The World Bank Report No: ISR15613 Implementation Status & Results Sri Lanka SL: WAREHOUSE RECEIPTS FINANCING PROJECT (P124091) Public Disclosure Copy Operation Name: SL: WAREHOUSE RECEIPTS FINANCING PROJECT Project Stage: Implementation Seq.No: 4 Status: ARCHIVED Archive Date: 28-Jul-2014 (P124091) Country: Sri Lanka Approval FY: 2012 Product Line: Recipient Executed Activities Region: SOUTH ASIA Lending Instrument: Learning and Innovation Loan Implementing Agency(ies): Key Dates Board Approval Date 01-Jun-2012 Original Closing Date 31-May-2015 Planned Mid Term Review Date 08-Sep-2014 Last Archived ISR Date 10-Feb-2014 Effectiveness Date 17-Jul-2012 Revised Closing Date 31-May-2015 Actual Mid Term Review Date 09-Jun-2014 Project Development Objectives Project Development Objective (from Project Appraisal Document) The proposed Project Development Objective (PDO) of the pilot Warehousing Receipts Financing Project is to provide access to farmers in the territory of the Recipient to quality storage facilities for agricultural products and to facilitate the use of such products as collateral to access financial services by developing an electronic and negotiable warehouse receipt financing program. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Establishment of Warehouses 4.50 Product Development 0.80 Capacity Building, Technical Assistance (TA) and Awareness Creation 0.45 Monitoring and Evaluation 0.25 Public Disclosure Copy Implementation Support 0.50 Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Moderately Unsatisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Unsatisfactory Overall Risk Rating Substantial Substantial Implementation Status Overview Page 1 of 6 The World Bank Report No: ISR15613 The construction of the first warehouse at Upuldeniya village in Anuradhapura District began on February 27, 2014, and is expected to be complete by October 2014, after which the installation of the machinery for cleaning, drying, and milling can be started. While completion and operation of the Upuldeniya warehouse had been planned for October 2014, delayed commencement of construction has caused a six-month slippage. As a result, it is no longer possible to store this year's October harvest. The installation of the IT equipment and software for the electronic receipt system is expected to begin from December 2014, and the warehouse can become operational by February 2015, so that the first Public Disclosure Copy harvest can be stored from March 2015. Land for the second warehouse in Ampara has been identified and surveyed. Bids for construction will now be published by July 20, 2014, and construction is expected to be complete by February 2015. The construction of the small B-onion storage facilities is also progressing slowly and only 30 facilities have become operational although a total of 299 agreements have been signed by the Ministry of Finance and Planning with small farmers (as of June 15, 2014) in Matale, Anuradhapura and Polonnaruwa. The small B-onion farmers that have completed these storage facilities are benefiting significantly by storing their B-onion crops during harvest and selling them after the post-harvest glut is over. Locations Country First Administrative Division Location Planned Actual Sri Lanka North Western North Western Province ✔ Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Number of warehouses established and Number Value 0.00 0.00 3.00 operational with the required IT equipment and Date 31-Jul-2013 18-Jun-2014 31-May-2015 software systems to manage a warehouse Comments There are no warehouses The construction of the first receipt financing mechanism operational to manage warehouse in Anuradhapura warehouse receipt financing began in February 2014, and mechanism. is expected to be completed by October 2014. Land for the second warehouse in Ampara has been identified and construction may begin from Public Disclosure Copy October 2014. Number of farmers accessing credit using Number Value 0.00 0.00 35000.00 warehouse receipts as collateral. Date 31-Jul-2013 18-Jun-2014 31-May-2015 Comments No farmer is accessing credit Warehouse receipts are using warehouse receipts as expected to be issued from collateral March 2015, after the first warehouse in Upuldeniya is functional. Page 2 of 6 The World Bank Report No: ISR15613 Total amount of loans accessed through the Amount(USD) Value 0.00 0.00 10000000.00 mechanism Date 31-Jul-2013 18-Jun-2014 31-May-2015 Comments No loans have been granted Farmers will be able to Public Disclosure Copy against warehouse receipts. access loans after the warehouse receipts system is in place, beginning from March 2015. Decrease in price variation in areas served by Percentage Value 0.00 20.00 warehouse Date 18-Jun-2014 31-May-2015 Comments Baseline survey is in process No decrease in price variation to determine the average noted at this time. price variation due to the absence of quality storage facilities. Direct project beneficiaries Number Value 0.00 0.00 45000.00 Date 31-Jul-2013 18-Jun-2014 31-May-2015 Comments There are no beneficiaries. Warehouses not built yet. Female beneficiaries Percentage Value 0.00 0.00 8.89 Sub Type Supplemental Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Participation of commercial operators -- banks, Number Value 0.00 0.00 10.00 insurance companies, operators Date 31-Jul-2013 18-Jun-2014 31-May-2015 Comments No financial institution is Commercial operators can participating begin participation after the warehouse receipts system is in place from March 2015. Public Disclosure Copy Number of banks engaged in lending with Number Value 0.00 0.00 4.00 farmer friendly innovative instruments Date 31-Jul-2013 18-Jun-2014 31-May-2015 Comments None. Banks will be able to lend to the small farmers after the warehouse receipts system is operational from March 2015. Number of trained male and female farmers Number Value 0.00 0.00 45015.00 and warehouse managers Date 31-Jul-2013 18-Jun-2014 31-May-2015 Page 3 of 6 The World Bank Report No: ISR15613 Comments None Training is expected to begin Male = 41,000 from December 2014. Female = 4,000 WHM = 15 Public Disclosure Copy Public awareness about using the warehouse Yes/No Value No Yes Yes system Date 31-Jul-2013 18-Jun-2014 31-May-2015 Comments None. Public awareness has been created to some extent by the awareness workshops held so far. Further awareness workshops are planned during the next six months. Number of trained local bank staff in Number Value 0.00 0.00 260.00 warehouse mechanism and electronic Date 31-Jul-2013 18-Jun-2014 31-May-2015 instrument Comments None Training of bank staff is expected to begin from November 2014. Number of active loan accounts from Number Value 0.00 0.00 30000.00 innovative instruments held by farmers in Date 31-Jul-2013 18-Jun-2014 31-May-2015 targeted areas Comments None. Farmers will be able to apply for loans after the warehouse receipts system is operational from March 2015. Number of active loan accounts held by female Number Value 0.00 0.00 2000.00 farmers in targeted areas as a result of farmer Date 31-Jul-2013 18-Jun-2014 31-May-2015 friendly financial products Comments None Female farmers will also be able to apply for loans after the warehouse receipts system is operational from March 2015. Regulatory mechanism improved Yes/No Value No No Yes Public Disclosure Copy Date 31-Jul-2013 18-Jun-2014 31-May-2015 Comments The Legal Department of MoFP will be requested by PIU to carry out a gap study to determine the gaps in the current legal framework. Page 4 of 6 The World Bank Report No: ISR15613 Number of signed warehouse lease Number Value 0.00 0.00 7.00 agreements between Government and private Date 31-Jul-2013 18-Jun-2014 31-May-2015 sector Comments No lease agreements signed. A consultant will be hired in Public Disclosure Copy August 2014, to assist PIU in leasing out the Anuradhapura warehouse. Access to quality storage by farmers Number Value 0.00 0.00 40000.00 Date 31-Jul-2013 18-Jun-2014 31-May-2015 Comments Warehouses not built yet. Access to quality storage is expected after the first warehouse is operational around March 2015. Around 30 small B-Onion farmers have access to quality storage now. Increase in income and access to finance for Percentage Value 0.00 0.00 15.00 farmers Date 31-Jul-2013 18-Jun-2014 31-May-2015 Comments None. Paddy, maize and soyabean farmers are expected to benefit from increased income after the warehouse receipts system is functional. The 30 B-onion farmers realized substantial increase in income by storing their onions in the newly constructed facilities. Data on Financial Performance (as of 23-Jun-2014) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date Public Disclosure Copy P124091 TF-12186 Effective 17-Jul-2012 17-Jul-2012 17-Jul-2012 31-May-2015 31-May-2015 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P124091 TF-12186 Effective USD 6.50 6.50 0.00 2.42 4.08 37.00 Disbursement Graph Page 5 of 6 The World Bank Report No: ISR15613 Public Disclosure Copy Key Decisions Regarding Implementation A mid-term review was undertaken from June 9 to 18, 2014, which focused on overall implementation progress and recommended an action plan to complete as much of the project activities as possible before the closing date of May 31, 2015. The mission worked with the Project Implementation Unit (PIU) at the Ministry of Finance and Planning to assess how much of the planned activities can be completed before the closing of the project. The implementation delays have caused the completion and operation of the first warehouse at Upuldeniya in Anuradhapura to slip from October 2014 to February 2015. Therefore, the earlier target of storing the October harvest this year is no longer possible and now the target to begin storage has shifted to March 2015. To ensure that the March 2015 harvest can be stored in the Upuldeniya warehouse a new timeline of critical activities has been agreed with the PIU. The second warehouse at Ampara, if built on a tight schedule, may become operational by the closing date of this project. However, a third warehouse is no longer feasible under this project. Because of the delay in implementing the action plan agreed during the previous mission and given that none of the results indicators have been achieved in the two years since the project became Effective, the ratings of the Project Development Objective and overall Implementation Progress are both downgraded to Moderately Unsatisfactory. Moreover, the implementation delays will no longer make it possible to achieve the original results and hence it was agreed that the project would be restructured to revise the PDO and the results framework indicators and targets. Restructuring History Public Disclosure Copy There has been no restructuring to date. Related Projects There are no related projects. Page 6 of 6