Document of The World Bank Group FOR OFFICIAL USE ONLY Report No: 94017-GY INTERNATIONAL DEVELOPMENT ASSOCIATION, INTERNATIONAL FINANCE CORPORATION, AND MULTILATERAL INVESTMENT GUARANTEE AGENCY COUNTRY ENGAGEMENT NOTE FOR THE COOPERATIVE REPUBLIC OF GUYANA FOR THE PERIOD FY16-18 March 23, 2016 Caribbean Country Management Unit Latin America and the Caribbean Region The International Finance Corporation Latin America and the Caribbean Region Multilateral Investment Guarantee Agency This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency unit = Guyanese dollar (GYD) US$1.00 = 207.21 GYD (exchange rate effective as of 3/18/2016) FISCAL YEAR January 1-December 31 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS AAA Analytic and Advisory Activity AFC Alliance for Change AML/CFT Anti-Money Laundering and Countering the Financing of Terrorism APNU A Partnership for National Unity ASA Advisory Services and Analytics CDB Caribbean Development Bank CEM Country Economic Memorandum CEN Country Engagement Note CFATF Caribbean Financial Action Task Force CLR Completion and Learning Review CPF Country Partnership Framework CSO Civil Society Organization DFID Department for International Development (UK) ECE Early Childhood Education EDWC East Demerara Water Conservancy EFA-FTI Education For All-Fast Track Initiative EU European Union FCCC Forestry Climate Change and Communities FDI Foreign Direct Investment FY Fiscal Year GBTI Guyana Bank for Trade and Industry Limited GDP Gross Domestic Product GoG Government of Guyana GPE Global Program for Education GRIF Guyana REDD Plus Investment Fund HIPC Heavily Indebted Poor Countries Initiative ICT Information, Communication, and Technology IDA International Development Association i IDB Inter-American Development Bank IEG Independent Evaluation Group IFC International Finance Corporation IMF International Monetary Fund LAC Latin America and the Caribbean LCDS Low Carbon Development Strategy MDG Millennium Development Goal MDRI Multilateral Debt Relief Initiative MIGA Multilateral Investment Guarantee Agency MoLHSSS Ministry of Labor, Human Services and Social Security MSME Micro, Small, and Medium-Size Enterprise NGO Nongovernmental Organization NPL Non-Performing Loan OP/BP Operations Policy/Bank Procedure PER Public Expenditure Review PRSP Poverty Reduction Strategy Paper REDD Reducing Emissions from Deforestation and Forest Degradation TF Trust Fund UG University of Guyana UN United Nations UNDP United Nations Development Programme UNICEF United Nations International Children’s Emergency Fund US$ United States Dollar USAID United States Agency for International Development VAT Value-Added Tax WB World Bank WBG World Bank Group IBRD IFC MIGA Vice President Jorge Familiar Snezana Stoiljkovic Karin Finkleston Country Director Sophie Sirtaine Lizabeth N. Bronder Yasser Ibrahim (Acting) Task Team Leader(s) Pierre Nadji Frank Sader Petal Jean Hackett Leonardo Aleixo Lemes ii Table of Contents I. INTRODUCTION AND RATIONALE ..................................................................................................1 II. COUNTRY CONTEXT...........................................................................................................................2 A. Recent Economic Developments ............................................................................................................2 B. Poverty Reduction and Shared Prosperity ..............................................................................................6 C. Country Challenges.................................................................................................................................8 III. GOVERNMENT STRATEGY .......................................................................................................... 11 IV. GUYANA WORLD BANK GROUP PARTNERSHIP ..................................................................... 11 A. Results and Lessons Learned from Implementation of the FY09-12 CAS........................................... 11 B. Ongoing Portfolio ................................................................................................................................. 13 C. Country Engagement Note.................................................................................................................... 13 D. Proposed WBG Engagement ................................................................................................................ 15 V. RISKS .................................................................................................................................................... 18 Annex 1. Guyana Completion and Learning Review (CLR), FY09-FY12 .................................................... 20 Annex 2. CAS CLR - Guyana CAS CLR Results Framework ....................................................................... 34 Annex 3. CAS CLR - Planned vs Delivered Lending Operations .................................................................. 38 Annex 4. CAS CLR - Planned Non-lending Services and Actual Deliveries ................................................ 40 Annex 5. CAS CLR - Projects Closed during CAS........................................................................................ 40 Annex 6. CAS CLR – Trust Fund Portfolio and Multilateral Debt Relief Initiative ...................................... 41 Annex 7. Guyana Operations Portfolio (IBRD/IDA and Grants) ...................................................................42 Annex 8. IFC Investment Operations Program .............................................................................................. 43 Annex 9. Guyana IFC Committed and Disbursed Outstanding Investment Portfolio .................................... 43 MAP ............................................................................................................................................................... 44 TABLES Table 1. Guyana Selected Economic Indicators ...............................................................................................5 Table 2. National Grade Six Assessment (percentage of students scoring 50% or more by subject) ............ 10 Table 3. Guyana: IDA Projects, January 2016 ............................................................................................... 13 Table 4. Guyana CEN—WBG Program FY16-18 ......................................................................................... 18 Table 5. Guyana World Bank Group Portfolio Risk Rating ........................................................................... 19 FIGURES Figure 1. GDP Growth and CPI Inflation .........................................................................................................3 Figure 2. Current Account Balance and Fiscal Balance ...................................................................................4 BOXES Box 1. Activities of Main Development Partners ........................................................................................... 15 iii THE COOPERATIVE REPUBLIC OF GUYANA COUNTRY ENGAGEMENT NOTE I. INTRODUCTION AND RATIONALE 1. The proposed Country Engagement Note (CEN) for FY16-18 presents a program focused on strengthening the World Bank Group’s relationship with Guyana over the next two years. The CEN follows the FY09-12 Country Assistance Strategy (CAS) and will serve as an opportunity for the World Bank Group (WBG) to maintain continuity under IDA17 and build a dialogue with the Government of Guyana (GoG) on a longer-term engagement framework. A number of issues make it difficult to define a more comprehensive medium-term program at this juncture. First, the new government, elected in May 2015, is in the process of preparing their national development strategy. Once the government’s strategy is finalized, the WBG and the GoG will need time to agree on a set of common priorities to reduce extreme poverty and promote shared prosperity. Second, given the limited engagement between the WBG and the GoG over the past few years, the Bank and the government will need time to fill some important analytical gaps. Finally, the current adverse economic environment for a commodity exporting country such as Guyana introduces an additional element of uncertainty that makes it difficult to design a comprehensive program. In this context, the WBG and the government have agreed to support a 24-month CEN focusing on selective areas in which the WBG is already engaged and strategically positioned to provide support. 2. Throughout the FY09-12 CAS period and until FY15, the World Bank Group’s engagement in Guyana was selectively focused on the following areas: strengthening environmental resilience and sustainability, and improving education quality and social safety nets. In addition, the WBG also provided support to activities aimed at private sector development. The prevailing political context during the CAS period, particularly following the government’s loss of a majority in Parliament in 2011, limited the scope of the WBG’s engagement, as the government found it more difficult to pass legislation and approve new programs, or projects. Against this backdrop, the government and the WBG could not find the appropriate basis to start preparing a new Country Partnership Strategy (CPS). Nevertheless, the WBG’s program continued to achieve substantial results in all its areas of focus. Thus, from 2012 onwards the WBG focused on implementation of activities already committed under the FY09-12 CAS, and on addressing requests for policy advice and technical support through administrative funds or grant financing. This opened the way for new lending to resume in FY14, leading to a doubling of the IDA portfolio in FY14- FY15. 3. To capitalize on the WBG’s existing program, the CEN is articulated within the strategic objectives that guided the FY09-12 CAS, which remain priorities for Guyana and relate directly to the WBG’s overarching twin goals: poverty reduction and shared prosperity: (a) enhancing resilience of selected infrastructure and building disaster risk management (DRM) capacities; (b) setting up the foundations for high quality education; and (c) laying the ground for private sector development. While the FY09-FY12 CAS was not a joint strategy with the IFC, going forward under this CEN, private sector initiatives will formally reflect a joint WBG strategy, and will also include efforts by the Multilateral Investment Guarantee Agency (MIGA) to explore opportunities to foster private sector investments. 1 II. COUNTRY CONTEXT 4. Guyana is a small, sparsely populated developing country in South America. Some 90 percent of its multi-ethnic population of 765,0001 lives on the narrow Atlantic coastal plain. With a per capita GDP of $4,053,2 the Guyanese economy relies on an abundance of natural resources— including fertile agricultural lands, mineral wealth (bauxite, gold), and extensive unspoiled tropical forests covering 84 percent of the country. 5. Guyana’s dependence on agriculture and natural resources leaves the country vulnerable to adverse weather conditions and commodity price fluctuations. Sugar, gold, bauxite, shrimp, timber, and rice represent over 80 percent of the country’s exports. However, the economy has undergone significant transformation over the last two decades. The traditional sectors of sugar, rice, and bauxite, which together accounted for 30 percent of GDP in 1993, have lost importance in comparison to the gold sector, which more than doubled in percentage of GDP during the last decade, from 5 percent to 12 percent. In 2014, notwithstanding progress in economic diversification, the services sector (a significant portion of which is linked to the commodity sectors) contributed 64 percent of GDP, followed by the agriculture sector with 19 percent. The mining sector’s contribution, which has been falling since the recent decline in international commodity prices, accounted for 15 percent of GDP in 2014 versus 18 percent in 2013. The contribution of the manufacturing sector (excluding sugar processing and rice milling) remains fairly low, at just below 4 percent.3 A. Recent Economic Developments 6. Guyana’s economic performance has been tied closely to world commodity prices, performing well while prices were rising, but decelerating since 2014. Although Guyana has experienced eight consecutive years of growth, it faces several challenges central to reducing poverty, increasing shared prosperity, and building sustainability in the medium- to longer term. Underpinned by booming investment activities and favorable terms of trade, the economy expanded by an annual average of 4.6 percent during 2008-13 (see Figure 1). 4 In addition, the timely introduction of a value-added tax (VAT) and implementation of debt relief agreements under the Heavily Indebted Poor Countries Initiative (HIPC) and Multilateral Debt Relief Initiative (MDRI) reinforced the country’s macroeconomic performance. During the FY09-12 CPS period, under the HIPC initiative, the Bank managed trust funds which led to a total debt relief of $97 million (see Annex 6). 1 According to the 2002 census (the latest publicly available data), the population is composed of Indo-Guyanese (43.5 percent); Afro-Guyanese (30.2 percent); mixed heritage (17.6 percent); Amerindian (9.2 percent); and people of Portuguese and Chinese descent (1 percent). Historically, ethnic divisions have been prominently reflected in the electoral sphere. 2 Data from World Development Indicators, 2014. Unless otherwise specified the currency used throughout this CEN is the US$. 3 Source: Bureau of Statistics—Guyana, final 2014 data. 4 Robust growth in remittance flows (about 25 percent of GDP in 2007) and foreign direct investment (FDI) were largely responsible for the growth in investments. 2 Figure 1. GDP Growth and CPI Inflation 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 ‐1.0 ‐2.0 Real GDP growth CPI inflation Sources: Guyanese authorities and IMF and WBG staff estimates and forecast. 7. Less favorable terms of trade led to a slowdown in growth in 2014 and 2015, a pattern observed in other commodity-exporting countries. Economic growth slowed from 5.0 percent in 2013 to 3.8 percent in 2014 and to 3.0 percent in 2015, as a result of falling commodity prices as well as acute drought, the end of the favorable rice-for-oil deal with Venezuela, and reduced fiscal stimulus. Strong growth in the transport and storage industry and in gold mining in 2015 accounted for most of total real growth. The opening of two new mines contributed to a 16.4 percent increase in declared gold production. Manufacturing output grew, principally reflecting higher rice and sugar yields. Counterbalancing these gains were substantial declines in construction and somewhat large declines in forestry and bauxite production. 8. The current account deficit fell to 4.4 percent of GDP in 2015, following a decade of deficits that ranged between 10 and 17 percent of GDP (see Figure 3);5 this was due to a 39 percent decline in the oil import bill. Despite falling commodity prices, gold export revenue rose by 7 percent as a result of expanded production; this was sufficient for total export revenue to increase by 0.2 percent. The stock of international reserves had been declining in value terms over the past four years; however, reserves were still equivalent to 3.9 months of imports at the end of 2015. 9. Fiscal and current account deficits expanded while commodity prices were high and contracted when prices fell. In 2015, the government’s overall fiscal deficit contracted by more than four percentage points of GDP from the preceding year, to 1.4 percent of GDP. Fiscal compression during the first eight months of the year contributed to the improved balance, aided by a low execution rate for investment projects. Total revenue rose by 11 percent in 2015, as a consequence of large increases in both tax revenue and contributions from public enterprises. Although total consumption tax revenue increased, VAT revenue (which makes up around 25 percent of total tax revenue) fell by 5.2 percent because of an increase in the number of exemptions. For 2016, the government is forecasting a widening of the fiscal deficit to 4.5 percent of GDP on account of weak revenue performance and higher capital expenditures (see Figure 2). 5 The 2015 number is a preliminary estimate by the Ministry of Finance of Guyana. 3 Figure 2. Current Account Balance and Fiscal Balance 0.0 0.0 ‐2.0 ‐5.0 ‐4.0 ‐10.0 ‐6.0 ‐15.0 2008 2009 2010 2011 2012 2013 2014 2015e 2016f Current account balance, % of GDP (rhs) Fiscal balance, % of GDP (lhs) Sources: Guyanese authorities and IMF and WBG staff estimates and projections. 10. Public debt has grown since 2014, although debt sustainability analysis suggests that Guyana’s external and public debt remains sustainable. As a result of larger budget deficits, public debt climbed to 65.8 percent of GDP in 2014, from 57.3 percent in 2013, and is estimated to reach 70.2 percent in 2015 (see Table 1). The government’s policy of borrowing on highly concessional terms keeps debt service manageable, although under some more negative scenarios debt service could grow significantly and limit resources available for public investment and social spending. Debt service could also increase if the government is unable to continue contracting new loans on concessional terms. 11. The government is faced with maintaining fiscal prudence so as to ensure debt sustainability while expanding public investment to reduce poverty and relieve infrastructure bottlenecks (which are subsequently discussed in Section B and C, respectively, of this Chapter). Despite eight consecutive years of solid growth, the fiscal deficit remains relatively large, projected at 4.5 percent of GDP in 2016. Since the granting of debt relief under the HIPC initiative in 2007, public debt has grown steadily and now exceeds 70 percent of GDP. 4 Table 1. Guyana Selected Economic Indicators Est. Proj. 2013 2014 2015 2016 2017 2018 (Annual percent change) Production and prices Real GDP 5.2 3.8 3.0 4.4 4.1 3.0 Consumer prices (average) 2.2 1.0 -0.9 2.3 3.5 3.8 Consumer prices (end of period) 0.9 1.2 -1.8 3.5 3.6 4.0 Exchange rate G$/US$ (average) 205.3 206.4 206.5 (Percent of GDP) Government operations Revenue and grants 25.7 23.6 24.9 25.9 27.4 25.5 Expenditure 29.9 29.1 26.3 30.5 30.9 28.6 Current 19.7 21.1 21.8 23.3 20.3 18.8 Capital 10.2 8.0 4.5 7.1 10.6 9.8 Overall balance -4.3 -5.5 -1.4 -4.5 -3.5 -3.1 Total public sector gross debt (eop) 57.3 65.8 70.2 70.2 70.7 70.5 External 42.0 47.4 51.3 53.7 57.3 57.8 Domestic 15.3 18.4 18.9 16.5 13.4 12.7 External sector Current account balance 1/ -13.3 -12.5 -4.4 -21.9 -21.1 -17.3 Gross reserves (months of imports) 2/ 4.0 3.5 3.9 3.9 4.0 4.2 Memorandum items Nominal GDP (G$ billion) 614.1 635.3 677.8 736.3 786.7 839.1 Sources: Guyanese authorities and IMF and WBG staff estimates and projections (2014-16). 1/ Including official transfers. 2/ Includes SDR allocation. 12. There have been improvements in the financial sector regulatory framework, but non- performing loans remain substantial. The oversight framework has been strengthened, with the insurance and pension sectors as well as the New Building Society (a deposit-taking nonbank financial institution) now under Central Bank supervision. In addition, in June 2015, the authorities made progress toward strengthening the existing banking system framework with the passage by Parliament of a new anti-money laundering/countering financing of terrorism (AML/CFT) legislation. This represents an important step toward compliance with the requirements of the Caribbean Financial Action Task Force (CFATF) and the implementation of Guyana’s action plan in this respect. Furthermore, an insurance law is currently under preparation, and pension legislation has been drafted and is pending further consultations with stakeholders. Although bank solvency and liquidity appear adequate, 6 substantial non-performing loans (11.5 percent, as of December 2015) warrant close monitoring of the soundness of the banking system. 13. The medium-term outlook faces a number of downside risks. The economy is forecast to expand by over 4.0 percent annually over the next two years (see table 1 above), but this outcome assumes that global commodity prices will not drop any further. The decline in commodity prices highlights the susceptibility of Guyana, among other natural resource exporters, to exogenous shocks. While current macroeconomic projections assume that the prices of Guyana’s major commodity exports will remain close to current levels, a large decline in prices would adversely 6 Capital Adequacy Ratio averaged 23.9 percent and the liquid to total assets ratio 28.8 percent as of December 2015, according to the Bank of Guyana. 5 affect the balance of payments and create fiscal pressures, with likely adverse implications for growth, employment and poverty. B. Poverty Reduction and Shared Prosperity 14. With the country’s positive growth performance, moderate and extreme poverty rates may have improved, although there is insufficient data to adequately assess the incidence of poverty. The latest household budget survey dates back to 2006 and precludes a more up-to-date assessment of trends in poverty reduction and shared prosperity. The available evidence shows that moderate and extreme poverty rates declined from 43.2 percent and 28.7 percent, respectively, in 1992 to 36.1 percent and 18.6 percent by 2006 (the latest data for which comprehensive poverty statistics are available). 7 After the 2008-09 global financial crisis, the country experienced high growth rates. It is possible that the incomes of the bottom 40 percent of the population may have seen some improvement since 2009, although the absence of recent data limits a more accurate determination of whether this has actually been the case. 15. The available evidence suggests significant geographical and ethnic disparities in the incidence of poverty. Based on 2006 data, poverty rates were at 19 percent in urban areas and 74 percent in rural hinterland areas. Although poverty rates for the Afro-Guyanese (31.6 percent), Indo- Guyanese (30.0 percent), and the mixed (33.7 percent) populations were quite similar, the Amerindian population (which represents 9.2 percent of the population) experienced the highest poverty incidence (around 78 percent) and included one-third of the extremely poor.8 16. Among the determinants of poverty, education levels appear to have the strongest association with poverty status. The 2006 data show that the poverty rate among households with a low level of education (i.e., none or incomplete primary education) was 41 percent, while individuals with completed primary education or incomplete high school education were less likely to be poor. Completing secondary education was associated with a significant decline in poverty rates and with earnings that were 20 percent higher than for those with incomplete secondary education. Having some tertiary education reduced the probability of being poor even further, to 23 percent.9 17. Although the country has achieved improvements in nutrition and child health, maternal and reproductive health indicators are poor. Guyana has made significant gains in education, gender equality, and environmental sustainability. The country has halved the proportion of people who suffer from hunger and malnutrition among children under five. Compared to other Latin America and Caribbean (LAC) countries with similar per capita incomes, educational attainment is relatively high in Guyana, and the country is on track to achieve universal primary education by 2016. The country has also reduced the under-five mortality rate by two-thirds, and maternal mortality is on a declining trend as a function of almost universal antenatal care coverage and the fact that almost all births are attended by skilled health personnel. However, the country faces challenges in reducing maternal and child mortality, improving maternal health, and addressing 7 Household Income and Expenditure Survey completed in 2006. 8 Household Income and Expenditure Survey completed in 2006, and Poverty Assessment Report (World Bank, 2008). 9 Poverty Assessment Report (World Bank, 2008). 6 major diseases. Despite a high percentage of births attended by skilled health staff (91.9 in 2009), maternal mortality is high, at 280 per 100,000 births in 2013. Furthermore, the 2013 adolescent birth rate, at 88.5 births per 1,000 women ages 15-19, is well above the LAC average of 68.1.10 18. While access to improved water sources has improved over the years, wastewater and sanitation coverage and infrastructure in the country are limited, thus hampering efforts to improve health conditions and consequently shared prosperity. In 2012, approximately 97 percent of the population in both urban and rural areas used an improved drinking water source (as compared to 83 percent in rural areas in 2000)11. However, an assessment conducted by multilateral partners in 2014, point out that the quality of water supply services is hindered by decaying distribution networks, with 50 percent to 70 percent of wastewater going unaccounted for at the national level (and more than 70 percent in Georgetown). In addition, the assessment indicated that the sewage system in 2014 covered just 48,000 of the people living in Georgetown (about 6.5 percent of the national population) and that untreated wastewater was being discharged in the Demerara river.12 The GoG is working closely with multilateral partners to address these issues, especially in view of the health and sanitation risks involved. 19. There have been improvements in promoting gender equality in Guyana but inequality persists in the labor market. On the positive side, female representation in Parliament (31.3 percent) is the highest in the Caribbean region.13 Also, 61.5 percent of adult women have reached at least a secondary level of education, compared to 48.8 percent of their male counterparts.14 However, as with many other developing countries in LAC and elsewhere, women continue to face barriers to employment: the ratio of female to male labor force participation is low at 0.54 (2012), and women are more likely to be unemployed than men. 15 Furthermore, there are widening gender gaps in education, favoring girls at both primary and secondary levels: the boy-girl gap in the primary school completion rate increased from -2.4 in 2011 to -9.1 in 2012, and the ratio of female to male enrollment in secondary education increased from 1.10 in 2011 to 1.15 in 2012. 20. Criminal activity continues to be a major threat, particularly violent aggravated robberies. Serious crimes, including murder and armed robbery, are common, especially in suburban areas and interior regions. The most recent information from the United Nations Office on Drugs and Crime lists Guyana’s 2012 homicide rate at 17 per 100,000 people—the fourth highest murder rate in South America (behind Venezuela, Colombia, and Brazil). The latest information available shows an increase in crime: at the end of September 2015 the Guyana Police Force recorded a 10 percent increase in serious crimes in comparison to the same period in 2014. 21. Gender-based violence remains a concern. Despite significant efforts on the part of the GoG, including passage of the Sexual Offenses Act in 2010, gender-based violence remains a serious issue and crosses ethnic and socioeconomic lines. Estimates by various agencies, such as the United Nations Development Program (UNDP), the University of Guyana, and others, suggest that Guyana 10 Human Development Report (UNDP 2014). 11 WHO/UNICEF, 2014. Progress on Drinking Water and Sanitation: 2014 Update 12 Water Supply and Sanitation Infrastructure Improvement Program. IADB/EU, 2014. 13 The Constitution Amendment Act requires a minimum of one-third female representation on parties’ list of candidates for parliamentary elections. 14 World Development Indicators, 2015. 15 Ibid. The ratio of total female unemployment rate over total male unemployment rate was 1.35 in 2012. 7 has one of the highest rates of domestic violence among the Commonwealth Caribbean and that as many as 40 percent of women have experienced domestic abuse. C. Country Challenges 22. The WBG’s accumulated knowledge and experience in Guyana is limited given the absence of recent data and limited analytical and operational work conducted in the country. The WBG’s engagement in Guyana during the CAS FY09-FY12 period was limited to selective areas (see section IV—Guyana World Bank Group Partnership). In addition, scant and outdated statistics make it difficult to conduct in-depth assessments of the sources of poverty and of obstacles to increasing shared prosperity. A common pattern across most of the Caribbean countries, with a few exceptions, is the lack of statistical information for monitoring socio-economic indicators and conducting evidence-based policy making. 16 Nevertheless, there is enough knowledge, acquired through the WBG’s existing operations and some assessments conducted by multilateral partners, to highlight four critical challenges: macro and fiscal management issues, vulnerability to weather- related disasters, quality of education, and limited private sector growth and diversification. These are some of the key challenges identified during the CAS period that are important to achieving the twin goals; although other challenges may exist, further analysis, including through a Systematic Country Diagnostic, would be necessary to flesh them out. 23. The Guyanese economy is susceptible to macro and fiscal volatility, as it relies on commodity exports. In 2014 and 2015, less favorable terms of trade led to volatility in many export- oriented economies, including Guyana. Terms of trade shocks also slowed GDP growth from 2013 to 2014. Such volatility creates challenges for the fiscal management of the government, with potential adverse consequences on debt sustainability. In addition, in the presence of fiscal pressures, the government may find it difficult to undertake public investment in infrastructure (e.g., roads, ports, and airports) and improve the coverage and quality of public services (e.g., water and sanitation, health services, education), all of which have a direct impact on shared prosperity. 24. Guyana is one of the most vulnerable countries to global climate change; parts of the country are low-lying, with some coastal areas below mean sea-level and with a high percentage of the population and critical infrastructure located along the coast. Rising sea levels will accelerate coastal erosion, increase flood risk, and lead to permanent loss of land in some areas. These adverse developments may be exacerbated by any increase in the destructiveness of tropical storms, the impacts of which will be greater because of rising sea levels even without increases in storm intensity. The impacts of rising sea levels will be further. These challenges call for comprehensive measures to enhance resilience to climate change. 16 A recent global survey conducted by the World Bank identified Guyana as one of the 29 countries with extreme data deprivation on poverty (defined as the absence of poverty data in the last 10 years). Guyana’s most recent household income and expenditure survey data dates back to 2006. See Serajunddin, U.; H. Uematsu; C. Wieser; N. Yoshida; and A. Dabalen (2015), Data Deprivation: Another Deprivation to End, Policy Research Working Paper N. 7252, The World Bank, Washington, D.C., April 2015. 8 25. Guyana is endowed with abundant forest resources, which it must simultaneously protect, exploit to foster development, and use to fight climate change. This necessitates an assessment of trade-offs. Important landscape transformations are underway in the tropical forests of Guyana, driven by national policies and markets and by global market dynamics associated with an increased role for transnational traders and investors. In a context of climate change and capacity constraints, Guyana needs concerted help from partners to implement sustainable forest management programs that reduce emissions from deforestation and forest degradation and enhance carbon stocks (REDD+).17 REDD+ activities will need to be better aligned with current landscape trajectories and associated actors (including forest-dependent communities) to better address climate-change mitigation with effective and equitable outcomes. 26. As noted earlier, the coastal plain in Guyana—home to some 90 percent of the country’s population (including most of its poor people) and the site of agricultural areas that generate approximately 23 percent of the nation’s GDP—is at risk of rising seas and changing rainfall patterns, including the loss of protective coastal systems such as mangroves. Extreme rainfall has caused widespread flooding in the coastal lowlands and, in 2005, resulted in estimated damages of 59 percent of Guyana’s GDP. Other more recent severe rainfall events (e.g., February 2006, December 2008, January 2009, February 2011, January 2012, and June 2015) have also caused economic and livelihood losses, further highlighting Guyana’s vulnerability. Research shows that the impact of rising sea levels and intensified storm surges in Guyana would be among the greatest in the world, exposing 100 percent of the country’s coastal agriculture and 66.4 percent of the coastal urban areas to flooding and coastal erosion, with potential GDP losses projected to exceed 46.4 percent.18 Hence, disaster risk management support through both infrastructure development and capacity building are paramount. In this regard, the government is preparing a Climate Resilience Strategy and Action Plan (CRSAP), which is expected to provide a comprehensive framework for adaptation and resilience building in Guyana. To promote climate resilient growth in the country, it will be critical to implement measures such as upgrading infrastructure and assets to protect against flooding, fostering mangrove restoration, developing and implementing effective Early Warning Systems, enhancing weather forecasting (including microclimate studies and localized forecasting), and promoting climate-smart agriculture (e.g., crops that are flood resistant, drought tolerant, disease resistant). 27. Guyana has made progress in achieving universal primary education, but the education system still faces important access issues at the secondary level and quality issues across all levels of schooling. The percentage of children attending secondary school was estimated at 84.5 percent in 2014.19 The annual results of the National Grade Six Examination for 2011-2015 also show little progress overall (see Table 2).20 Similarly, the results for student learning achievement in secondary education show that only 50 percent pass mathematics and 70 percent pass English in 17 Reducing emissions from deforestation and forest degradation (REDD+ or REDD-Plus), which covers the role of conservation, sustainable forest management, and enhancement of forest carbon stocks in developing countries, is a mechanism that has been under negotiation by the United Nations Framework Convention on Climate Change since 2005. The Bank’s involvement in GRIF is detailed the Guyana CAS 2009-12 Completion and Learning Review, which comprises Annex 1 of this document. 18 See Dasgupta et al. (2009), “Sea-Level and Storm Surges: A Comparative Analysis of Impacts in Developing Countries,” Policy Research Working Paper No. 4901, World Bank. 19 UNICEF Multiple Indicator Cluster Survey, 2014. 20 Guyana Education Strategy, 2014-2018. 9 11th grade tests. The main factors underlying this weak performance are overcrowded classrooms, poorly trained teachers (only 64 percent are qualified), insufficient learning materials, low student attendance (about 70 percent), and inadequate knowledge levels among students entering secondary education. Table 2. National Grade Six Assessment (percentage of students scoring 50% or more by subject) 2011 2012 2013 2014 2015 Mathematics 39.47 23.99 43.94 31.52 37.49 English 36.48 31.94 28.73 51.92 45.88 Science 31.17 41.57 31.77 43.75 44.12 Social Studies 42.19 43.64 43.97 40.49 46.50 Source: Government of Guyana—Ministry of Education. 28. The difficulty of providing quality education, in particular in the extensive hinterland, is also concerning. The hinterland is home to some 10 percent of the country’s population, and to a large percentage of people living below the poverty line. Hence both access and quality, particularly in the interior, are issues contributing to continued poverty and inequality challenges—not least because this 10 percent of the population is dispersed over 90 percent of the country’s land mass. The quality of education is a matter of great concern when the attendance rates, number of trained teachers in the system, availability of equipment, and operationalizing of child-centered schools are examined. An average attendance rate of 75 percent, or less at some levels, reduces the benefits to be gained from universal enrollment at the primary level. A similarly low average rate of attendance by teachers compounds the problem. In brief, it is possible for students to be enrolled in schools and still receive less than half the number of contact hours needed to complete the syllabus for any particular grade. This in turn has serious implications on skills mismatch in the labor market, constraining private sector growth and limiting employment opportunities. 29. With an underdeveloped investment climate and shallow financial infrastructure, Guyana faces challenges in attracting investments and diversifying the economy. The overall business regulatory framework remains complex and cumbersome. Guyana ranks 137 out of 189 economies in the Doing Business Report (2016), below LAC’s regional average of 104. An onerous regulatory environment for businesses particularly affects micro, small, and medium-size enterprises (MSMEs), which account for most businesses in Guyana. 30. Access to finance is also restricted, especially for a significant share of small enterprises. According to information obtained by Bank staff in the context of technical assistance extended through the Financial Sector Reform and Strengthening Initiative (FIRST), the credit union sector tries to serve individuals and MSMEs but is not well regulated. Agricultural cooperatives also provide short-term credit to farmers, but in highly informal and unregulated ways. An underdeveloped payment system legal framework and financial infrastructure deficiencies present risks and are suppressing retail payment development. The interbank market and securities (t-bills) payment is paper based, and there are very few interbank retail payments. Credit information remains poorly developed despite efforts to establish a private credit bureau. Lack of credit information depresses both credit risk monitoring by the authorities and lending institutions, further restraining access to finance. Moreover, if risks to the financial system are poorly managed, their materialization could lead to both fiscal losses and depressed economic activity. 10 31. Infrastructure to support private sector growth is also underdeveloped, and is hindering access to external markets. Transport infrastructure in Guyana remains deficient, with a lack of large deep-sea port facilities and insufficient and decaying road networks. The 3,995 km road network of Guyana consists of six main roads of two lanes each. Guyana has 98 km of railroads, which primarily serve the ore industry, one international airport, and one general cargo seaport in Georgetown.21 Electricity production is highly inefficient, and is one of the most expensive in the region. Telecommunication services are better developed but still costly. The Inter-American Development Bank (IDB), in particular, is active in the transport and energy sectors, both in terms of infrastructure development as well as in supporting diversification of renewable energy sources. III. GOVERNMENT STRATEGY 32. The new government is in the process of preparing its medium-term strategy, which is expected to focus on creating an enabling environment for private sector-led economic diversification and growth—focusing especially on building a green economy (through implementation of the Low Carbon Development Strategy) and the development of knowledge- driven growth industries. In turn, this will involve improved macroeconomic management, greater investment in human and physical capital, and public sector modernization. The strategy will have a strong focus on poverty reduction, targeting the most vulnerable groups, such as Amerindians, those living in hinterland areas, as well as rural areas and parts of urban centers. Addressing poverty will involve continued attention to climate change adaptation to reduce the impact on poor households of frequent flooding and other natural disasters associated with rising sea levels. IV. GUYANA WORLD BANK GROUP PARTNERSHIP A. Lessons Learned from Implementation of the FY09-12 CAS 33. The FY09-12 CAS for Guyana was aligned with the government’s reform efforts in three areas: climate change, education, and private sector development. The CAS comprised a small, selective IDA lending program (amounting to about $14.2 million equivalent) as well as substantial trust-funded projects and complementary technical assistance. Although the Guyana CAS was not prepared as a joint WBG product, the IFC was able to expand its role in the country during the CAS implementation period, coordinating closely with the Bank/IDA and other development partners. CAS implementation also benefited from partnering with and leveraging other partners’ funds, knowledge, and innovation capacity. 34. The CEN program embodies several lessons drawn from the experience of the FY09- 12 CAS (as detailed in the CAS Completion and Learning Review presented as Annex 1 of this document).  The WBG should continue to be engaged in the country, keeping a focus on areas benefitting from broad-based support within Guyanese society. The experience acquired during FY09-12 shows that the Bank can play an important role even with a small financial envelope, providing it concentrates its efforts in a limited number of sectors and seeks to build viable partnerships with domestic actors as well as with 21 Source: Bureau of Statistics—Guyana. 11 external partners so as to leverage local knowledge, technical skills, and financial resources. IDA’s long-standing engagements in education and (to a lesser extent) flood risk management are cases in point: the Bank’s longer-term engagement over two or more CAS periods produced tangible results (e.g., contributing to achieving universal primary education, improving the GoG’s capacity to reduce exposure to flood risk; for further details, see Annex 1). The Bank also established adequate relationships with sectoral officials and stakeholders, which enabled it to continue having an impact throughout the CAS period.  Maintaining regular interaction and working with other external partners yield substantial benefits beyond expanding financial resources. Sharing of country/sectoral knowledge and past project experience are valuable in the Guyanese context, where government institutional capacity is limited and institutional memory is affected by frequent staff changes. Partnering also offers opportunities to remain engaged in sectors where the Bank is currently not providing financial support. This was clearly the case in the areas of forest conservation and carbon emissions reduction, where the Bank stayed engaged in the debate through its role in the Guyana REDD+ Investment Fund (GRIF). It was also important in the water sector, where the Bank maintained its knowledge base and shared its experience and insights—although a follow-up IDA operation was not immediately possible—by working with IDB and the U.K. Department for International Development (DFID).  Given Guyana’s weak institutional and fiduciary capacities, financial support should be linked from the outset to systematic technical and training support. The attention to this type of support for project implementation increased systematically during implementation of the FY09-12 CAS, and it yielded important pay-offs in terms of improved project implementation and overall portfolio performance. Attention to implementation support during project preparation could play an important role in supporting portfolio performance, especially when working with counterparts that have not previously worked with the Bank.  While challenges associated with the political environment, such as those that emerged during of the FY09-12 CAS period, cannot be totally avoided, their adverse impact can be mitigated. Among other things, this would involve maintaining alignment with the political cycle in developing lending operations and Advisory Services and Analytics (ASA), ensuring strong demand by the government as well as other domestic stakeholders and involving a wide range of stakeholders in Bank tasks.  Although the CAS was not developed jointly with the IFC, the trend toward greater IFC engagement over the CAS period and beyond should be continued. Experience suggests that there are multiple opportunities for IFC engagement in business climate improvement, financial sector/MSME development, and extractive industries, where the IFC could support private sector development in Guyana—likely a key ingredient in making progress toward the WBG’s twin goals. 12 B. Ongoing Portfolio 35. Many of the results under this CEN will be achieved through the implementation of the current IDA portfolio, which consists of three projects with a total net commitment of $36 million, of which $21.9 million were committed between FY14-FY16. Approximately 60 percent of total portfolio remains undisbursed. The overall portfolio performance is good, with two operations rated “Satisfactory” and one “Moderately Satisfactory” for achieving their project development objectives and on implementation progress (see Annex 7). In addition to close implementation support, which enables an early response to implementation problems, the Bank continues to strengthen government capacity during project implementation by providing fiduciary and procurement training. Table 3. Guyana: IDA Projects, February 2016 Project Approval Closing Date Commitments Date (US$ million) UG Science and Technology Support Project (P125288) June 2011 June 2017 13.66 GY Secondary Education Improvement Project (P147924) June 2014 March 2020 10.00 GY Flood Risk Management Project (P147250) June 2014 January 2019 11.89 Total commitments 35.55 Note: All projects are effective. UG Science and Technology Support Project (P125288) includes the additional financing of $3.66 million signed in December 2015. 36. The Bank is also implementing two Trust Funds, with an estimated value of $5.4 million, which support early childhood education and rehabilitation of the Cunha canal. 37. During FY09-15, IFC committed $71 million and mobilized an additional $140 million. As of February 29, 2016, IFC’s committed and outstanding portfolios each amounted to $47 million. IFC has two active projects: Guyana Goldfield and Aurora Gold (AGM Inc.), with $9.28 million and $37.75 million in own account, respectively. Aurora Gold has additional $140 million in mobilization, committed in FY2015. IFC also has four active advisory services projects: (a) Guyana Bank for Trade and Industry (GBTI) Risk Management; (b) LAC Regional Indicator Based Reform Advisory; (c) Caribbean Regional Credit Bureau; and (d) Trade Logistics in the Caribbean. Currently, MIGA has no exposure in Guyana. C. Country Engagement Note 38. During the FY16-18 CEN, the WBG will focus on accelerating the implementation of ongoing operations and the preparation of new operations under IDA17. During this period, the Bank will aim to strengthen collaboration with the government and seek opportunities to increase our knowledge-base in areas that are of strategic relevance for Guyana. The upcoming national development strategy will be particularly important in this regard, as it will identify the government’s medium-term priority areas and inform a collaboration framework that can be leveraged by the Bank following the completion of this CEN (i.e., FY18 onwards). 39. The CEN program is predicated on three principles of engagement that reflect the existing portfolio: (a) highly selective focus on areas that are aligned with Guyana’s current priorities, where the Bank is already engaged in and has a sound knowledge base, a shared vision 13 with the government, and a track record of delivering results, (b) flexibility to take into account the evolving political environment, and (c) continued engagement with a view to laying the foundations for a medium-term strategic cooperation program. 40. CEN activities will contribute to Guyana’s efforts to enhance resilience to natural disasters, improve the quality of education, and support private sector development initiatives. By supporting natural disaster vulnerability reduction the Bank can help improve resilience in flood- prone coastal areas, thus reducing vulnerability to economic losses and minimizing health and other risks that accompany floods—risks to which the poorest are most exposed. Similarly, by strengthening the quality of education and secondary school enrollment in targeted areas, the Bank will contribute to higher quality learning and instruction, and to improving economic opportunities and inclusion of the most vulnerable households in the medium term. In parallel, it is expected that both the Bank and IFC will continue supporting private sector development, particularly by focusing on improving the business enabling environment and financial sector development. 41. This CEN was developed in close cooperation with the government of Guyana and discussed with other stakeholders, including the private sector, civil society, and Guyana’s main development partners. The consultations confirmed that the priority areas under the latest CAS (FY09-12) are still relevant for the government and are guiding the focus of the CEN. The main issues discussed were (a) vulnerability to the impact of climate change, (b) the poor quality of education and insufficient labor and entrepreneurial skills, and (c) limited economic diversification and high vulnerability to commodity price fluctuations, in great part linked to private sector development constraints (weak infrastructure with notably high energy costs and deficient transport/logistics, limited access to finance for MSMEs, and a weak business environment). Cross- cutting issues such as limited institutional capacity, limited access to data, and weak data management were also raised. 42. Close coordination with other development partners will be essential in Guyana, especially given limited Bank financing and limited government capacity. Thus, CEN activities will be closely coordinated with external partners, many of which have extensive programs in Guyana across a wide range of sectors and development areas (see Box 1). In particular, given the Caribbean Development Bank’s programs in both the education and disaster-risk management areas, close coordination will be required. 14 BOX 1. Activities of Main Development Partners IDB is Guyana’s leading multilateral lender (with about 45 percent of externally financed public investments in the country), with a 2012-16 program of around $100 million focused on (a) sustainable energy, (b) natural resource management, (c) private sector development, and (d) public sector management. The IMF provides advice on macroeconomic issues through its Article IV reviews, as well as technical assistance to the Central Bank and the Ministry of Finance. UNDP activities in Guyana center on three thematic areas: (a) environment and sustainable development, (b) inclusive growth, and (c) inclusive governance. UNICEF has also an active program. Other partners include the Caribbean Development Bank (CDB), Canada, the European Union (EU), DFID, and United States Agency for International Development (USAID). CDB focuses its activities on social and economic infrastructure (schools, roads, and water), building more disaster-resilient structures, community skills training, and support for SMEs. The EU is supporting the Low Carbon Development Strategy (LCDS) efforts on poverty reduction and climate change adaptation through key infrastructure for flood prevention, including river and coastal management. The USAID program focuses on health, economic growth, and democracy and governance. Canada and DFID support Guyana through their regional programs, which include activities in education, infrastructure, governance, and health. Technical assistance is also provided by Brazil and China, while Norway has provided considerable support for Guyana’s LCDS through GRIF. D. Proposed WBG Engagement 43. The proposed program is limited to three objectives: (a) enhancing resilience of selected infrastructure and building disaster risk management (DRM) capacities, (b) setting up the foundations for high quality education, and (c) laying the ground for private sector development. Building on the CAS FY09-FY12 engagement, the WBG will rely on the implementation of ongoing operations to achieve results. Guyana’s IDA17 notional financing envelope is SDR16.5 million (about $22.7 million, of which $3.7 million has been allocated) and will further support activities that will contribute to achieving these objectives. While preparation of IDA 18 might start during this CEN period, its expected results are likely to be seen beyond the period covered by this engagement. 44. CEN implementation performance will be measured against qualitative criteria linked to the delivery of the program. These criteria will derive from existing portfolio results frameworks. Multi-disciplinary teams will work closely with the ministries and agencies concerned to support program implementation, including multi-sector dialogue and inter-agency coordination. Quarterly review meetings with the government will monitor progress toward program milestones and, as may be needed, adjust the scope or modality of activities. i. Enhancing resilience of selected infrastructure and building DRM capacities 45. Given Guyana’s high vulnerability to floods and their substantial adverse impact on the population and economy, the Bank will continue to support activities and investments to address climate change. Donor coordination with other development partners active in this area (e.g., Japan International Cooperation Agency, IDB, CDB, EU, and UNDP) will be particularly relevant to support the development of the national Climate Resilience Strategy and Action Plan. The Bank will leverage both its country and global knowledge and provide:  institutional strengthening and strategy implementation, through support for hydraulic and hydrological modelling, professional training, and data management. 15  rehabilitation of critical infrastructure to reduce the risk of flooding in the low-lying areas of the East Demerara. Analytics and solutions identified under the Conservancy Adaptation Project (closed in December 2014) will be used for the upgrading of a key relief structure (the Cunha Canal) in the East Demerara Water Conservancy (EDWC) system. 46. The ongoing Flood Risk Management Project ($11.9 million) approved in June 2014 will finance rehabilitation of critical infrastructure, and provide further institutional strengthening. In addition, a complementary Cunha Canal Rehabilitation Project (approximately $3.7 million to be financed by the GRIF) will contribute to improving drainage in the East Demerara Water Conservancy (EDWC). The project will support priority works and institutional strengthening for flood risk reduction. The estimated population directly benefitting from the project is 113,066. The project will also indirectly benefit the entire East Demerara (estimated population of 310,000) through improved operations, monitoring, and emergency preparedness related to the EDWC system as a whole. 47. To support the transition to a “green economy” the Bank will also help develop Guyana’s capacity to manage climate change impact through research and innovation. The University of Guyana (UG) Science and Technology Project ($13.7 million) will establish an International Center for biodiversity research and low carbon development. In particular, the project will (a) carry out a science curriculum reform process by updating existing curricula and/or reorienting the existing curricula of UG aimed to support the government of Guyana’s Low Carbon Development Strategy (LCDS); and (b) carry out of selected research relevant to the LCDS through the provision of Research Grants to selected UG lecturers. Bank ASA work to support climate resilient agriculture and greater food security prospects is under consideration. 48. Complementing the Bank’s environmental efforts, IFC will also assist the government and the private sector in adopting sustainable standards and natural resource management best practices, to support implementation of the country’s LCDS in forestry, mining, and potentially renewable energy. ii. Setting up the foundations for high quality education 49. The Bank will continue its engagement with the GoG to set up foundations for a stronger educational system. Bank assistance will focus on the development of human resources and capacity for more effective teaching and learning throughout the school system in Guyana, strengthening science and technology education at UG, as well as supporting Guyana’s objective of achieving high quality in early childhood education and quality universal secondary education, including special needs education. 50. The Bank will strengthen the UG Science and Technology faculties and continue its engagement in secondary education. Through the UG Science and Technology Support Project, the Bank will strengthen the four science and technology faculties through infrastructure rehabilitation, research, and curriculum improvements. An emphasis on secondary education, with the Secondary Education Improvement Project, is intended to strengthen the capacity of secondary school mathematics teachers, and introduce technology-assisted learning in mathematics. Improved 16 mathematics instruction at the secondary level for the whole country and improved learning conditions in regions with the highest numbers of poor people will increase future economic opportunities for populations that have been largely marginalized. 51. The Bank will also focus on Early Childhood Education (ECE). A Global Partnership for Education-funded project22 will support quality ECE provisions to all nursery and Grade 1 classes in the hinterland regions and targeted remote riverine areas, where poverty rates are among the highest. Bank assistance will focus on the cognitive development of children, improving pedagogic skills of ECE teachers and their ability to assess early learning, and engaging parents/caregivers in supporting children’s learning at home. The skills developed in early childhood form the basis for future learning and labor market success, and the failure to develop these skills can negatively affect educational attainment and productivity and earning potential.23 iii. Laying the ground for private sector development 52. Both IFC and the Bank will focus on strengthening the financial infrastructure and the business regulatory environment to support the government’s efforts to promote private sector growth and access to finance. Potential Bank non-lending assistance in the investment climate will seek to improve private sector development prospects by supporting the investment climate reform efforts of the GoG. The Bank will continue to focus on strengthening the financial sector infrastructure, including the payment system and the legal, regulatory, and institutional environment for banking, insurance, credit cooperatives, AML/CFT, and consumer protection in financial services. This will be accomplished through a Financial Sector Assessment Program (FSAP), an ongoing Financial Sector Reform and Strengthening Initiative (FIRST) grant to the Central Bank, and a potential operation to strengthen the financial sector infrastructure through the development of a national payments system. While the aforementioned operations would start during this CEN engagement, their expected completion and results may be seen beyond the CEN period. IFC’s existing operations will aim at increasing SME lending through a credit line to a local financial institution and enhancing the capacity and coverage of the credit bureau. 53. IFC and MIGA will seek to support private sector investments. IFC will be working especially through its existing investments in the mining sector. These investments will create jobs and support domestic suppliers. Their developmental impact includes payments in the form of royalties and taxes paid to the government (estimated at $210 million), creation of some 700-900 jobs, and the development of a local supplier program in the mining sector. Through these investments, IFC will continue to promote sustainable practices in mining, with particular attention on compliance with the Guyana mining, legal, and regulatory frameworks; civil society participation; the rights of indigenous people; and environmental impact. MIGA will look to support productive investment projects through its political risk guarantees as relevant opportunities emerge. 22 The Global Partnership for Education supports 60 developing countries to ensure that every child receives a quality basic education, prioritizing the poorest, most vulnerable, and those living in fragile and conflict-affected countries. 23 Early Childhood Development. Knowledge Exchange Issues Paper. World Bank 2013. 17 Table 4. Guyana CEN—WBG Program FY16-18 Objectives WBG Program Enhancing resilience of selected infrastructure and Guyana Flood Risk Management (P147250) ($11.9 building DRM capacities million ) Cunha Canal Rehabilitation (P132408) ($3.7 million—  Institutional strengthening in DRM GRIF)  Infrastructure rehabilitation to reduce risk of flooding in the low lying areas of the East Demerara Setting up foundations for high quality education Secondary Education Improvement Project (P147924) ($10 million)  Strengthened teacher education Trust Fund: Early Childhood Education (P129555)  Strengthened science and technology faculties at UG ($1.7 million) UG Science and Technology Support (P125288) ($13.7 million) Laying the ground for private sector development Bank ASA in payment systems reform Bank NLTA in financial sector strengthening  Improved payments system framework WBG investment climate support: Indicator-Based  Improved sustainable practices in mining Reform IFC support to the financial sector: Advisory Services in Risk Management and SME Banking (GBTI RM), and Credit Bureau IFC Investments in Guyana Goldfield and Aurora Gold (mining) V. RISKS 54. The overall risk to implementing the CEN program is moderate. The CEN program is subject to the following risks. 55. Macroeconomic Risk—Substantial. Commodity price fluctuations could introduce terms of trade volatility and adversely affect growth and fiscal revenues and complicate macroeconomic management. The consequences of lower commodity prices on the fiscal and external balances could potentially impact the availability of fiscal resources for counterpart funding and recurring expenditures, and therefore affect the pace of implementation of the government’s program. To alleviate these imbalances, the government is supporting efforts to ensure fiscal prudence, including improved financial performance and reforms proposed by the Commission of Inquiry for large state- owned enterprises (e.g. Guyana Power and Light, and Guyana Sugar Corporation). However, vulnerabilities to external shocks remain substantial and the consequent macroeconomic effects could materialize in the short run. However, the fact that most of the CEN program focuses on the implementation of ongoing operations makes it unlikely that operations would be interrupted or delayed, especially since these benefit from concessional lending under IDA. Projects supporting the private sector are also unlikely to be affected, as they are either grant funded or non-lending operations. 56. Institutional Capacity for Implementation and Sustainability—Substantial. Capacity constraints remain a major issue in Guyana. There is a risk that the new government may not be fully 18 able to implement some of the activities within project timeframes, and limited financial resources could prevent the execution of some critical activities. This risk also applies to the government’s capacity to create the regulatory and business environment for the implementation of large and complex projects in the mining sector. The government is implementing training programs for its staff, most of which are donor-supported, including Caribbean regional training on procurement (supported by the WBG). The WBG-financed projects also complement the government’s efforts through knowledge transfer to upgrade skills of project implementation units, and similar training is provided by the IDB. Furthermore, multilateral donors also coordinate to reduce the burden on the government administration, avoiding duplication and improving efficiency. 57. Environment and Social Risk (E&S)—Substantial. This risk is largely concentrated in projects related to flood risk management, and IFC investments in mining, both of which can have significant social and environmental impact. Considering the government’s fiscal constraints and the country’s high vulnerability to flooding, in particular in productive low-lying zones, environmental risks are particularly a concern and could impact the implementation of existing operations. In mining, since 2006, the private sector, with support from the IFC, has been engaged in enhancing environmental and social management capacity, encouraging appropriate resource utilization and conservation practices. Although the IFC-supported investments in mining could face weather- related risk from exposure to tropical rainstorms, the project includes strong mitigating elements to cope with 25-year events. Table 5. Guyana World Bank Group Portfolio Risk Rating Risk Categories Rating (H, S, M, L) 1. Political and Governance M 2. Macroeconomic S 3. Sector Strategies and Policies L 4. Technical Design of Project and Program L 5. Institutional Capacity for Implementation and Sustainability S 6. Fiduciary M 7. Environment and Social S 8. Stakeholders M 9. Other N/A Overall M 19 Annex 1. Guyana Completion and Learning Review (CLR), FY09-FY12 CAS Board Discussion April 15, 2009 Period Covered by CLR May 2009-June 2012 I. CAS OVERVIEW 1. The FY09-12 Country Assistance Strategy (CAS) for Guyana was prepared following a period of successful poverty reduction and economic expansion in the mid-2000s, but amid growing concerns about the socioeconomic impact of the 2008-09 global financial and economic crisis. After years of economic volatility, Guyana had achieved real GDP growth of 5.1 percent and 5.4 percent in 2006 and 2007, respectively, underpinned by booming investment and favorable terms of trade. Moderate and extreme poverty rates had declined from 43.2 percent and 28.7 percent, respectively, in 1992 to 36.1 percent and 18.6 percent by 2006, and significant progress was made on Millennium Development Goal (MDG) targets, especially those related to women’s empowerment, hunger, and primary education. There was concern, however, that this positive trend could stall during the 2009- 2012 CAS period, given Guyana’s vulnerability to the global crisis through weakening demand for its main commodity exports—sugar, rice, timber, bauxite, and gold—which accounted for 40 percent of Guyana’s GDP, possible reductions in worker remittances, and reduced foreign direct investment (FDI). 2. To maximize the impact of a relatively small IDA allocation, the CAS was selective and fully aligned with Guyana’s Poverty Reduction Strategy Paper (PRSP); the latter emphasized (a) sustaining the momentum of economic growth; (b) protecting the environment, including from climate change challenges; (c) promoting human development (health and education); and (d) improving citizen security. CAS activities were organized under two pillars derived from the PRSP priorities: environmental resilience and sustainability; and education quality and social safety nets. The CAS planned for a relatively small lending engagement under IDA15 (about $8.2 million equivalent), complemented by HIPC debt relief of about $11 million as well as technical assistance and analytic and advisory activities (AAA). Additional allocations were made under IDA15 during CAS implementation, raising the total lending envelope to about $14 million equivalent. The Bank also mobilized significant funds from other development partners in support of Guyana—most notably through the Education for All/Fast Track Initiative (EFA/FTI) and the Guyana Reducing Emissions from Deforestation and Forest Degradation and Investment Fund (GRIF), financed by the government of Norway, with up to $250 million. 3. In addition to selectivity and alignment, two additional principles guided CAS development and implementation: adaptability and partnerships with other donors to share knowledge and leverage resources. These principles derived from the experience of implementing the previous CAS and were confirmed through extensive Government of Guyana (GoG) and stakeholder consultations during CAS preparation. Guyana’s development needs, debt sustainability challenges, and the small initial IDA allocation pointed to the need for a flexible (albeit focused) program that could be adapted to changing needs arising from external economic and natural (climatic) shocks, shifts in external partner funding, or domestic policy changes. Moreover, as a 20 comparatively small player in Guyana in terms of lending, the CAS sought to leverage IDA resources—both internally within the World Bank Group (WBG) and externally with development partners—to reduce costs and enhance impact. This, in turn, meant that the CAS systematically sought opportunities to partner with and leverage the funds, knowledge, and innovation capacity of other external development agencies active in Guyana—including shifting IDA lending resources in instances where originally planned CAS activities could be covered through partners’ programs. 4. The Guyana CAS was not formally designated a joint WBG product, but IFC was able to extend its role in the country during the CAS implementation period, coordinating closely with the Bank/IDA and other development partners. Coordination between IFC and IDA around common strategic goals was strengthened and expanded during CAS implementation. IFC played an increasingly active role, focusing on the extractive industries, the financial sector, and broader support for private sector development. Specifically, IFC followed a two-pronged approach in its support for private sector development, focusing on (a) supporting business climate improvements and expansion of financial services, particularly through partnerships in underserved rural areas; and (b) assisting the government and the private sector in adopting sustainable standards and natural resource management best practices for the implementation of the country’s Low Carbon Emissions Development Strategy (LCDS). Finally, IFC joined the Bank’s efforts in playing an important role in the implementation of the LCDS through its contribution to the development of sustainable mining, transfer of environmental management standards and practices, and introduction of appropriate resource utilization and conservation methods. In fact, IFC’s engagement with Guyana Goldfields helped establish a viable model for sustainable mining development in the country. 5. CAS implementation was affected by changes in Guyana’s political environment, and shifts in the availability of donor funds in priority sectors. Shortly after the Board discussed the CAS, the governing party lost its parliamentary majority by a single vote, leading to increased political polarization and substantially complicating the government’s ability to pass new legislation, programs, or projects. This change not only affected the national development program as a whole, but also complicated approval of new IDA operations, which require parliamentary approval prior to effectiveness. In turn, this led to substantial delays in project effectiveness in some instances. The availability of grant funds, especially for forest conservation, also led to changes in the CAS program. 6. A challenging political environment stalled finalization/presentation of the Country Assistance Strategy Progress Report (CASPR) prepared over late 2010/early 2011. The absence of a final CASPR precluded formal documentation to the Board of the changes to the CAS program and to the associated results matrix—although the changes were generally appropriate in light of CAS objectives, development needs, and changes in the Guyanese context. All CAS activities remained within the two Pillars defined in the original CAS, but there was an increased emphasis on the education sector, using both IDA and Trust Fund resources. However, given that the CASPR was not presented to the Bank’s Board, this CLR evaluates CAS performance in accordance with the results matrix presented in the original CAS. It does, however, make note of activities/outcomes that were added, dropped, or modified over the CAS implementation period and provides the rationale for these changes as appropriate (see Table in Annex 3). 21 II. CAS DEVELOPMENT OUTCOMES 7. The CAS development outcome is rated Moderately Satisfactory (MS). The CAS program was structured around two strategic pillars, four results areas (two per pillar), and eight specific outcomes. Pillar I was Partially Achieved (PA) but with strong results in a key area—flood vulnerability reduction—that has important implications for economic growth and population welfare, especially among the rural and urban poor. Pillar II was Mostly Achieved (MA), with notably strong positive outcomes in education during the CAS period. On the other hand, changes in program activities substantially delayed forest conservation-related interventions and only partial results were achieved with respect to social protection. The overall development rating of MS is derived from the outcomes achieved across the eight outcomes specified in the original CAS (summarized in Table 1). If consideration is given to important achievements over the CAS period that were not included in the original matrix—for example, outcomes with respect to establishment of the innovative GRIF, water supply improvements, and improvements to tertiary science and technology education—the development outcome could reasonably be seen as satisfactory. Table 1. Summary of CAS Pillars and Outcomes Ratings Strategic Pillar I – Environmental Resilience and Sustainability Outcome 1. New management models that help reduce deforestation and demonstrate social and economic NA viability, piloted in the field, and ready for scaling up Outcome 2. National forest and carbon baseline scenario and monitoring systems established A Outcome 3. Risk and flood vulnerability reduction integrated in regional development and planning A+ activities in project areas (three regions in low-lying coastal plains) Outcome 4. One agricultural insurance contract for small farmers designed PA Strategic Pillar II – Education Quality and Safety Nets Outcome 5. A policy framework for restructuring the teacher education system that consolidates and A harmonizes requirements among the teacher education institutions established Outcome 6. Student to trained teacher ratio at nursery, primary, and secondary school levels by coastland A+ and hinterland Baseline 2006-07: nursery = 27.8 natl, 26.0 C, 59.7 H primary = 45.9 natl, 43.3 C, 73.0 H secondary = 36.3 natl, 35.0 C, 52.2H Target 2012: nursery = 26.5 natl, 25 C, 57 H primary = 42 natl, 40 C, 70 H secondary = 35.3 natl, 34 C, 50 H Outcome 7. Primary and secondary school completion rates by coastland and hinterland: MA Baseline 2006-07: primary = 103.6 natl, 105 C, 94 H secondary (10th grade) =53.7 natl and C; 69 H Target 2012: Primary = 100% natl and C; 95 H. Secondary = 55% natl and C; 71 H Outcome 8. A finalized time-bound strategy to strengthen (a) targeting and administration of social PA assistance programs in the Ministry of Labour, Human Services, and Social security (MOLHSSS); (b) the National Insurance Scheme (in terms of equity, adequacy, sustainability, administration, and compatibility with the civil service pension scheme). Objective Ratings: A—Achieved; MA—Mostly Achieved; PA—Partially Achieved; NA—Not Achieved. 22 Strategic Pillar I: Strengthening Environmental Resilience and Sustainability (overall rating: Partly Achieved) 8. This strategic pillar aimed to support the government’s strong policy and institutional commitment to addressing climate change as expressed by then-President Jagdeo as well as the legislature. In particular, the CAS cited the 2009 passage of Guyana’s Forestry Bill (after years of stalemate) and the establishment of a high-level climate change unit in the President’s Office to facilitate implementation of the low carbon growth agenda as positive developments warranting a strong CAS emphasis in this area. The Pillar also built on the Bank’s considerable experience in Guyana in environment under the previous CPS, focusing on two vital areas from the standpoint of improving Guyana’s resilience to environmental factors: forest conservation (mitigation) and flood risk reduction/management (adaptation). Specific activities and outcomes in each of these results areas are described in some detail below. Results with respect to forest conservation were only partially achieved during the CAS period, while strong results were achieved with respect to water and flood risk management. Results Area 1: Improved ability to combine economic development and reduced deforestation/forest degradation, and to access markets for ecosystem services 9. With respect to forest conservation, the Bank sought to support the GoG’s efforts to reduce carbon emissions from deforestation and help negotiate external resources in return. Within this overall objective, the specific CAS activities in forestry were modified significantly in the early years of CAS implementation. Specifically, the Bank helped negotiate an arrangement between the GoG and the Norwegian government whereby Norway made available up to NKR1.5 billion ($250 million equivalent) for forest protection, with the Bank serving as trustee for GRIF, as well as partner entity together with the Inter-American Development Bank (IDB) and the United Nations Development Program (UNDP). GRIF provided financial support for Guyana’s Low Carbon Development Strategy (LCDS) by enabling performance-based payments for avoided deforestation—a path-breaking, results-based approach to climate change financing and forest preservation. As a result of the availability of the GRIF, the government requested that IDA funds earmarked for the $3 million Forestry, Climate Change and Communities project (FCCC) 24 be reprogrammed to other CAS priorities. The FCCC project prepared by IDA was transferred to UNDP for implementation under GRIF. A number of projects have since been approved under GRIF, involving both IDB and UNDP, with the Bank providing oversight and administrative services. 10. Given the aforementioned CAS program changes, modifications to the CAS outcome areas in forest conservation were needed to reflect the new role of the Bank as GRIF Trustee— but were not made given the absence of a formal CASPR. As a result, this CLR focuses on the original outcome areas, as required under CLR guidelines. These included (a) establishment of national forest and carbon baseline scenario and monitoring systems, and (b) development of viable models for combining economic development and forest conservation through innovative programs and the full participation of the local communities. Progress with respect to each is noted below: 24 Prior to this reallocation, the project had been renamed the Communities Non-Timber Forest Uses Project, to be supported by $5 million in IDA resources. 23  Forest/Carbon baseline and monitoring. This outcome area was fully achieved (A) during the CAS period. Baseline scenarios on Guyana’s forests and carbon were developed under the $0.2 million Readiness Grant from the Forest Carbon Partnership Facility (FCPF) approved in 2009. This project to strengthen the monitoring capacity of national institutions in charge of forest protection and management was reprogrammed to IDB. Under the IDB, the forest monitoring system for forest carbon was established in 2010, and has been operational since then. The IDB GRIF operation is continuing to provide support for the institutional development of Guyanese agencies associated with forest protection, including monitoring.  Models for combining economic development and forest conservation. The extent of progress on this outcome by the end of the CAS period was also not verifiable; therefore, it is assessed as not achieved (NA) for purposes of this CLR. The demonstration models were originally to have been developed through a series of pilot projects under the IDA- supported FCCC project. While UNDP is now overseeing implementation of the project, the fact that the project encountered delays—largely because of the transfer of external partner from IDA to IDB—suggests that the pilots were not completed by mid-2012 as originally intended. Results Area 2: Improved government ability to reduce exposure to natural disasters and global climate risk 11. On the climate adaptation side, the CAS aimed to reduce vulnerability to coastal flooding in the low-lying coastal area threatened by sea level rise, including both rural regions and the country’s densely populated capital, Georgetown. The key CAS outcome expected under this results area was to ensure the integration of flooding risk and vulnerability reduction in regional development and planning activities in project areas (three regions in the low-lying coastal plains covering 15 percent of the total area at risk). This outcome was fully achieved (A) and in some respects, surpassed, during the CAS period. 12. The principal Bank intervention that supported this outcome was the Global Environment Facility (GEF)-financed Conservation Adaptation Project, for $3.8 million (completed FY11), which enabled a complex/comprehensive engineering study and 10 key drainage interventions. Pre-investment studies for engineering design of works provided the hydrologic baseline necessary to consider rational interventions that would increase the current discharge capacity of the flood control system. A model has been developed and calibrated to identify key drainage regimes and map key conservancy interventions to improve water flow to the Demerara River. The institutional framework for flood control within the context of the national emergency management system has been strengthened. Moreover, the establishment and operationalization of the Implementation Secretariat staffed with 10 engineers fully trained in the use of flow models and engineering equipment has consolidated the approach to flood control in Guyana, creating consensus around a medium- and long-term adaptation strategy. A comprehensive upgrading program of the East Demerara Water Conservancy (EDWC) and a lowland drainage system have been developed, including a technical framework (engineering baseline) and tools to be used by the GoG, donor agencies, and investors in future efforts to adapt to climate change and flooding. In addition, some 24 infrastructure improvements have been carried out to help cope with the immediate threats to the drainage system. 13. The investments supported by IDA have further offset the effects of sea level rise and stabilized the situation by increasing GoG’s ability to manage water levels of the EDWC system.25 A dam safety study has identified sections in need of repair, which have been executed, and an EDWC reservoir bathymetry has been completed. The discharge capacity of a key relief canal from EDWC to the Demerara river has been increased by 30 percent. The Conservancy Adaptation Project findings and results will provide key data and analytics for the Cunha Canal Rehabilitation, which is part of Guyana’s LCDS adaptation initiatives also financed by GRIF. 14. As a complement to flooding control interventions, the CAS included a second outcome in this Results Area that aimed to promote agricultural risk insurance as a means of reducing the impact of climatic disasters. The CAS program planned for a consultative AAA program to design and support the signing of at least one agricultural insurance contract by mid-2012. The goal was to target small-scale and vulnerable farmers, and provide the basis for medium- and longer-term efforts to reduce poverty, smooth consumption, and enhance the financial stability of individual households and the economy as whole. Several technical missions to promote these aims were undertaken by Bank teams in 2009 and 2010, which helped to lay out a draft agricultural risk management and insurance strategy for consideration by the government and stakeholders. However, the final step of moving forward with a pilot agricultural insurance contract did not proceed, as the government called a halt to the work. As a result, the outcome is rated as partially achieved (PA). 15. Although no specific indicators with respect to water supply were included in the CAS results matrix, it is worth noting that the IDA engagement in the water sector yielded important results in the provision of safe and affordable water during the CAS period—an important environmental improvement. The $11.3 million Water Sector Consolidation Project concluded in 2011 helped to significantly increase the percentage of people with access to treated water, from 20 percent in 2001 to 45 percent in 2011. The investments provided a significant improvement in the continuity of water supply services for consumers in targeted areas. Universal metering was achieved and relevant institutions have been strengthened for higher efficiency. With IDA’s support, Guyana Water Incorporated (GWI) has achieved operating efficiencies in Georgetown, as measured by improvements in water pressure and quality, and in cost recovery. Physical losses have been reduced from 70 percent to 45 percent; and iron content has declined to safe levels. System-wide estimates show a reduction of non-revenue water from 60-65 percent to 53 percent. The engagement contributed to the successful development of water supply infrastructure servicing 51,000 people, a population greater than the initial estimates. While the Bank did not develop a follow-up project under the FY09-12 CAS, it remained engaged in the sector through close collaboration with IDB and the Department for International Development (DFID) in three different urban and peri-urban areas of the country. 25 The Bank is preparing a complementary project to rehabilitate the Cunha Canal ($2 million) that is already approved for financing by GRIF. 25 Strategic Pillar II: Improving Education Quality and Safety Nets (overall rating: Mostly Achieved) 16. This CAS Pillar built on the Bank’s extensive experience in Guyana in strengthening basic education services, and sought to extend its engagement in the social sectors through addressing social assistance and pension issues. In education, the overall aim was to improve both equity and quality of basic education, as a continuation of the efforts begun in 2004 under the Education for All-Fast Track Initiative (EFA-FTI) to significantly expand basic education coverage. With respect to social safety nets, the proposed interventions were relatively limited and targeted to areas in which the Bank had a comparative advantage as a consequence of experience in similar contexts in seeking to balance social welfare and fiscal considerations. As with Pillar I, Pillar II includes two results areas, pertaining to education and safety nets, respectively. Results Area 1: Improved quality of education through reform of teacher education and better service delivery 17. The education sector was arguably the most important sector in the CAS program, especially given that the entire IDA envelope was devoted to the sector, plus sizeable additional resources mobilized from the EFA-FTI Trust Fund. The CAS sought to maintain the reform momentum in basic education, which had already seen significant improvements in the preceding five years, through the mobilization of close to $30 million from the EFA-FTI. IDA’s approach to improving education was a holistic one, focusing on three interlinked factors: teaching force, teaching/learning environment (such as school infrastructure), and school-community partnerships. The focus for the FY09-12 CAS was to address second-generation problems of regional disparities and poor quality in basic education deriving from inefficiencies in teacher education, a shortage of qualified teachers, and unacceptably high teacher-student ratios in many areas. In addition to producing a comprehensive teacher development strategy and strengthening teacher training, ongoing in-service support was provided through the establishment of Learning Resource Centers, and the provision of incentives such as stipend enhancement and teacher housing construction. Total new resources committed to these areas under the CAS amounted to about $7.2 million including an IDA operation ($4.2 million), and an EFA-FTI funded operation ($3 million). The three specific outcomes specified in the CAS for this Results Area and their status at the end of the CAS program are described below.  Policy framework for teacher education. The first education outcome area included in the CAS results matrix sought the establishment of a policy framework for restructuring the teacher education system that consolidates and harmonizes requirements among the various teacher education institutions. This outcome was fully achieved (A). A new policy framework for teacher education was put in place and implementation was well underway by 2012. Among other things, the new framework helped to put in place a two- year Bachelor of Education Program (reducing the total length of a B. Ed. Degree from 7 to 4 years); a practical training semester and classroom observation; and, integration of ICT into the learning process.  Improved student to teacher ratios. The second outcome area set specific targets for student to teacher ratios (see Table 2) with the aims of both lowering these to more manageable levels overall as well as reducing disparities between the coastal areas and 26 the hinterlands. The CAS matrix included targets by level (nursery, primary, and secondary schooling) with specificity by region to ensure improvements in equity. All these targets were achieved (A) by the end of the CAS period and were exceeded in a majority of cases, with positive implications for the quality of basic education in the country.  Primary and secondary completion rates. As with the previous outcome area, the CAS also set specific outcome indicators (see Annex 2) to measure the quality and effectiveness of changes to the education system at primary and secondary levels. Specific indicators were set for coastal and hinterland schools to ensure that disparities among them would start to narrow. The CAS targets with respect to primary completion were exceeded in both coastal and hinterland areas. While improvements were also noted at the secondary level, and the CAS targets had been exceeded by 2014, data for the secondary school level were not available in 2012 making it impossible to verify if the specific targets had been met at the time by CAS completion. In this context, the CLR rating for this outcome is mostly achieved (MA). 18. Although not foreseen at the time of the Board presentation of the CAS, the Bank, at government’s request, approved the University of Guyana Science and Technology Support Project ($10 million) in FY11. The project (still ongoing) was fully supportive of both CAS pillars, as it both strengthens the education sector and focuses on the four science and technology faculties at the University of Guyana to prepare the next generation of professionals for the “green economy.” Given its approval in 2011 and the long lead times involved in securing parliamentary approvals, the project only became effective by the end of the CAS period. Results Area 2: Improved governmental institutional capacity to deliver an enhanced social protection program 19. The last outcome area included in the CAS results matrix, pertained to safety nets—an area that was highly relevant to the protection of vulnerable population groups as well as Guyana’s efforts to achieve fiscal consolidation. Specifically, the CAS program in this area focused on undertaking AAA that would assist Guyana to finalize strategies to strengthen (a) targeting and administration of social assistance programs in the MOLHSSS; and (b) the National Insurance Scheme (in terms of equity, adequacy, sustainability, administration, and compatibility with the civil service pension scheme). AAA on safety nets was intended to be conducted in FY11 but was dropped at GoG request. Analysis of national insurance, including its relation to the civil servants’ pension program, was undertaken in 2012, with support from a FIRST grant that was approved for Guyana in that year. The AAA helped lay out a viable strategy for sector development, which was completed and discussed with government and stakeholders before CAS completion. The proposed analysis of the social assistance programs was not undertaken in the CAS period. Reflecting these findings, the CLR rates CAS performance in this outcome area as partially achieved (PA). 27 III. WORLD BANK PERFORMANCE 20. The World Bank’s performance is rated Good overall. The assessment is primarily based on (a) the high relevance of CAS objectives and design; (b) close coordination with, and leveraging of, partners’ technical and financial resources; (c) flexibility and responsiveness to changing circumstances; and (d) continuity of dialogue and program implementation. Weaknesses included some issues in the design of the results matrix and the apparent underestimation of the risks to the CAS program deriving from domestic political polarization. These factors are discussed further below. 21. CAS design. The CAS was designed in a context where the Bank had a very limited financial envelope for Guyana relative to other external partners (e.g., IDB’s portfolio amounted to more than $360 million at a time when the CAS IDA envelope was just $8.2 million). Nonetheless, the CAS approach was able to maximize impact by:  Focusing resources in areas of critical importance to Guyana’s development (i.e., environment and education) and avoiding areas (e.g., health) which were adequately covered by other donors at CAS inception  Consciously building on areas where the Bank had deep experience in Guyana (e.g., flood risk management, education) or a specific comparative advantage (e.g., social insurance, where the Bank was well placed to combine fiscal and welfare aspects effectively)  Maintaining sufficient flexibility in the program to enable appropriate changes (e.g., agreeing to pass the FCCC project to IDB while supporting the process as a GRIF trustee)  Designing the program to obtain maximum benefit from cooperation with other external partners  Adopting an appropriate mix of instruments, including a strong focus on technical support (often through trust funds) and knowledge transfer to compensate for implementation capacity weaknesses. 22. Results Matrix. The CAS results matrix was well designed in that there was a clear causal chain between national development challenges, government objectives/programs, the Bank’s contribution to these objectives, and the specified outcomes. Outcomes were also appropriately linked to CAS activities, both ongoing interventions inherited from the previous CAS as well as new operations and AAA. Moreover, in all instances, the outcome indicators were measurable and, for the most part, actually measured. Some indicators, such as those related to student-to-teacher ratios and school completion rates were strong in measuring actual impacts of the interventions to improve the teaching-learning process and overall quality. In several instances, however, the indicators could be viewed as overly process-oriented. This is especially true for indicators related to the development of strategies or plans, as in the safety net area or the actual indicators for flood risk management. 23. Coordination with other external partners. Perhaps the strongest area of Bank performance with respect to design and implementation of the FY09-12 CAS was the creative and innovative approach to partnership that was integral to the program. For example, Guyana was one of the first countries to access and utilize the FCPF Readiness grant and this helped pave the way for GRIF, which represented a new and innovative way to finance sustainable development and 28 carbon emissions control in developing countries. It also mobilized substantial resources for Guyana ($250 million), which might not otherwise have been made available to the country. In this respect, it is worth noting that the Bank, coordinating closely with the IMF, also delivered an $11 million Heavily Indebted Poor Countries (HIPC) package to Guyana during the CAS period, which helped put the country on a more sustainable debt path. The Bank partnered successfully with IDB and DFID in the water sector, sharing the knowledge it gained through the Conservation Adaptation Project (CAP) with these partners and government agencies. The partnership with EFA-FTI in delivering a package of complementary interventions in support of education improvements was a long-standing and fruitful one, which delivered important results in terms both of basic education coverage and quality. It is also worth noting that the Bank used its role with respect to GRIF and FCPF to coordinate and maintain a regular dialogue with donors, government, and domestic and international civil society organizations (CSOs) on climate change. 24. Program flexibility and responsiveness. As noted, the Bank remained flexible in adapting the CAS program as necessary given changing circumstances and client demand, while still maintaining appropriate focus on the core CAS objectives and its technical and fiduciary responsibilities. Some examples of this flexibility were the negotiation and management of GRIF, the transfer of the FCCC project to another partner, the scaling up of the teacher education project (from $3 million to $4.2 million), and the introduction of the University Science and Technology project in furtherance of both environmental and education goals. 25. Bank-GoG relations. For most of the early CAS period, relations between the government and Bank remained cooperative and positive, with the Bank playing a role in terms of technical advice and overall development support that clearly outweighed the small size of its IDA contribution. GoG kept a solid ownership of the program, playing notably a crucial role in the allocation of the country’s IDA envelope. However, the relationship met with some challenges in late 2010 and 2011, which precluded the finalization and presentation of the CAS Progress Report to the Board. The Amaila Hydropower Project was strongly promoted by the then government, which was keen to have WBG participation, which initially seemed feasible from the WBG side as a possible clean energy substitute for fossil fuel-sourced electricity. However, the WBG’s technical assessment concluded that the project was unlikely to achieve the objective of reliably substituting for other electricity sources, and that costs were likely to be considerably greater than estimated. These conclusions were challenged by GoG at that time. (The new Guyanese administration has arrived at similar technical conclusions to those of the Bank and has decided to abandon of the project.) While the Bank’s decision to withdraw from the project occasioned some difficulties in Bank-GoG relations for the CAS program, it was clearly justified on the merits. In this sense, the Bank team could be commended for standing its ground as well as for remaining steadfast in its support for other elements of the program (especially flood risk management and education), which yielded the positive results reported in the preceding section. This stance also clearly paid off in terms of the continuing relationship between the Bank and Guyana, which has led to a new engagement in the country. 26. Program risks. The CAS document appropriately identified a number of risks that might affect implementation of the portfolio and laid out of strategies for mitigating them. These mitigation measures—especially those related to countering weak implementation capacity and governance gaps—were largely put into practice during the CAS period. However, there appears to have been 29 considerable underestimation of the impact of political polarization on the Bank’s ability to widely publish and discuss analytical findings from AAA tasks. Following the Administration’s loss of its parliamentary majority there was heightened sensitivity to data sharing and to publishing analyses that might be construed as reflecting on the government’s performance. As a result, important AAA activities, such as the 2008 poverty assessment and the integrated fiduciary assessment (led by the EU and involving participation of a number of agencies, including IDA), were completed but never published. Thus, although these documents and their recommendations were reviewed (and sometimes adopted) by GoG, they were not widely disseminated and could not inform the wider Guyanese policy debate. 27. Portfolio implementation. The portfolio of IDA-financed projects at the end of the CAS period was small, comprising two projects with total commitments of $14.2 million and an average age of 2.7 years (see Table 2). The University of Guyana Science and Technology project was at risk because of initial implementation delays, primarily arising from weak implementation capacity at the University, which was new to IDA processes/requirements. Project implementation was already improving as a result of an intensive effort to provide training and supervision support, so that both projects were fully on track to achieve their development objectives. Two projects that closed during the CAS period were rated as satisfactory. Bank close implementation support prevented any potential procurement and fiduciary issues. Table 2. Guyana Portfolio (FY09-12) Fiscal year 2009 2010 2011 2012 # Projects 2 1 2 2 Net Comm Amt 21.3 11.3 14.2 14.2 Age years 9.2 4.9 0.7 2.7 # Prob Projects 1 0 0 1 # Projects At Risk 1 0 0 1 Comm At Risk 11.3 0.0 0.0 10.0 % Commit at Risk 53.1 0.0 0.0 70.4 28. Portfolio Implementation beyond the CAS period – FY13-15. Although there was no new lending activity in FY13, the Guyana portfolio doubled in FY14-15 with three new lending operations: (a) Guyana Flood Risk Management (P147250, US$11.89 million–IDA, FY14), (b) Guyana Secondary Education Improvement (P147924, US$10 million–IDA, FY14), and (c) Guyana Early Childhood Education (P129555, US$1.7 million–Global Partnership for Education Trust Fund, FY15). Two nonlending operations were also delivered during that time: Supervision of Nonbanking Finance Institutions (FY13), and Pension Regulation (FY14). 29. During the CAS implementation period (FY09-12), IFC aligned its support to Guyana’s development agenda following a two-prong strategy: (a) supporting improved business climate and expansion of financial services, particularly in underserved rural areas, through partnerships; and (b) assisting the GoG and the private sector in adopting sustainable standards and natural resource management best practices for the implementation of the country’s LCDS. 30 30. Access to Services and Improved Business Climate - IFC’s financial sector initiatives were geared towards increasing banking penetration outside of the capital city and expanding the level of credit to low income households and local SMEs. Through partnerships with well- established institutions IFC was able to expand the level of outreach, and extend the terms of credit in order to avoid reliance on collateral-based lending and short term finance. With support from Canada, IFC expanded its Global Trade Finance Program to Guyana Bank for Trade and Industry Limited (GBTI), the country’s second largest bank. GBTI expanded trade finance solutions to small and medium enterprises. Building on its initial success, IFC signed another cooperation agreement with GBTI, to provide advisory services to improve the Bank's risk management practices in the following areas: risk governance, credit risk, liquidity risk, interest rate risk, market risk and operational risk. These efforts have increased the bank’s long-term sustainability and established a strong foundation for furthering its SME outreach. 31. With IFC support, Guyana enhanced the business environment for access to credit by establishing a regulatory framework that allows the licensing of private credit bureaus and gives borrowers the right to inspect their data 26 . Working with local financial institutions and the authorities IFC provided advice on a new credit reporting bill that was passed by the government in June 2010. IFC's CIDA-funded Caribbean Credit Bureau program enabled the establishment of a credit bureau. IFC contributed by drafting the legislation and engaging with the Central Bank in developing regulations for the implementation of the legislation. Under its guidance, a training program was developed for the regulators, and consumer education materials were published. 32. Since 2009, IFC is providing tailored financial and technical support to the management and the board of Small Business Development Finance Trust (SBDF).27 Given the company’s average loan size of approximately $900, IFC’s financing enabled SBDF to provide over 2,000 loans during the life of the project. The beneficiaries of these loans are low-income entrepreneurs, including women. In 2012 the SBDF disbursed more than 722 loans (value of $G440.5million) and facilitated the creation of more than 2700 jobs, by increasing its ‘outreach program’ in rural areas, with emphasis on food production for local and export markets. The loan portfolio of the Trust has appreciated from $G37.1M in 2003 to $G282.3M in 2012. Building on this success, IFC has continued to support the Trust under a new agreement. 33. In collaboration with the Republic Bank and IBM IFC launched Guyana’s Small and Medium Enterprises Competitiveness initiative with the “SME Toolkit Caribbean”. The SME Toolkit Caribbean 28 provides small business owners with free, online, easy access to expert information, including business forms, tools, how-to-articles, free software, and advice about accessing markets. The Republic Bank has customized the platform and the content to meet Caribbean-specific business reality and needs. 26 Doing Business 2013. 27 SBDF was established in 2002 as a non-profit organization. In 2009 became a corporate entity with the support of IFC. The main thrust of the agency is to transform subsistence entrepreneurs into commercial suppliers with environmentally friendly and efficient practices of production. The agency aims to become a micro-finance leading institution. 28 Globally, it has been launched in 17 languages, in more than 30 markets, and annually receives more than 5 million unique visitors. 31 34. Introducing Sustainability Standards - IFC is supporting the implementation of Guyana’s LCDS through its contribution to the development of sustainable mining, transfer of environmental management standards and practices, and introduction of appropriate resource utilization and conservation methods. IFC’s engagement with Guyana Goldfields29 has set a model of sustainable mining development in Guyana through fostering local economic development, skills transfer, and building environmental management capacity. IFC has made a second equity investment of $4.15 million in the project in June 2009,30 as a continuation of a partnership focused on introducing clean energy, preserving the biodiversity in the rainforest, and implementing international standards for sustainable mining in a remote region where artisanal mining practices had a significant adverse impact on the environment. The project contributed to local economic growth by generating more than 300 jobs and $1.5 million in purchases of local goods and services. IV. ALIGNMENT WITH WBG CORPORATE GOALS 35. Although the CAS was prepared well before the adoption of the WBG twin goals, the program was closely aligned with ending extreme poverty and boosting shared prosperity in a sustainable manner. The focus on improving education coverage, equity, and quality is fundamental to both twin goals. The expansion of coverage meant enhanced services and opportunities for children from poorer households, especially since education is a critical avenue for increasing the potential for higher future earnings. The focus in forestry of providing new sources of revenue for poor hinterland communities while maintaining consistency with forest conservation objectives was also clearly aligned with WBG corporate goals. Similarly, given the devastating impact of frequent flooding on the welfare and livelihoods of poorer communities, the CAS focus on reducing vulnerability to flooding was intended to help avoid catastrophic economic losses and minimize the health and other personal risks that accompany floods. Finally, although interventions with respect to the safety net were only partially achieved, they were clearly targeted to protection of the most vulnerable—namely, elderly individuals and the poorest households. V. MAIN LESSONS 36. The WBG should continue to be engaged in Guyana, focusing on areas with broad support from Guyanese society, such as education, flood and water management, and the environment more broadly. Experience of the FY09-12 CAS shows that the Bank can play an important role even with a small financial envelope, providing it concentrates its efforts in a limited number of sectors and seeks to build viable partnerships with relevant domestic actors as well as other external partners so as to leverage local knowledge, technical skills, and financial resources. IDA’s long-standing engagements in education and (to a lesser extent) flood risk management are cases in point. In each of these sectors, the Bank’s longer-term engagement over two or more CAS periods paid off in terms of tangible results. The Bank was also able to build up an adequate relationship with sectoral officials and stakeholders that enabled it to continue having an impact throughout the CAS period. 29 Guyana Goldfields signed a Mineral Agreement with the government of Guyana and has received the Mining License in November 2011 to build and operate the Aurora Gold Project. 30 IFC purchased an initial equity stake in the company of $4.7 million in 2006. 32 37. Maintaining regular interaction and working with other external partners yields substantial benefits beyond expanding financial resources. Sharing of country/sectoral knowledge and past project experience proved valuable in the Guyanese context, where institutional capacity is limited and institutional memory is affected by frequent staff changes. Partnering also offers opportunities to remain engaged in sectors where the Bank is currently not lending. This was clearly the case in the forest conservation and carbon emissions reduction area, as the Bank stayed engaged in the debate through its role in GRIF. It was also important in the water sector, where the Bank maintained its knowledge base and shared its experience and insight by working with IDB and DFID—even though a follow-up IDA operation was not immediately possible. 38. Given Guyana’s limited institutional and fiduciary capacities, lending should be linked from the outset to systematic technical and training support. The attention to this type of support for project implementation increased systematically during implementation of the FY09-12 CAS, and it yielded important pay-offs in terms of improved project implementation and overall portfolio performance. Attention to implementation support during project preparation could play an important role in supporting portfolio performance, especially when working with counterparts that have not previously worked with the Bank. 39. While political risks of the type that emerged during this CAS period cannot be totally avoided, their adverse impact can be mitigated, including through maintaining alignment with the political cycle in developing lending operations and undertaking ASA work, ensuring strong demand by the government as well as other domestic stakeholders, and involving a wide range of stakeholders in Bank tasks. Greater attention to political economy considerations should also be incorporated into all analytical work. 40. The trend towards greater IFC engagement over the CAS period and beyond should be continued. The experience of CAS implementation suggests that there are a number of opportunities for IFC engagement in business climate improvement, financial sector/SME development, and the extractive industries. In each of these areas, IFC could usefully bring its experience to bear in supporting private sector development in Guyana—likely a key ingredient in making progress toward the Bank’s corporate goals. 33 Annex 2. CAS CLR - Guyana CAS CLR Results Framework  CAS Objectives and Lending and Non-Lending Outcome Indicators Status and Evaluation Summary Activities that Contributed Lessons Learned and Suggestions for the New (baseline and targets) to the Outcome CPF Strategic Pillar 1: Strengthening Environmental Resilience and Sustainability 1a. Improved government Maintaining regular interaction and working with and local communities’ other external partners yields substantial benefits ability to combine economic beyond expanding financial resources. Partnering development with reduced offers opportunities to remain engaged in sectors deforestation/degradation, where the Bank is currently not lending, such as and to access markets for forest conservation and carbon emissions ecosystem services Not Achieved reduction, where the Bank stayed engaged in the debate through its role in GRIF. Outcome 1. New Specific CAS activities in forestry were modified None management models that significantly in early years of CAS help reduce deforestation and implementation. The Bank helped structure the demonstrate social and GRIF ($250 million equivalent Norwegian trust economic viability, piloted in fund). As a result the government requested that the field, and ready for IDA funds earmarked for the $3 million Forestry scaling up: Climate Change and Communities project be reallocated to other CAS priorities. Baseline: 0 Target: 2 Achieved Outcome 2. National forest Baseline scenarios on Guyana’s forests and Readiness Grant from Forest and carbon baseline scenario carbon were developed. Monitoring systems Carbon Partnership Facility and monitoring systems is were established. (FY09) – P123701 established 34 1b. Improved The Bank can play an important role even with a Government’s ability to small financing envelope, providing it concentrates reduce exposure to natural its efforts in a limited number of sectors and seeks disasters and global climate to build viable partnerships with relevant domestic risk actors and other external partners so as to leverage local knowledge, technical skills, and financial Outcome 3. Risk and flood Achieved GEF-Financed Conservation resources. The Bank’s longer term engagement vulnerability reduction The GEF-financed Conservation Adaptation Adaptation Project (FY09- over two or more CAS periods produced tangible integrated in regional Project enabled a complex/comprehensive FY13) results. development and planning engineering study, and 14 key drainage activities in project areas interventions. A model was developed and Project Design: i) enable the use of a Designated (three regions in low-lying calibrated to identify key drainage regimes and Account for disbursement and budget to directly coastal plains): map key interventions to be made within the fund project staff, ii) establish a detailed Conservancy to improve water flow to the procurement plan at appraisal, iii) TOR Baseline: 0% Demerara River. The institutional framework for specifications should incorporate close and Target: 15% of planned flood control was strengthened. The created continued technical supervision, iv) technical activities Implementation Secretariat consolidated the review of project throughout implementation national approach to flood control, creating including quality control consensus for a medium- to long-term adaptation Contract Awards: use a single contract award for strategy. Discharge capacity of a key relief canal large parts of project from the Easter Demerara Water Conservancy to Training: provision for continuous training, the Demerara river was increased by 30 percent. practice and supervision; minimize use of one-off workshops/training events Communication: include a communication plan to facilitate knowledge transfer, coordination, and future activities Technical Baseline: remote sensing technologies and modelling methods can be replicated for other Caribbean countries with similar situations. Outcome 4. One agricultural Partially Achieved AAA—Agriculture Risk insurance contract for small A draft agricultural risk management and Insurance (FY10) farmers designed (June 2011) insurance strategy was submitted to the government, but the agricultural insurance contract was not finalized. 35 Strategic Pillar 2: Improving Education Quality and Social Safety Nets 2a. Improved quality of The Bank can play an important role even with a education through reform small financing envelope, providing it concentrates of teacher education and its efforts in a limited number of sectors and seeks better service delivery, as to build viable partnerships with relevant domestic measured by the following: actors and other external partners so as to leverage local knowledge, technical skills, and financial Outcome 5. A policy Achieved Trust Fund—Education for resources. The Bank’s longer term engagement framework for restructuring A new policy framework for teacher education All Fast Track Initiative over two or more CAS periods produced tangible the teacher education system was established. results. that consolidates and harmonizes requirements among the teacher education institutions is established Outcome 6. Student-to- trained teacher ratio at Achieved IDA—Improving Teacher Stability in WB team sector specialist, i.e. nursery, primary, and All targets were surpassed by the end of the CAS Education (FY11)—P110018 spanning over two CAS period facilitates project secondary school levels by period. Trust Fund—Education for implementation and enhances sustainability coastland and hinterland All Fast Track Initiative (FTI) prospects. 2012 results: (FY05)—P1089324 Baseline 2006-07: Nursery: 22 natl, 21 C, 36 H  nursery = 27.8 natl, 26.0 Primary: 36 natl, 34 C, 54 H C, 59.7 H Secondary: 32 natl, 31 C, 46 H  primary = 45.9 natl, 43.3 C, 73.0 H  secondary = 36.3 natl, 35.0 C, 52.2H Target 2012:  nursery = 26.5 natl, 25 C, 57 H  primary = 42 natl, 40 C, 70 H  secondary = 35.3 natl, 34 C, 50 H 36 Trust Fund—Education for Outcome 7. Primary and Mostly Achieved All Fast Track Initiative (FTI) secondary school completion The CAS targets with respect to primary (FY05-FY13)—P089324 rates by coastland and completion were exceeded in both coastal (C) hinterland: and hinterland (H) areas. While improvements were also noted at the secondary level, and the Baseline 2006-07: CAS targets were exceeded by 2014, data for the  primary = 103.6 natl, 105 secondary school level were not available in C, 94 H 2012, making it impossible to verify if the  secondary (10th grade) specific targets had been met by the time of the =53.7 natl and C; 69 H CAS completion. Target 2012:  Primary = 100% natl and Primary School completion rates targets were C, 95 H exceeded in 2011:  Secondary = 55% natl  Nationwide (natl): 103.78% and C; 71 H  Coastal (C): 101.8%  Hinterland (H): 118.82% In 2015, the primary school completion rates were 103.8% natl and 118.8% H 2b. Improved institutional capacity of the government, and ability to deliver an enhanced social protection program as measured by: Outcome 8. A finalized time-bound strategy to Partially Achieved strengthen (a) targeting and AAA—Pension Regulation administration of social Analysis of national insurance, including its Project (FIRST – P144225) assistance programs in the relation to civil servants’ pension system was MOLHSSS; and (b) the undertaken in 2012. The AAA helped lay out a National Insurance Scheme viable strategy for the National Insurance (in terms of equity, adequacy, Scheme (b). The proposed analysis of the social sustainability, administration, assistance program (a) was not undertaken in the and compatibility with the CAS period. civil service pension scheme) 37 Annex 3. CAS CLR - Planned vs Delivered Lending Operations CAS PLANS Planned Loans US$ (M) Status and Latest Ratings US$ (M) FY IDA TF IDA TF Operations Approved prior to this CAS period, i.e. before FY09, and implemented during CAS period P076722 – HIV/AIDS Prevention & amp; Control Closed FY10 – Fully disbursed Project – Approved in FY04 10.0 PDO: S 10.0 IDA H0790 IP: S P088030 – Guyana Water Sector Consolidation – Closed FY11 – Fully disbursed Approved in FY05 11.3 PDO: S 11.3 IDA H1800 IP: MS P089324 – Guyana, Education for All – Fast Track Closed FY13 – Fully disbursed Initiative – Approved in FY05 32.920 PDO: S 32.920 TF 53679 IP: S Closed FY10 – 90% disbursed P099848 – Guyana National Statistics Strategy and 0.285 Overall rating: MS 0.256 Statistical Development – Approved in FY07 Closed FY14 – Fully disbursed P103539 – Conservancy Adaptation Project – PDO: S 3.800 Approved in FY08 3.800 IP: S TF 91692 ICR Ratings: Outcomes – MS, Global Env. – M, Bank Perf. – MS, Borrower Perf. - MS P090044 – Bagasse Cogeneration Project – Cancelled in FY013 Approved in FY08 2.600 PDO: U TF92256 – Community Development Carbon Fund IP: U Subtotal 21.3 39.605 Subtotal 21.3 36.976 CAS period – FY09-FY12 Approved, then cancelled at Government request - P123701 – 0.285 Readiness Grant from Forest Carbon Partnership Guyana FCPF REDD READINESS, approved June 2010, cancelled TBD 2009 Facility (FCPF) November 2010. Subtotal Subtotal 0.285 Dropped at government request – P116443 – Guyana Community Forestry, Climate Change and Communities 3.0 Non-Timber Forest Uses, dropped in FY11 2010 GRIF – Norwegian Trust Fund ($250m equivalent), World Bank is 250 custodian/partner entity Subtotal 3.0 Subtotal 250 38 Approved: P110018 - Improving Teacher Education, approved October 2010, closed July 2015, fully disbursed - IDA 48030 IDA Education project TBD 2.8 PDO: MU IP: S 2011 Approved: P125288 – University of Guyana Science and Technology Support, approved June 2011 – IDA 49690 10.0 PDO: MS IP: MS Subtotal Subtotal 12.8 2012 Additional CAS Lending Deliveries – FY13-FY16 (as of October 2015) 2013 Approved: P147250 - Guyana Flood Risk Management, approved June 11.89 2014 – IDA 54740 PDO: S IP: S 2014 Approved: P147924 – Guyana Secondary Education Improvement, 10.00 approved June 2014 – IDA54730 PDO: S IP: S Subtotal 21.89 Subtotal Approved: P129555 – Guyana Early Childhood Education Project, 1.70 approved May 2015 – TF 19053 2015 PDO: S IP: S Subtotal 1.70 Subtotal TOTAL CAS Plans 13.3 2.885 ACTUAL CAS 14.2 250.74 39 Annex 4. CAS CLR - Planned Non-lending Services and Actual Deliveries CAS PLANNED DELIVERIES (FY09-FY12) ACTUAL DELIVERY 2009 AAA: On-demand economic monitoring and just-in-time analysis (e.g. Delivered - AAA: On-demand economic monitoring and just-in-time analysis policy options to manage the impact of the crisis) Partially Delivered - AAA: P117601 – Market-Based Agriculture Risk Management in 2010 AAA: Agriculture Risks Insurance the Caribbean. Guyana Agricultural Insurance Component – Pre-Feasibility Study Report, delivered in May 2010 (draft report – not for circulation). Delivered - AAA: On-demand economic monitoring and just-in-time analysis AAA: On-demand economic monitoring and just-in-time analysis Delivered – P103214 – Guyana ROSC Accounting and Auditing, delivered March 2010 2011 AAA: Safety Nets Dropped at request of GoG 2012 Delivered, but not approved by GoG – P078845 - Guyana Country Poverty Assessment, delivered October 2011 2013 Delivered – P129409 – Supervision of Nonbanking Finance Institutions, TF (US$0.2m), delivered June 2013 2014 Delivered – P144225 – Pension Regulation, TF (US$0.12m), delivered February 2014 Annex 5. CAS CLR - Projects Closed during CAS Amount IEG Project Loan/TF Approval Closing ICR Project Name (US$ IP PDO ICR Number Number Date Date rating million) rating MS (overall 0.285 31-Aug-06 31-Aug-09 N/A N/A P099848 Guyana National Statistics Strategy and Statistical Development TF 57131 rating) P076722 HIV/AIDS Prevention & Amp; Control IDA H0790 10.000 30-Mar-04 30-Jun-10 S S P123701 Guyana FCPF REDD READINESS TF 96006 0.200 3-Jun-10 17-Nov-10 N/A N/A N/A N/A P088030 Guyana Water Sector Consolidation Project IDA H1800 11.300 28-Jul-05 31-Mar-11 MS S P090044 Bagasse Cogeneration TF 92256 2.584 27-Jun-08 13-Aug-12 U U N/A N/A P089324 Guyana – Education for All – Fast Track Initiative TF 53679 32.920 28-Sep-04 31-Dec-12 S S P103539 Conservancy Adaptation Project TF 91692 3.800 30-Oct-07 30-Aug-13 S S TOTAL 61.089 40 Annex 6. CAS CLR – Trust Fund Portfolio and Multilateral Debt Relief Initiative Guyana TF Portfolio Trust TF Name TF Status Hold Curr Closing Date Grant Grant Amount % Fund Curr Disbursed TF055112 TF for Opening and Running of the Country Coordinating LCLS USD 3/31/2012 USD $ 40,067.20 100.00 Office in Georgetown Cooperative Republic of Guyana TF055114 DFID GRANT FOR SUPPORT TO THE COUNTRY LCLS USD 12/31/2011 USD $ 693,583.50 100.00 COORDINATION OFFICE IN GUYANA (CHILD UNDER SUB TF055113) TF091692 REPUBLIC OF GUYANA: CONSERVANCY LCLS USD 8/30/2013 USD $ 3,780,509.07 100.00 ADAPTATION PROJECT TF053696 TRUST FUND FOR SUPERVISION OF CATALYTIC LCLS USD 8/31/2010 USD $ 350,692.11 100.00 FUND GRANTS TO LAC COUNTRIES TF053679 GUYANA EFA-FTI MULTI DONOR TRUST FUND LCLS USD 12/31/2012 USD $ 32,919,857.00 100.00 TF091884 GUYANA CONSULTATION LCLS USD 6/30/2011 USD $ 30,290.11 100.00 TF057131 TFSCB - GUYANA NATIONAL STATISTICS LCLS USD 8/31/2009 USD $ 256,678.58 100.00 STRATEGY AND STATISTICAL DEVELOPMENT TOTAL TFs $38,071,677.57 Multilateral Debt Relief Initiative (MDRI) Trust Funds Trust TF Name TF Status Hold Curr Closing Date Grant Grant Amount % Fund Curr Disbursed TF024893 HIPC - IDA - GUYANA EHIPC ACTV USD 12/31/2030 USD $ 72,006,467.89 17.67 TF050885 HIPC - IADB - GUYANA ACTV USD 12/31/9999 USD $ 17,710,000.00 100.00 TF051089 HIPC - IFAD - GUYANA ACTV USD 12/31/2030 USD $ 1,009,704.41 100.00 TF055173 HIPC - CDB - GUYANA ACTV USD 12/31/2030 USD $ 6,479,020.00 100.00 TOTAL MRDI TFs $97,205,192.30 41 Annex 7. Guyana Operations Portfolio (IBRD/IDA and Grants)  (as of 02/29/16) 42 Annex 8. IFC Investment Operations Program FY12 FY13 FY14 FY15 FY16 Original Commitments (US$m) IFC and Participants 1.14 5.54 0.00 45.00 0.00 IFC's Own Accounts Only 1.14 5.54 0.00 45.00 0.00 Original Commitments by Sector (%) - IFC Accounts only FY12 FY13 FY14 FY 15 FY16 OIL, GAS AND MINING 0.00 100.00 0.00 100.00 0.00 FINANCE & INSURANCE 100.00 0.00 0.00 0.00 0.00 Total 100 100 0 100 0 Original Commitments by Investment Instrument (%) - IFC Accounts only FY12 FY13 FY14 FY 15 FY16 EQUITY 0.00 100.00 0.00 0.00 0.00 GUARANTEE 100.00 0.00 0.00 0.00 0.00 LOAN 0.00 0.00 0.00 100.00 0.00 Total 100 100 0 100 0 * IFC committed an additional US$140 million in non-traditional mobilization in mining in FY2015. Annex 9. Guyana IFC Committed and Disbursed Outstanding Investment Portfolio International Finance Corporation Statement of IFC's Committed and Outstanding Portfolio Amounts in US Dollar Millions Accounting Date as of : 02/29/2016 Region(s):Latin America and the Caribbean Country(s) : Guyana Commitment Institution LN LN ET QL + QE GT RM ALL ALL LN ET QL + QE GT RM ALL ALL Fiscal Year Short Name Cmtd - IFC Repayment - IFC Cmtd - IFC Cmtd - IFC Cmtd - IFC Cmtd - IFC Cmtd - IFC Cmtd - Part Out - IFC Out - IFC Out - IFC Out - IFC Out - IFC Out - IFC Out - Part 2016 AGM_Inc 37.75 0 0 0 0 0 37.75 0 37.75 0 0 0 0 37.75 0.00 2006/ 2009/ 2011/ 2013/ 2015 Guyana Goldfield 0 1.17 9.28 0 0 0 9.28 0 0 9.28 0 0 0 9.28 0.00 Total Portfolio 37.75 1.17 9.28 0 0 0 47.04 0 37.75 9.28 0 0 0 47.04 0.00 43 MAP 44