IRAQ: SECOND EXPENDITURE RATIONALIZATION, ENERGY EFFICIENCY AND STATE-OWNED ENTERPRISE GOVERNANCE PROGRAMMATIC DPF (P161

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1 Public Disclosure Authorized IRAQ: SECOND EXPENDITURE RATIONALIZATION, ENERGY EFFICIENCY AND STATE-OWNED ENTERPRISE MIDDLE EAST AND NORTH AFRICA Iraq Macroeconomics, Trade and Investment Global Practice IBRD/IDA Development Policy Lending FY 2017 Seq No: 2 ARCHIVED on 30-Apr-2018 ISR31706 Implementing Agencies: Prime Minister's Office, Ministry of Finance Public Disclosure Authorized Key Dates Key Project Dates Bank Approval Date:20-Dec-2016 Planned Mid Term Review Date:15-Mar-2017 Original Closing Date:31-Dec-2017 Effectiveness Date:22-Dec-2016 Actual Mid-Term Review Date:05-Jun-2017 Revised Closing Date:31-Dec-2017 Public Disclosure Authorized Program Development Objectives Program Development Objective (from Program Document) The proposed operation aims to achieve economic stabilization and lay the ground for structural reforms around three pillars, whichform the operation s Program Development Objectives (PDOs): Improve (1) expenditure rationalization; (2) energy efficiency; and (3)the transparency and governance of state-owned enterprises. PHRPDODEL Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Public Disclosure Authorized Overall Risk Rating High High Implementation Status and Key Decisions Implementation of the results framework is moderately satisfactory as the Government of Iraq is making sufficient progress to reach targets of seven out of 10 results indicators by end With the assistance of the World Bank, the Government should take corrective actions to ensure the achievement of the expected results related to the reform of the Social Insurance Law, the increase of gas used in electricity production and the implementation of the roadmap of the SOE Charter of Good Governance. Risks 4/30/2018 Page 1 of 6

2 Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance High High High Macroeconomic High High High Sector Strategies and Policies Substantial High High Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Sustainability High High High Fiduciary High High High Environment and Social Substantial Substantial Substantial Stakeholders Substantial Substantial Substantial Other -- High Substantial Overall High High High Results Results Indicators Strengthened payroll expenditure control as measured by the percentage of verified central government employees whose compensation and daily attendance is tracked electronically (minimum of the two va (Percentage, Custom) Value Date 31-Dec May Feb Dec-2018 Number of government spending units whose detailed payroll data is captured monthly in Central Payroll Database. (Percentage, Custom Supplement) Value /30/2018 Page 2 of 6

3 Improved selection and assessment of public investment projects as measured by the percentage of capital projects that exceed ID100,000 billion (about US$85 million) for which a feasibility study with (Percentage, Custom) Value Date 31-Dec May Dec Dec-2018 Share of the domestic debt in total public debt (Percentage, Custom) Value Date 31-Dec Dec Dec Dec-2018 Comments The indicator measuring the percentage of domestic debt in total debt has been modified to track the share of market-based debt in total domestic debt. The change was reflected to align the indicator to the policy commitment of the GoI to reduce the amount of domestic debt that is automatically rolled over and gradually increase reliance of debt instruments issued on the domestic debt market through monthly auctions, which follows a pre-announced calendar, consistent with the annual borrowing plan. Share of total domestic debt issued using market instruments on total domestic annual borrowing. (Percentage, Custom Supplement) Value Improved social insurance efficiency, coverage, and sustainability as measured by the expected actuarial deficit period (years left till going into deficit from 2015) (Years, Custom) Value Date 31-Dec May May Dec /30/2018 Page 3 of 6

4 Improved social safety net efficiency as measured by: (1) coverage ratio of the poor (Percentage, Custom) Value Date 31-Dec Dec-2018 Reduction in gas flared as measured by (1) the expansion in Iraq s gas processing capacity (Cubic meters/year, Custom) Value 6, , , , The amount of locally produced gas-to-power allocation (Cubic meters/year, Custom Breakdown) Value 6, , , Improve electricity generation efficiency, cost, and environmental impact through increased share of gas used in the power generation mix. (Percentage, Custom) Value /30/2018 Page 4 of 6

5 Reduced electricity subsidies, as measured by improved revenue collection as a percentage of generation (Percentage, Custom) Value Improved collection from non-government sources (Amount(USD), Custom Supplement) Value 317,258, ,458, ,163,282, Improved SOEs transparency and governance as measured by the ISAR Benchmark of Corporate Governance Disclosures to measure corporate governance disclosure changes at a regulatory level as well as the (Percentage, Custom) Value Date 31-Dec May Dec Dec-2018 Capping of state-owned banks exposure to non-financial SOEs. (Amount(USD), Custom) Value 8,291,032, ,291,032, ,291,032, Overall Comments 4/30/2018 Page 5 of 6

6 Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P IBRD Closed USD 1, , , % Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P IBRD Closed 20-Dec Dec Dec Dec Dec-2017 Tranches Restructuring History There has been no restructuring to date. Related Operations P IRAQ: Third Expenditure Rationalization Energy Eff. and SOE Governance 4/30/2018 Page 6 of 6