Public Disclosure Copy The World Bank Implementation Status & Results Report Kosovo Financial Sector Strengthening & Market Infrastructure Project (P108080) Kosovo Financial Sector Strengthening & Market Infrastructure Project (P108080) EUROPE AND CENTRAL ASIA | Kosovo | Finance & Markets Global Practice | IBRD/IDA | Technical Assistance Loan | FY 2008 | Seq No: 15 | ARCHIVED on 15-Jun-2016 | ISR24165 | Implementing Agencies: Central Banking Authorities of Kosovo, Kosovo Banking Association, Association of Microfinance Institutions of Kosovo (AMIK), Deposit Insurance Fund of Kosovo Key Dates Key Project Dates Bank Approval Date:13-Dec-2007 Effectiveness Date:03-Jan-2008 Planned Mid Term Review Date:04-Mar-2015 Actual Mid-Term Review Date:04-Mar-2015 Original Closing Date:30-Jun-2010 Revised Closing Date:30-Jun-2016 Project Development Objectives Project Development Objective (from Project Appraisal Document) The main objective of the project is to enhance CBAK's capacity to oversee the financial system's stability and its developmentinKosovo. The project will focus on strengthening the capacity of CBAK to supervise banks and non bank financial institutions(inparticular insurance companies and pension funds). Has the Project Development Objective been changed since Board Approval of the Project Objective? Yes Board Approved Revised Project Development Objective (If project is formally restructured)PHRPDODEL The objectives of the Project are to (i) enhance the stability and development of the financial sector; and (ii) strengthen thefinancial sector’s underlying market infrastructure. Components Name Assistance to CBK:(Cost $1.67 M) Assistance to AMIK:(Cost $0.24 M) Assistance to KBA:(Cost $0.20 M) Establishment of a RTGS:(Cost $1.87 M) Provision of seed funding to the DIFK:(Cost $4.00 M) Establishment of a BCC:(Cost $0.85 M) Overall Ratings 6/15/2016 Page 1 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kosovo Financial Sector Strengthening & Market Infrastructure Project (P108080) Name Previous Rating Current Rating Progress towards achievement of PDO  Moderately Satisfactory  Moderately Satisfactory Overall Implementation Progress (IP)  Moderately Unsatisfactory  Moderately Satisfactory Overall Risk Rating  High  High Implementation Status and Key Decisions Overall project implementation has been facing significant delays. However, substantial progress has recently been achieved in the Real Time Gross Settlement System (RTGS) with implementation expected to be finalzied by July 2016. The Business Continuity Center (BCC) refurbishment works have commenced but were suspended till mid June 2016 due to issues surrounding the usage and work permits. This has now been resolved. In order to allow for successful completion of all outstanding activities, the authorities have requested a 6 months extension of the closing date to December 31, 2016. 6/15/2016 Page 2 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kosovo Financial Sector Strengthening & Market Infrastructure Project (P108080) 6/15/2016 Page 3 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kosovo Financial Sector Strengthening & Market Infrastructure Project (P108080) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Substantial  Substantial Macroeconomic  --  Low  Low Sector Strategies and Policies  --  Moderate  Moderate Technical Design of Project or Program  --  Moderate  Moderate Institutional Capacity for Implementation and Sustainability  --  Moderate  Moderate Fiduciary  --  Moderate  Moderate Environment and Social  --  Low  Low Stakeholders  --  Moderate  Moderate Other  --  --  -- Overall  --  High  High Results Project Development Objective Indicators PHINDPDOTBL  Status of updated legal and regulatory framework for banks and NBFIs and capacity building in the financial sector (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Non existent Achieved Achieved Achieved Date 01-Jan-2008 31-Jan-2016 13-Jun-2016 30-Jun-2016 6/15/2016 Page 4 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kosovo Financial Sector Strengthening & Market Infrastructure Project (P108080) PHINDPDOTBL  Status of operationalization of RTGS (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Non existent In progress In progress Achieved Date 14-Jun-2011 31-Jan-2016 13-Jun-2016 30-Jun-2016 Comments The operationalization of the Real Time Gross Settlement System (RTGS) has been significantly delayed in its two-stage bidding process. Implementation started in June 2015 and is now well underway. The RTGS testing and pilot run phase is currently being finalized with the aim to achieving a fully-automatic, operational RTGS by July 2016. PHINDPDOTBL  Status of establishment of a fully operational Business Continuity Center (BCC) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Non existent In progress In progress Achieved Date 14-Jun-2011 31-Jan-2016 13-Jun-2016 30-Jun-2016 Comments The establishment of a fully operational Business Continuity Center (BCC) has faced significant delays primarily due to the unclear ownership of the building that was scheduled for renovation. The required permits have now been issued by the Municipality of Prizren and the contractor has re-started refurbishment works with the aim to complete all works by the fall 2016. PHINDPDOTBL  Status of establishment of the DIFK (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Non existent Operational Operational Operational Date 14-Jun-2011 31-Jan-2016 13-Jun-2016 30-Jun-2016 Overall Comments Intermediate Results Indicators 6/15/2016 Page 5 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kosovo Financial Sector Strengthening & Market Infrastructure Project (P108080) PHINDIRITBL  Intermediate Result 1.1. - Number of missing and/or outdated regulations and directives drafted for banks and NBFIs new laws, which have been passed recently or to be passed over the life of the proje (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 70.00 70.00 70.00 Date 14-Jun-2011 31-Jan-2016 13-Jun-2016 30-Jun-2016 PHINDIRITBL  Intermediate Result 1.2. - Automated database for off-site supervision acquired and implemented (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Off-site database for Off-site database for Off-site supervision Implementation in monitoring and Value monitoring and analysis database is non existent pogress. analysis used used in day to day work in day to day work Date 14-Jun-2011 31-Jan-2016 13-Jun-2016 30-Jun-2016 PHINDIRITBL  Intermediate Result 1.3. - Percentage of CBK supervisors trained in using analytical tool and regarding new regulations (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 100.00 100.00 Date 14-Jun-2011 31-Jan-2016 13-Jun-2016 30-Jun-2016 Comments The percentage of supervisors trained: 1. Banking supervision 100% (22 out of 22 2. Insurance supervision 100% (19 out of 19) 3. Pension supervision 100% (6 out of 6) The percentage of other staff trained that will be using the software: 4. Financial Stability 85% (5 out of 6) The percentage of total staff number trained: 5. All departments combined using the software 96% 6/15/2016 Page 6 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kosovo Financial Sector Strengthening & Market Infrastructure Project (P108080) PHINDIRITBL  Intermediate Result 1.4. - Number of training sessions to MFIs in transforming into deposit taking institutions and to other MFIs (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 20.00 20.00 20.00 Date 01-Jan-2008 31-Jan-2016 13-Jun-2016 30-Jun-2016 PHINDIRITBL  Intermediate Result 1.5. - Number of training sessions to bank officers and KBA staff on banking sector topics (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 23.00 23.00 23.00 Date 01-Jan-2008 31-Jan-2016 13-Jun-2016 30-Jun-2016 PHINDIRITBL  Intermediate Result 2.1. - Status of operational integration of the RTGS system with the existing Electronic Interbank Clearing System (EICS) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Non existent In progress In progress Achieved Date 14-Jun-2011 31-Jan-2016 13-Jun-2016 30-Jun-2016 PHINDIRITBL  Intermediate Result 2.2. - Status of operational integration of the RTGS system with the Central Securities Depositary (CSD) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Non existent In progress In progress Achieved Date 14-Jun-2011 31-Jan-2016 13-Jun-2016 30-Jun-2016 6/15/2016 Page 7 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kosovo Financial Sector Strengthening & Market Infrastructure Project (P108080) PHINDIRITBL  Intermediate Result 2.3. - Percentage of transactions in GoK and CBK securities settled in the RTGS system in conformity with the principles of Delivery versus Payment (DvP) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 100.00 Date 14-Jun-2011 31-Jan-2016 13-Jun-2016 30-Jun-2016 PHINDIRITBL  Intermediate Result 2.4. - Percentage of payments settled immediately or with a short delay (<15 minutes) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 95.00 Date 14-Jun-2011 31-Jan-2016 13-Jun-2016 30-Jun-2016 PHINDIRITBL  Intermediate Result 3.1. - Status of completion of refurbishment of the BCC facility (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Non existent In progress In progress Achieved Date 14-Jun-2011 31-Jan-2016 13-Jun-2016 30-Jun-2016 PHINDIRITBL  Intermediate Result 3.2. - Percentage of failover from the CBK's primary processing site to BCC, and restoration back to the primary site, successfuly demonstrated for all CBK's critical systems (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- -- -- 0.00 Date 14-Jun-2011 31-Jan-2016 13-Jun-2016 30-Jun-2016 6/15/2016 Page 8 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kosovo Financial Sector Strengthening & Market Infrastructure Project (P108080) PHINDIRITBL  Intermediate Result 3.3. - Number of regular failover exercises conducted on a quarterly basis per year (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- -- -- 4.00 Date -- 31-Jan-2016 13-Jun-2016 30-Jun-2016 PHINDIRITBL  Intermediate Result 4.1.- Contributed amount from GoK (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 3.30 3.30 3.30 Date 14-Jun-2011 31-Jan-2016 13-Jun-2016 30-Jun-2016 PHINDIRITBL  Intermediate Result 4.2.- Premiums received from member banks (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Yes Yes Yes Date 14-Jun-2011 31-Jan-2016 13-Jun-2016 30-Jun-2016 Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P108080 IDA-50060 Effective XDR 4.30 4.30 0.00 3.22 1.08 75% P108080 IDA-H3410 Effective XDR 1.30 1.30 0.00 1.12 0.18 86% Key Dates (by loan) 6/15/2016 Page 9 of 10 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kosovo Financial Sector Strengthening & Market Infrastructure Project (P108080) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P108080 IDA-50060 Effective 14-Jun-2011 03-Aug-2011 25-Jan-2012 30-Jun-2014 30-Jun-2016 P108080 IDA-H3410 Effective 13-Dec-2007 14-Dec-2007 03-Jan-2008 30-Jun-2010 30-Jun-2016 Cumulative Disbursements Restructuring History Level Approved on 27-Apr-2010 ,Level 2 Approved on 18-Jun-2014 Related Project(s) P122084-Kosovo, Financial Sector Strengthening and Markets Infrastructure Project - Additional Finance 6/15/2016 Page 10 of 10 Public Disclosure Copy