03 0.13 .. Annexes CLR Review 29 Independent Evaluation Group Development Partners 2015 2016 2017 Romania 0 .. .. Thailand 0.05 0.02 .. Turkey .. 0.05 .. United Arab Emirates 0.01 .. .. Non-DAC Countries, Total 0.09 0.2 0 EU Institutions 0.59 40.62 .. Regional Development Banks, Total 16.16 7.61 .. Inter-American Development Bank, Total 16.16 7.61 .. IDB Special Fund 16.16 7.61 .. United Nations, Total 3.08 3.69 2.7 Food and Agriculture Organization [FAO] .. .. .. International Atomic Energy Agency [IAEA] 0.32 0.42 0.24 IFAD -0.54 -0.39 .. International Labour Organization [ILO] 0.92 0.78 1.16 UNAIDS 0.01 0 .. UNDP 0.7 0.56 .. UNFPA 0.79 0.86 0.64 UNICEF 0.89 1.46 .. UNTA .. .. .. WFP .. .. .. World Health Organization [WHO] .. .. 0.66 World Bank Group, Total .. .. .. World Bank, Total .. .. .. International Development Association [IDA] .. .. .. Other Multilateral, Total 6.67 8 .. Global Environment Facility [GEF] 2.02 2.92 .. Global Fund 6.02 3.3 .. OPEC Fund for International Development [OFID] -1.38 1.78 .. Multilateral Agencies, Total 26.5 59.92 2.7 Development Partners, Total 60.16 88.53 3.73 Source: OECD Stat database as of 11/08/2018. Note: Data available through 2017. Annexes CLR Review 30 Independent Evaluation Group Annex Table 11: Economic and Social Indicators for Paraguay Paraguay LCR World Series Name 2015 2016 2017 Average 2015-2017 Growth and Inflation GDP growth (annual %) 3.0 4.0 0.8 2.6 0.4 2.8 GDP per capita growth (annual %) 1.6 2.7 -0.5 1.3 -0.6 1.6 GNI per capita, PPP (current international $) 8,690 9,050 9,180 8,973 15,017 16,261 GNI per capita, Atlas method (current US$) (Millions) 4,210 4,060 3,920 4,063 8,535 10,429 Inflation, consumer prices (annual %) 3.1 4.1 3.6 3.6 2.2 1.7 Composition of GDP (%) .. .. .. Agriculture, value added (% of GDP) 17 18 18 18 5 4 Industry, value added (% of GDP) 27 28 27 27 24 26 Services, etc., value added (% of GDP) 46 45 46 46 60 65 Gross fixed capital formation (% of GDP) 16 18 19 18 19 23 Gross domestic savings (% of GDP) 18 20 18 19 18 25 External Accounts .. .. .. Exports of goods and services (% of GDP) 42 42 42 42 21 29 Imports of goods and services (% of GDP) 41 40 43 41 22 28 Current account balance (% of GDP) -1 2 -1 0 .. .. External debt stocks (% of GNI) 63 63 .. 63 .. .. Total debt service (% of GNI) 8 5 .. 7 6 .. Total reserves in months of imports 6 7 7 6 11 13 Fiscal Accounts* .. .. .. General government revenue (% of GDP) 19 19 19 19 27 .. General government total expenditure (% of GDP) 20 19 20 20 33 .. General government net lending/borrowing (% of GDP) -2 0 -1 -1 -6 .. General government gross debt (% of GDP) 18 19 19 19 58 .. Health .. .. .. Life expectancy at birth, total (years) 73.0 73.1 .. 73.1 75.4 71.9 Immunization, DPT (% of children ages 12-23 months) 92 92 92 92 90 85 People using at least basic sanitation services (% of pop) 91 .. .. 91 86 68 People using at least basic drinking water services (% of 99 .. .. 99 96 88 pop) Mortality rate, infant (per 1,000 live births) 19.0 18.4 17.9 18.4 15.3 30.3 Education .. .. .. School enrollment, preprimary (% gross) .. .. .. .. 73 49 School enrollment, primary (% gross) .. .. .. .. 109 104 School enrollment, secondary (% gross) .. .. .. .. 94 76 Population .. .. .. Population, total (Millions) 6.6 6.7 6.8 6.7 6,376.2 7,444.0 Annexes CLR Review 31 Independent Evaluation Group Paraguay LCR World Series Name 2015 2016 2017 Average 2015-2017 Population growth (annual %) 1.3 1.3 1.3 1.3 1.0 1.2 Urban population (% of total) 61 61 61 61 80 54 Poverty .. .. .. Poverty headcount ratio at $1.90 a day (2011 PPP) (% of 2 2 .. 2 4 10 pop) Poverty headcount ratio at national poverty lines (% of pop) 27 29 26 27 .. .. Rural poverty headcount ratio at national poverty lines (% of .. .. .. .. .. .. rural pop) Urban poverty headcount ratio at national poverty lines (% .. .. .. .. .. .. of urban pop) GINI index (World Bank estimate) 47.6 47.9 .. 47.8 .. .. Source: WB Development Data Platform as of 11/08/2018. *International Monetary Fund, World Economic Outlook Database, October 2018. Note: Data available through 2017. *Data from the International Monetary Fund, World Economic Outlook Database (WEO) and the Central Bank of Paraguay (CBP) report that GDP growth for 2017 is 4.8 and 5 percent, respectively. This would imply that the GDP per capita growth would be 3.5% (WEO) or 3.7% (CBP). ** WEO Database, October 2018. Annexes CLR Review 32 Independent Evaluation Group Annex Table 12: List of IFC Investments in Paraguay (US$, millions) Investments Committed in FY15-18 Project Cmt Project Project Net Net Net Primary Sector Name ID FY Status Size Loan Equity Comm 40605 2018 Active Agriculture and Forestry 105 25 - 25 37602 2017 Active Agriculture and Forestry 80 50 - 50 38575 2017 Active Finance & Insurance 5 14 - 14 39189 2017 Active Oil, Gas and Mining 3 3 3 3 36572 2016 Closed Finance & Insurance 60 - - - 37098 2016 Active Finance & Insurance 90 60 - 60 28777 2015 Active Finance & Insurance 75 50 - 50 34095 2015 Closed Agriculture and Forestry 110 75 - 75 35997 2015 Closed Finance & Insurance - 25 - 25 36669 2015 Active Oil, Gas and Mining 0 4 4 4 Sub-Total 528 306 7 306 Investments Committed pre-FY15 but active during FY15-18 Project CMT Project Project Net Net Net Primary Sector Name ID FY Status Size Loan Equity Comm 33629 2014 Active Finance & Insurance 7 7 - 7 33842 2014 Active Oil, Gas and Mining 24 24 24 24 35007 2014 Active Finance & Insurance 60 40 - 40 29531 2010 Active Agriculture and Forestry 5 5 5 5 29706 2010 Active Finance & Insurance 13 139 - 139 24770 2009 Active Finance & Insurance 3 6 - 6 26882 2009 Active Finance & Insurance 10 168 - 168 26883 2009 Active Finance & Insurance 20 131 - 131 27063 2009 Active Finance & Insurance 15 196 - 196 Sub-Total 156 717 29 717 TOTAL 684 1,023 36 1,023 Source: IFC-MIS Extract as of 9/30/18 Annexes CLR Review 33 Independent Evaluation Group Annex Table 13: List of IFC Advisory Services in Paraguay (US$, millions) Advisory Services Approved in FY15-18 Project Impl Impl Project Primary Total Project Name ID Start FY End FY Status Business Line Funds 602962 VISION Banco RM 2018 2019 ACTIVE FIG 0.2 601952 Sustainable Beef - Paraguay 2017 2022 ACTIVE MAS 2.4 600669 Sudameris SME/RM 2015 2016 ACTIVE FIG 0.3 Sub-Total 2.8 Advisory Services Approved pre-FY15 but active during FY15-18 Project Impl Impl Project Primary Total Project Name ID Start FY End FY Status Business Line Funds No Active projects Sub-Total - TOTAL 2.8 Source: IFC AS Portal Data as of 10/15/18 Annex Table 14: IFC net commitment activity in Paraguay, FY15 - FY18 (US$, millions) 2015 2016 2017 2018 Total Long-term Investment Commitment Financial Markets 75 75 (40) - 110 Agribusiness & Forestry 8 - 45 65 118 Oil, Gas & Mining 4 (0) 3 0 7 Total IFC Long Term Investment 87 75 8 65 235 Commitment Total Short-term Finance/Trade Finance / Average Outstanding 44 9 8 13 74 Balance (GTFP) Source: IFC MIS as of 9/30/18 Note: IFC began reporting average outstanding short-term commitments (not total commitments) in FY15 and no longer aggregates short-term commitments with long-term commitments. IEG uses net commitment number for IFC's long-term investment. For trade finance guarantees under GTFP, average commitment numbers have been used. Annex Table 15: List of MIGA Projects Active in Paraguay, 2015-2018 (US$, millions) Max Project ID Contract Enterprise FY Sector Investor Gross Status Issuance No Active Projects Total - Source: MIGA 11/12/15