Document of The International Development Association Acting as Administrator of the Interim Trust Fund FOR OFFICIAL USE ONLY Report No.: P-7056-MLI MEMORANDUM AND RECOMMENDATION OF THE MANAGING DIRECTOR TO THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION ON A PROPOSED INTERIM FUND CREDIT IN AN AMOUNT OF SDR 3.0 MILLION TO THE REPUBLIC OF MALI FOR A PILOT PRIVATE IRRIGATION PROMOTION PROJECT April 29, 1997 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 Cirrencv Unit =CA FrI c; (CFAF) US$1.00 = CFAF 517 WEIGHTS ANI) MEASURES Metric Systeim ABBREVIATIONS ANI) A( RONYMS APROFA Agricultural Trading and Processing Promotion Agency (Agence pour la Promotion des Filières Agricoles) CFAF Franc CFA FISCAL YEAR January 1 - December 31 Vice-President: Jean-Louis Sarbib, AFR Country Director: Hasan Tuluy, AFC 15 Technical Manager: Jean-Paul Chausse, AFTA3 Task Team Leader: Arne Mossige, AFTA3 FOR OFFICIAL USE ONLY REPUBLIC OF MALI PILOT PRIVATE IRRIGATION PROMOTION PROJECT CREDIT AND PROJECT SUMMARY Borrower: Republic of Mali Implementing Agency: Agence pour la Promotion des Filieres Agricoles (APROFA) Beneficiaries: Individual small-scale irrigation producers, men and women, producer groups, and private and public sector entities, including financial institutions involved in small-scale private irrigation, and the Ministry of Rural Development and Environment Poverty: Program of Targeted Interventions Credit Amount: SDR 3.0 million (US$4.2 million equivalent) Terms: Standard, with 40 years maturity Commitment Fee: 0.5 percent on undisbursed credit balances, beginning 60 days after signing, less any waiver On-lending Terms: Proceeds of the Interim Trust Fund Credit would be transferred in grant form to APROFA Financing Plan: See Schedule A Economic Rates of Return: The project is mainly a technical assistance project that aims at addressing key constraints to small-scale private irrigation development. The project's capacity building efforts in the sub-sector are expected to lay the basis for enhanced private sector investments in the sub-sector. The economic rates of return on on-farm investments in small-scale irrigation have been calculated. They are generally high, ranging from a low of 32 percent for new investments in medium-size rice farms in Mopti to a high of 116 percent for the rehabilitation of family gardens. Staff Appraisal Report: No.: 16256-MLI Map: No.: IBRD 28717 Project Identification No.: 1738 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.  MEMORANDUM AND RECOMMENDATION OF THE MANAGING DIRECTOR TO THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION (THE ASSOCIATION ACTING AS ADMINISTRATOR OF THE INTERIM FUND) TO THE REPUBLIC OF MALI FOR A PILOT PRIVATE IRRIGATION PROMOTION PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed development credit financed under the Interim Trust Fund to the Republic of Mali for SDR 3.0 million, the equivalent of US$4.2 million, on standard IDA terms, with a maturity of 40 years, to help finance a Pilot Private Irrigation Promotion Project. The project beneficiaries would finance about 10 percent of total project costs, or about US$470,000. The proceeds of the Interim Trust Fund Credit would be made available as a grant to the Agricultural Trading and Processing Promotion agency (APROFA, Agence de Promotion des Fili&res Agricoles), an implementation entity within the Permanent Assembly of Malian Chambers of Agriculture. 2. Country and Economic Background. With a per capita GNP of only US$250 in 1996, Mali is one of the world's poorest countries. The literacy rate (32 percent), life expectancy (49 years), and access to basic services are also among the lowest in the world. Its population of 9.5 million is predominantly young and rural. Half of the population is under 20 years of age, and three fourths live in rural areas. Since the late 1980s, Mali has implemented a wide range of economic and institutional reforms under its structural adjustment program. Domestic pricing and marketing have been completely liberalized, most trade distortions have been removed with significant reductions in the levels of protection and the streamlining and simplification of the tariff structure. Several public enterprises have been liquidated or privatized and those remaining in the public domain are being restructured to improve their performance. The impact of the reform program is most noticeable in improved macroeconomic management. Fiscal and external balances have improved and inflation has been successfully contained. Growth impact has, however, been modest due largely to the overvaluation of the CFA franc (CFAF) over much of the reform period. 3. Macroeconomic Performance. The devaluation of January 1994 has provided optimism for Mali's future growth. In 1996, the economy grew by 4 percent in real terms. Inflation was reduced from 24.8 percent in 1994 to an estimated 7.0 percent in 1996, thus ensuring durability of real exchange depreciation and the competitiveness of domestic production. Mali's improved competitiveness had a very favorable effect on exports, especially of cotton, gold, livestock, and fruits and vegetables. Food processing and textile industries are also experiencing renewed growth. In 1995, real growth rates were 19.8 percent for export crops, including cotton, fruits and vegetables; 11.9 percent for food crops; 3 percent for livestock; 10 percent for mining (gold); and 6.4 percent for manufacturing and handicrafts. Real growth is projected to average about 5 percent per annum over the medium-term, allowing per capita income growth of at least 1.5 percent. The projected growth rate will have to be complemented by policies to help the poor benefit from growth in order to achieve the Government's objective of significantly reducing poverty. These would include policies to improve access to education and health, support income-generating activities, and improve basic urban and rural infrastructure. 4. The Agricultural Sector. Agriculture, including livestock, will continue to be the driving force of the Malian economy. It contributes about 50 percent of GNP, employs over 80 percent of the active population, and provides three quarters of export revenues. The 1994 devaluation of the CFAF has been significantly beneficial to this sector. It has increased the competitiveness of agricultural products such -2- as cotton, rice, and livestock. The devaluation has made Malian cotton internationally competitive, and with a production of 405,000 tons in 1995/96, Mali is currently the leading cotton producer in Sub- Saharan Africa. Local rice is now able to compete with imports from Asia, and Mali is expected to be self-sufficient in rice in 4-5 years. Livestock exports in particular have expanded significantly within the sub-region, replacing imports from the European Union and South America. The devaluation has also increased the profitability of the production, processing and marketing of fruits and vegetables such as mangoes and onions. In the period between 1987 to 1992, the Government's spending on agriculture declined by about 8.5 percent in real terms. However, over the same period, the sector consumed the bulk of expenditures on economic services - on average about CFAF 28 billion per annum, which is about 40 percent of total investment spending. 5. The main constraints in the agricultural sector include: (a) rapid population growth which exacerbates land pressures, leading to declining soil fertility; (b) natural resource degradation and erratic rainfall which has declined over the last 20 years; (c) limited rural infrastructure for input delivery and output evacuation; (d) low input use of 0.8 kg/ha of fertilizer versus Sub-Saharan average of 5.3 kg/ha; (e) low adult literacy with its negative impact on overall sector productivity; (f) weak government institutions; and (g) limited access to credit, particularly by women. 6. The Irrigation Sub-Sector. Mali is the country with the largest irrigation potential in the western Sahel. Estimates of available water resources indicate an irrigation potential of 560,000 ha, but there are technical and economic constraints to the exploitation of this potential, including irregular rainfall and hydrological patterns, and the cost of mobilizing surface water. At present about 216,000 ha are irrigated, of which large-scale public schemes account for 90 percent and small-scale communal or privately owned perimeters account for 10 percent. Rice production is dominant and covers more than seventy percent of the irrigated land and is primarily grown in Government-financed large scale irrigation schemes, in small-scale village schemes, and in lowland areas. The remaining irrigated area is mainly used for production of sorghum, sugar, wheat, fruits, and vegetables. Average annual irrigated production is around 0.6 million tons. Irrigation in Mali exhibits a large array of production systems depending on the nature of the water source, the level of water control, the degree of intensification of production, and the type of crops grown. There are five types of production systems: (a) large scale surface irrigation with full water control accounting for 30 percent of irrigated lands; (b) controlled flood recession, accounting for 60 percent of irrigated lands; (c) village irrigated perimeters accounting for 4 percent of irrigated lands; (d) small and medium-sized, privately financed, irrigated perimeters accounting for 4 percent of irrigated lands; (e) traditional irrigation in lowlands accounting for 2 percent of irrigated lands; and (f) "oasian" irrigation, which accounts for a marginal share of irrigated lands. 7. Large-Scale Irrigation Development in Mali was considered an operational responsibility of Government institutions, while assistance to small-scale irrigation was neglected. Only formal irrigation operations designed and managed by parastatals, such as Office du Niger, the Segou Rice Office, and the Mopti Rice Office, benefited from the Government's technical and financial support. However, the performance of the state-led irrigation activities has been unsatisfactory. Budgetary resources to pay for operating and maintaining these irrigation schemes have been difficult to secure, and farmers have not taken an active interest in participating in their maintenance. Although the recent changes in the sector have caused an increase in farmers' participation in the maintenance costs, the Government of Mali continues to be responsible for the infrastructure as well as maintenance costs of the primary irrigation canals. -3- 8. Small-Scale Irrigation Development. The increase in privately developed small-scale schemes funded from producers' own resources, or funded in combination with commercial bank loans, over the last years, is slowing because of the profitability of these schemes, particularly for fruit and vegetable production. Key Constraints are: (a) use of primitive technology and inefficient design and management of equipment; (b) farmers' limited access to technical and managerial support services; (c) producers' marginal access to credit; (d) inadequate diversification, marketing, storage and handling of production; (e) low adult literacy; (f) limited formal land tenure arrangements; and (g) limited number of technically skilled private consultants and consulting firms. 9. The implications of the survey are that: (a) the Malians private sector is willing to invest in small-scale irrigation; (b) adequate solutions to the technical and managerial problems encountered by farmers exist, but public services lack the capacity to provide some of these services (technical and managerial aspects of small-scale irrigation), and have until now neglected the sub-sector in the areas of research and extension; (c) because of the specificity and the diversity of private irrigation, its promotion must be supported jointly by the public (extension and research services) and the private sector (technical and management specialists, legal consultants, and financial institutions). The Government should play a catalytic role. This includes the maintenance of an incentive environment, the testing of organizational and institutional arrangements aimed at promoting the capacity of private consultants or firms to provide relevant technical assistance to investors in small-scale irrigation, and the strengthening of the capacity of the staff of financial institutions in appraising investment projects in irrigation. The above considerations form the building blocks of the proposed project. 10. The Government's Strategy. The key objectives of the Government's rural development plan (1992) are to: (a) improve the effectiveness of development activities at the local level through decentralization of public support services; (b) reverse Mali's low input/output agriculture through improved extension and agricultural research services; (c) provide adequate training for rural organizations which will be given lead roles in the identification and implementation of group activities so that they can take on an increasing share of the activities performed in the past by the public sector; (d) further disengage the Government from commercial activities and to promote private sector initiative and intervention in such activities; and (e) launch socio-economic programs for rural development as priority investments within Mali's overall development strategy, with an emphasis on sustainable natural resource management, rural infrastructure, ensuring competitiveness of Malian products, capacity building, rural credit promotion, and support to vulnerable groups. In addition, the Government issued an action plan in 1993 to refocus the functions of the Ministry of Rural Development and Environment on core rural development services, and is currently formulating operational programs to implement the action plan. 11. With respect to the irrigation sub-sector, the Government's strategy includes the following key objectives: (a) focus public investments on a selective rehabilitation of existing irrigation schemes; (b) provide effective extension and research services to farmers; (c) promote options for greater participation of the producers in the rehabilitation and maintenance efforts in public irrigation schemes; and (d) stimulate private investments in small-scale irrigation by enhancing farmers' capacity to identify, operate and manage cost-effective investments. 12. Proiect Rationale. The need for development of small-scale private irrigation is supported by several economic studies and surveys that have been carried out over the last five years. They include: (a) comprehensive surveys among actual and potential private investors in small-scale irrigation, reviewing their technical and institutional constraints; (b) Mali's 1992 household consumption survey -4- which has shown surprisingly high demand for fruits and vegetables, especially in urban areas; and (c) market studies which show high demand on European markets for many Malian agricultural products, such as mangoes and green beans. The project would address several of the key constraints in the small scale irrigation sub-sector and would also complement the newly started Agricultural Trading and Processing Promotion Pilot Project (Cr. 2737-MLI) which aims at addressing key sector constraints to private investments in agricultural trading and processing. Their joint management by APROFA, a private agency which represents rural producers organizations, would facilitate both the transfer of information on marketing constraints and opportunities to the producers, and the transfer of information on production constraints and opportunities to traders and agro-processors. In addition, the project would collaborate closely with the ongoing National Agricultural Extension Project (Cr. 2235-MLI) and the National Agricultural Research Program (Cr. 2557-MLI). 13. Project Obiectives. The project's overall development objective is to improve and induce, through capacity building activities, an expansion of investments in small-scale irrigation, which would contribute to increased on-farm diversification of investments, productivity, and food security. The project is conceived as a research and development, and capacity building investment which would improve the technical capacities of private sector institutions to provide support and financing of investments in small-scale irrigation. The specific medium-term objective of this pilot operation is to increase the delivery of technical and managerial services to small-scale irrigation producers, in order to improve their capacity to: (a) identify the most cost-effective investments in irrigation equipment and infrastructure; (b) properly operate and maintain such equipment; (c) prepare requests for loans from financial institutions and increase their access to credit for investments in irrigation; (d) improve the security of their assets, including land holdings; and (e) capacity building of producer groups and individual producers in organizational, financial, and micro-enterprise management. Furthermore, the project would, through training, strengthen: (a) financial institutions' expertise in appraising investment projects in irrigation; and (b) the technical performance of individual consultants and firms involved in the sub-sector. The success of the project is defined as the beneficiaries' willingness to pay an increased share of the costs of the services provided under the project, and the private sector's ability to provide these services. On-farm investments, induced by the project interventions, are expected to lead to the rehabilitation of 400 ha and to the establishment of about 600 ha of new irrigated land. 14. Proiect Description. This four-year pilot operation would finance technical assistance, incremental operating costs, and equipment to provide private irrigators with: (a) technical and managerial consultancy services and training; (b) legal services and technical studies; (c) testing of irrigation equipment; (d) training of producer groups and individual farmers in organizational and financial management; (e) environmental mitigation measures to correct the potential harmful effects of the project such as water-borne diseases and soil degradation; and (f) monitoring of the incentive environment for private irrigation development through surveys and studies. Furthermore, the project would strengthen, through training, the technical performance of individual consultants and firms involved in the sub-sector as well as the capacity of financial institutions in appraising investment projects in irrigation. Beneficiary participation in financing the delivery cost of support services is a key factor for ensuring that services provided by the project would match the needs of the irrigators, and would be essential to the sustainability of many of the project activities beyond the life of the project. The cost of most consultant services and training would be paid on a cost-sharing basis between project funds and beneficiaries contribution. Total project costs are estimated at US$4.67 million equivalent, of which the ITF credit would finance US$4.2 million equivalent and the project beneficiaries US$0.47 million equivalent. -5- 15. Project Implementation. The project would be managed by APROFA which is currently satisfactorily implementing the Agricultural Trading and Processing Project (Cr. 2737-ML). Additional technical staff would be hired to execute the project activities, and would include technical staff in the coordinating unit in Bamako and an irrigation engineer in each of the four regional branches. APROFA would, as the project's implementing agency, have the primary responsibility for the execution of all project activities and would carry out this function under a performance contract with the Government to deliver programs of assistance and services to local producers, financial institutions, and private sector agents/actors involved in private irrigation activities. Services to individual producers and producer groups, staff of financial institutions, and private consultants and firms involved in irrigation would be provided: (a) directly and exclusively by staff of APROFA, which would include overall project management, recruitment of personnel and consultants; coordination of project activities; maintenance of relations with public and private entities involved in the sub-sector, and day-to-day monitoring and evaluation; or (b) by APROFA in collaboration with existing public institutions, and/or through out- contracting to consulting firms, and would include provision of technical and managerial services and training, provision of legal services and technical studies, testing of irrigation equipment, and parts of the environmental component; or (c) exclusive out-contracting to private consultants or firms, and would include technical studies for irrigation development, training in credit documentation and appraisal of loan requests, environmental surveys and economic studies, beneficiary assessments and studies related to the mid-term and final evaluations. APROFA has already stringent management rules and procedures, similar to those already used in Agence d'Exicution des Travaux dIntjr6t Public pour l'Emploi (AGETIPE) projects in the Sahelian region. APROFA's existing Implementation Manual will be amended to reflect the Agency's new responsibilities in executing the proposed project. 16. Lessons from Previous IDA Involvement. Emerging lessons from the Bank's lending experience in the agricultural sector in Mali are that: (a) farmers are responsive to improved and profitable technologies, and are prepared to invest their time and resources to adopt them; (b) individual farmers or farmers' groups are, if coached and well-trained, willing to take active roles in the management, design and funding of rural development activities; and (c) centrally-managed projects involved in commercial activities tend to loose sight of farmers' constraints and priorities. Lessons from the Mauritania Small- Scale Irrigation Project (Cr. 1571-MR) were fully taken into consideration in the design of the proposed project, including the need to implicate farmers at the on-set of project implementation, and to allow them to participate in site selection and perimeter layout. 17. Rationale for Bank Involvement. The project fits well with IDA's Country Assistance Strategy (CAS) of promoting both agricultural and private sector development, last discussed by the Board on December 1, 1994. It has as its central objective, support for the Government's efforts to alleviate poverty through sustained broad based economic growth, and human resources development. The project would complement the Agricultural Trading and Processing Project and they would, with the support of Structural Adjustment Lending and the IDA-financed Private Sector Assistance Project (Cr. 2432-MLI), form an essential element of Mali's Private Sector program. The project is also consistent with the Bank's strategy of assistance in the agricultural sector which emphasizes local capacity building and empowerment of local communities/farmers organizations to manage their affairs/assets and become active participants in the delivery of public services. In addition, the project would, by providing support capabilities for specialized irrigated production activities, complement the ongoing National Agricultural Extension Project and National Agricultural Research Program, as well as the agricultural extension and research components of the Rural Sector Support Program which is under preparation, in identifying producers' priority constraints, disseminating available and improved techniques, and carrying out other on-farm experiments tailored to the needs of the irrigation producers. -6- 18. Agreed Actions. The Government has agreed upon the following as condition of effectiveness: the signature of APROFA's legal agreement ("Convention") between the Government and APROFA. 19. Environmental Aspects. The project is classified as Category B for purposes of environmental impact, and an Environmental Analysis was carried out. The anticipated water withdrawals under the project are small in relation to the available water supply and the project's individual perimeters are small and scattered over twelve widely separated areas. The approximately 600 ha of new land that are expected to be irrigated as a result of the project would use about 5001/s, which amounts to less than 0.5% of river low flows in the Niger and Bani rivers. The two most common potential negative impacts in the project's intervention areas are expected to be the degradation of the vegetation cover and waterborne diseases. The mitigation plan includes the following activities: (a) conservation techniques to prevent and control soil degradation and salinization; (b) information campaigns and health preventive measures to make the population more aware of the disease risks involved in irrigation; (c) environmental monitoring of project interventions; (d) training of project staff in environmental mitigation measures; and (e) financing of environmental studies. In addition, the Government has informed the Niger Basin Authority about the project in compliance with the terms of the international agreements in force among the riparian countries. 20. Poverty and Program Obiective Categories. The project is a Program of Targeted Interventions. Although the project does not specifically target the poorest, it is expected to contribute substantially to poverty alleviation by enhancing income generation and job creation in rural and peri-urban areas. Poor smallholders involved in irrigation activities, women and men, would specifically benefit from the project's many training and capacity building activities. During the project period, APROFA would monitor closely the extent to which various categories of beneficiaries, such as women farmers and producer groups, are benefiting from the various project interventions. Specific measures would be made to ensure that women irrigators (individuals and women groups) are targeted in the various project activities, including training, technical, managerial and legal services, and testing of irrigation equipment. The appropriate program objective categories are Poverty Alleviation and Private Sector Development. 21. Participatory Approach. Success of the project would be measured by the willingness of beneficiaries to pay for an increasing share of the cost of the services and the private sector's ability to provide these services. This would require a strong participation of all the project beneficiaries from the very on-set of project implementation. One of the project's mandates would be to facilitate the contacts between producers and existing public and private service entities, and to strengthen the performance of these institutions through training. There would be no pre-determined investment or infrastructure patterns imposed on farmers, nor would the project impose cropping patterns. Instead, farmers would approach the project staff with problems related to their farms and seek assistance on how to enhance investment efficiency and thus profitability. 22. Project Benefits. Key project benefits would be: (a) strengthening of the technical, institutional and financial capacities of producer groups and individual producers involved in the sub-sector; (b) learning through pilot activities the selection, management and delivery of the most cost-effective services and techniques to small-scale irrigation producers; (c) developing Malian banks' expertise in appraising investment projects in irrigation, thereby increasing potential access of farmers to credit; (d) increasing the technical capacities of private and public sector entities involved in the sub-sector; and (e) expanding and increasing the efficiency of on-farm investments in small-scale irrigated production, in -7- particular in specialized fruits and vegetable production as a likely follow-up of the project's capacity- building efforts. Success in this endeavor would pave the way for enhanced private sector investments in small-scale irrigated production, contribute to increased on-farm diversification of investments in agricultural development and food security. 23. Project Sustainability. The project is conceived as a pilot research and development and capacity-building investment which should both lead to an increased capacity of private and public sector entities to manage and deliver the most cost-effective services and techniques essential to small-scale irrigation development as well as increased private sector investments in the sub-sector. Beneficiaries contribution would be gradually increased after the mid-term review in order to ensure long-term sustainability. A follow-up operation may be necessary to consolidate the experiences made under the project and to increase its geographic scope. 24. Project Risks. A major risk would be the potential lack of willingness of investors, such as traditional farmers, traders, and public and private sector employees, to invest in small-scale irrigation, and of financial institutions to provide medium-term loans for investments in the sub-sector. Precautions taken to minimize this risk include provisions for: (a) capacity building of Malian bank's staff in appraising investment projects in irrigation, and of farmers to prepare adequate investment plans; and (b) strengthening of micro-financial institutions that target rural smallholders under the proposed Mali Financial Sector Program. Another risk would be poor management, inadequate monitoring of project activities, or misuse by APROFA of its autonomy in overseeing project implementation could result in the project failing to provide relevant services to farmers. This risk would be minimized by the provision of: (a) stringent management rules and procedures; (b) strong monitoring of management performance, intensive technical supervision, and regular evaluation of beneficiaries' response; and (c) gradual implementation of the project and a timely mid-term review that would allow for corrective changes to project design and implementation procedures. The risk of a potential reversal by the Government of its current private sector support policies is rather slim in view of the growing constituencies for these policies in Mali, and of the Bank/IMF dialogue with Government, supported by an already completed PFP and expected to receive further support under the CAS. 25. Recommendation. I am satisfied that the proposed Interim Fund Credit would comply with Resolution No. 184, adopted by the Board of Governors of the Association on June 26, 1996, establishing the Interim Trust Fund and I recommend that the President approve it. Gautam S. Kaji Managing Director Washington, D.C. April 29, 1997 Attachments -8- Schedule A Page 1 of 1 REPUBLIC OF MALI PRIVATE IRRIGATION PROMOTION PILOT PROJECT Estimated Costs and Financing Plan A. Estimated Costs Expenditures % Base % Foreign Categories Costs Local Foreign Total Cost Exchange A. Vehicles 0.01 0.11 0.12 3 90 B. Equipment 0.05 0.40 0.45 11 88 C. Training 0.63 0.26 0.89 21 29 D. Consultants 0.97 0.48 1.45 34 33 E. Incremental Operating Costs 0.51 0.04 0.55 13 8 F. PPF Refinancing 0.13 0.62 0.75 18 83 Total Baseline Costs 2.30 1.91 4.21 100 45 Price Contingencies 0.17 0.07 0.24 6 29 Physical Contingencies 0.12 0.10 0.22 5 46 Total Project Costs 2.59 2.08 4.67 111 45 B. Financing Plan Financing Plan (US$ million) Local Foreign Total IDA 2.12 2.08 4.20 Beneficiaries 0.47 0.00 0.47 Total 2.59 2.08 4.67 -9- Schedule B Page 1 of I REPUBLIC OF MALI PRIVATE IRRIGATION PROMOTION PILOT PROJECT Key Performance Indicators Indicators Responsible Year 1 Year 2 Year 3 Year 4 Total (1) Number of Consultations to Irrigators Legal Consultations to Irrigators APROFA/lawyer 100 100 125 125 450 Managerial Consultations APROFA/consult. 100 100 150 150 500 Feasibility Studies APROFA/consult. 75 75 125 125 400 Technical Consultations APROFA/consult.. 75 75 75 75 300 (2) Land Security Titles Issued 10 15 20 25 70 (3) Number of Loans Processed Total Number of Applications APROFA/consult.. 70 70 95 95 330 Loans Approved by financial finan. institutions 42 42 58 58 200 institutions Total Loan Amount ( million FCFA) finan. institutions 195 195 269 269 927 (4) Training A. Financial Management Sessions APROFA/consult. 15 15 15 15 60 B. Sessions - financial institutions APROFA/consult. 4 4 8 8 24 C.Sessions - Operations and APROFA/consult. 18 18 12 11 59 Maintenance for Irrigators, cons. mechanics (5) Test of Equipment Area with Adopted Technology (ha) APROFA/IER 50 50 100 (6) Area Affected by Project (ha) - Developed APROFA 150 150 150 150 600 - Rehabilitated APROFA 100 100 100 100 400 - 10 - Schedule C Page 1 of 2 REPUBLIC OF MALI PRIVATE IRRIGATION PROMOTION PILOT PROJECT Summary of Proposed Procurement Arrangements (USS million including contingencies, net of taxes and duties) Categories of Expenditures Procurement Method Total Cost ICB NCB Other Methods 0.1 0.1 (0.1) (0.1) 0.4 0.1 0.5 2. Irrigation and Office Equipment 0.3 0.0 0.5 (0.36) (0.09) (0.45) 4. Consultant Services, Studies 2.3 2.3 and Audits; (2.0) (2.0) 5. Training (trainers, material and 1.1 1.1 facilities) (1.0) (1.0) 6. Incremental Operating Costs 0.7 0.7 (0.65) (0.65) Total 0.1 4.6 4.7 IDA financed (0.1) (4.1) (4.2) - 11 - Schedule C Page 2 of 2 REPUBLIC OF MALI PRIVATE IRRIGATION PROMOTION PILOT PROJECT Allocation and Disbursement of the IDA Credit Categories Proposed IDA Allocation % of Expenditure (US$ million) 1. Vehicles and Equipment 0.55 100 percent of foreign and 90 percent of local expenditures 2. Consultant Services, Studies, 2.00 100 and Training 3. Incremental Operating Costs 0.50 100 5. PPF Refinancing 0.75 100 6. Unallocated 0.40 Total 4.20 Estimated IDA Disbursement (US$ million) IDA Fiscal Year 98 99 2000 2001 2002 Annual 1.0 0.9 1.0 1.0 0.3 Cumulative 1.0 1.9 2.9 3.9 4.2 100 percent of payment by APROFA which may represent 75-100 percent of amounts of the consultant contracts based on cost-sharing with beneficiaries. - 12 - Schedule D Page 1 of 1 REPUBLIC OF MALI PRIVATE IRRIGATION PROMOTION PILOT PROJECT Key Project Processing Events (a) Time taken to prepare IEPS: 4 months (b) First IDA Mission: February 1993 (c) Appraisal Mission: October 1994 (d) Re-appraisal Mission: April 1996 (d) Negotiations: March 1997 (e) Planned Date of Effectiveness: August 1997 After the appaisal mission in October 1994, the Government disagreed with the proposed organizational structure of the project, and there were continuous discussions between the Government and the Bank until the post-appraisal mission in December 1995. This mission agreed with the Government that the project would be implementd by APROFA. The joint management of the project with the agro-processing project, required a re-appraisal mission. - 13 - Schedule E Page 1 of 3 REPUBLIC OF MALI PILOT PRIVATE IRRIGATION PROMOTION PROJECT Status of Bank Group Operations A. IBRD Loans and IDA Credits in the Operations Portfolio As of March 31, 1997 Difference Original amount in USS millions between expected Project Loan or Fiscal and actual ID Credit No. Year Borrower Purpose IBRD IDA Cancellations Undisbursed disbursements' Number of Closed Loans/Credits: 48 Active Loans ML-PE-1750 CN0040 1997 GOVT OF MALI URBAN DEVT & DECENTR 80.00 76.77 ML-PE-1735 C28940 1996 GOVT OF MALI ECONOMIC MGMT 60.00 38.42 0.14 ML-PE-34617 C28500 1996 GOVT OF MALI SELINGUE REHAB. 27.30 24.88 5.55 ML-PE-1746 C28280 1996 GOVT OF MALI VOCATIONAL EDUC TRNG 13.40 12.45 0.70 ML-PE-1755 C27370 1995 GOVT OF MALI AGRO-PROCESSING TRD 6.00 4.62 1.29 ML-PE-1730 C26170 1994 GOVT OF MALI TRANSPORTSECTOR 65.00 55.29 12.06 ML-PE-1751 C25570 1994 GOVT OF MALI AG. RESEARCH 20.00 12.90 4.04 ML-PE-1747 C24320 1993 GOVT OF MALI PRIVATE SECTOR ASSIS 12.00 7.47 3.17 ML-PE-1756 C23900 1992 GOVT OF MALI MINING CAPACITY 6.00 3.13 2.71 ML-PE-1745 C23700 1992 GOVT OF MALI NATURAL RES. MGMT 20.40 14.06 10.98 ML-PE-1727 C22170 1991 GOVT OF MALI HEALTH/POPULATION/RU 26.60 6.85 4.31 ML-PE-1744 C21630 1990 GOVT OF MALI AG SECAL 53.00 8.74 4.41 ML-PE-1723 C19980 1989 GOVT OF MALI POWER II 33.00 11.64 10.47 ML-PE-1718 Cl9060 1988 GOVT OF MALI OFFICE DU NIGER II 39.80 4.08 8.91 TOTAL 0.00 462.50 0.00 281.32 68.74 Active Loans Closed Loans Total Total disbursed (IBRD and IDA) 182.95 735.43 918.38 Of which repaid 0.00 39.84 39.84 Total now held by IBRD and IDA 462.50 657.74 1120.24 Amount sold 0.00 0.00 0.00 Of which repaid 0.00 0.00 0.00 Total undisbursed 281.32 8.36 289.68 a. Intended disbursements to date minus actual disbursements to date as projected at appraisal. - 14 - Schedule E Page 2 of 3 REPUBLIC OF MALI PILOT PRIVATE IRRIGATION PROMOTION PROJECT Status of Bank Group Operations B. Statement of IFC Investments As of March 31, 1997 (In US $ million) Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1992 SOMISY 0.00 1.41 26.28 000 0.00 1.41 26.28 0.00 1994 AEF Hotel Bamako 0.88 0.00 0.00 0.00 0.88 0.00 0.00 0.00 1995 SEMOS 35.00 4.80 0.00 25 00 35.00 4.80 0.00 25.00 Total Portfolio: 35.88 6.21 26.28 2500 35.88 6.21 26.28 25.00 Approvals Pending Commitment Loan Equity Quasi Partic 1991 AEF-BOAM 0.00 0.23 0.00 000 1996 AEFGGG 0.39 0.00 0.39 0.00 Total Pending Commitment 0.39 0.23 0.39 000 Action Plan to Improve Implementation RATINGS FY Board Credit Project Dev. Implem. Cum. Approval No. Name Object. Progress Disb. Lag Problems and Proposed Actions 89 1998-ML Power II U S 17.6 Tight power supply has created massive power shortage which had two adverse consequences: strained the relationship between EDM and government, and financial and cashflow crisis. The last supervision mission (November 1996) agreed with the government that the new financial projections and new restructuring plan would be prepared and sent to the Bank. These were received in early February 1997, but were disappointing. New proposals are expected shortly. 92 2432-ML Private U U 27.9 The sub-components relating to the Chamber of Commerce and BEP are Sector not implemented at all; project management of 2 agencies are weak; the Assistance components to assist enterprises through APEP is not fully achieving the objectives; implementation of the legal and regulatory component is very slow due to the lack of ownership. A supervision mission will shortly go to the field with the objective of completing preparatory activities for project retrofitting. It is expected that, at completion, the mission will have a realistic basis for restructuring the project, and submit their proposal to Board Approval by the end of the calendar year 1997. 93 2557-ML Agricult. U U 38.7 The main problems are: financial management, institutional reform, lack of Research land title, dispute over the land occupied by the main research station (Sotuba), and insufficient monitoring of scientific activities. During the last supervision mission (February 1997), a set of recommendations to correct these discrepancies were agreed with government, namely recruitment of an auditor/accounting firm, recruitment of a financial management specialist, evaluation of cost of network operation. review of budget presentation and organization, assessment of institutional reforms, extension of the regional user commissions, comments on bids for equipment and vehicles. The mid-term review is scheduled for the end of FY97. Note: Cr. 1906 - Office du Niger II. This Project was approved in 1988 and designed to be implemented over 9 years. It is due to close in June 1997. 0- -16- Schedule F Mali at a glance Page lof2 Sub- POVERTY and SOCIAL Saharan Low- Mali Africa income Development diamond* Population mid-1995 (millions) 9.8 589 3,188 GNP per capita 1995 (US$) 250 490 460 Life expectancy GNP 1995 (billions US$) 2.4 289 1,466 Average annual growth, 1990-95 Population (%) 3.0 2.8 1.8 GNP Gross Labor force (%) 2.8 2.8 1.9 pr iper