The World Bank Burkina Faso - Bagre Growth Pole Project (P119662)

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized The World Bank RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF BURKINA FASO - BAGRE GROWTH POLE PROJECT APPROVED ON JUNE 21, 2011 TO MINISTRY OF ECONOMY, FINANCE AND DEVELOPMENT REPORT NO.: RES28884 Public Disclosure Authorized TRADE & COMPETITIVENESS AFRICA Public Disclosure Authorized Regional Vice President: Country Director: Senior Global Practice Director: Practice Manager/Manager: Task Team Leader: Makhtar Diop Pierre Frank Laporte Anabel Gonzalez Rashmi Shankar Martin Maxwell Norman, Aguiratou Savadogo- Tinto, Yoro Sidibe

2 ABBREVIATIONS AND ACRONYMS BDA ESMF Ha ISR MEBF PAD PAP PDO PIE SME SONABEL Bagre Development Authority Environmental social management framework hectares Interim Supervisory Report Maison d Entreprise du Burkina Faso Project Appraisal Document Project-affected-persons Project Development Objective Project Implementing Entity Small and Medium-sized enterprises Société nationale d'électricité du Burkina Faso

3 Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID P Original EA Category Full Assessment (A) Approval Date 21-Jun-2011 Financing Instrument Investment Project Financing Current EA Category Full Assessment (A) Current Closing Date 30-Nov-2018 Organizations Borrower Ministry of Economy, Finance and Development Responsible Agency BagrePole,Maison d'entreprise du Burkina Faso Project Development Objective (PDO) Original PDO The Project Development Objective (PDO) is to contribute to increased economic activity in the Project Area, resulting in an increase in private investment, employment generation, and agricultural production. Summary Status of Financing Ln/Cr/Tf Approval Signing Effectiveness Closing Net Commitment Disbursed Undisbursed IDA-Q Oct Oct Oct Nov Jun Jul Nov Nov Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No

4 A. Summary The purpose of this level two restructuring is to (i) adjust the results framework; (ii) apply changes to two components: (a) adjust the size of area targeted under Component 2, and (b) add unconditional cash transfers to the Project activities related to matching grants under Component 3; (iv) modify two legal covenants: (a) land rights review by addressing any lingering grievances through community projects and extending the deadline for compliance; (b) dam safety to extend the date for fulfilling this covenant and to allow Bagrépôle, the implementing agency, to carry out certain activities originally assigned to SONABEL (the State-owned company in charge of electricity in Burkina Faso). This is the second Level 2 restructuring of the Project, the first having been processed in April Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Status (Suggest we include brief information on progress of the various components you could mine text from the last ISR - and why the results framework will be changed. 1. The Project is currently at 73% disbursement. Cost overruns for the construction of irrigation canals from the original project meant that the electric power and roads programmed under the Project, but which are also necessary in the medium term to attract private investment, were not able to be constructed. Hence, an additional financing is currently being prepared for the complementary electric power and roads. 2. In response to two fatal accidents of workers at the irrigation sites on April 6 and June 3, 2017, the Project team conducted a worker safety and health audit in July and August of That study has been completed, and the Project team is working with the PIE to ensure that the recommendations of the audit are carried out with all possible speed to avoid further accidents. A summary of recommendations to enhance health and safety measures has been prepared and is being made legally binding on the Recipient by cross reference in the legal agreement. 3. Progress with specific components: Component 1: Institutional activities under Component one are progressing well, with Bagrepole having (i) made significant progress on the Action Plan for complying with legal covenants, especially in contracting a firm to perform the dam safety study and completing community projects for the Legacy PAPs, (ii) begun a close engagement with DGCOOP on the additional financing and a detailed development of AF activities, and (iii) hired key personnel to assist with project management such as an environmental specialist to work with the correct implementation of the environmental social management framework (ESMF). Component 2: Quick progress has been made with constructing the primary canals in the Project area. A water test in which water is opened for the first time from the existing canals to the canals constructed under the current Project was successfully launched on October 27, 2017, and the construction along the full 19 km length

5 of canals has been completed with significant advances having been made on the secondary and tertiary canal networks. Component 3: Since April 2017, the Project has been responsible for attracting $1.53 million of new investments for a total of US$24.7 million, for creating more than 1300 new jobs (total to date 25,020), and for fostering the establishment of 9 new enterprises in the Project area for the agricultural value chain (a total of 89). The design for a parallel cash transfers program has been finalized and is currently going through a stakeholder consultation. An impact evaluation will be conducted after a certain time has transpired of implementing the cash transfer program. B. Rationale for Restructuring: The Project team became aware late in 2016 that several legal covenants had not yet been complied with in the following areas: 1. Land rights review (Financing Agreement, Schedule 2, Project Execution, Section 1.E.4): The original legal covenant states that at the latest December 31, 2012, the Project was to have identified individuals displaced or adversely affected by the construction of the Bagre Dam (1992-3) and irrigation schemes prior to the Project (2004-7), neither of which were World Bank Projects. The legal covenant further states to confirm the implementation of compensation (including land) to these individuals and that it should be determined whether they have any outstanding grievances; that these grievances should be resolved; and that the adequacy of land tenure arrangements should be evaluated. The referred covenant was not required under OP 4.12, as the displacement by the dam was not caused by a Bank financed project and the dam construction does not meet the criteria in paragraph 4 of OP Rather, it appears that the covenant was prompted by concerns that there may be continuing grievances associated with dam-related resettlement that could pose a social risk to the Project going forward. Implementing what the Project s PAD envisaged (reflected in the above-mentioned covenant) has proved to be much more complex than originally anticipated given the time that transpired between the original resettlement and the design of the Project (e.g., it was not possible to identify exactly who was resettled in the 1990s due to the construction of the dam and who moved in and out of the area in the following decades). Indeed, after a comprehensive search of both electronic and physical files, the absence of any of the original files on individuals who may have been resettled from the previous dam and canal construction has rendered such individual compensation inoperable. Hence, based on the audit report of 2014, and lack of information on individuals who had been resettled, the Bank safeguard specialists considered that it was more appropriate to address any lingering grievances associated with the dam (as well as any other grievances in the area) through the implementation of community projects on an on-demand basis and financed by the project, an approach which was started immediately and is currently on-going. An Action Plan agreed with the Recipient refers to these community projects and is made legally binding by cross reference in the legal agreement. 2. Dam safety study (Financing Agreement, Schedule 2, Project Execution, Section 1.F.1 (a)): the original legal covenant stipulates that a dam safety study be completed at the latest by September 30, In addition, the legal covenant stipulated several key activities that should be implemented as a result of the recommendations of the dam safety study, such as the updating of an operations and maintenance plan, an emergency preparedness plan, and providing training for the members of a steering committee. However, the report was never completed, and it was not until mid-2017 that the study was commissioned to a consulting company

6 which is currently in the process of completing it. The report is expected to be completed by November 30, SONABEL inspections (Financing Agreement, Schedule 2, Project Execution, Section 1.F.1 (b)): the original legal covenant also stipulates that at intervals of not less than once every two years during Project implementation, dam safety inspections should be conducted by independent experts. This function was to be performed by the electric utility in Burkina Faso, the Société Nationale d'electricité du Burkina Faso (SONABEL), however the organization has no funds for performing this function, hence it has been determined that Bagrépôle itself will contract independent experts to conduct the inspections with Project funds (the relevant legal covenant and the Project activities are being amended accordingly to provide for this). This will allow Bagrépôle to carry out the first several annual inspections while waiting for SONABEL to receive a budget for performing the inspections every two years. Bargepole s assumption of Project responsibilities. Following the successful transformation of the original Project Implementing Entity, Bagre Development Authority ( BDA ) into Bagrépôle, language within the original Financing Agreement will need to be updated. Additionally, financial management assessments will be carried out on Bargepole and an update to the original financial management assessment carried out for the other Project s implementing entity, Maison d Entreprise (MEBF). C. In addition to the above-mentioned non-compliance with the original legal covenants, there are two additional areas requiring restructuring at this time: 4. Irrigation Infrastructure (Financing Agreement, Schedule 1, Project Description, B, Section (1)): Originally, the project sought to design, construct, and equip an ambitious 15,000 hectares of primary canals. Due to the cost overruns, the Project now seeks to concentrate on design, construction and equipping of primary irrigation infrastructure to enable cultivation of around 5,500 ha of the Rive Gauche and Rive Droite. 5. Matching Grants (Financing Agreement, Schedule 1, Project Description, Part C, Section (1)): This legal covenant describes a matching grants program to be financed under the original project, with contributions by both the Project and the beneficiaries. The Project Appraisal Document (PAD) establishes an 80% contribution by the Project and 20% by the beneficiary. However, with funds from a multi-donor trust fund from the Jobs Group, a parallel cash transfers program was designed that has the potential to create more jobs than the matching grants program has previously been able to do. This legal covenant will be changed to add a more flexible unconditional cash transfers program to the Project without any contribution requirements. A basic financial management assessment of each of the financial institutions used to disburse Project funds to beneficiaries will be carried out before the matching grants and cash transfers activities are initiated in order to ensure the capacity of each financial institution for handling Project funds. An agreement will also be signed between the implementing agency, the Maison d Entreprise (MEBF) and each financial institution to ensure compliance with World Bank anti-corruption requirements. The financial management assessment of the financial institutions will be completed and the anti-corruption agreements between the MEBF and financial institutions signed by November 30, Given the changes above and developments in the Project, the following changes will be made to the results framework, the PDO indicators:

7 Direct project beneficiaries and the corresponding Percentage female beneficiaries will be deleted because of the mix of beneficiary types associations, individuals, SMEs, etc. and that there is duplication because the beneficiaries are already counted under other indicators. The Number of Jobs Created will henceforth be broken down by percentage of females and percentage of youth employment, given that that the implementing agency of the matching grants, the MEBF, is able to measure not only female employment but also youth employment. 7. Given the changes above and developments in the Project, the following changes will be made to the results framework, the intermediate outcome indicators: Number of agribusiness firms having signed an agreement committing to invest in an area of at least 100 ha is being changed to 5 ha, as most of the demand for spaces in the Bagre area is for spaces under 80 ha, and because the Chenale Nord development with most of the larger plots will no longer take place under the current project. The end target value for Hectares of land allocated with land title or under a lease is being decreased from 5000 ha to 100 ha because of the delays with the irrigation canal construction, and therefore a lower quantity of irrigated land actually available by Project end. Number of proposals financed by the matching grants fund and Beneficiaries satisfied with the matching grants program both add on cash transfers to reflect the newly-designed impact evaluation comparing matching grants and cash transfers. Operational water user associations created and/or strengthened is a new indicator needed to reflect the need for such an association to properly allocate irrigated land to the project-affected persons in the Project area. II. DESCRIPTION OF PROPOSED CHANGES

8 A. Proposed changes According to the rational above, the following are the proposed changes to the Project as a result of this Level II Restructuring: 1. Change in Results Framework: As per the rationale above, the results framework will be changed in the following ways: (a) The number of jobs created will be disaggregated by women and youth (b) PDO indicator direct project beneficiaries, and its disaggregation for gender will be deleted. (c) The end target will be changed for intermediate outcome indicator Hectares of land allocated with land title or under a lease. (d) Cash transfers will be added to the indicators on matching grants. (e) The new intermediate outcome indicator Operational water user associations will be added. 2. Change in components and cost: (a) Component 2 (Development of Critical Infrastructure): Modify the size of total area provided with primary irrigation infrastructure to reflect new targeted areas. (b) Component 3 (Development of Critical Services and direct support to smallholders and SMEs), Matching Grants (Financing Agreement, Schedule 1, Project Description, Part C, Section (1)): Amend the description to add unconditional cash transfers (with no beneficiary matching) as an activity and eligible expenditure of the Project. 3. Change in Legal Covenants: (a) Land rights review (Financing Agreement, Schedule 2, Project Execution, Section 1.E.4): Modify the text to address any grievances related to construction of the Bagré Dam or of BagréPôle irrigation schemes through community projects (schools, clinics, livestock markets, and the like), and to extend the deadline for compliance to November 30, (b) Dam safety study (Financing Agreement, Schedule 2, Project Execution, Section 1.F.1 (a)): Extend the deadline for compliance to November 30, (c) Dam Safety inspections (Financing Agreement, Schedule 2, Project Execution, Section 1.F.1L: Modify the text to remove the stipulation that NEC (SONABEL) shall carry out Bagré Dam safety inspections, and instead allow Bagrépôle to hire independent experts directly with project funds in order to fulfill the stipulations for this covenant (amend the Project description to include this activity). 4. Change in Project Implementing Entity: Replace all references to Bagre Development Authority ( BDA ) to read Bagrépôle thus reflecting the 2014 restructuring of BDA into Bagrépôle. During successive missions, including a very thorough stocktaking for the Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. III. SUMMARY OF CHANGES Changed Change in Results Framework Not Changed

9 PDO_IND_TABLE The World Bank Change in Legal Covenants Change in Implementing Agency Change in DDO Status Change in Project's Development Objectives Change in Components and Cost Change in Loan Closing Date(s) Cancellations Proposed Reallocation between Disbursement Categories Change in Disbursements Arrangements Change in Disbursement Estimates Change in Systematic Operations Risk-Rating Tool (SORT) Change in Safeguard Policies Triggered Change of EA category Change in Institutional Arrangements Change in Financial Management Change in Procurement Change in Implementation Schedule Other Change(s) Change in Economic and Financial Analysis Change in Technical Analysis Change in Social Analysis Change in Environmental Analysis IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_RESULTS_TABLE RESULTS FRAMEWORK Project Development Objective Indicators Value of investment flows Unit of Measure: Amount(USD)

10 Value Revised Number of jobs created Unit of Measure: Number Value Revised of which percentage female Unit of Measure: Percentage Supplement Value New of which percentage youth Unit of Measure: Percentage Supplement Value New Direct project beneficiaries Unit of Measure: Number Value Marked for Deletion Date 27-May Jun Nov-2018 Female beneficiaries Unit of Measure: Percentage Supplement

11 Value Marked for Deletion Volume of cereals and horticulture production (rice, maize, sorghum, millet beans, fruits & vegetables, etc.) Unit of Measure: Metric tons/year Value Revised Intermediate Indicators IO_IND_TABLE Number of agribusiness firms having signed an agreement committing to invest in an area of at least 5ha Unit of Measure: Number Value Revised Number of enterprises established Unit of Measure: Number Value Revised Number of private service providers operating in Bagre Unit of Measure: Number Value Revised Hectares of land allocated with land title or under a lease

12 Unit of Measure: Hectare(Ha) Value Revised Date 31-May Dec Nov-2018 Area provided with new/improved irrigation or drainage services Unit of Measure: Hectare(Ha) Indicator Type: Corporate Value Revised Date 31-May Dec Nov-2018 Area of irrigated land in production with Project support Unit of Measure: Hectare(Ha) Value Revised Date 31-May Dec Nov-2018 Number of proposals financed by the matching grants and cash transfers fund Unit of Measure: Number Value Revised Beneficiaries satisfied with the matching grants and cash transfers program Unit of Measure: Percentage Value Revised Operational water user associations created and/or strengthened Unit of Measure: Number

13 OPS_DETAILEDCHANGES_LEGCOV_TABLE The World Bank Value New Date 23-Jun Dec Nov-2018 LEGAL COVENANTS Loan/Credit/TF Description Status Action Finance Agreement :Section 4.01 Description :Any party to Subsidiary Agreement, Safeguard Implementation Agreement or Bagré Dam Management Agreement has failed to perform any of its obligations under the relevant agreement. Frequency :Yearly Partially complied with Finance Agreement :Section 5.01 (a), Schedule 2, Section I.A.2 Description :The Recipient has adopted the Project Implementation Manual. Due Date :01- Dec-2011 Finance Agreement :Section 5.01 (b); Schedule 2, Sections I.B and I.E Description :Subsidiary Agreements between Recipient and MEBF and MOB, and Safeguard Implementation Agreement among Recipient, MEBF and MOB havebeen executed on behalf of the parties to relevant agreement. Due Date :31-Oct-2011 Finance Agreement :Section 5.01 (c) Description :Bagré Dam Management Agreement between Recipient and SONABEL has been executed on behalf of the parties to the agreement. Due Date :01-Dec-2011

14 Finance Agreement :Section 5.01 (d) Description :MOB has Project Management team with general man., production man., financial man., invest. prom. man., operations man., procurement spec., M&E expert, env. spec. and soc. and land spec. Due Date :31-Oct-2011 Finance Agreement :Section 5.01 (e) Description :MEBF has recruited an additional procurement specialist. Due Date :31-Oct-2011 After delay complied with Finance Agreement :Schedule 2, Section I.A.1 Description :The Recipient shall maintain the Steering Committee throughout the Project, to provide strategic directions for and policy guidancefor the Project; the SC shall meet once every semester. Frequency :Yearly Finance Agreement :Schedule 2, Section I.A.3 Description :The Recipient shall restructure MOB based on terms of reference acceptable to the Association. Due Date :31-May-2012 Finance Agreement :Schedule 2, Section I.D; MEBF/MOB PA, Schedule, Section I.C Description :Recipient shall prepare prior to each calendar semester a Semi-annual Work Program of activities for inclusion in the Project during the following semester. Frequency :Yearly Finance Agreement :Schedule 2, Section I.E; MEBF/MOB PA, Schedule, Section I.D Description :Recipient shall ensure that no activities in Semi-annual Work Program requiring EA, EMP or RAP be implem. unless requ. EA/EM has been prep., discl. and appr., and RAP measures taken. Frequency :Quarterly Finance Agreement :Schedule 2, Section I.E Description :Recipient shall carry out study to ident. persons displ. by dam and irrigation, confirm compensat. provided to them, det. if outstanding Expected soon

15 grievances, recom. measures and ensure land tenure arrangs Due Date :31-Dec-2012 Finance Agreement :Schedule 2, Section I.F Description :Recipient shall carry out inundat. risks study and related pot. uncontr. rel. of water from dam, prepare OMP, adopt OMP and EPP, estab. train and EC, ensure safety inspection by SONABEL. Due Date :30- Sep-2012 Proposed Revised Due Date: November 30, 2018 CP Partially complied with Revised Finance Agreement :MEBF PA, Schedule, Section I.C Description :MEBF shall make Matching Grants to Beneficiaries for Sub-projects on standard terms and conditions, and in accordance with key Project-specific criteria and procedures. Frequency :Quarterly MEBF shall make Matching Grants and cash transfers to Beneficiaries for Sub-projects on standard terms and conditions, and in accordance with key Project-specific criteria and procedures. Revised Proposed Expected soon Finance Agreement :MOB PA, Schedule, Section I.A Description :MOB shall employ private operators for the following activities: planning, design, construction, management, maintenance and critical services. Due Date :30-Jun-2012 Partially complied with Note to Task Teams: End of system generated content, document is editable from here.