The World Bank SN:Casamance Development Pole Project (P125506) REPORT NO.: RES35968 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SN:CASAMANCE DEVELOPMENT POLE PROJECT APPROVED ON SEPTEMBER 25, 2013 TO MINISTRY OF ECONOMY AND FINANCE SOCIAL, URBAN, RURAL AND RESILIENCE GLOBAL PRACTICE AFRICA Regional Vice President: Hafez M. H. Ghanem Country Director: Louise J. Cord Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez Practice Manager/Manager: Aly Zulficar Rahim Task Team Leader: Nicolas Perrin, Najat Yamouri The World Bank SN:Casamance Development Pole Project (P125506) ABBREVIATIONS AND ACRONYMS AGEROUTE Road Works and Management Agency (Agence des Travaux et de Gestion des Routes) AGETIP Agence d'Exécution Travaux d'Intérêt Public ANIDA Agence Nationale d'Insertion et de Développement Agricole ARD Regional Development Agencies (Agences Régionales de Développement) CDP Communal Development Plans CDPP Casamance Development Pole Project CEC Citizen Engagement Committees FERA Autonomous Road Maintenance Fund (Fonds d'Entretien Routier Autonome) FNDASP Fonds National de Développement agro-sylvo pastoral GRM Grievance Redress Mechanism HIMO High Intensity Labor Force IDA International Development Association IEPB Integrated Economic Platform of Bignona PDO Project Development Objective PIU Project Implementation Unit PSC Project Steering Committee SDR Special Drawing Right SODAGRI Société de développement agricole et industriel du Sénégal US$ United States Dollars The World Bank SN:Casamance Development Pole Project (P125506) BASIC DATA Product Information Project ID Financing Instrument P125506 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 25-Sep-2013 30-Jun-2019 Organizations Borrower Responsible Agency Ministry of Economy and Finance Project Implementation Unit (PIU),Steering Committee Project Development Objective (PDO) Original PDO The Project Development Objectives (PDO) are to: (i) enhance the agricultural productivity of youth and female farmers for selectedcrops; and (ii) improve transport linkages in isolated rural communities in targeted areas of the Casamance region. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-53050 25-Sep-2013 22-Nov-2013 20-May-2014 30-Jun-2019 40.00 31.61 5.53 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank SN:Casamance Development Pole Project (P125506) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Overall progress 1. The original credit for the Casamance Development Pole Project was approved on September 25, 2013 for an amount of US$40 million and became effective on May 20, 2014, with an original closing date of June 30, 2019. A restructuring of the project was approved in September 2017 which introduced a citizen engagement pilot component, amongst others. US$30.52 million – more than 82 percent of the total US$40 million loan – has been disbursed as of February 9, 2019.1 The Project has also been making satisfactory progress towards the achievement of both the Project Development Objectives (PDOs) and overall implementation. Despite delays, the PDO Indicators are on track and 3 out of 5 PDO Indicators have already superseded the end-of project targets2; this includes the project’s direct beneficiary number which has been superseded by 42 % (current actual is 70,799 beneficiaries; target value was 50,000). With regards to the Intermediate Results Indicators, 7 out of 16 have already superseded the end-of project targets and the majority of the others are on track. A restructuring, including the one-year extension of the loan closing date, is required for achieving more fully the project’s PDO with the finalization of the works under Component 1 expected to improve value chains opportunities for isolated communities, including better access to markets. 2. For activities under Component 1 (Support to agricultural production, Post-harvest, and marketing for selected value-chains), progress has been moderately satisfactory, with an achievement rate of 65 percent. All the activities planned in Component 1 are underway. Some significant results have already been achieved, for example, an increase of the average revenue per hectare of agriculture by 330 % (from a baseline of US$500 to US$1,650), and an average increase in rainfed rice output by 1.18 tones per year. Despite some delays observed during previous missions in the launching of the market gardening works, the activities accelerated, with a rate of execution of 37%. Delays have also been noted in the construction of market access infrastructures, including the Integrated Economic Platform of Bignona (IEPB)3. Such delays result in part from the immediate suspension of excavation works on the IEPB, started before the Resettlement Action Plan(RAP) was finalized and the environmental assessment approved by the World Bank, at the occasion of a Bank supervision mission in October 2018. Minor excavation work had started to coincide with the inauguration of the site during a presidential visit and was immediately stopped by the Bank to ensure proper steps were followed. The RAP has been finalized and published on December 15, 2018. The final Environmental and Social Impact Assessment has been sent to the Regional Safeguards Advisor on April 15, 2018. Approval is expected in May 2019, which should allow the excavation work on the IEPB to resume once the remaining compensations for 8 households resettlements are concluded. In the meantime, construction of mini-platforms, storage warehouses and small embankments in the rehabilitated valleys has continued to progress well. The bank safeguards have been followed carefully for all those investments. The works regarding the IEPB and the mini-platforms will be executed in two phases. From May/September 20194, the IEPB will continue the pilot phase using the network of mini-plateforms and existing facilities. The second phase is expected to happen in April/May 2020, once the full IEPB infrastructure work is completed. 3. Under Component 2 (Rural Accessibility), progress has been satisfactory, with an achievement rate of 97 percent and a 100% of funds committed. The activities realized under this component have made it possible for around 70 percent of the rural population to access an all-season road, exceeding end-of-project targets of 60 percent. 397 km of roads have undergone rehabilitation and Critical Points Treatment to facilitate the flow of production and circulation of 1 Figures are from the World Bank’s Operations Portal. 2 The original end-of project target is 31 December 2018. 3 The IEPB is a multisectoral platform to process, package and dispatch fruits to the markets of destination. 4 If this restructuring including a one-year extension of the Loan Closing Date is approved. iv The World Bank SN:Casamance Development Pole Project (P125506) the population. The rural road maintenance pilot (adopting High Intensity Labor methods, HIMO) has ensured the maintenance of 38 km of rural roads, with good ownership by the local population, as well as generated about 50 jobs in the five pilot communes. This component also allowed for capacity building activities for the Regional Development Agency and rural communities (around 300 people have been trained by the Training and Development Center for Public Works). 4. Progress under Component 3 (Project implementation and capacity building) has been moderately satisfactory, with an achievement rate of 71 percent. Component 3 includes the implementation of a monitoring and evaluation system, including a functional GIS database. It has also allowed the project to rapidly implement communication activities on the project and to set up citizen engagement pilots in nine zones5 in three municipalities in the three regions. The pilot in Diégoune has mobilized the population for the identification and prioritization of micro-investment projects, as part of the update of Communal Development Plans (CDPs). All CDPs have been formulated and validated. Citizen engagement committees (CEC) have been set up in three communes. Additionally, a grievance redress mechanism (GRM), has been in place and operational since November 2017. First tested in the commune of Diégoune, it is currently being scaled up to three communes. 128 grievances were registered from November 2017 to August 2018.6 5. The Borrower’s performance, including Financial Management, Procurement and Safeguards compliance, is moderately satisfactory. There are no outstanding audits under the project. All audit and financial management reports have been submitted on time and found to be acceptable to the Bank. The past safeguard issue – where excavation work on the IEPB commenced before the finalization of the Resettlement plan and approval of environmental assessment (as mentioned above) – has since been resolved. B. Rationale for Restructuring 6. On 01 February, 2019, the Ministry of Economy and Finance of Senegal sent a letter to the World Bank, which included a formal request to extend the project closing date by one-year, from June 30, 2019 to June 30, 2020. This extension would entail a concomitant revision in the disbursement forecasts and results framework indicators (as outlined in the next section). Additionally, the Borrower has requested that the remainder of project preparation funds provided to this project be utilized to support the project coordination unit’s operations for the one-year extension period. 7. The requested restructuring, entailing the one-year extension of the loan closing date, will be indispensable for the finalization of the works under Component 1, which are necessary for achieving the project’s PDO. As described under Section A, some activities under Component 1, such as the construction and operationalization of the IEPB and its mini-platforms, storage warehouses and small embankments in the rehabilitated valleys have experienced small delays despite good overall progress. The requested one-year extension will allow for the proper completion of all the activities (including those that are season dependent such as the mini-platforms and IEPB which are supporting different fruits production depending on the seasons – mangoes, cashnew, agrumes, etc) funded under the project, as well as for ensuring the sustainability of the equipment and works. This will not only facilitate the transfer of the project achievements to government partners, but also facilitate a strategic programmatic reflection with the Government of Senegal on a possible consolidated intervention of the World Bank portfolio in Casamance, which could regroup several sectors of activities (such as social and human development, infrastructure, agriculture, governance). 5Each zone comprises a homogeneous groups of several villages. 6Out of which, 118 (93%) were directed to the project. Out of the 118 grievances, 77 have been resolved. The 51 unresolved grievances were not within the prerogatives of the project. v The World Bank SN:Casamance Development Pole Project (P125506) 8. An extension of the closing date of the project for one-year is possible as (i) the Project’s Development Objective remains achievable, (ii) the performance of the Borrower remains satisfactory, and (iii) the Bank and the Borrower have agreed on an Action Plan to complete the Project. These points are explained in more detail as follows: i. The original PDO remains achievable: The project has been making satisfactory progress towards the achievement of the PDO and 3 out of 5 PDO Indicators have already superseded end-of project targets. A one-year extension of the loan closing date will allow the project to: (i) finalize all activities, in particular those that have experienced delays and are season-dependent (i.e. the IEBP and its mini-platforms), (ii) transfer the works under this project to partner institutions, therefore ensuring the sustainability of the project’s works; and (iii) maximize development benefits by updating some target values of PDO and Intermediate Results Indicators. ii. The performance of the Borrower remains satisfactory: As outlined in Section A, the Project has been making satisfactory progress towards the achievement of both the Project Development Objectives (PDOs) and overall implementation. Also, there are no outstanding audits under the Project and all audit and financial management reports have been submitted in time and found to be acceptable to the Bank. iii. The Bank and the Borrower have agreed on an Action Plan to complete the project: A detailed Action Plan to complete this project had been discussed during the last supervision mission in October 2018. The Action Plan to complete the project has been finalized and includes a detailed workplan for the consolidation of activities to be implemented by June 2020. II. DESCRIPTION OF PROPOSED CHANGES C. Proposed changes under this Restructuring 9. Five changes are proposed under the restructuring: a) Change in Loan Closing Date; b) Reallocation Between Disbursement Categories; c) Change in Disbursement Estimates; d) Change in Results Framework; and e) Change in Implementing Agencies. The proposed changes are outlined in detail below. a) Change in Loan Closing Date 10. In light of the Borrower’s request, the proposed restructuring seeks to extend the closing date of the project by one year, from June 30, 2019 to June 30, 2020. This one-year extension will allow the completion of all outstanding project activities that are required to achieve the project’s PDO, such as increasing the rain-fed rice output and tons of local products passing through the IEPB. b) Reallocation Between Disbursement Categories 11. As requested by the Borrower, this proposed restructuring seeks to reallocate the remaining XDR 683,894.57, currently in Disbursement Category 2 “Refund of Preparation Advance”, to the Disbursement Category 1 “Goods works, non-consulting services Operating Costs, Training, and consultant’s services for the project”. This change will allow the project to cover part of the operating costs of the PIU needed due to the requested one-year extension of the loan closing date of the project. The mobilization of this remaining fund will therefore also allow the successful achievement of the PDO. c) Change in Disbursement Estimates 12. The one-year extension of the closing date to June 30th, 2020 also introduces changes in the disbursement estimates and timeline for the completion of all the other project activities, in achieving the PDOs. The requested change vi The World Bank SN:Casamance Development Pole Project (P125506) in disbursement estimates is shown in Table 1, and a revised detailed disbursement plan for the remainder of the project is shown in Table 2.7 Table 1: Disbursement Plan: Estimates, actuals and requested revisions ORIGINAL DISBURSEMENT ACTUAL REQUESTED PERIOD ESTIMATE DISBURSEMENT REVISION FY2014 1,920,760.00 2,268,654.70 - FY2015 6,338,520.00 3,613,054.73 - FY2016 9,865,200.00 4,098,831.55 - FY2017 9,061,600.00 10,284,770.10 - FY2018 7,798,720.00 6,593,487.32 - FY2019 5,015,200.00 3,659,141.08 - FY2020 - - 5,100,000.00 Table 2: Revised Detailed Disbursement Plan from January 1, 2019 to June 30, 2020 (in million US$, using Calendar Year) Amount not IDA Total disbursed on Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 5 Qtr 6 IDA CREDIT CREDIT Amount January 1, Jan-March Apr-Jun Jul-Sept Oct-Dec Jan-Mar Apr-June 53050 Q 8490 2019 2018 2019 2019 2019 2020 2020 40.00 1.55 41.55 7.60 1.00 1.50 2.00 2.00 0.50 0.60 d) Change in Results Framework 13. With this proposed restructuring, the results framework indicators will be updated to reflect the revised end target date (see Annex Results Framework for full list). A summary of the changes to be made is presented in the table below: Table 3: Summary of proposed changes to the project’s Results Framework Indicator Change Rationale PDO-Indicators The end project target will be The one-year extension of Direct project beneficiaries (Number) increased from 50,000 to the project allows the project 75,000. to achieve more ambitious results and end project The end project target will be Average increase in rainfed rice output (Tones/year) targets are therefore raised. increased from 1.60 to 3.0. Intermediate Results Indicators Women and youth groups provided with equipment and input The end project target will be The one-year extension of packages – Horticulture (Number) increased from 75 to 85. the project allows the project Women and youth groups provided with equipment and input The end project target will be to achieve more ambitious packages – Oyster farms (Number) increased from 2 to 15. results and end project Women and youth groups provided with equipment and input The end project target will be targets are therefore raised. packages - Rice (Number) increased from 509 to 524. 7The change in Disbursement Estimates as shown in III. Summary of Changes, p. x misses information, as it does not include a new FY2020 Disbursement Line (Estimated Disbursement in FY2020 is 5,100,00 as shown above in Table 1). The proposed changes as shown on p. x are the actuals (i.e. the actual amount that the project has disbursed in the respective FYs or is planning to disburse in the current FY19). vii The World Bank SN:Casamance Development Pole Project (P125506) The end project target will be Rice valleys rehabilitated (Hectare) increased from 30,000 to 120,000. People in the project area aware of the project's beneficiary The end project target will be targeting criteria (Percentage) increased from 50% to 95%. e) Change in Implementing Agencies 14. This proposed restructuring regularizes the role of the implementing agencies of the project of the original agreement: Original references to Regional Development Agencies (Agences Régionales de Développement, ARDs) are deleted as those agencies have not been associated to the project execution from the start. Initially, the project had envisioned that the ARDs would play a key role in the project implementation. With the “Acte III of Decentralization” in 2013, however, it was clear that the ARD could no longer play this role and to avoid too much delays in project implementation, it was decided to “upgrade” the technical responsibilities of the already existing Coordination Office8 to a full “Project Implementation Unit” – PIU- to overtake the tasks the ARDs were supposed to be in charge of. The PIU has been reporting to the Project Steering Committee (PSC) and has from the start of the project the overall fiduciary responsibility of the project under one single designated account. The PIU was transferred to Ziguinchor in 2014 and its fiduciary and technical capacity strengthened (financial management specialist, procurement and safeguards specialists and technical specialists). The fiduciary and safeguards capacities of the PIU have been assessed regularly and found satisfactory. Those changes were not reflected in the Financial Agreement at the project effectiveness. 15. Conventions were signed by the PIU with five executing agencies to ensure the provision of the technical services initially envisaged through the ARDs. These agencies are: Agence de Gestion des Routes (AGEROUTE), Agence d'Exécution Travaux d'Intérêt Public (AGETIP) ; Fonds National de Développement agro-sylvo pastoral (FNDASP), , Société de développement agricole et industriel du Sénégal (SODAGRI) and Agence Nationale d'Insertion et de Développement Agricole (ANIDA). The fiduciary capacity of the each of those agencies was assessed by the bank and conventions were signed for specific services. The Project Implementation Manual describes those arrangements and has been reviewed and found acceptable by the Bank. Under the September 2017 restructuring, the activities related to ARDs in Component 3 were dropped but the role played by the executing agencies was not amended. The Project Implementation Manual has been revised to address these changes and has been reviewed and found acceptable. This restructuring provides the opportunity to make those changes in the datasheet and the Financing as well Subsidiary Agreement of the project. 8This Coordination Office was created in April 2014 and had to physically move from Dakar to Ziguinchor in September 2014 at the request of officials from Casamance to the Government. viii The World Bank SN:Casamance Development Pole Project (P125506) III. SUMMARY OF CHANGES Changed Not Changed Implementing Agency ✔ Results Framework ✔ Loan Closing Date(s) ✔ Reallocation between Disbursement Categories ✔ Disbursement Estimates ✔ DDO Status ✔ Project's Development Objectives ✔ Components and Cost ✔ Cancellations Proposed ✔ Disbursements Arrangements ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ ix The World Bank SN:Casamance Development Pole Project (P125506) IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_IA_TABLE IMPLEMENTING AGENCY Implementing Agency Name Type Action Project Implementation Unit (PIU) Implementing No Change Agency Steering Committee Implementing No Change Agency Regional Development Agency - Ziguinchor Implementing Marked for Deletion Agency Regional Development Agency - Sedhiou Implementing Marked for Deletion Agency Regional Development Agency - Kolda Implementing Marked for Deletion Agency OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-53050 Effective 30-Jun-2019 30-Jun-2020 30-Oct-2020 OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-53050-001 | Currency: XDR iLap Category Sequence No: 1 Current Expenditure Category: GDS,WK(except Pt C.4),NCS,TR,CS,OP 25,400,000.00 21,520,063.11 26,083,894.57 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: PPF REFINANCING 1,100,000.00 416,105.43 416,105.43 100 Total 26,500,000.00 21,936,168.54 26,500,000.00 x The World Bank SN:Casamance Development Pole Project (P125506) OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2014 0.00 2,268,654.70 2015 0.00 3,613,054.73 2016 0.00 4,098,831.55 2017 0.00 10,284,770.10 2018 0.00 6,593,487.32 2019 0.00 3,659,141.08 . xi The World Bank SN:Casamance Development Pole Project (P125506) . Results framework COUNTRY: Senegal SN:Casamance Development Pole Project Project Development Objectives(s) The Project Development Objectives (PDO) are to: (i) enhance the agricultural productivity of youth and female farmers for selectedcrops; and (ii) improve transport linkages in isolated rural communities in targeted areas of the Casamance region. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline End Target Enhance the agricultural productivity of youth and female farmers for selected crops Direct project beneficiaries (Number) 0.00 75,000.00 Action: This indicator has been Revised Female beneficiaries (Percentage) 0.00 60.00 Youth beneficiaries (Percentate, Custom Supplement) 0.00 50.00 (Percentage) Tons of local products passing through the platform of Bignona 0.00 13,000.00 per Year (Tones/year) Average revenue per hectare of horticulture (Amount(USD)) 500.00 1,350.00 Average increase in rainfed rice output (Tones/year) 0.00 3.00 Action: This indicator has been Revised Improve transport linkages in isolated rural communities in targeted areas of the Casamance region xii The World Bank SN:Casamance Development Pole Project (P125506) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline End Target Share of rural population with access to an all-season road 0.00 59.63 (Percentage) Number of rural people with access to an all-season road 614,000.00 700,699.00 (Number) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target Rural Accessibility Rural Roads rehabilitated and/or improved to all weather 0.00 480.00 conditions (Kilometers) Support to agricultural production, Post-harvest, and marketing for selected value-chains The platform of Bignona is constructed and functional (Yes/No) No Yes Agricultural storage facilities (Number) 0.00 15.00 Area provided with irrigation and drainage services (ha) (CRI, 0.00 30,000.00 Hectare(Ha)) Area provided with irrigation and drainage services - 0.00 12,000.00 Improved (ha) (CRI, Hectare(Ha)) Area provided with improved irrigation or drainage services 0.00 18,000.00 (Hectare(Ha)) Women and youth groups provided with equipment and input 0.00 85.00 packages Horticulture (Number) Action: This indicator has been Revised xiii The World Bank SN:Casamance Development Pole Project (P125506) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target Women and youth groups provided with equipment and input 0.00 15.00 packages Oyster farms (Number) Action: This indicator has been Revised Women and youth groups provided with equipment and input 0.00 524.00 packages Rice (Number) Action: This indicator has been Revised Rice valleys rehabilitated (Hectare(Ha)) 0.00 120,000.00 Action: This indicator has been Revised Small enterprises created around the platform of Bignona 0.00 15.00 (Number) Targeted clients satisfied with agricultural services (percentage) 0.00 85.00 (Percentage) Horticultural perimeters rehabilitated managed and /or 0.00 300.00 developped (hectares) (Hectare(Ha)) Project implementation and capacity building Percentage of grievance responses within the required 0.00 100.00 timeframe (Percentage) Number of citizen engagement pilots implemented (Number) 0.00 9.00 People in the project area aware of the project's beneficiary 0.00 95.00 targeting criteria (Percentage) Action: This indicator has been Revised IO Table SPACE xiv The World Bank SN:Casamance Development Pole Project (P125506) Click here to enter text. xv