Public Disclosure Copy
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- Clifton Higgins
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1 Public Disclosure Authorized AFRICA Madagascar Urban Development Global Practice IBRD/IDA Specific Investment Loan FY 2006 Seq No: 21 ARCHIVED on 30-Dec-2014 ISR17647 Implementing Agencies: Public Disclosure Authorized Key Dates Key Project Dates Board Approval date:12-jul-2005 Planned Mid Term Review Date:-- Original Closing Date:31-Dec-2010 Project Development Objectives Effectiveness Date:28-Sep-2005 Actual Mid-Term Review Date:28-Nov-2014 Revised Closing Date:31-Dec-2014 Public Disclosure Authorized Project Development Objective (from Project Appraisal Document) The overall purpose of the proposed project is to help provide the adequate business environment to stimulate and lead economicgrowth in three selected regional poles. The specific objectives are to assist the GOM to: (i) construct and rehabilitate criticalinfrastructure essential for sustained economic activity in the tourism, manufacturing, agribusiness and mining sectors; (ii) putin placeappropriate incentive measures to achieve rapid growth; (iii) develop the instruments to ensure equitable, sustainablegrowth; and (iv) strengthen the capacity of local authorities to formulate, prepare, implement, and manage medium- and long-termintegrated of future regional development projects Has the Project Development Objective been changed since Board Approval of the Project Objective? Yes Board Approved Revised Project Development Objective (If project is formally restructured)phrpdodel The PDO is to increase business and formal job creation in particular in the mining, tourism and agribusiness sectors in the Nosy Be and Taolagnaro regions. Public Disclosure Authorized Components Name Component A: Strengthening the business environment:(cost $26.25 M) Cancelled component Component C: Tourism led growth in Nosy Be:(Cost $49.20 M) Component D: Mining and Tourism led growth in Tolagnaro (Fort Dauphin):(Cost $68.20 M) Component E: Program and Project Implementation, Evaluation and Monitoring:(Cost $19.35 M) Overall Ratings Name Previous Rating Current Rating 12/30/2014 Page 1 of 16
2 Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating -- Moderate Implementation Status and Key Decisions The Sixteenth and final Implementation Support Mission for the Madagascar Integrated Growth Poles Project (IG2P) was conducted on November 10-28, The main objectives of the mission were to take stock of implementation progress following the Fifteenth Implementation Support Mission; and ensure that the due diligence process is timely adhered to for the closing of the project, including preparations for the implementation completion report. Overall Implementation Progress and Progress towards Achievement of the Development Objectives are both rated Satisfactory. The PIU has performed strongly throughout the implementation period. The Overall Safeguards rating for this Category A project is Satisfactory at project closing and so are the ratings on procurement and financial management. The original credit (Cr. 4100, US$125mn) was fully disbursed on December 31, By November 31, 2014, the disbursement rate of the additional financing credit (Cr.4399, US$40mn) was 89% and total commitments were 95% of the credit. The PIU and Task Team agreed upon a revised Procurement Plan that will bring the disbursement rate to near 100% by December 31, The Project disbursed US$7.9 million in Q1-Q2 FY14 and US$9.1 million in Q3-Q4 FY14. The projected disbursement for Q1-Q2 FY15 is US$10.1 million. Data for October 31, 2014, reveal that the Project has achieved its PDO level results indicators. Fort Dauphin and Nosy Be have seen a ten-fold increase in the stock of formal enterprises (to 5,291) and a near seven-fold increase in the number of formal jobs (to 15,745) since the start of implementation. The results should be viewed in an overall context of political uncertainty and economic malaise since The Project has achieved, or is on track to achieve, the great majority of its intermediate results indicators. Data for 2014 of some outcome indicators will only be available in 2015 and will be presented in the Implementation Completion Report. The time it takes to start a business has been cut by up to 75% and to obtain a construction permit by up to 86%. More than 5,200 people have benefited from subsidized business development services. The number of hotel rooms in Nosy Be (+125%) and Fort Dauphin (+103%) has more than doubled and the number of tourist arrivals notwithstanding the political crisis had increased by more than 60% in 2013 since the start of the project. The number of people in the two regions that have access to improved water resources has more than quadrupled (to 133,350 people) and the number of people in urban areas with access to regular solid waste collection has also nearly quadrupled (to 143,600). Nosy Be and Fort Dauphin are today the only towns in Madagascar with solid waste dumpsites managed to international standards. By 2013, the municipal revenue in Fort Dauphin had increased by 659% and while the amount for 2014 is likely to decline vis-à-vis 2013 due to a reduction in exports of ilmenite it is still a significant improvement. In addition, all output indicators (urban and rural road rehabilitation, electricity generation capacity, electricity network construction/rehabilitation) have been achieved, exceeded, or will be achieved by December 31, Private investments and IG2P support have transformed the two regions in terms of the local economy structures and access to basic services. Two intermediate outcome indicators are most unlikely to be achieved for First, the number of tourist arrivals in Nosy Be will be lower than projected because of the poor performance of Air Madagascar and due to an insecurity problem. The murder of two foreign tourists in September 2013 led the French Embassy to put an orange alert to its nationals from Sept 2013 to April 2014 and this warning led to a high rate of holiday cancellations in the fall of 2013 and for National and local authorities have since reinforced security in Nosy Be and the alert has been lifted. The Regional Tourism Office stressed that holiday reservations by French tourists have bounced back strongly in the fall of 2014 for the forthcoming season. Second, the volume of traffic in Ehoala Port will experience a dip in 2014 due to the depressed price for ilmenite, which has resulted in a slow-down of operations in the QMM mine outside Fort Dauphin. The Mission inspected several recent project completions. The rehabilitation of Nosy Be Port and Ankify Port were recently completed and the two ports are now operating as normal and both seem to be well managed. The new Joby Bridge in Nosy Be and the partial rehabilitation of Rip 118 as well as the collapsed section of the cornice in Fort Dauphin were also visited. The development of the Mont Passot tourist attraction is particularly pleasing and it is already making a healthy profit for the local public-private association. The continuous effort to strengthen maintenance and by extension the sustainability of Project investments was rewarded by the Government of Madagascar s recent decision to include the Nosy Be ring road of which the Project rehabilitated and expanded core segments will be classified as national road and hence covered the National Road Fund for future maintenance. Local authorities have already allocated budget for 2015 to do spot improvements of the ring road. EDBM and the One Stop Shops it operates are now financially autonomous following some decisive action taken by the new Government. A covenant in the Project s Development Credit Agreement states that: No later than June 30, 2014, the Recipient shall take all measures, in form and substance satisfactory to the Association, to implement the strategy and action plan referred to in (A) immediately above to ensure that EDBM becomes financially sustainable and can continue its activity of one stop shop. The "Loi de Finance Rectificative", which was adopted by the Parliament in August 2014, paved the way for a Decree (N ) adopted on December 5, 2014, which revised the statues of EDBM. The agency will from now on report directly to the Presidency and it will collect and manage its own financial resources. A long held ambition to strengthen and guarantee the financial and operational sustainability of EDBM has thus come to an end in time of the closing of the Project. The Second Integrated Growth Poles and Corridor Project will consequently finance technical assistance and capacity building for the agency so it after years of relative neglect during the political crisis can take up its original mandate to proactively facilitate and promote investment in addition to operating the One Stop Shops and lead the public private dialogue in the country. It will also be lead agency for the implementation of the investment climate reform agenda that the soon-to-be-established 12/30/2014 Page 2 of 16
3 Investment Climate Reform Committee, chaired by the Presidency, will design. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Moderate Macroeconomic Moderate Sector Strategies and Policies Moderate Technical Design of Project or Program Moderate Institutional Capacity for Implementation and Sustainability Low Fiduciary Low Environment and Social Substantial Stakeholders Moderate Other Overall Moderate Results Project Development Objective Indicators PHINDPDOTBL Number of businesses registered in the two poles (Number, Custom) Value /30/2014 Page 3 of 16
4 PHINDPDOTBL Number of businesses registered in Nosy Be (Number, Custom Breakdown) Value Date 31-Dec Oct Dec-2014 PHINDPDOTBL Number of businesses registered in Fort Dauphin (Number, Custom Breakdown) Value Date 31-Dec Oct Dec-2014 PHINDPDOTBL Number of formal jobs in the two poles (Number, Custom) Value PHINDPDOTBL Number of formal jobs in Nosy Be (Number, Custom Breakdown) Value Date 31-Dec Oct Dec-2014 PHINDPDOTBL Number of formal jobs in Fort Dauphin (Number, Custom Breakdown) Value /30/2014 Page 4 of 16
5 Date 31-Dec Oct Dec-2014 PHINDPDOTBL Direct project beneficiaries (Number, Core) Value PHINDPDOTBL Female beneficiaries (Percentage, Core Supplement) Value Overall Comments Intermediate Results Indicators Days required to start a business (Text, Custom) Value Capital: 21 Days Regions: >30 Days Capital 7 days Regions 7 days Capital 8 days Regions 7 days Capital: 3 Days Regions: 7 Days 12/30/2014 Page 5 of 16
6 Number of individual recipients of subsidized BDS services (Number, Custom) Value Annual sales value of assisted firms in selected value chains (cum.) (Percentage, Custom) Value Date 31-Dec Dec Oct Dec-2014 PDO 3.1: EDBM is fully staffed and operational (Yes/No, Custom) Value N Y Y Y PDO 3.2: Adoption of regional development plans (Yes/No, Custom) Value N Y Y Y 12/30/2014 Page 6 of 16
7 PDO 4: Adoption by National Assembly of a new Investment Law and amended Free Zone law (Yes/No, Custom) Value N Y Y Y Component C: 1.1: Number of tourist arrivals by air or sea per annum (Number, Custom) Value Date 31-Dec Dec Oct Dec-2014 Component C: 1.2: Number of formal and direct tourism related jobs in Nosy Be (Number, Custom) Value Component C: 1.3: Increase in hotel rooms (Percentage, Custom) Value /30/2014 Page 7 of 16
8 Component C: 2.1: People provided with access to Improved Water Sources under the project (Number, Custom) Value Component C: 2.2: Roads rehabilitated (Kilometers, Custom) Value Urban (Kilometers, Custom Supplement) Value Rural (Kilometers, Custom Supplement) Value /30/2014 Page 8 of 16
9 Component C: 2.3: Completion of upgrading works of Hellville and Ankify ports (Yes/No, Custom) Value N N Y Y Component C: 2.4: Time required to issue a construction permit by the municipality of Nosy Be (Days, Custom) Value Component C: 2.5: Value of additional Municipal revenue generated (Percentage, Custom) Value Date 31-Dec Dec Oct Dec-2014 Component C: 2.6: Additional generation capacity installed - conventional (Megawatt hour(mwh), Custom) Value /30/2014 Page 9 of 16
10 Component C: 2.7: Existing electricity networks rehabilitated (Text, Custom) Value 0 Km of distribution lines Constructed (Text, Custom Supplement) Value Rehabilitated (Text, Custom Supplement) Value Component C: 2.8: People in urban areas provided with access to regular solid waste collection under the project (Number, Custom) Value /30/2014 Page 10 of 16
11 Component D: 1.1: Number of tourist arrivals in Taolagnaro per annum (Number, Custom) Value Date 31-Dec Dec Oct Dec-2014 Component D: 1.2: Number of formal and direct tourism related jobs in Taolagnaro (Number, Custom) Value Component D: 1.3: Increase in hotel rooms (Percentage, Custom) Value Component D: 2.1: People provided with access to Improved Water Sources under the project (Number, Custom) Value /30/2014 Page 11 of 16
12 Component D: 2.2: Roads rehabilitated (Kilometers, Custom) Value Urban (Kilometers, Custom Supplement) Value Rural (Kilometers, Custom Supplement) Value Component D: 2.3: Time required to issue a construction permit by the Municipality of Taolagnaro (Days, Custom) Value /30/2014 Page 12 of 16
13 Component D: 2.4: Value of additional Municipal revenue generated (Percentage, Custom) Value Date 31-Dec Dec Oct Dec-2014 Component D: 2.5: Additional generation capacity installed - conventional (Megawatt hour(mwh), Custom) Value Component D: 2.6: Existing electricity networks rehabilitated (Text, Custom) Value Constructed (Text, Custom Supplement) Value 0 Km of distribution lines Km of distribution lines 12/30/2014 Page 13 of 16
14 Rehabilitated (Text, Custom Supplement) Value 0 Km of distribution lines Km of distribution lines Component D: 2.7: People in urban areas provided with access to regular solid waste collection under the project (Number, Custom) Value Component D: 3: Volume of traffic handled by Ehoala Port (Text, Custom) Value 0 ('000 tonnes) ('000 tonnes) Date 31-Dec Dec Oct Component D: 4: Number of formal jobs in mining, construction, agribusiness and in Ehoala Park/Port (Number, Custom) Value Overall Comments Data on Financial Performance 12/30/2014 Page 14 of 16
15 Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P IDA Closed XDR % P IDA Effective XDR % Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P IDA Closed 12-Jul Jul Sep Dec Oct-2012 P IDA Effective 17-Apr May Aug Dec Dec-2014 Cumulative Disbursements Restructuring History Level Approved on 13-Dec-2007,Level Approved on 14-Nov-2011,Level Approved on 21-Dec-2011,Level Approved on 03-Dec-2012 Related Project(s) 12/30/2014 Page 15 of 16
16 P MG - Integrated Growth Poles Additional Financing Credit 12/30/2014 Page 16 of 16
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