Document of The World Bank IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-H0680, CIDA-54421) ON A INTERNATIONAL DEVELOPMENT ASSOCIATION GRANT

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank Report No: ICR IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-H0680, CIDA-54421) ON A INTERNATIONAL DEVELOPMENT ASSOCIATION GRANT IN THE AMOUNT OF 2.9 MILLION SDR (US$ 4.0 MILLION EQUIVALENT) TO THE UNITED NATIONS INTERIM ADMINISTRATION MISSION IN KOSOVO FOR THE BENEFIT OF KOSOVO, SERBIA AND MONTENEGRO Human Development Sector Unit South East Europe Country Unit Europe and Central Asia Region FOR A COMMUNITY DEVELOPMENT FUND II PROJECT January 3, 2008

2 CURRENCY EQUIVALENTS (Exchange Rate Effective October 7, 2007) Currency Unit = Euro Euro 1.00 = US$ 1.44 US$ 1.00= Euro 0.70 FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS CAS CDF CPC CPG EA FMR HSB IDA KDSP KPA LSMS MEM MFE MIS NGO OM PISG PIU PSC SOK SRSG TSS UNMIK WFP Country Assistance Strategy Community Development Fund Community Project Committee Corporate Planning Group Environmental Assessment Financial Management Report Household Budget Survey International Development Association Kosovo Development Strategic Plan Kosovo Poverty Assessment Living Standards Measurement Study Ministry of Energy and Mining Ministry of Finance and Economy Management Information System Non-Governmental Organization Operational Manual Provisional Institutions of Self-Government Project Implementation Unit Project Steering Committee Statistical Office of Kosovo Special Representative of the UN Secretary General Transitional Support Strategy United Nations Interim Administration Mission in Kosovo World Food Programme Vice President: Shigeo Katsu Country Director: Jane Armitage Sector Manager: Hermann A. von Gersdorff Project Team Leader: Caroline Mascarell ICR Team Leader: Menahem Prywes ICR Primary Author: Warren A. Van Wicklin III

3 KOSOVO COMMUNITY DEVELOPMENT FUND II PROJECT Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring (if any) I. Disbursement Profile CONTENTS 1. Project Context, Development Objectives and Design Key Factors Affecting Implementation and Outcomes Assessment of Outcomes Assessment of Risk to Development Outcome Assessment of Bank and Borrower Performance Lessons Learned Comments on Issues Raised by Borrower/Implementing Agencies/Partners Annex 1. Project Costs and Financing Annex 2. Outputs by Component Annex 3. Economic and Financial Analysis Annex 4. Bank Lending and Implementation Support/Supervision Processes Annex 5. Beneficiary Survey Results Annex 6. Stakeholder Workshop Report and Results Annex 7. CDF Monitoring and Evaluation Framework Annex 8. Summary of Borrower's ICR and/or Comments on Draft ICR Annex 9. Comments of Cofinanciers and Other Partners/Stakeholders Annex 10: Poverty Targeting Strategy and Regional Allocation of Funds Annex 11. Kosovo CDF Corporate Plan Annex 12. List of Supporting Documents MAP MAP IBRD 35406

4 A. Basic Information Country: Kosovo Project Name: Community Development Fund 2 Project Project ID: P L/C/TF Number(s): CIDA-54421,IDA- H0680 ICR Date: 01/04/2008 ICR Type: Core ICR Lending Instrument: SIL Borrower: UNMIK Original Total Commitment: XDR 2.9M Disbursed Amount: XDR 2.9M Environmental Category: F Implementing Agencies: UNMIK Cofinanciers and Other External Partners: B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 04/30/2003 Effectiveness: 04/19/ /19/2004 Appraisal: 07/21/2003 Restructuring(s): Approval: 12/02/2003 Mid-term Review: 08/15/ /04/2006 Closing: 06/30/ /30/2007 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Risk to Development Outcome: Bank Performance: Borrower Performance: Satisfactory Low or Negligible Satisfactory Highly Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Satisfactory Quality of Supervision: Satisfactory Implementing Agency/Agencies: Highly Satisfactory Overall Bank Performance: Satisfactory Overall Borrower Performance: Highly Satisfactory i

5 C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Performance (if any) Potential Problem Project No at any time (Yes/No): Problem Project at any time (Yes/No): DO rating before Closing/Inactive status: No Satisfactory Quality at Entry (QEA): Quality of Supervision (QSA): None None Rating D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) General education sector General water, sanitation and flood protection sector Health 10 5 Other social services Sub-national government administration Theme Code (Primary/Secondary) Conflict prevention and post-conflict reconstruction Primary Primary Municipal governance and institution building Primary Primary Other social protection and risk management Primary Primary Participation and civic engagement Primary Primary Rural policies and institutions Primary Primary E. Bank Staff Positions At ICR At Approval Vice President: Shigeo Katsu Shigeo Katsu Country Director: Jane Armitage Orsalia Kalantzopoulos Sector Manager: Hermann A. von Gersdorff Michal J. Rutkowski Project Team Leader: Caroline Mascarell Caroline Mascarell ICR Team Leader: ICR Primary Author: Menahem M. Prywes ii

6 F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The objectives of the proposed Community Development Fund II (CDF II) Project are to: (i) Improve the quality, access, and availability of community infrastructure and services in poor and conflict-affected communities, and for the most vulnerable groups, The objectives of the proposed Community Development Fund II (CDF II) Project are to: (i) improve the quality, access, and availability of community infrastructure and services in poor and conflict-affected communities, and for the most vulnerable groups, including returnees; and (ii) promote institutional capacity building at the community and municipal levels so as to improve the quality and sustainability of service delivery, and enhance stakeholder participation and empowerment in local development. Revised Project Development Objectives (as approved by original approving authority) The project development objectives were not revised. (a) PDO Indicator(s) Indicator Indicator 1 : Value quantitative or Qualitative) Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years Completed Community Works projects benefiting poor, conflict-affected communities, and the most vulnerable groups of Kosovo. This indicator measures the achievement of project development objective (i): access and availability of community infrastructure. 0 at the start of the project. A total of 40 Community Works projects were targeted. A total of 39 Community Works projects were completed. Date achieved 04/19/ /30/ /30/ % achieved. The project was able to exceed the target in dollar terms due to Comments a higher level of community contribution(22%) than expected (10%), a decline (incl. % in the price of construction materials, and the appreciation of the SDR against achievement) the US dollar. Completed Community Social Services projects benefiting poor, conflictaffected communities, and the most vulnerable groups of Kosovo. This indicator Indicator 2 : measures the achievement of project development objective (i): access and availability of services. Value quantitative or Qualitative) 0 at the start of the project. A total of 57 Community Social Services were targeted to be financed under the Bank and CIDA Trust Funds. A total of 68 Community Social Services projects were completed. Date achieved 04/19/ /30/ /30/2007 Comments 119% achieved. The project significantly exceeded its target in terms of the iii

7 (incl. % achievement) Indicator 3 : Value quantitative or Qualitative) number of community social services projects that were completed. The details are contained in Annex 2. Completed Community Works and Community Social Services projects carried out in Serb and mixed and minority communities. This indicator measures the achievement of project development objective (i): access and availability of community services. Six projects in Five projects were Serb communities completed in Serb and four projects communities, and 0 at the start of the in mixed and four projects were project. minority completed in mixed communities were and minority targeted. communities. Date achieved 04/19/ /30/ /30/2007 Comments (incl. % achievement) 90% achieved. The project met the target number of projects in mixed and minority communities, and fell one project short of the target number of projects in Serb communities. The sixth project in a Serb community. Improved quality of infrastructure facilities and works (technical quality of Indicator 4 : project design, construction, operation and maintenance). This indicator measures the achievement of project development objective (i): improvement in the quality of services. Value quantitative or Qualitative) 0 due to the qualitative nature of the indicator 0 due to the qualitative nature of the indicator. Two technical assessments found that the technical quality of design and construction was good and that the infrastructure facilities were in good condition and functioning properly. Date achieved 04/19/ /30/ /30/2007 Comments (incl. % achievement) Fully achieved. The 2006 technical assessment reported that, #According to the field visits and talks with the beneficiaries, it can be concluded that the buildings are in good condition and functioning with no particular problems. Beneficiary satisfaction regarding community investments as documented in Indicator 5 : Beneficiary Assessments. This indicator measures the achievement of project development objective (i): quality of community infrastructure and services. Value quantitative or Qualitative) Because these are new community works or social services, there is no existing baseline satisfaction rate. Average of 70% overall beneficiary satisfaction regarding community investments In the 2007 beneficiary assessment, over 90% of respondents expressed positive remarks about the impact of the overall project on their lives. Date achieved 04/19/ /30/ /30/2007 iv

8 Comments (incl. % achievement) Indicator 6 : Value quantitative or Qualitative) More than 100% achieved. The three beneficiary assessments determined that beneficiaries had very high overall satisfaction levels with the CDF projects, project implementation, the quality of work, the selection of contractors the project impacts. Beneficiary satisfaction regarding the quality of services received from CDF staff at all stages of microprojects. There is no existing baseline satisfaction rate. because the target is the satisfaction level relating to new services. Average of 90% satisfactory ratings from beneficiaries. Fully achieved. The vast majority (98%) expressed satisfaction with support from CDF: 55% are extremely satisfied, 28% are satisfied, and 15% are somewhat satisfied. Date achieved 04/19/ /30/ /30/2007 Fully achieved. Community members say that they were surprised by the Comments meticulousness in project management and implementation. BA respondents (incl. % were very satisfied with CDF's selection of the contractors (76%), 77% are very achievement) satisfied with the CDF. Trained community members at the microproject level. This indicator measures Indicator 7 : the achievement of the project development objective (ii): promote institutional capacity building at the community level. Value quantitative or Qualitative) 0 at the start of the project. An estimated total of 240 community members were to be trained. A total of 293 community members were trained: 53 on operation and maintenance of water projects and 240 on spatial planning for informal settlements. Date achieved 04/19/ /30/ /30/2007 Comments Fully achieved. The details on CDF training of community members at the (incl. % microproject level are reported in Annex 2. achievement) Trained municipal and PISG officials in support of the Government's Indicator 8 : decentralization agenda and the process towards European integration. Value quantitative or Qualitative) 0 at the start of the project. No target value set due to the demanddriven nature of the local government training program. A total of 550 municipal and PISG officials were trained: 123 in public financial management, 30 in public administration, 290 v

9 on European integration, and 107 in other subjects. Date achieved 04/19/ /30/ /30/2007 Comments (incl. % achievement) Indicator 9 : Value quantitative or Qualitative) Fully achieved. The details on CDF training of municipal and PISG officials are reported in Annex 2. Beneficiary satisfaction regarding training received as documented in Beneficiary Assessments and in training evaluations. There is no existing Average 70% Average 70% baseline satisfaction rate satisfaction rates satisfaction rates because the target is a with training with training satisfaction level relating received. received. to new training,. Date achieved 04/19/ /30/ /30/2007 Fully achieved. The 2007 beneficiary assessment covering training, reported that Comments "Participants in trainings have expressed high levels of satisfaction. All (incl. % beneficiaries interviewed during the assessment are satisfied with all aspects of achievement) the trainings". Formation of Community Project Committees (CPCs) reflecting partnerships Indicator 10 : between community members and municipal officials. Value quantitative or Qualitative) Formation of 40 CPCs with a total 0 at the start of the project membership of at as it relates to the least 200 formation of new CPCs members, of which for the CDF II Project. at least 40 are municipal officials. Formation of 59 CPCs with a total membership of 321 of which at least 40 are municipal officials. Date achieved 04/19/ /30/ /30/2007 More than 100% achieved. About 50% more CPCs were formed than the target Comments with about 60% more members than the target. The CPCs also include 89 youth (incl. % (28% of the total) and 8 youth CPC chairmen (14% of the total) among their achievement) membership. (b) Intermediate Outcome Indicator(s) Indicator Indicator 1 : Value (quantitative or Qualitative) Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years Strenthen capacity of local government to identify priorities, manage, and maintain local investments and improve service delivery. 0 at the start of the project. No quantitative target due to the qualitative nature of the intermediate outcome. Municipal governments demonstrated increased capacity to manage and maintain vi

10 infrastructure and services. Date achieved 04/19/ /30/ /30/2007 Comments (incl. % achievement) Indicator 2 : Value (quantitative or Qualitative) Achieved. Six public sector management capacity building projects supporting national institutional strengthening programs were targeted at municipalities to strengthen the capacity of municipal officials in different areas. Improved maintenance through training of community members. This intermediate outcome indicator contributes to the achievement of the project development objective (ii): promote institutional capacity building at the community level. 0 at the start of the project. No quantitative target due to the qualitative nature of the intermediate outcome. Communities have kept all water supply and sewage projects functioning properly. Date achieved 04/19/ /30/ /30/2007 Comments (incl. % achievement) Achieved. The 2006 technical assessment reported that, "All water supply projects functioned well. The beneficiaries are very satisfied with the water quality and network maintenance. All sewage projects are functioning properly." Outcomes due to local government training and institution building. This Indicator 3 : intermediate outcome indicator contributes to the achievement of the project development objective (ii): promote institutional capacity building at local level. Value (quantitative or Qualitative) 0 at the start of the project. No quantitative target due to the qualitative nature of the intermediate outcome. Training and institution building has led to increased ability for local government to undertake their responsibilities. Date achieved 04/19/ /30/ /30/2007 Comments (incl. % achievement) According to the an institutional assessment carried out covering capacity building activities under the CDF II, officials from municipalities who participated in the training organized by the CDF tended to be more proactive. Strengthening of partnerships between local governments and communities. This Indicator 4 : intermediate outcome indicator contributes to the achievement of the project development objective (ii): promote institutional capacity building at the local level. Value (quantitative or Qualitative) 0 at the start of the project. No quantitative target due to the qualitative nature of the intermediate outcome. Partnerships between local governments and communities were significantly strengthened. Date achieved 04/19/ /30/ /30/2007 Achieved. The formation of CPCs with government and community members Comments has helped strengthen partnerships. The CPC provided a forum for community (incl. % members and municipal authorities to engage them in an open dialogue centered achievement) around microprojects. vii

11 G. Ratings of Project Performance in ISRs No. Date ISR Archived DO IP Actual Disbursements (USD millions) 1 06/02/2004 Satisfactory Satisfactory /17/2004 Satisfactory Satisfactory /09/2005 Satisfactory Satisfactory /03/2006 Satisfactory Satisfactory /13/2006 Satisfactory Satisfactory /09/2007 Satisfactory Satisfactory 4.29 H. Restructuring (if any) Not Applicable I. Disbursement Profile viii

12 1. Project Context, Development Objectives and Design (this section is descriptive, taken from other documents, e.g., PAD/ISR, not evaluative) 1.1 Context at Appraisal (brief summary of country and sector background, rationale for Bank assistance) Country Background Kosovo is a small, landlocked, mountainous territory in South East Europe with a population estimated at 2.1 million. Kosovo remains a province of Serbia, but has been under the autonomous administration of the United Nations since 1999, consistent with United Nations Security Council Resolution The majority of the population is of Albanian ethnicity (88 percent), followed by ethnic Serbians (7 percent), Slav Muslims (2 percent), Roma (2 percent), and others (1 percent). Tensions between the Albanian and Serbian populations, especially following the constitutional changes, led to conflicts which culminated in air strikes by NATO between March and June The conflict ended in June 1999, leaving Kosovo with a collapsed state of industrial and agricultural output. Inter-ethnic tensions remain high. The Special Representative of the UN Secretary General (SRSG) remains the final legal authority and responsibility for administering Kosovo is shared between the United Nations Interim Administration Mission in Kosovo (UNMIK) and the Provisional Institutions of Self-Government (PISG). Sector Background Dimensions of Poverty. With a GNI per capita of US$1,170 at the time of the mid-term review, Kosovo remains one of the poorer territories in Eastern Europe largely reflecting the ethnic conflict which intensified in 1998 and The Kosovo Poverty Assessment (KPA) of December 2001 found that Kosovo has one of the highest poverty rates in the region with 50 percent of the population living in poverty (less than US$2 a day per person) and 12 percent of living in extreme poverty (less than US$1 a day). Unemployment. According to the Kosovo Labor Market Study of June 2003, the most likely unemployment rate in Kosovo was estimated at percent of the labor force, although the formal labor market analysis based on adjusted labor force survey data indicated an estimate of around 40 percent in The KPA found that after a decade of discrimination, Albanians felt discouraged in their job search, and therefore stopped looking for work. According to labor source surveys, youth unemployment was estimated at 69 percent in Kosovo is one of two post-conflict areas in South-East Europe affected by youth population bulges and high rates of school leaving, youth unemployment, substance abuse, post-traumatic stress disorder, and young male suicide. Youth risks are the highest in Kosovo due to the combined conditions of conflict, poverty, and high levels of youth unemployment. Educational Standards. Education in Kosovo suffered a setback in the 1990s following the adoption of Serbian as the official language for formal education. Consequently, ethnic Albanians were forced to adopt an informal parallel system of education at the primary, secondary, and tertiary levels. The lack of adequate school infrastructure has resulted in overcrowding and poor access to schools. The provision of education was severely curtailed in the areas affected by the conflict. This lack of access to formal education in the 1990s resulted in 1

13 an increase of illiteracy from 15 to 22 percent among 16 to 25 year olds. Furthermore, the lack of adequate school infrastructure resulted in overcrowding in and poor access to schools. Health Standards. Kosovo ranks the lowest in Europe on virtually every health indicator. At the time of project appraisal, the infant mortality rate of 45 deaths per 1,000 live births was the highest in Europe. Access to health care (in terms of distance to facilities) is constrained by the shortage of primary health clinics, especially in the rural areas. Kosovo s health status is negatively affected by severe inadequacies in safe drinking water and sewerage disposal. Displacement of Population. The 1999 conflict destroyed 700 villages and caused 10-12,000 casualties and missing people. The KPA found that 70 percent of the population was displaced during the 1999 conflict. At the time of the KPA, 4 percent of the total population and 8 percent of all Serbs were internally displaced and an additional 3 percent were diaspora returnees who were outside Kosovo before the conflict. The study found that both categories were twice as likely to be extremely poor as the rest of the population due to poor access to land and lack of non-agricultural employment opportunities. Many rural communities are in the process of disintegration due to migratory movements, isolation and poverty. Institutional Capacity at the Local Level. The lack of institutional capacity at the local government and community levels to effectively address social sector issues remains a major problem and is due to: (i) institutionally weak local governments with limited financial resources; (ii) inadequate systems of accounting, financial planning, and budgeting; (iii) the lack of effective partnerships; (iv) the lack of citizen involvement in the decision-making process in development activities and service provision; and (v) citizen lack of access to basic information regarding services and entitlements, particularly in rural areas. While some of the larger municipalities have received attention through donor-assisted programs, smaller municipalities, along with local communities, particularly in rural and remote locations, are receiving much less attention and financial support. Government Priorities and the Rationale for Bank Assistance PISG s current development strategy aims at addressing the above-mentioned issues. Accordingly, the four broad priorities of the PISG are: (i) fostering economic development and growth, and increasing employment; (ii) improving the living standards of vulnerable groups, and enhancing the quality of and access to education and health; (iii) ensuring an efficient and transparent public administration; and (iv) providing equal opportunities for all citizens. The Community Development Fund (CDF) II was designed to support the second, third, and fourth of these priorities. The CDF I project made significant progress in local level capacity building, focused on training project committee members in preparing project proposals, developing business plans, enhancing community participation and partnerships with local governments and NGOs, selection of contractors, and supervising project implementation. However, more needed to be done to establish and strengthen relationships among the local stakeholders. The CDF II was designed to address poverty through rehabilitation or construction of small-scale social and economic infrastructure, and by targeting project funds to the poorest, especially those in remote isolated villages, and in mixed and minority communities, including returnees. The project supported the PISG s programs which are aimed at improving service delivery in health, education, and social assistance to communities within a decentralized framework. Support was 2

14 provided through technical assistance and training to local government officials in areas relevant to the project. The CDF II Project is an integral part of the Bank s development assistance strategy for Kosovo as set out in the Transitional Support Strategy (TSS, Bank Report KOS). The TSS was endorsed by the Board on July 25, As noted in the TSS, although Kosovo has moved beyond the emergency phase and much of the reconstruction has been completed, it faces many of the structural issues as other low-income, rural, transition economies. The main focus of the Bank s assistance program is on poverty reduction. Accordingly, the financial assistance program provided for the Community Development Fund II Project (US$ 4 million), which is essentially a continuation of the previous project, targeting the poor and vulnerable groups, especially in the conflict-affected and rural areas. The medium- and long-term challenge of the CDF II Project was to build upon the decentralization process started under the first operation, and move forward to an integrated development framework responsive to the priorities of the poor, vulnerable groups, and returnees. The most vulnerable groups include the disabled, the elderly, widows, the destitute, victims of the conflict, children at risk, mixed and minority communities, and communities in remote and mountainous villages. 1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) The objectives of the CDF II Project were to: (i) improve the quality, access, and availability of community infrastructure and services in poor and conflict-affected communities, and for the most vulnerable groups, including returnees; and (ii) promote institutional capacity building at the community and municipal levels so as to improve the quality and sustainability of service delivery, and enhance stakeholder participation and empowerment in local development. The project was designed to support key policy and institutional reforms consistent with the Government s current development strategy and the related mandate to establish substantial selfgovernment. The project was to support the efforts to transfer responsibilities from UNMIK to the PISG and municipalities by strengthening their capacity to absorb and carry out their new responsibilities within the development framework of the project. The key performance indicators of the CDF II project reflect monitorable outcomes and impacts covering key project activities. These include quantitative indicators relating to project benefits and qualitative assessments of demand-driven mechanisms, service delivery, and community participation. The specific areas that were assessed include: (i) processes relating to poverty targeting, participatory mechanisms, capacity building, and monitoring and evaluation; (ii) outputs relating to successful completion of cost-effective and good quality community infrastructure and services projects which are sustainable, and those relating to timely and effective capacity building programs benefiting local governments and communities, as well as capacity building at the national level to effectively carry out poverty monitoring on a regular basis; and (iii) project impact in terms of social and economic benefits to poor communities in rural and urban areas relating to the improvement of the quality and availability of community infrastructure and services in poor and conflict-affected communities, and increased institutional capacity at the local level. 3

15 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification The project objectives and key indictors were not revised. 1.4 Main Beneficiaries, (original and revised, briefly describe the "primary target group" identified in the PAD and as captured in the PDO, as well as any other individuals and organizations expected to benefit from the project) The main beneficiaries of the CDF II Project included the poor and vulnerable groups. The Project focused on the disabled, the elderly, widows, the destitute, victims of conflict, children at risk, mixed and minority communities, and communities in remote and mountainous villages. The Project also targeted Serbian communities which were living in enclaves with poor infrastructure facilities. The Project also targeted returnees a group that had a different set of problems arising from internal displacement in Kosovo such as poor access to land, the lack of non-agricultural employment opportunities, and poor housing. Because other donors were providing financial support for returnee-oriented projects, the CDF II Project provided administrative support in the implementation of housing microprojects for the returnees which were financed by other donors. The lack of a population census was a major impediment to constructing a poverty map for Kosovo. However, the availability of poverty indicators following the Bank s Poverty Assessment Report of 2001 provided an opportunity to improve the CDF s methodology of targeting project funds. Accordingly, the design of the CDF II Project included an improved twostage poverty targeting strategy (see Annex 10 for details) consisting of: (i) a regional allocation mechanism based on population estimates, poverty indicators from this Poverty Assessment Report; and (ii) detailed criteria at the community level. The existence of extremely poor communities, living in isolated and remote villages or pockets of poverty without access to basic public services, was a cause for concern and was addressed through the second stage of the CDF II poverty targeting strategy. It was recognized that while economic growth helped reduce the overall level of poverty, a well designed poverty targeting strategy and specific anti-poverty interventions were required to meet the needs of the extremely poor and vulnerable. 1.5 Original Components (as approved) Project Component 1 - US$3.33 million Community Investment Projects This component was to finance small-scale community infrastructure and services projects selected with the active participation of community groups and local governments. These types of projects are important in getting communities to work together in designing and implementing community projects which yield visible and immediate improvements for the common good of the community. The CDF II team was to focus their efforts on strengthening the demand orientation of projects, community outreach and participation. Community Infrastructure Sub-component: This subcomponent was to address the need for rehabilitation and construction of small-scale social and economic infrastructure at the local level. These investments are necessary for economic growth, employment creation, human development 4

16 and poverty reduction. To ensure sustainability of project outcomes, the CDF II Project would finance a comprehensive capacity building and technical assistance program, benefiting Community Project Committees, local governments, and contractors. The microprojects were to be carried out by Community Project Committees (CPCs) and focus on renovation, rehabilitation, or construction of key infrastructure mainly covering education (i.e., kindergarten, primary and secondary schools), health (i.e. primary health care facilities), small-scale water supply and sewerage, community access roads, and other priority sectors. In addition, this sub-component included the financing of consultant services for microproject design and supervision to assure good quality works. Community Social Services Sub-component: This subcomponent was to support community services programs targeted to address the needs of vulnerable and disadvantaged groups to promote inter-community integration by actively engaging citizens in development. Community services projects were to be carried out by qualified local NG0s and would focus on a wide range of programs benefiting different groups in support of the decentralized management of basic social services. Some of these programs were designed to include: community health awareness and education including dissemination of information and workshops on safe motherhood and on treatment of sexually transmitted diseases; assistance for returning families; community-based day care centers for the disabled, elderly and other marginalized and vulnerable groups; support for inter-ethnic activities such as sports events and open market places; and literacy courses for elderly women, civic education for minority children, sewing classes, computer courses, and special programs for women who were victims of violence during the war. Project Component 2 - US$0.25 million Institutional Capacity Building This component was to complement the community investment component, enabling local level institutions and community groups to address the needs and priorities for local development through a comprehensive capacity building program. A community profiling, needs, and capacity assessment was to be carried out as a first step to systematically identify the priority social needs of communities. The proposed local level institutional strengthening program was to focus on two key levels, the microproject level and the local government level. At the microproject level, institutional strengthening was to focus on local governments, communities and contractors participating in community infrastructure and services microprojects. The focus was to be on building the capacity of local groups to plan, manage, operate, supervise and maintain investments and improve the quality and availability of local service provision. At every phase of the microproject cycle, promotion, appraisal and follow-up teams from the PIU were to provide technical, managerial and organizational support including on-the-job training to the local groups. At the local government level, the project was to focus on enhancing the understanding of municipal authorities of their potential role in facilitating and supporting community-based initiatives. The training was to support local governments to: (i) develop, plan and manage budgets related to community investments; (ii) acquire a basic knowledge of asset management of public facilities rehabilitated or constructed under the CDF II Project; and (iii) improve communications and information flows to local communities and marginalized groups, as well as to the donor community. 5

17 Project Component 3 - US$ 0.84 million Project Management This component was to support the PIU and cover operating costs such as office furniture and equipment, communications, local travel, utilities and publications, office rent, office supplies, fuel, internet service, bank commission charges, vehicle maintenance and repair, and CDF staff salaries. It was also to finance financial audits. Project Financing The majority of project financing was to come from a US$4 million IDA Grant financing. The communities would contribute US$420,000 as their share of community investment costs. A CIDA Grant of US$800,000 provided support to the components focusing on social services, institutional strengthening, and technical assistance in support of consultancies for project design and supervision, and support to the Project Management Unit. About 74 percent of the CIDA grant was for the community social services component, 16 percent for consultant services, and 10 percent for project operating costs. Bank supervision was carried out systematically with CIDA counterparts. All progress reports were submitted to CIDA on a timely basis and CIDA did not raise any issues during project implementation. (see Annex 9 for CIDA s comments) 1.6 Revised Components None. 1.7 Other significant changes (in design, scope and scale, implementation arrangements and schedule, and funding allocations) There were no significant changes. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry (including whether lessons of earlier operations were taken into account, risks and their mitigations identified, and adequacy of participatory processes, as applicable) Quality at Entry. The project s quality at entry was satisfactory. Although it was a follow-up to the CDF I Project, its design had a number of new features such as an integrated development framework to enhance community participation and capacity building at the local level, an improved poverty targeting strategy, and greater attention to cost-effectiveness. The project design addressed its objectives to improve the quality, access, and availability of community infrastructure and services in poor and conflict-affected communities and to promote institutional capacity building. They were consistent with the Bank s Transitional Support Strategy (TSS). Poverty Targeting. Notwithstanding the modest size of the CDF II (US$4.0 million), the objective of the regional allocation was to ensure equity across regions and all ethnic groups in the use of CDF II Project funds and to provide the basis for planning the disbursement of project funds to the poorest segments of the population. The allocation mechanism also included additional flexibility in dealing with the Serbian, mixed and minority communities, including returnees through two special funds (see below and also Annex 10). 6

18 A two-stage poverty targeting strategy (see Annex 10) experience gained over the four-year implementation period of the Kosovo CDF I Project; (ii) key lessons learned in Bank funded projects in supporting the transition of countries involved in conflict; and (iii) World Bank experience with social funds in more than 95 countries since Community based approach. The design of the project was based on a successful implementation of CDF I which demonstrated how a community-based project can serve as a catalyst for a process in which targeted communities, especially mixed and minority communities, gradually come together and participate in the design, implementation and monitoring of projects for the common good of the community. Furthermore, setting aside funds for mixed and minority communities has proven to be an effective mechanism for ensuring equitable access to project resources. Consistency with other Development Programs. Social fund projects have shown that it is critical that social fund activities are consistent with social sector strategy priorities, government reform programs, and activities of municipal, NGO, UN, and donor agencies. Under the CDF II project, this was achieved through the Project Steering Committee - - a new institutional structure under the CDF II Project. The Committee was established by a Government Decision and consisted of one representative from key relevant ministries including: (i) the Ministries of Education, Science and Technology, Health, Labor and Social Welfare, Local Governance, Returnees, Environment and Spatial Planning, and Agriculture, Forestry, and Rural Development. The key role of the Steering Committee was to ensure consistency of the CDF work programs with Kosovo s social sector strategies and Government reform programs in relevant sectors. It was to be further strengthened through the implementation of an effective information, outreach, and communications strategy. Project Sustainability. Social fund operations in the region have clearly demonstrated the need to improve project sustainability. Experience has pointed to the development of a comprehensive framework encompassing strong institutional support from the Project PIU, effective systems and procedures, and greater involvement of key stakeholders. Based on these experiences, procedures were put in place under the CDF II to: (i) improve the quality of works through compliance with technical standards and close supervision; (ii) develop the capacity of local authorities to help formulate budgets which provide adequate financing for operation and maintenance of completed microprojects; (iii) carry out effective monitoring and evaluation under the joint responsibility of the PIU and the project committees; (iv) strengthen local government and community involvement in the design, implementation, and maintenance of microprojects; and (v) enhance information dissemination activities. (see also section 4 below) Project Preparation. The background analysis and rationale for Bank support was thorough and provided a solid ground for the proposal. The design was not complex or unrealistic. The project was a high priority for the PISG and other stakeholders. The project preparation team prudently assessed the operation s risks and made suitable provisions for mitigating them. The importance given by the project team to project preparation, design and quality at entry was critical to the successful implementation and outcomes of the CDF II Project. The project objectives were sensitive to, and realistic about, the tensions between the majority Albanian population and Serb minorities. These had been worsened by such actions as the banning of the use of the Albanian language in schools. Following the constitutional changes, Serb officials reduced local authorities autonomy, removed 150,000 Albanians from the civil service and denied badly needed funds for infrastructure. After the conflict, there were interethnic disputes following the return of a relatively small number of Serbs. These restrictions 7

19 needed to be undone in order to meet the UN resolution s call for Kosovo s substantial autonomy and meaningful self-administration. Therefore, the project design opted for channeling IDA assistance through a community-based vehicle for public services, responsive to citizens priorities and aimed at strengthening local institutions. There was no Quality Assessment Group assessment of the project s preparation. 2.2 Implementation (including any project changes/restructuring, mid-term review, Project at Risk status, and actions taken, as applicable) Following the successful completion of the CDF I Project in December 2003, the CDF II project was launched in January 2004 and gathered momentum very quickly. The first six months focused on promotional activities in all five regions of Kosovo. The promotional team targeted 24 out of 30 municipalities and 75 communities including one Serb community and one mixed community. During this period, a total of 1,971 community members participated in general community meetings organized by the CDF promotion team, of whom 226 were women and 742 were youth. A total of 207 community members joined Community Project Committees (CPCs). Following this intensive period of promotional activities, the CDF moved forward with the next phase of activities covering appraisal, procurement and implementation of infrastructure and social services projects. In response to the recommendations of the June 2005 supervision mission, to ensure the sustainability of social services projects implemented under the project at the local level, the CDF, in partnership with the Ministry of Labor and Social Services, initiated an integrated social services pilot project covering the coordination, management, training and monitoring and supervision of social services projects at the local level. This pilot directly supported the Government s decentralization legislation focusing on social and family services and on local-self government. The first phase included in-depth assessment of the social service delivery situation in the pilot region covering three municipalities and the development of a training proposal to build the capacity of local municipal officials, staff of Social Service Centers, and NGO representatives. The social service delivery assessment was carried out by a respected local firm from June to August The assessment was carried out with the close cooperation of the Ministry of Labor and Social Welfare, the municipalities selected, and the CDF. The main goal of this work was to increase the efficiency, effectiveness, and sustainability of the provision of social services. The key tasks were: (i) analysis and assessment of the key roles and responsibilities of the Ministry of Labor and Social Welfare, the Centers for Social Works and the respective Municipal Directorates; (ii) analysis of service delivery including perceived gaps; and (iii) identification of capacity gaps at key levels. The assessment found agencies with overlapping responsibilities, lack of coordination with regard to social service delivery, lack of clarity on the roles and mandates, lack of strategic planning at the municipal level, lack of communication and understanding within and among social services and with citizens, weak monitoring systems, inadequate social service standards, insufficient staff at social service institutions, lack of specific services, concentration of social services in urban areas, and the need for capacity building. The CDF conducted a second phase of the social services pilot which consisted of training programs for the capacity gaps identified in the assessment and the implementation of priority social services projects identified by communities. 8

20 Two technical assessments were conducted during The aim of the technical assessments was to provide a professional opinion on the technical quality of CDF II projects. The assessments included the technical quality, field implementation, preliminary documents prepared for tender announcements, documents for contractor s selection, and quality of works by the supervising consultants, project operations and maintenance, and the need for further interventions. It concluded that the buildings are in good condition and functioning with no particular problems. All water supply projects worked well. The civil works were in conformity with projects supervisors recommendations and technical terms and standards. The sewage projects were found to be functioning properly. The works has been performed in conformity with the design and supervisors recommendations. The CDF hired consultants from utility companies to provide technical assistance in the design of projects, as well as in the supervision of projects, which has been very important in ensuring good quality designs and works. CDF engineers spent a good portion of their time in the field working with communities. An external consultant was also contracted to carry out a technical assessment of infrastructure programs. The quality of the designs has improved over time as a result of innovative design ideas generated by the CDF engineers, design consultants, and the external consultant. During microproject appraisal, the CDF team discussed maintenance issues with community members and ensured that a Memorandum of Understanding was signed with the relevant formal entity responsible for the sustainability of the community investments. All microprojects were linked to formal local institutions of the PISG by involving officials in all stages of the microproject cycle and through training in financial and asset management. As a result of this training, municipalities have begun to include line items in the municipal budgets to finance operation and maintenance of public facilities. The report of the May 2006 Technical Assessment identified methods to improve operation and maintenance, mainly more training. A mid-term review of the CDF II Project was carried out in November This review was scheduled at a later date than planned to take account of the results of (i) the BA/institutional assessment; (ii) the social services pilot; and (iii) the community mapping and profiling exercise. The mid-term review provided helpful recommendations for improving implementation drawing on the findings from the first two beneficiary assessments (BAs), the first technical audit, an environmental assessment, a monitoring and evaluation review, and an integrated social service pilot project. These included recommendations on improving: (a) social service delivery and information about entitlements and benefits, (b) the monitoring and evaluation framework, and (c) the environmental assessment process including staff training on environmental assessment. Considering the focus on quality throughout project implementation, the results of the reviews and assessments carried out, and the actions taken by the CDF to produce the good results achieved under the project, project implementation can be considered as satisfactory. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization Project monitoring was the joint responsibility of the CDF II PIU (under the supervision of UNMIK and the Project Steering Committee), the CPCs and the Bank supervision team. The objectives of the monitoring and evaluation activities were to: (i) ensure that procedures carried out for implementing microprojects, executing contracts, and managing project accounts were in compliance with the Operational Manual; (ii) provide information regularly on progress toward achieving project objectives and facilitate reporting to the Board of Directors, the Government, and donors; (iii) provide information on project performance in terms of social development 9

21 outcomes; (iv) alert managers to actual or potential problems in implementation so that corrective actions could be taken in a timely manner; (v) determine how the project was affecting the intended beneficiaries; and (vi) provide a vehicle whereby beneficiaries could reflect on and improve their performance. The monitoring and evaluation framework included: (i) community investment project monitoring and reporting by CDF II staff, Community Project Committees, and local supervisors; (ii) the management information system (MIS); (iii) technical and financial project audits; (iv) annual beneficiary assessments; (v) special evaluations of community investments carried out by CPCs before the final hand-over of projects; (vi) informal surveys of the impact of community investments conducted by the CPCs; (vii) semi-annual Bank supervision missions; (viii) a midterm review; and (ix) quarterly and annual progress reports prepared by the CDF PIU. The CDF used multiple methods of monitoring performance throughout the project. They are described in Annex 7 and include: MIS/database tracking, technical assessments of infrastructure programs, beneficiary assessments, and project assessments carried out by beneficiary communities, social services training evaluations, financial audits, and monitoring of operation and maintenance. During project implementation, the key performance indicators were monitored and tracked in the CDF Progress reports, Bank Mission Reports, and in Implementation Status Reports (ISRs). They provided information on: (i) the number of community members benefiting from community investments including minority groups; (ii) results from qualitative assessments (i.e., beneficiary assessments) documenting the levels of satisfaction with services received, the positive effect the project had on social integration, and how projects helped build confidence; and (iii) specific outcomes related to training such as the development of five-year municipal plans, three year regional plans and annual budgets which provided for line items for the maintenance of facilities rehabilitated under the project, development of a government/citizen web page used for information dissemination, and ratings for maintenance of facilities. As part of the mid-term mission, an international monitoring expert was hired to carry out an initial review to assess the capacity of the CDF to monitor youth inclusion in project activities. The consultancy was financed by SDV as the CDF was a beneficiary project of the TFESSD Grant for youth and inclusion. The review focused on the development of methodological tools, indicators and analysis to assess impact of programs on youth inclusion leading to stronger actions and project responses to promote youth inclusion. The review also focused on the skills and management of the project team in order to implement improved monitoring. As a result of this assessment, a number of recommendations were primarily targeted at actions to be taken by the CDF, with oversight and assistance from the Bank. They included recommendations focused on ways to improve program monitoring, issues to consider during the design of a possible follow-up operation to both improve overall monitoring and evaluation and incorporate youth inclusion, and modifications to the organizational structure of CDF to improve monitoring and evaluation. The first set of recommendations on improving program monitoring was fully implemented by the CDF during the remaining period of the project. 10

22 2.4 Safeguard and Fiduciary Compliance (focusing on issues and their resolution, as applicable) Safeguards Compliance. As a financial intermediary project, the environmental category for the CDF II is F. Some of the projects clearly have beneficial environmental impacts (e.g. sanitation, solid waste management), but others could have had minor negative impacts if they were not designed and implemented correctly. These negative impacts were mitigated. Local capacity, while limited, was considered sufficient for case-by-case review and assessment of environmental impacts and recommended mitigation measures by CDF staff and limited environmental assessments by outside local consultants. During the pilot phase and the previous project, CDF staff successfully identified, jointly with the community, mitigation measures and monitored their implementation. Projects requiring a full environmental impact assessment would not meet cost effectiveness criteria for CDF funding and were not eligible for financing. According to Kosova environmental legislation, none of the CDF II projects required an EIA. An environmental impact assessment of 11 completed infrastructure subprojects was undertaken in early 2007 to assess the environmental impacts of CDF projects. It confirmed that the 11 subprojects were implemented in accordance with the environmental legislative framework, and that the prevention and mitigation measures were effective. Given the growing importance of adequately addressing the environmental impact of projects carried out under the Project, an independent environmental assessment was carried out by BLK- Environmental Consulting, a local firm in Prishtina, covering CDF projects completed during the period January 2004 to December As a result of this assessments the following actions were taken by the CDF: (i) training on Environmental Impact Assessment for CDF staff, (ii) a health and safety assessment was made a part of the CDF project appraisals, and (iii) the CDF, through a donor project and in cooperation with the Ministry of Environment and Spatial Planning, offered training sessions to other local NGOs in projects similar to the CDF program. Fiduciary Compliance. The CDF had previously implemented a Bank-financed Grant. The internal controls and procedures for the CDF I project were reviewed and found satisfactory for the CDF II. The CDF II also benefited from an accounting system effectively linked to the MIS developed under the CDF I project. Accounts were maintained in accordance with the required financial standards and World Bank guidelines, and were audited annually by independent auditors acceptable to IDA. In addition, a simplified cost accounting system was integrated with the upgraded MIS to strengthen monitoring and to ensure the cost-effectiveness of microprojects under the CDF II Project. The financial audit report of June 2006 and the review of financial management arrangements carried out in October 2006 confirm that the financial management system including accounting, controls, auditing and reporting continue to be adequate and satisfied the Bank s financial management requirements. Internal control procedures were documented and duly followed by project staff. The project maintained its accounting records correctly and regularly reconciled all general ledger account balances with relevant source documents. Audit reports for project accounts were submitted on time and were acceptable to the Bank. The FMRs were on time and found satisfactory in terms of format and content. The procurement management arrangements of the CDF II PIU remained the same as in the CDF I operation. No specific procurement issues and complaints have been reported during the discussions on the implementation of the procurement activities and the procurement plan. 11

23 2.5 Post-completion Operation/Next Phase (including transition arrangement to post-completion operation of investments financed by present operation, Operation & Maintenance arrangements, sustaining reforms and institutional capacity, and next phase/follow-up operation, if applicable) The Kosovo Development Strategy and Plan, (KDSP) will serve as the framework of the evolving role of the CDF over the medium term. The KDSP takes into account the findings of the European Commission Staff Working Document of August 18, 2006, as well as the current progress towards the resolution of the status of Kosovo. CDF management s vision of the future role of the CDF is of an agency engaged in providing opportunities for community development by offering high quality services in support of local initiatives for improving the living conditions of the poor through small and medium-scale infrastructure construction or renovation, especially in rural and isolated communities. The CDF will also continue and enhance its well recognized role of capacity building services to municipalities, communities and local groups and increase their participation in development processes. These activities would prepare it to take on additional responsibilities inherent in the PISG s evolving development plans, and, in particular, its decentralization program. UNMIK and the PISG share a similar vision in which the CDF will become a relatively independent entity and function as an active partner in social development. The financing of such an entity could come from the PISG, external donors, local NGOs and sponsors. At the request of the Prime Minister, the CDF developed a Corporate Plan highlighting the planned directions of the CDF in line with the evolving environment in Kosovo and in support of Government policies and reforms related to local development activities. The plan covers the challenges, directions, and opportunities facing the CDF over a five-year time horizon. The Plan is the result of a three-month process of active participation of CDF Board and staff, independent experts on management and European integration, representatives from the governmental and partner institutions, as well as other stakeholders. The CDF Corporate plan draws from relevant documents on development programs in Kosovo, analysis of needs of communities, studies and reports on impact of the CDF projects on communities, as well as the situational analysis conducted by synthesizing varied points of view. The Corporate Plan (summarized in Annex 11) presented by the CDF to the Prime Minister and key government officials received the full support of the PISG. The Plan was approved by the CDF Board and by the CDF Steering Committee. The Prime Minister sent the Plan to Bank management expressing his support for the Plan and requested a follow-up CDF project noting that this was an opportune time for the CDF to continue and expand its activities in support of the evolving environment in Kosovo. On behalf of UNMIK, the Acting Deputy Special Representative of the Secretary-General also expressed support for a follow-up project, noting in particular the quality and impact of the CDF II Project and the role a follow-up project could play in poverty alleviation initiatives in Kosovo. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation (to current country and global priorities, and Bank assistance strategy) The project objectives, design, and implementation remain relevant to Kosovo s development priorities, as well as to the Bank s assistance strategy. The Vision Statement of the Kosovo Development Strategic Plan (KDSP) highlights the importance of eradicating poverty and social 12

24 exclusion, enhancing the quality of life, and investments in education and health. The project was also an integral part of the Bank s Transitional Support Strategy of 2002, which focused on poverty reduction. At a regional level, the project contributed to the PISG s European Integration agenda through capacity building, especially on the priority standards for municipalities. The objectives continue to be just as important now as when the CDF was established. Frequent meetings of the PSC ensured consistency between the project s implementation and government social sector strategies and priorities. The capacity building component was also highly relevant. The project was designed to support key policy and institutional reforms consistent with the Government s development strategy and the related Mandate to establish Substantial Self-Government. The project also supported efforts to transfer responsibilities to the Provisional Institutions of Self-Government (PISG) and municipalities. Local government is in great need of professional assistance to increase their capacities, develop professionally, and increase their efficiency. Local authorities lack qualified human resources to manage their day-to-day business and engage in strategic mid and long-term planning. The capacity building projects are in three vital fields: public financial management, urban planning and European integration. The need for such training was rather obvious due to the poor condition of the cadastre and urban planning departments. As confirmed by the three beneficiary assessments, the project was relevant to the needs of the project s beneficiaries. The biggest concerns of surveyed Kosovars are related to economic issues and poverty. Other issues of concern that also are partly related to economic situation include lack of institutional care, poor education system, social assistance and an extremely passive cultural life. Income generation and assisting children with disabilities were other top priorities. Respondents to the BAs believed the CDF project addressed their priorities. The vast majority (90 percent) of respondents answered that the project was a community priority. Even the beneficiaries of the projects for people with disabilities believe that infrastructure is a higher priority for the community. 3.2 Achievement of Project Development Objectives (including brief discussion of causal linkages between outputs and outcomes, with details on outputs in Annex 2) The project development objectives were to increase the quantity and quality of infrastructure and services and to promote local capacity building including participation and empowerment. This was a small (US$4 million), three year project that attempted to provide quick, tangible benefits to help stabilize poor and vulnerable communities not being reached by other projects and donors. It was not looking for long-term outcomes. That is why the project development objectives focused on more immediate outputs. Project impacts are often measured by household surveys. This was not economically justifiable given the small size of the CDF and its 115 microprojects with average costs of less than US$50,000, of which 68 were services projects with an average cost of US$12,000. Therefore, this impact assessment relies on the project s monitoring and evaluation system. The outcomes reflect feedback received from beneficiaries documented in the three annual beneficiary assessments (see section 3.6 and Annex 5 for details) carried out under the project. 13

25 The Bank s Kosovo Poverty Assessment (KPA) Report of October 2007 provides poverty profiles for 2003/04 and 2005/06. This report draws much of its content from the Household Budget Survey (HSB), which is a core survey conducted by the Statistical Office of Kosovo (SOK), on a monthly basis since June Although the HSB provides a useful start for monitoring poverty and inequality, uncertainties remain regarding the representativeness of the samples. The surveys still use the 1981 population frame (from the last census) for selecting areas, and therefore households, to include in the sample. Much has changed since then; some areas which were highly populated may not be now, and vice versa. Furthermore, the sample size of 2400 was noted in the KPA to be rather small. Thus, the results of the KPA are not representative at the community level. Nevertheless, at more aggregated levels (administrative regions, or ruralurban divides) the results of the KPA provide some useful results, which are of relevance for the second level poverty targeting (see Annex 10). Project Development Objective 1: Improve the quality, access, and availability of community infrastructure and services in poor and conflict-affected communities, and for the most vulnerable groups, including returnees. The CDF II Project achieved its first development objective of improving the quality, access, and availability of community infrastructure and services in poor, conflict-affected communities, and for the most vulnerable groups, including returnees. This objective was achieved through the first project component. The success of CDF II is attributable to its implementation of high quality and cost-effective microprojects which made a tangible development impact on the living conditions of the Kosovo population as well as in capacity building at the local level (see Table 1 below). Table 1: Kosovo CDF II Community Investments Cost per Project Job Days (dollars) Type of Project No. Cost (dollars) Direct Beneficiaries Cost per Beneficiary (dollars) Infrastructure 39 4,391, ,599 26,188 57, Social Services ,535 12, , Capacity Building 8 234,056 29, Total 115 5,441,956 47,321 26, , Source: CDF Office. Community Infrastructure microprojects. Infrastructure projects accounted for 84 percent of the community investment budget. As shown in Table 1 above, the CDF financed 39 infrastructure projects serving 57,380 direct beneficiaries. Two thirds of the projects were schools or water supply systems. There were no more than three projects in any other sector. Of the 39 projects, 5 were in Serbian communities and 4 were in mixed and minority communities (see Annex 2 for details). Communities are now enjoying potable water in their homes, rehabilitated and warmer schools for their children, cleaner and safer sewerage systems, access roads to neighboring communities, and multi-purpose community centers and local market places. The latter, in particular, have helped strengthen social interaction and provided incentives to the young to remain in local areas, thus stemming the tendency for rural-urban migration. Infrastructure projects generated 26,188 days of temporary labor which was an important contribution, given Kosovo s very high unemployment rate. 14

26 Community Social services projects. The CDF II funded 68 social service projects reaching 59,984 direct beneficiaries. They cover a wide range of services including 10 for youth, 11 for women and 30 for the disabled. There were fewer than six projects in any other category (see Annex 2). Some particularly innovative projects included multi-ethnic camps, computer courses for the handicapped, and bee-keeping and flower cultivation for widows. Some activities for the handicapped were commended by the beneficiary assessments in the belief that they would facilitate these persons greater integration into society. The social services projects provided employment for 130 experts and 199 NGO staff, but the number of job days is not known. CDF Support for the Living Conditions of Returnees. The CDF II Project also provided administrative support for the implementation of microprojects for the returnees which were financed by other donors. These included the following microprojects and programs. At the request of the Central Inter-Ministerial Committee, established by the Government, the CDF carried out the reconstruction of 81 private houses in a Serb community in the Obiliq Municipality which were damaged during the March 2004 conflict. The CDF was contracted by the UNDP to administer the process of reconstructing 111 houses for returnees covering all parts of Kosovo. With funding from the Government, the CDF was contracted to administer five infrastructure projects for returnees of minority communities in the Municipality of Klina. These projects included the reconstruction of schools and houses, and the construction of water supply systems, electrical networks, and septic tanks. Project Outcomes and Development Impact. According to the perceptions of beneficiary communities, the outcomes of CDF II Project have had a significant impact on the quality of living standards in these communities. Some of the impacts were social inclusion and integration, improved confidence and sense of worth, better dialogue between communities and municipalities, and better informed and trained municipal officers. One of the reasons that the CDF financed projects made such a difference, even more than three years after the conflict ended, was the sheer magnitude of the remaining tasks in rehabilitating basic social and economic infrastructure, and improving service delivery to poor and vulnerable communities. One needs to compare the pre-project and post-project situations to gauge their impact, and the following project examples are designed to capture some of the key outcomes and development impacts. Better Health from Clean Water Supply. After years of failed water supply systems and the destruction of some systems during the conflict, the CDF II financed the rehabilitation of the system and people finally had running water in their homes. According to a review carried out by the CDF in consultation with stakeholders, a direct outcome of the CDF s water supply projects has been a dramatic reduction of water borne diseases. For example, in the Bakshi dhe Raskovë project area of 1,520 beneficiaries, the number of people suffering from water borne diseases dropped from 84 to 0. In Petrove, out of 5,220 beneficiaries, the number dropped from 98 to 12. In total, in four projects analyzed by the CDF, the number of people suffering from water borne diseases declined by almost 90 percent, from 245 to 25. Saving of Time and Effort in Carrying Water. Another important outcome of the water supply systems financed by the CDF II Project has been the elimination of time and effort in carrying water. For example, in a study carried out by the CDF, prior to the water supply project in Bakshi dhe Raskovë, 160 people carried water 200 meters. The time and effort in doing so has been completely eliminated as an outcome of the project. Likewise, in Ljubinje e Epërme with 2,730 beneficiaries, 250 people carried water 150 meters before the project; the time and effort in doing 15

27 so has been completely eliminated. On average, in the four projects analyzed, 104 people (average) had carried water prior to the projects. The time and effort in doing so has been eliminated as a result of these projects thus improving the quality of life of the community. Improved Learning Environment as a Result of School Construction. Prior to the CDF II Project, children in the Budrikë village had to attend classes in containers because their old school building had been burned down during the war. In another village, before the school was constructed, students had to travel up to 8 kilometers to the next village to receive education. This was extremely difficult during winter and students would get sick. The impact of new schools on the lives of community members has been significant, as students benefited from better school conditions for effective learning, vicinity of the school, and students health. Parents interviewed under the BAs carried out, expressed the satisfaction of their children attending better schools with more functional hexagonal designs and attractive color schemes. It should be noted that primary education is compulsory and the choice of attending or not does snot arise which in effect precludes the quantification of income earning potential by attending primary schools. In these circumstances, the use of cost-benefit analysis is not applicable to these primary school projects. The only quantifiable aspect, based on available data, was a modest improvement in school attendance due to better access and improved school conditions. In four school projects analyzed by the CDF, the total number of students increased from 772 to 819. Inclusion and Empowerment of People with Disabilities. The social services projects had similar dramatic impacts. Nearly half of the social services projects targeted the disabled through employment generation activities, public awareness campaigns, rehabilitation and counseling. The acquisition of computer skills gave them a sense of hope and opened up employment possibilities. One project provided psychosocial and physiotherapy rehabilitation for 153 children from rural areas. In another project, during a six month period, 112 persons with mental disabilities attended daily classes including math, English, and computer training. The project brought great satisfaction to the parents, seeing someone taking care of their disabled children. Previously there had been a lack of respect for people with disabilities. They were often teased and mocked. The disabled have increased their self-confidence and believe that they are very valuable members of society. Municipal authorities have established a committee to deal with disability issues and have promised to create a budget for office space and efforts for their employment; medical treatment; and training. Reducing Rural-Urban Migration. Another outcome of CDF projects is reduced migration from rural to urban areas and an increase of property values. The percentage of people who believe that the value of property has increased as a result of the implemented projects is quite high (over 60 percent), thus reducing the tendency to leave rural areas. Community projects have provided economic hope, better services, and cultural activities, thereby making life in those communities more attractive. Social Integration. Close to two-thirds of the BA respondents stated that implementation of these projects had a positive effect on integration. One project targeted both Serbian and Albanian youth. The project gave attention to multi-ethnicity of the northern part of Kosovo, and to inter-ethnic youth cooperation, which for some time had been nonexistent. As the 2007 BA noted, The CDF, the Kosovo Relief Committee and the youth activists have shown to both Albanian and Kosovar politicians that cooperation is possible and that only through inclusive dialogue and decision-making, problems can be resolved successfully. 16

28 Project Development Objective 2: Promote institutional capacity building at the community and municipal levels so as to improve the quality and sustainability of service delivery, and enhance stakeholder participation and empowerment in local development. The CDF II achieved the second development objective of building the necessary institutional capacity to ensure the quality and sustainability of microprojects. This objective was achieved through 8 institutional capacity building projects of the second project component. Six projects were targeted at municipalities to strengthen the capacity of municipal officials in areas such as public financial management, standards implementation, and European Integration (see Annex 2 for details). Two projects were targeted at community members in the areas of operation and maintenance and informal settlements to ensure the quality and sustainability of newly constructed or rehabilitated facilities. This component trained community members and local government officials (245 and 550 respectively). The capacity building projects provided employment for 7 experts and 6 NGO staff. Participation and Inclusion. The second element of the capacity building objective was to enhance stakeholder participation and empowerment in local development. Promotional activities of the CDF consist of initial meetings with regional administrators and municipalities, General Community Meetings (GCMs) following the submission of priority lists from the municipalities, meetings with Community Project Committees (CPCs), and media-based publicity campaigns. A total of 3,848 people from 28 municipalities participated in GCMs and 59 CPCs were formed with a total membership of 321, of whom at least 40 were municipal officers. The majority (75 percent) of respondents of the beneficiary assessments was very enthusiastic to speak about their involvement in village and community meetings. Youth participation is considered relatively high in comparison to similar programs in other countries. The most common explanation is that youth comprise a high percentage of the overall population. The percentage of people attending General Community Meetings that were youth ranged from 11 to 91 percent, with an average of 42 percent. Communities were encouraged to elect youth members to the CPCs, and most elected 1 to 3 youth. In 8 of the 59 communities, a young person received the highest number of votes and was elected chairperson. Considering the large youth population bulge in Kosovo, most of whom are unemployed, youth empowerment projects assume great importance, especially in developing productive skills, fluency in foreign languages, and information technology (IT) to expand their employment opportunities. The CDF supported NGOs that design programs specifically for youth. Ten of the 68 social services projects targeted youth. These focused primarily on providing minority-run youth centers with capacity building assistance and promoting awareness campaigns on HIV & AIDS. One project benefited 23 youth through skills enhancement programs. Two projects disseminated information on employment opportunities to 560 youth. Another project opened a youth center for Bosnian and Roma minority, at the same time helping local NGOs to conduct their activities, as well as raising awareness for cooperation among different community groups. Table 2 provides some indicators of youth involvement in the CDF II Project. 17

29 Measure Table 2: Youth Inclusion in CDF II Projects Total Participants Children/ Youth Participants Children/ Youth as a Percentage of the Total Participation in General Community Meetings 3,848 1, Membership of Community Project Committees Number of CPC chairmen Planned beneficiaries based on Project Application Forms for infrastructure projects Youth beneficiaries of 10 social service programs specifically targeting youth 65,446 25, ,927 5, The main impact of the project on youth was capacity-building to do voluntary work, initiate new projects, and become involved in organizational work or other activities. Now, more young people consider themselves capable of action and feel they have gained important experience. Around 62 percent of the households participated in funding the projects. A considerable portion of the households did not participated in financing projects because, according to them, there was no need for it (22 percent), they did not have the means for it (10 percent), or they were not informed about it (2 percent). Beneficiaries were of the view that the CPCs needed some strengthening. This was considered important for increasing the commitment and accountability of the local governments, community-based associations and community members. The CDF promotion team enhanced their outreach and training activities in the targeted communities to ensure a greater engagement of CPCs in community investment projects. The main impact on communities was their empowerment through participation in subproject decision-making and the creation of social capital through cooperation in community projects, especially between different ethnic groups with previously low levels of trust. Beneficiary Assessments reported that the microprojects boosted participatory spirit and civic identity. The project also empowered communities through training and capacity building. The 321 community members of CPCs were empowered by engaging with municipal officials on project related issues and in particular on issues related to the maintenance of project facilities. Seven years of CDF operation has helped build the capacity of community members who were engaged in CDF community subprojects. In some of the more proactive communities, participation in CDF project activities helped community members lobby for projects from the donor community and to develop project proposals. The Development of Five-Year Plans in Municipalities. One important outcome of the CDF s capacity building program is that the sustainability of community investments has significantly improved through the financial management training. The resulting five-year financial plans and the annual budgets developed in the municipalities now provide line items for maintenance expenditures of public facilities. In recognition of the quality of capacity building provided, the CDF was invited by the Ministry of Finance and Economy and the Ministry of Administration and Local Government to coordinate a comprehensive training program in financial management and budgeting for all budget units at the central and local government levels in Kosovo. Standards Implementation and European Integration. The standards implementation training helped prepare municipal officials for that task. In most cases, municipalities were behind in implementing the standards for Kosovo, but after training, most municipalities advanced quite rapidly. While this project is probably not the only reason, municipal officials state that the 18

30 training has been very helpful in clarifying a significant portion of the tasks ahead of them and receiving a better evaluation in standards implementation. Similarly, the training on European Integration has improved their understanding of the current situation of Kosovo with regards to European Integration and the mechanisms of integration which were rather unclear to them before the training. Support for the Decentralization Program. In addition to ongoing, systematic training carried out under the CDF benefiting participating communities, the CDF has also made impressive progress in their local government capacity building activities. The CDF is involved in a number of municipal training activities requested by the Ministry of Finance and Economy, the Ministry of Administration and Local Government, the Ministry of Labor and Social Services, and the Ministry of Environment and Spatial Planning. The CDF s active participation in supporting the Government s decentralization program through critically needed capacity building activities at the local level has brought the project much recognition and an increased number of requests from the Government and the donor community in the area of municipal level training. The project has successfully built upon the decentralization process, started under the first operation, and moved forward to an integrated development framework. Through the efforts of the CDF, an important process is gradually emerging in support of the decentralized management of basic social services. Community members have been progressively engaging in selfgenerated development activities combined with training activities aimed at having communities take part in ensuring the quality, effectiveness and sustainability of service delivery. The CDF promoted the concept of self-help mechanisms, increased the sense of community ownership, and enhanced the efficiency of local community development operations. Development of a Popular Government/Citizen Website. The training program was conducted in four phases, benefiting 30 municipal officials and 8 officials from the Ministry of Administration and Local Government. As a result, there have been close to 20,000 visits to the website, which has been instrumental in improving interactions between citizens and government. 3.3 Efficiency (Net Present Value/Economic Rate of Return, cost effectiveness, e.g., unit rate norms, least cost, and comparisons; and Financial Rate of Return) The project s economic rate of return was not calculated because operations of this type yield a wide range of external benefits to society that are not readily quantifiable. Moreover, the demanddriven character of the microprojects and the fact that neither their size nor their type was known ex ante precluded the use of traditional methods of cost-benefit analysis. At the microproject level, although the costs of projects are known with some precision at the appraisal stage by the CDF, data deficiencies at the community level precluded the quantification and valuation of the wide range of benefits and externalities generated by microprojects. Therefore, the assessment of efficiency was focused on studying the cost-effectiveness of CDF microprojects vis-à-vis those of comparator organizations. Accordingly, a cost-effectiveness study was conducted in 2003 by specialized local consultants under the guidance of an international consultant. The approach adopted was to examine the economic use of project funds at the macro and micro levels as follows: (i) the project rationale within the broader context of national development objectives, government strategy, and the Bank s TSS and programs; and (ii) the cost-effectiveness of microprojects completed under the CDF compared with those completed under government programs and NGO programs. Costeffectiveness comparisons showed that the costs of school rehabilitation and construction carried 19

31 out under the CDF were substantially less (by 19 percent) than those under NGO programs; the result was even more favorable in the case of roads projects, where the average cost of microprojects was 34 percent less than those under NGO programs. Since the CDF II as a whole is a non-revenue generating project, no detailed financial analysis of the net present value and the financial rate of return were carried out. In the case of microprojects which are revenue generating, such as water projects or solid waste disposal projects, the CDF ensured that beneficiaries contributed to cost recovery through the payment of user fees to government or local authority collection systems already in place. Communities were required to finance up to 15 percent of the total microproject costs. This was considered feasible since community contributions under the CDF I averaged 19 percent. Costs during the CDF II proved those assumptions. The CDF closely monitored microproject costs, as well as the unit costs of construction and costs per beneficiary. In regard to schools, the overall trend is that actual unit costs (per square meter and per direct beneficiary) have been contained below planned costs for the years Costs for new construction declined from 2002 to 2006, from 386 to 174 Euros/square meter. During that same period, costs per direct beneficiary fell from 611 to 320 Euros. For water supply projects, the overall trend is that actual unit costs (per meter and per direct beneficiary) have been contained below planned costs for During this 4-year period, actual costs of pipelines have fluctuated within the range of Euros per meter, reflecting in part, the type of water supply project involved. These costs are still below the planned unit cost of 20 Euros per meter and costs declined from 82 to 34 Euros per direct beneficiary. As cost controls are now in place, it is likely that CDF s comparative advantage in cost-effectiveness visà-vis the NGOs reported in the 2003 study has been maintained during During project implementation, the CDF carried out a simple cost-effectiveness analysis for each microproject proposal presented by the communities. The analysis was based on viable project alternatives, least-cost solutions, unit cost estimates from private construction firms, specific circumstances of the community, estimated benefits from the project, number of beneficiaries, and other relevant factors at the micro level. 3.4 Justification of Overall Outcome Rating (combining relevance, achievement of PDOs, and efficiency) Rating: Satisfactory The project achieved its development objectives by effectively delivering benefits to target groups that are among the poorest in Europe. It used innovative poverty targeting methods to ensure its infrastructure improvements and social services benefited the poorest communities in remote and isolated areas, and the socially vulnerable including children, returnees, disabled persons, the elderly, Serb and other ethnic minorities. Infrastructure was built at lower cost than by comparator government agencies and NGOs. Participation, while not broad based, was judged to be greater than that under CDFI, particularly due to the expanded membership of CPCs. Three beneficiary assessments demonstrated that beneficiaries greatly valued the project, held very positive views about the CDF, and believed the project significantly improved their lives. The Project also supported local level institutional capacity building consistent with the Government s decentralization initiatives, so as to improve the quality and sustainability of community investments. The project did not have any significant shortcomings, inefficiencies or other inadequacies. Its accomplishments are still consistent with Kosovo s present development 20

32 priorities and current Bank strategies and goals. And the Government has recognized the CDF II Project as an important tool for poverty reduction in Kosovo. 3.5 Overarching Themes, Other Outcomes and Impacts (if any, where not previously covered or to amplify discussion above) (a) Poverty Impacts, Gender Aspects, and Social Development Poverty Impacts. The focus of the project was on non-income poverty reduction through the provision of local infrastructure and social services. The project was not designed to generate income. Nonetheless, the infrastructure subcomponent generated 26,188 days of work that provided at least short term income. Some of the social services projects such as the milk collection and processing, beekeeping, and flower cultivation projects directly provided income to poor communities. The project made the communities more livable and may have indirectly led to poverty reduction. For example, road reconstruction probably reduced transport costs, improved water supply and sanitation probably reduced health costs, and so on. Social Development. The main social development achievements were empowerment of communities through participation in subproject decision-making and creation of social capital through cooperation in community subprojects, especially between different ethnic groups with previously low levels of trust. A total of 3,848 participants from 28 municipalities participated in General Community Meetings. A total of 321 community members served on Community Project Committees. The project also empowered communities through training and capacity building. More than half (56 percent) of BA respondents claimed that as a result of the implementation of these projects, these was an increase in undertaking these kinds of initiatives. Close to two-thirds of the 2005 and 2006 BA respondents stated that implementation of these projects had a positive effect on integration. Gender Aspects. Eleven of the social services projects were specifically targeted to women. For example, one project supported cooperative milk collection where cow milk is delivered by 20 women. Three women are in charge of the project committee and responsible for the processing and sale of the milk. A second project supported an experienced NGO to provide health education to 243 women from five villages, especially pregnant and antenatal women. A third project provided legal advice to women and taught them about their legal rights. A fourth project supported greenhouse productive activities for women. Women also were the main beneficiaries of many of the infrastructure projects, such as the water supply systems, because women were primarily responsible for collecting water. (b) Institutional Change/Strengthening (particularly with reference to impacts on longer-term capacity and institutional development) As discussed above the CDF contributed to a notable institutional development impact (as part of its second component) in three areas: (i) in municipal government, (ii) among NGOs, and (iii) within CDF itself. CDF strengthened the capacity of municipal officers in financial management, budgeting and accounting and in the formulation of 5-year financial plans and annual budgets with line items for operations and maintenance for public facilities constructed or rehabilitated under the CDF. Furthermore, the participation of municipal authorities in the CPCs established under the CDF contributed to more effective and frequent interactions between municipal authorities and community members. The capacity of local NGOs was strengthened through their 21

33 engagement in capacity building activities, social service projects, and in a community mapping and profiling exercise financed under the CDF program. The CDF II was designed to support key policy and institutional reforms consistent with the Government s current development strategy and the related Mandate to establish Substantial Self-Government. This allowed the CDF to branch into areas involving medium-term development activities focusing on service delivery and governance. The result has been the evolving role of the CDF under the second operation, which is increasingly being recognized by the PISG and by the donor community as an effective development agency linking local development activities with government programs and institutions. The CDF became the leading NGO in Kosovo to administer key capacity building programs benefiting local government officials. (c) Other Unintended Outcomes and Impacts (positive or negative) None. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops (optional for Core ICR, required for ILI, details in annexes) The strongest message of the BAs is the sense of satisfaction with the CDF, expressed both quantitatively and qualitatively. Some of the quotes speak more eloquently than any statistics. One BA respondent said, CDF has done an incredible job and we have no complaints. Another said, As far as CDF is concerned, there are no words large enough to thank them. Finally, As for CDF, what can I say more than God will reward them. The author of the BA noted, Not a single person encountered during site visits to the communities has expressed dissatisfaction with this organization. These responses came from multiple BAs (see Annex 5 for description of the methodology of each of the BAs and for a more detailed description of the results). The CDF has certainly earned strong support and admiration from some individuals. The quantitative data, from the surveys and interviews, provides a statistical measure of the breadth of support. About 83 percent of respondents have expressed various degrees of satisfaction with the support provided by CDF: 55 percent are extremely satisfied, and 28 percent are satisfied with the support provided by CDF. Table 3 summarizes community satisfaction with the CDF and the community investment component on a variety of measures. 22

34 Table 3: Community Satisfaction with the CDF II Project Project Results percent of beneficiaries responding yes, highly satisfied, or satisfied The project responds to a community priority 90 Satisfied with the support from CDF 83 Satisfied with the work of CDF 72 Very satisfied with how CDF organized work in the community 77 Consider their cooperation with CDF very positive 83 CDF has done good quality work 84 Organization of services is good 66 Satisfied with project implementation 60 Satisfied with project monitoring by CDF 75 Would support another CDF project 98 Satisfied with CDF s selection of the contractor 76 Agreed with the selection of the implementation agency 83 Satisfied with the performance of the implementing parties 83 Satisfied with the professionalism of the implementing agency 85 Satisfied with contractor s behavior in the community 95 Satisfied with the manner in which concerns are addressed 75 Satisfied with the materials and equipment used 75 Satisfied with CPC transparency 60 Project has improved confidence and sense of worth 66 Overall project has had a positive impact 90 Services projects have had a positive impact on the community 100 Project has had a positive impact on community integration 72 Property values have increased as a result of the implemented projects 60 Sources: Beneficiary Assessment Report, Index Kosovo, 2005; 2007 Beneficiary Assessment Executive Report, UBO Consulting, June With regard to the capacity building component, recipients of training have expressed high level of satisfaction. All beneficiaries interviewed during the assessment are satisfied with all aspects of the training. Participants were satisfied with the quality of training. Nonetheless, there was some sentiment that the training made a good start and needed follow-up training activities on institutional capacity, fundraising, working with donors, monitoring, evaluation, and reporting. 4. Assessment of Risk to Development Outcome Rating: Low. There is only a low risk that the project s development outcomes will not be maintained, in part, because Kosovo s economic and social perspectives indicate that there will be both an ongoing need for, and continuing public policy to provide, the types of assistance which CDF s activities have supported. In all likelihood, they will remain priority Government objectives. The sustainability of community investments has significantly improved through the financial management training received, and the resulting five-year financial plans developed in the municipalities which now provide line items for maintenance expenditures of public facilities. However, the role of the municipalities in CDF projects is very limited in the rural areas. Nonetheless, the project s sustainability is rated likely on the basis of the following factors: 23

35 Kosovar communities were shown to be interested in, willing to, and well prepared to participate in CDF activities. Their substantial self-help contributions demonstrated the importance they attached to CDF products. The CDF has been successful in actively engaging community members in self-generated development activities. The latter have been combined with training activities aimed at having communities better appreciate and take part in ensuring the quality, effectiveness and sustainability of infrastructural and service improvements. Municipal governments have been made more conscious of their residents desires for infrastructure and service improvements. The CDF established a model for municipal officials of greater transparency and responsiveness to poverty and social protection concerns which may induce increased appreciation of their electorate's expectations and priorities. Local governments have been made more sensitive to operations and maintenance issues, as well as the importance of ensuring the sustainability of the newly constructed or rehabilitated facilities, and new or upgraded services. 5. Assessment of Bank and Borrower Performance (relating to design, implementation and outcome issues) 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry (i.e., performance through lending phase) Rating: Satisfactory The Bank s work during the preparation of the project was of high quality. Its strategy and instruments were very appropriate. The project s design took into account lessons from previous projects in Kosovo and elsewhere. Appraisal of the commitment of the Government, the implementing agency and potential beneficiaries for the tasks appear to have been generally sound. Technical aspects were thoroughly examined, as were the fiduciary elements. Links with other donors were well considered and incorporated. The implementation plan was thorough and well balanced. Preparation costs (US$118,770) were reasonable. The Bank s performance in ensuring quality at entry of the project is rated satisfactory. This takes into account the efficacy of the work carried out in the activities described above, which covered the most important aspects of the project s strategic relevance and its preparation. (b) Quality of Supervision (including of fiduciary and safeguards policies) Rating: Highly Satisfactory The project was closely monitored through frequent field supervision, special studies and assessments of the project. These covered broad issues about the CDF s operations and their benefits, as well as technical, environmental, administrative, financial, procurement matters, and qualitative assessments of the project s progress, functioning and impacts. These reports were comprehensive and well documented and effectively informed the Government and Bank management of the operating conditions in an objective and timely manner. They dealt professionally with the problems and possible solutions. The mid-term review comprehensively assessed overall performance. The Bank staff had a good working relationship with the CDF officials and its project unit. The Bank and CDF were in continuous dialogue with CIDA, UNMIK, and the PISG. The PSC 24

36 ensured more frequent communication and closer coordination than in other similar projects. This permitted constructive resolution of any issues that arose. Bank supervision responsibilities have been effectively discharged. These were reflected in the quality of project status reports, the early detection and elimination of important bottlenecks to progress, and the positive feedback from CDF on the support it had received. Careful, detailed attention to beneficiary assessments also figured into the Bank s supervision, whose costs (US$248,120) are reasonable. The Bank s performance during project supervision did not show any shortcomings in the identification of opportunities and promptly and effectively resolved all issues. Therefore, the Bank s supervision performance is rated highly satisfactory. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory The Bank s overall performance is rated satisfactory on the basis of the aforementioned factors and the other elements of the Bank s work described elsewhere in this report. 5.2 Borrower Performance (a) Government Performance Rating: Satisfactory Under the CDF II Project, the Recipient of the IDA and CIDA Grants was UNMIK. This was in accordance with the TSS which refers to the practice followed under the Bank s Trust Fund financed program and which is consistent with UNMIK s legal status and responsibilities in Kosovo under UN Security Council Resolution The counterpart Ministry was the Ministry of Finance and Economy (MFE). UNMIK and the MFE effectively participated in the design and implementation of the CDF II Project. The responsibility for the flow of funds between UNMIK, the MFE and the CDF II PIU was carried out effectively with no problems during project implementation. Both UNMIK and the MFE were part of the CDF II Steering Committee set up specifically for overseeing the activities of the CDF II Project. The PSC effectively carried out its key role to ensure consistency of the CDF work programs with Kosovo s social sector strategies and Government reform programs in relevant sectors. UNMIK, as a member of the PSC, systematically monitored project activities both at the technical and operational levels. It reviewed, discussed and formulated recommendations on semi annual and work programs as well as on technical reports and on the CDFII Corporate Plan. UNMIK also participated in field visits to demonstration projects with other Steering Committee members. As the Recipient of the Grant, UNMIK submitted timely requests to the Bank for minor revisions to the Grant Agreement, and met with Bank staff during each of the supervision missions. (b) Implementing Agency or Agencies Performance Rating: Highly Satisfactory The project clearly demonstrated the CDF s main strength of being able to reach remote, isolated and poorer communities, obtain their residents consensus on development priorities, help mobilize collaborative efforts to address them, and to bring them to fruition. The CDF, as a local foundation functioned as the CDF II Implementation Unit (PIU) effectively administering its operations as an autonomous entity, governed by its Board, and reporting to the Project Steering Committee. The CDF has built up a solid technical and professional capacity based on close to 8 years of experience. As the beneficiary assessments noted, the CDF has impacted Kosovo s smaller and medium-sized communities, in which it has earned widespread popular trust, more than that of other national institutions. 25

37 The CDF performed very well. It merits praise for being reportedly the only local agency that tackled infrastructure and service improvements for poor residents, and for its useful institutionbuilding initiatives. It produced the quick, tangible results needed. The CDF performed well in project selection, operating procedures, technical design and community involvement in its activities. It followed the agreed typology of, and criteria for, projects to be funded. It was quite disciplined about, and tightened, contracting (particularly tendering) while simultaneously obtaining broad contractor participation. The CDF systematically monitored and evaluated project execution. Towards the project s conclusion, Bank staff judged the CDF to have developed sufficient capability for ensuring proper financial management. An independent assessment of the quality of the community works commended the CDF for its careful evaluation of each request it received. It credited the CDF with ensuring that project implementation faithfully followed the defined specifications and design. Beneficiary assessments noted community commendations of CDF s performance with only relatively modest reservations. These achievements were supported by CDF s recruitment and maintenance of professionally competent, hard working and committed personnel. The Bank staff judged them to have gained valuable experience in all aspects of project management and administration. In summary, the CDF was very effective in carrying out the project s activities. It established itself as a credible, independent entity with demonstrated competence in the delivery of technical, managerial and organizational support to Kosovar communities. It became a cost-effective instrument for meeting social infrastructure and services needs of the poor. (c) Justification of Rating for Overall Borrower Performance Rating: Highly Satisfactory CDF performance in the project is rated highly satisfactory on the basis of its highly creditable performance, as described above and in other portions of this report. CDF was the implementing agency, and the Borrower played a lesser role as described above. 6. Lessons Learned (both project-specific and of wide general application) Social Fund Approach and Community Based Development: The project confirmed that social fund activities can provide a better quality of life for the poor, can be efficient mechanisms for constructing small-scale infrastructure, can build social capital, and have a visible, inclusive development impact. Indeed, these operations can serve as catalysts for a process in which citizens in targeted communities, especially in mixed and minority communities, gradually came together over time and participate in the design, implementation and monitoring of projects which respond to the common good of the community. Cost Effectiveness: This project demonstrated that social fund projects can deliver infrastructure at lower costs than NGOs or government. Cost analysis showed that the costs of school rehabilitation and construction carried out under the CDF were substantially less (by 19 percent) than those under NGO programs. The result was even more favorable in the case of roads projects, where the average cost of micro-projects was 34 percent less than those under NGO programs. Importance of Poverty Targeting: Given a typically limited budget envelope in social fund projects, a clearly formulated poverty targeting and allocation mechanism based on objective 26

38 criteria and poverty data, is critical for ensuring the flow of project benefits to the neediest segments of the population. Youth Participation: The targeting of young people in this type of project, and particularly given the sensitive political situation in Kosovo, was of considerable importance because among conflict-affected areas, youth risks are the highest due to the combined conditions of conflict, poverty, and high levels of youth unemployment. Importance of building communication networks: A critical aspect in this type of operation is the development of a comprehensive framework for stakeholder involvement and participation, in addition to strong institutional support from the project team, effective systems and procedures. Outreach and promotion, a community mapping and profiling exercise, and needs assessments are important elements to the success of this operation. Indeed, better communication between project committees, municipality authorities and beneficiaries also underline the importance of including an awareness raising component in this type of operation. Capacity Building: An important lesson of this project is that the sustainability of community investments has significantly improved through the financial management training which resulted in municipalities preparing five-year financial plans which now provide line items for maintenance expenditures of public facilities. In addition, training in the areas of monitoring and supervision of micro-projects is equally critical. Links to Government Policies and Priorities: It is important to ensure that projects focus on greater coordination of social fund-type activities with relevant sectoral policies (i.e. health and education) and investment priorities. One mechanism for achieving this to institutionalize a Project Steering Committee that ensures that project activities are consistent with social sector strategy priorities and government reform programs in relevant sectors. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies None (b) Cofinanciers None (c) Other partners and stakeholders (e.g. NGOs/private sector/civil society) None 27

39 Annex 1. Project Costs and Financing (a) Project Cost by Component (in USD Million equivalent) Components Appraisal Estimate (USD millions) Actual/Latest Estimate (USD millions) Percentage of Appraisal 1. COMMUNITY INVESTMENT PROJECTS INSTITUTIONAL CAPACITY BUILDING PROJECT MANAGEMENT Total Baseline Cost Physical Contingencies Price Contingencies Total Project Costs Project Preparation Fund Front-end fee IBRD Total Financing Required (b) Financing Source of Funds Type of Cofinancing Appraisal Estimate (USD millions) Actual/Latest Estimate Percentage of (USD Appraisal millions) Borrower Local Communities IDA GRANT FINANCING

40 Annex 2. Outputs by Component A. Component 1: Community Investment Projects The community investment projects component dominated the project budget, accounting for 93 percent of total project program costs (excluding project management costs). The SDR appreciated against the dollar so the project budget increased in dollar terms. This enabled the project to target a greater number of poor communities and better meet its development objectives. This is attributable to: (i) a higher level of community contributions (22 percent) than the expected share of 9.5 percent; and (ii) a significant decline in the price of construction materials due to heavy competition. The CDF implemented 115 projects of which 39 are infrastructure projects, 68 are social services projects and 8 are capacity building projects (see Table 1). Table 1: Kosovo CDF II Summary of Project Outputs Cost per Project Job Days (dollars) Type of Project No. Cost (dollars) Direct Beneficiaries Cost per Beneficiary (dollars) Infrastructure 39 4,391, ,599 26,188 57, Social Services ,535 12, , Capacity Building 8 234,056 29, Total 115 5,441,956 47,321 26, , Source: CDF Office. Infrastructure projects. While there were many more social services projects, infrastructure projects accounted for 84 percent of the community investment budget. Two thirds of the projects were schools or water supply systems (see Table 2). There were less than four projects in any other category. The cost per completed infrastructure microproject averaged US$112,599. The cost per direct beneficiary is estimated at US$77. Infrastructure projects generated 26,188 days of temporary labor which is greatly valued given Kosovo s very high unemployment rate. Table 2: Infrastructure Projects by Type Cost per Type of Project No. Cost (dollars) Project (dollars) Job Days Direct Beneficiaries Cost per Beneficiary (dollars) Water supply system 14 1,539, ,943 6,476 28, School 12 1,840, ,347 14,184 5, Health clinic 3 318, ,008 1,820 13, Sewerage system 2 118,153 59, , Cultural Center 3 261,686 87,229 1,487 7, Road Reconstruction 2 155,078 77, Heating System (schools) 1 31,269 31, Sports Field 1 37,636 37, Community Center 1 90,154 90, Total 39 4,391, ,599 26,188 57, Source: CDF Office. Infrastructure projects in Serbian and Mixed and Minority Communities. The project planned to allocate US$260,000 (10 percent of the community investment component) to Serbian 29

41 communities and US$260,000 to mixed and minority communities. The CDF fell slightly short of the goal for the Serbian communities in percentage terms (it allocated 7 percent) but exceeded the target in dollar terms (US$305,897). The CDF met the goal for the mixed and minority communities in percentage terms and exceeded the target in dollar terms (US$429,242). Costs per project were less than the other CDF infrastructure subprojects (see Tables 3 and 4). Costs per beneficiary for the infrastructure projects in Serbian communities were significantly higher. Table 3: Serbian Community Infrastructure Projects by Type Cost per Project Job Days (dollars) Type of Project No. Cost (dollars) Direct Beneficiaries Cost per Beneficiary (dollars) Sewerage system 2 118,153 59, , Cultural Center 1 91,204 91, , Road Reconstruction 1 58,904 58, Sports Field 1 37,636 37, Total 5 305,897 61,179 1,439 2, Source: CDF Office. Table 4: Mixed and Minority Community Infrastructure Projects by Type Cost per Direct Cost per Type of Project No. Cost (dollars) Project (dollars) Job Days Beneficiaries Beneficiary (dollars) Water Supply 1 148, , , Schools 1 110, , Cultural Centers 2 170,482 85, , Total 4 429, ,310 1,743 10, Source: CDF Office. CDF support for returnees. The CDF II Project also provided administrative support for the implementation of microprojects for the returnees which were financed by other donors. These included the following microprojects and programs. At the request of the Central Inter-Ministerial Committee, established by the Government, the CDF carried out the reconstruction of 81 private houses in a Serb community in the Obiliq Municipality which were damaged during the March 2004 conflict. The CDF was contracted by the UNDP to administer the process of reconstructing 111 houses for returnees covering all parts of Kosovo. With funding from the Government, the CDF was contracted to administer five infrastructure projects for returnees of minority communities in the Municipality of Klina. These projects included the reconstruction of schools and houses, and the construction of water supply systems, electrical networks, and septic tanks. Social services projects. Three fourths of the social services projects were for the disabled, women or youth. There were fewer than six projects in any other category. Social services projects were more numerous, cheaper and had slightly more total direct beneficiaries than infrastructure projects (see Table 5). Given that their per project costs (US$12,008) were much less than those for infrastructure projects (US$112,599), its costs per beneficiary (US$14) were much lower than those for infrastructure projects (US$77). The social services projects provided employment for 130 experts and 199 NGO staff, but the number of job days is not known. 30

42 Table 5: Kosovo CDF II Social Services Projects Type of Project No. Cost (dollars) Cost per Project (dollars) Direct Beneficiaries Cost per Beneficiary (dollars) Projects for the Disabled ,903 11,597 8, Projects for Women ,798 13,982 6, Youth Development ,040 11,404 21,643 5 Environmental Protection 5 62,826 12,565 3, Projects for Children 5 48,739 9,748 17,565 3 Social Service Providers 2 38,550 19, Projects for the Elderly 2 27,190 13, NGO Capacity Building 3 23,488 7, Total ,535 12,008 59, Source: CDF Office. B. Component 2: Institutional Capacity Building The second component focused on capacity building. Most of this assistance was provided through training programs (see Table 6). This component trained community members and local government officials (293 and 550 respectively). The capacity building projects provided employment for 7 experts and 6 NGO staff, but the number of job days is not known. Table 6: Kosovo CDF II Capacity Building Projects Cost per Direct Project Beneficiaries (dollars) Type of Project No. Cost (dollars) Cost per Beneficiary (dollars) Local Government Level: - Public Financial Mgt. 2 55,010 27, Standards Implementation 1 27,971 27, European Integration 1 42,239 42, Web Application 1 57,513 57, Informal Settlements 1 14,990 14, Community Level - Operation and Maintenance 1 2,011 2, Informal Settlements 1 34,321 34, Total 8 234,056 29, Source: CDF Office. The CDF carried out six key local government capacity building training programs covering: public financial management in budget institutions (two projects); priority standards in municipalities and their implementation through MIS; the role of local government in European integration issues; an integrated training program focusing on informal settlements; and a training program on e-governance. 31

43 The CDF administered and coordinated a comprehensive training program in the areas of public financial management covering planning, budgeting, coordination and control in support of the Government s Budget Circular Three-day workshops benefited 123 participants, including financial officers from 30 municipalities and representatives from key sector ministries and budget institutions. The training program received high marks from participants regarding the course agenda, coverage of the topics, lecturers, the participatory process used in engaging participants in the course work, fulfillment of the participants training needs, and the impact of the training in terms of expanding knowledge and professional skills. One of the main outputs of the training was the formulation of 5-year plans for operating and maintenance of assets. The CDF provided training for 30 municipal officers from 30 municipalities on eight sets of standards relating to public administration. CDF provided training at the municipal level for the implementation a new Manual for Inclusion of the Informal Settlements into municipal development plans benefiting 84 municipal officials from 33 municipalities. The Ministry of Administration and Local Government requested training related to the implementation of the project Role of the Local Government in European Integration. The training benefited 290 municipal officers from 33 municipalities. The web-application software design and the training benefited 23 officials from 30 municipalities. At the microproject level, institutional strengthening focused on local governments, communities and contractors participating in community infrastructure and services projects. The focus of the training was on building the capacity of these local groups to plan, manage, operate, supervise and maintain investments and improve the quality and availability of local service provision. At every stage of the microproject cycle, the promotion, appraisal and follow-up teams of the CDF provided on-the-job training and technical, managerial and organizational support to these community groups. The training covered a variety of topics including the roles and responsibilities of members of Community Project Committees, project identification and formulation, competitive bidding procedures, operations and maintenance, quality control and monitoring and evaluation. In addition, special technical training was organized covering: (i) operations and maintenance of water supply projects in 5 villages benefiting 53 community members; and (ii) application of the manual for incorporating the informal settlements into spatial planning in the Brekoc neighborhood, benefiting 240 community members. Component 3: Project Management Component The Project helped develop the CDF into a much stronger, broader based institution. It also expanded its capacity to penetrate into more remote, isolated and poorer communities stimulate effective discussions on their perceived priorities, and to bring to fruition proposals to meet their needs. The CDF s improvements are credited to a large measure to inputs from the IDA Grant with CIDA s support. These provisions included training benefiting the Fund s management and staff, and administrative support. The financing also covered the Fund s operating costs and the expenditures related to the monitoring and evaluation work, and financial audits. The capacity of CDF staff was strengthened through training and study tours in the areas covering service delivery at the local level, promotion and outreach, monitoring and evaluation, and local governance. 32

44 Annex 3. Economic and Financial Analysis (including assumptions in the analysis) The objective of this annex is to assess the cost-effectiveness of the CDF II Project. The demand driven nature of the project, which responds to microproject proposals from poor communities during the life of the project, clearly precludes the ex-ante use of traditional methods of costbenefit analysis. Instead, the approach adopted is to assess the project at the macro and micro levels. At the macro level, the focus is on assessing the project rationale within the broader context of Kosovo s development objectives, government strategy, and the Bank s Transitional Support Strategy and programs. At the micro level, the focus is on examining the costeffectiveness of microprojects completed under the CDF compared with those completed through NGO programs. The micro level assessment in this annex is based on the findings of a costeffectiveness analysis carried out by a team of local consultants, as part of project preparation. The CDF II Project supported the PISG priorities mentioned earlier through the project s focus on rehabilitation of social and economic infrastructure, especially in the education and health sectors and the provision of social services to help improve the living standards of the poor and vulnerable groups. The project s support at the local level enhanced the capacity of local government officials and communities to effectively address post-conflict and poverty related issues on a sustainable basis. The CDF II Project similarly supported the TSS objective of poverty alleviation through its support for small-scale infrastructure and social services at the local level, and its demand-driven approach and strong emphasis on community participation. The CDF II Project was also consistent with the objectives of the Bank s Fourth Economic Assistance Grant and the Bank-financed Education Project (US$4.5 million). The CDF II Project is also consistent with the main findings and recommendations of Bank economic and sector work, including the 2001 Poverty Assessment and the Public Expenditure Review. The CDF II projects generated short-term employment for the poor, at least through the construction phase of microprojects. It also stimulated the development of the local construction industry through introducing competitive procurement and encouraging small-scale contracting firms. More importantly, through the use of participatory mechanisms and its demand-driven approach, significant qualitative benefits from the CDF II project increased the sense of ownership, trust and social cohesion in many communities throughout Kosovo. Cost-effectiveness comparisons showed that the costs of school rehabilitation and construction carried out under the CDF I were substantially lower (by 19 percent) than those under NGO programs; the result was even more favorable in the case of roads projects, where the average cost of microprojects was 34 percent less than those under NGO programs. That costeffectiveness analysis suggested that the CDF II Project would also be a cost-effective means of meeting the social infrastructure needs of the poor, provided that the same standards of technical and economic efficiency were maintained or improved. Costs during the CDF II proved those assumptions. The CDF has been closely monitoring the cost of microprojects, as well as the unit costs of construction and costs per beneficiary. In regard to schools, the overall trend is that actual unit costs (per square meter and per direct beneficiary) have been contained below planned costs for the years Construction costs for new construction declined from 2002 to 2006, from 386 to 174 Euros/square meter. During that same period, costs per direct beneficiary fell from 611 to 320 Euros. 33

45 For water supply projects, the overall trend is that actual unit costs (per meter and per direct beneficiary) have been contained below planned costs for During this 4-year period, actual costs of pipelines have fluctuated within the range of Euros per meter, reflecting in part, the type of water supply project involved. In fact, these costs are still below the planned unit cost of 20 Euros per meter and costs declined from 82 to 34 Euros per direct beneficiary. As cost controls are now in place, it is likely that CDF s comparative advantage in cost-effectiveness visà-vis the NGOs reported in the 2003 study has been maintained during During project implementation, the CDF carried out a simple cost-effectiveness analysis for each microproject proposal presented by the communities. The analysis was based on viable project alternatives, least-cost solutions, unit cost estimates from private construction firms, specific circumstances of the community, estimated benefits from the project, number of beneficiaries, and other relevant factors at the micro level. Because the CDF II as a whole is a non-revenue generating project, no detailed financial analysis showing the net present value and the financial rate of return was carried out. Such microprojects are of the non-revenue generating type and do not lend themselves to detailed NPV and FRR analyses. 34

46 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Names Title Unit Responsibility/ Specialty Lending Caroline Mascarell Sr Social Protection Specialist ECSHD Task Team Leader Hilarian Coddipily Social Development Economist ECSHD Consultant Colin Scott Lead Specialist MNSSD Social Dev Specialist Maria Gracheva Operations Officer ECSHD Operations Officer Maria Vannari Procurement Officer ECSPS Procurement Specialist Joseph Formoso Lead Finance Officer LOADM Lead Finance Officer Olav Christensen Financial Management Specialist Financial Management ECSPS Specialist Mark Walker Legal Counsel LEGAF Legal Counsel Sreypov Tep Program Assistant ECSHD Program Assistant Supervision/ICR Elona Gjika Financial Management Analyst Financial Management ECSPS Analyst Plamen Stoyanov Kirov Procurement Spec. ECSPS Procurement Spec. (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including travel No. of staff weeks and consultant costs) Lending FY FY Total: Supervision/ICR FY FY FY FY FY Total:

47 Annex 5. Beneficiary Survey Results (if any) Methodology. The CDF conducted three beneficiary assessments (BA). The 2005 BA was conducted from September to December It included 476 individual quantitative interviews with beneficiaries, 72 in-depth interviews with key informants, 43 in-depth interviews with nonbeneficiaries, 35 focus group discussions with beneficiaries (5-8 participants per group), and at least two day-long observations of each project. The distribution of the 476 beneficiaries was almost evenly split between men and women, and split between infrastructure and service projects in about the same proportion as the sample of 11 infrastructure projects and 10 social services projects. The sample reflects the general population in terms of employment and household income. The 2006 BA was conducted between October and December The methodology was more qualitative than quantitative. The sample included 11 infrastructure projects. The survey included 220 beneficiaries and non-beneficiaries (20 respondents per project). In-depth interviews were conducted with 5 respondents per project. Special attention was dedicated to identifying key informants from various elements of the community such as women, men, youth, senior citizens, widows, orphans, the disabled, leaders and non-beneficiaries. In turn, they were requested to suggest names and contacts of other suitable respondents. This selection method offered accuracy and an internal perspective on the beneficiary communities. The 2007 BA was conducted between April and June Its methods included in-depth individual quantitative interviews with beneficiaries, focus group discussions with beneficiaries, and direct observation of each project. The sample included 15 projects. The survey covered 300 beneficiaries and non-beneficiaries (20 respondents per project). Because the 2006 BA focused on infrastructure projects, the 2007 BA focused on social services and capacity building projects. While the assessment of social projects sought to obtain subjective/qualitative perceptions of beneficiaries, the assessment of capacity building projects sought to obtain concrete and tangible benefits of participants receiving training. The findings of all three are reported in this annex. All the various methods have provided similar results regarding the level of satisfaction with the CDF. It is clear that the quality of life has changed significantly due to CDF implemented projects. The importance of these projects is also demonstrated by the readiness of the vast majority of respondents to fund similar projects in their respective communities. Relevance of CDF community subprojects. Respondents to the BAs believed the CDF project addressed their priorities. The vast majority (90 percent) of respondents from the communities where infrastructure projects were implemented answered that the implementation of the respective project was a community priority. Around 40 percent of respondents saw the implemented projects as priority projects for their community, while 55 percent claimed that there was a big need for those projects, but they were not the main priorities. Even the beneficiaries of the projects for people with disabilities believe that infrastructure is a higher priority for the community. Rural communities identify infrastructure as the main problem (41 percent). Urban communities mention unemployment as the main problem (38 percent). Urban communities also mention water supply (25 percent), electricity (12 percent) and local infrastructure (11 percent) as major 36

48 problems. Men emphasize infrastructure and unemployment as the main problems, while women emphasize the lack of water, lack of health centers, children s education, and other social needs. Satisfaction with CDF. The strongest message of the BAs is the sense of satisfaction with the CDF, expressed both quantitatively and qualitatively. Some of the quotes speak more eloquently than any statistics. One BA respondent said, CDF has done an incredible job and we have no complaints. Another said, As far as CDF is concerned, there are no words large enough to thank them. Finally, As for CDF, what can I say more than God will reward them. The author of the BA noted, Not a single person encountered during site visits to the communities has expressed dissatisfaction with this organization. These responses came from multiple BAs. Table 3 summarizes community satisfaction with the CDF and the community investment component on a variety of measures. Table 1: Community Satisfaction with the CDF II Project Project Results percent of beneficiaries responding yes, highly satisfied, or satisfied The project responds to a community priority 90 Satisfied with the support from CDF 83 Satisfied with the work of CDF 72 Very satisfied with how CDF organized work in the community 77 Consider their cooperation with CDF very positive 83 CDF has done good quality work 84 Organization of services is good 66 Satisfied with project implementation 60 Satisfied with project monitoring by CDF 75 Would support another CDF project 98 Satisfied with CDF s selection of the contractor 76 Agreed with the selection of the implementation agency 83 Satisfied with the performance of the implementing parties 83 Satisfied with the professionalism of the implementing agency 85 Satisfied with contractor s behavior in the community 95 Satisfied with the manner in which concerns are addressed 75 Satisfied with the materials and equipment used 75 Satisfied with CPC transparency 60 Project has improved confidence and sense of worth 66 Overall project has had a positive impact 90 Services projects have had a positive impact on the community 100 Project has had a positive impact on community integration 72 Property values have increased as a result of the implemented projects 60 Sources: Beneficiary Assessment Report, Index Kosovo, 2005; 2007 Beneficiary Assessment Executive Report, UBO Consulting, June The CDF has certainly earned strong support and admiration from some individuals. But how representative are these attitudes? The quantitative data, from the surveys and interviews, provide a statistical measure of the breadth of support. Almost 98 percent of respondents have expressed various degrees of satisfaction with the support provided by CDF: 55 percent are extremely satisfied, 28 percent are satisfied, and 15 percent are somewhat satisfied. Only 2 percent are dissatisfied. Almost three fourths (72 percent) of the respondents expressed satisfaction with the work of the CDF. The respondents consider their cooperation with CDF very positive (83 percent). There is a positive correlation between the amount of community contribution and the overall level of satisfaction. 37

49 Respondents also compared their satisfaction with CDF to other development organizations. One respondent stated, In CDF, we have found the support we couldn t find in other organizations. When asked about which organization helped the community the most during the last two years, the respondents within the visited communities most often named the CDF (56 percent), as well as Municipal Authorities (30 percent), Handikos (an NGO, 18 percent), international NGOs (14 percent) and the Mother Teresa Humanitarian Society (4 percent). In a similar measure, international NGOs have succeeded in completely satisfying or satisfying 61 percent of the respondents compared to CDF s 75 percent of the community. Satisfaction with project implementation. Community members say that they were surprised by the meticulousness in project management and implementation. Results of the survey show that 84 percent thought that the CDF has done good quality work, 66 percent considered the organization of services as good, 77 percent were very satisfied with how CDF organized work in the community, and 60 percent are satisfied with the way these projects have been implemented. Three fourths of respondents in the 2006 survey were satisfied with how CDF monitored the project implementation, up 3 percent from the year before. Perhaps most telling, 98 percent of respondents answered that they would support an initiative for implementing another CDF project in their community. Satisfaction with the contractor. The community members were very satisfied with CDF s selection of the contractor (76 percent) and between 73 (2005 BA) and 83 (2006 BA) percent thought that the selection of the implementing agency was the right one. The same percentage (83 percent) was satisfied with the quality of performance by the implementing parties. Contractor behavior and professionalism were two key criteria in community satisfaction with the contractor. In two BAs, more than 95 percent of respondents claimed that they were satisfied with the contractor s behavior in relation to their community. Respondents are satisfied with the manner concerns are addressed (75 percent) and the level of professionalism on the part of implementing organization (85 percent). About 75 percent of respondents were happy about the materials and the equipment used for completing the work. The only reservation was that some felt contractors had a tendency to use inadequate materials and leave small unfinished details. Satisfaction with training. Recipients of training have expressed high levels of satisfaction. All beneficiaries interviewed during the assessment are satisfied with all aspects of the training. Aside from the content treated by the trainers, participants were also quite satisfied with the logistical aspects of these exercises. Participants were satisfied with the quality of the training. Nonetheless, there was some sentiment that the training, although a good start, were insufficient. A common attitude was that the training is the tip of the iceberg in comparison to the need for training in the field of European integration. One participant stated that The few training sessions that we had (4 or 5 modules) were just an isolated spark. Now, they need additional training on institutional capacity, fundraising, working with donors, monitoring, evaluation, reporting, etc. Beneficiaries suggest longer local government-specific training that would provide them with necessary skills. Exercises and training were perceived by participants more as a presentation on the changes introduced, than actual training, because during these exercises participants were exposed to information rather than skill-building. Exercises and training were perceived by participants more as a benchmark presentation on best practices than actual training because during these exercises participants were exposed to information rather than skillbuilding. The level of capacity building carried out through this project is not certain. The participants believe that the training will enhance their performance at work and are convinced it 38

50 will result in better evaluation of their work in the future. Time will tell. Although short term benefits for participants are evident, the long term capacities have not been affected a great deal. The reason is not the manner in which the training were conducted, but mainly due to the changing nature of procedures of the subject. Satisfaction with transparency. The majority of respondents are satisfied with CDF s transparency regarding project implementation expenditures: 32 percent claimed that they were very satisfied while 25 percent were somewhat satisfied. The percentage of those that are dissatisfied with CDF s transparency is very small. The same is true of satisfaction with the transparency of the Village/Community Committee: 60 percent claimed that they were satisfied. Satisfaction with sustainability. Beneficiaries were a little less satisfied with the sustainability/maintenance issue of social services projects, in comparison to what was the case with infrastructure projects: 36 percent were very satisfied, while 31 percent were somewhat satisfied with the solution of the project sustainability issue. The relatively high level of dissatisfaction with the sustainability issue of these projects has to do with their nature. Social projects are often linked with a set time period, deal with a narrow social category or a very specific activity, and are not projects that have physical results or that have a large number of direct beneficiaries. Satisfaction with project impacts. There was unanimous agreement from BA respondents that the services projects have had a positive impact on local communities. The level of satisfaction is very high with the overall project impact on the lives of interviewed respondents with over 90 percent expressing positive remarks: 51 percent were very happy with the impact of these projects on the community, while 33 percent were somewhat satisfied. Only 4 percent of respondents claimed they were unhappy with the impact these projects had on their community. Impacts of infrastructure. Almost three fourths (72 percent) of respondents emphasize the improvement of the living environment. School reconstruction in one village had a direct impact in improving the quality of the classes, consistency of the education process and even the students health. Approximately half (48 percent) of respondents have claimed that implementation of these projects has resulted in temporary employment. They believed that infrastructure projects have prevented the emigration of the population from villages to the cities. More than half (56 percent) of the respondents claimed that as a result of the implementation of these projects, these was an increase in undertaking these kinds of initiatives. Psychological impacts. Social programs have been very effective in restoring self-confidence in certain vulnerable groups in Kosovo, in particular, the disabled, the youth, the elderly, and mixed ethnic communities. Two thirds of (66 percent) of surveyed community members claim that the implementation of the projects has led to a confidence boost and a sense of worth within the community. The projects implementation in rural areas has helped in modernizing life there. With the improvement of living standards, the citizens feel they are involved in the trends of contemporary/modern life. It has provided for a sense of financial security. It has also increased the interaction of women. For example, service projects for women in one community where 100 men were lost in a single day of the war provided a forum for alleviating their emotional suffering and as awareness-raising mean for realizing that life must go on. More young people now consider themselves capable of these actions and feel they ve gained important experience. Projects working with the disabled brought great satisfaction to parents, seeing someone taking care of their disabled children. According to the respondents claims, these children need to get out of the house from time to time, change the environment and get involved in any activity. 39

51 Previously there had been a lack of respect for people with disabilities. They were often teased and mocked. Besides the increase of the respect that others had for the people with disabilities, the disabled have also increased their self-belief and believing that they are very valuable members of society. Half of the respondents claimed that the implementation of these projects has also had a positive influence in cultural development within the community. In the communities where schools were built, not only is there an improvement in working conditions within the school, but also an increase in literacy, especially among girls. Integration. Close to two-thirds of the BA respondents stated that implementation of these projects had a positive effect on integration. Almost three fourths (72 percent) of respondents emphasize this aspect of the change in their community s life. One project targeted both Serbian youth and Albanians. The project gave attention to multi-ethnicity of the northern part of Kosovo, and to inter-ethnic youth cooperation, which for some time had been nonexistent. As the 2007 BA noted, The CDF, the Kosovo Relief Committee and the youth activists have shown to both Albanian and Kosovar politicians that cooperation is possible and that only through inclusive dialogue and decision-making, problems can be resolved successfully. 40

52 Annex 6. Stakeholder Workshop Report and Results (if any) None. 41

53 Annex 7. CDF Monitoring and Evaluation Framework Table 1 below provides additional information describing each method used in the CDF monitoring and evaluation framework including its frequency and the responsible party. Table 1: Community Development Fund II Monitoring and Evaluation (M&E) Methods Utilized Type of M&E Method Description Frequency Who Carries it Out MIS/Database tracking continuous Technical Assessment of Infrastructure Programs Beneficiary Assessment (for both infrastructure and social service programs) Project Assessment from Community Social Services Training Evaluation Environmental Assessment for infrastructure projects Financial Audits The MIS compiles data from program tracking forms such as the Community Project Pre- Appraisal form, General Community Meeting Minutes Form, Community Project Application Form, Community Project Appraisal Form, as well as from technical and financial tracking forms. The TA provides an external assessment of a sample of infrastructure projects technical quality, the implementation process (promotion process, selection process, tendering, handover, etc), the projects sustainability and recommendations for improvement. The BA examines satisfaction levels of community members, in terms of project selection and implementation process as well as project quality and impact. Includes direct beneficiaries, key informants and regular community members. A shorter version of the beneficiary assessment, it is distributed by CPC members to an average of 25 community members per community. This survey requests community feedback on satisfaction levels with the implementation process and has some information on the perceived impact of the project. If an NGO has incorporated training into their program design, they typically carry out a preand post-training test. Ensures compliance with local environmental rules and regulations, as well as with environmental policy of the World Bank. The EA is carried out at different stages in the project cycle, including a preliminary assessment, final appraisal and implementation Ensures compliance with local financial rules and regulations. Annually, for annual report Annually 3 months after an infrastructure project is completed, data is compiled annually for annual report As applicable Currently being carried out for the first time Annually Promotion, technical and social services team responsible for distributing and collecting data from forms External Consultant External Consultant CDF Staff Distribute Form CPC members carry out NGOs External Consultant External Consultant Operation and Maintenance Monitoring The O&M provides an external assessment of all infrastructure projects on operation and maintenance carried out, either from community or utility company. Once per cycle External Consultant 42

54 Annex 8. Summary of Borrower's ICR and/or Comments on Draft ICR The following comments were submitted by the Acting Deputy Special Representative of the Secretary-General on December 7,

55 44