Completion Report Project Numbers: 31351-013 and 31351-014 Loan Numbers: 1949 and 2809 June 2016 Lao People’s Democratic Republic: Smallholder Development Project This document is being disclosed to the public in accordance with ADB’s Public Communications Policy 2011. CURRENCY EQUIVALENTS Currency Unit – kip (KN) At Appraisal At Project Completion Loan 1949-LAO(SF) (31 October 2002) (18 September 2012) KN1.00 = $0.0000922 $0.0001251 $1.00 = KN10,850 KN7,989 Loan 2809-LAO(SF) (28 September 2011) (26 October 2015) KN1.00 = $0.000125 $0.000123 $1.00 = KN8,011 KN8,128 ABBREVIATIONS ADB – Asian Development Bank AMIS – agriculture market information system APB – Agriculture Promotion Bank ATEC – Agriculture Technical Extension Center DAFO – district agriculture and forestry office DICO – district industry and commerce office DMF – design and monitoring framework DPO – district project office EIRR – economic internal rate of return FPMG – farmer production and marketing group GAP – gender action plan GMS – Greater Mekong Subregion ILO – International Labour Organization LCG – Lao Consulting Group MAF – Ministry of Agriculture and Forestry MOIC – Ministry of Industry and Commerce MTR – midterm review NAFES – National Agriculture and Forestry Extension Service NPSC – National Project Steering Committee ONPD – Office of the National Project Director PAFO – provincial agriculture and forestry office PCR – project completion report PICO – provincial industry and commerce office PPMS – project performance monitoring system PPO – provincial project office SOE – statement of expenditure TA – technical assistance WEIGHTS AND MEASURES ha – hectare km – kilometer m2 – square meter t – ton NOTE (i) The fiscal year (FY) of the Government of the Lao People’s Democratic Republic ends on 30 September. (ii) In this report, "$" refers to US dollars. Vice-President S. Groff, Operation 2 Director General J. Nugent, Southeast Asia Department (SERD) Director S. Nicoll, Lao People’s Democratic Republic Resident Mission, SERD Team leader P. Xayyavong, Project Officer, SERD Team members C. Bounnad, Associate Project Analyst, SERD P. Louangraj, Senior Economics Officer, SERD S. Phanouvong, Senior Project Officer, SERD P. Phanvongsa, Project Analyst, SERD T. Saphakdy, Social and Development Officer (Gender), SERD S. Schipani, Senior Portfolio Management Specialist, SERD In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. CONTENTS Page BASIC DATA i I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 1 A. Relevance of Design and Formulation 1 B. Project Outputs 3 C. Project Costs 5 D. Disbursements 6 E. Project Schedule 6 F. Implementation Arrangements 7 G. Conditions and Covenants 7 H. Related Technical Assistance 8 I. Consultant Recruitment and Procurement 8 J. Performance of Consultants, Contractors, and Suppliers 9 K. Performance of the Borrower and the Executing Agency 9 L. Performance of the Asian Development Bank 9 III. EVALUATION OF PERFORMANCE 10 A. Relevance 10 B. Effectiveness in Achieving Outcome 10 C. Efficiency in Achieving Outcome and Outputs 11 D. Preliminary Assessment of Sustainability 11 E. Impact 12 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13 A. Overall Assessment 13 B. Lessons 13 C. Recommendations 14 APPENDIXES 1. Project Design and Monitoring Framework 15 2. Original Project Loan 1949-LAO(SF): Overview of Implementation and Achievements 19 3. Additional Financing Loan 2809-LAO(SF): Overview of Implementation and Achievements 28 4. Project Performance Assessment: Summary of Major Issues 37 5. Project Implementation Arrangements 41 6. Compliance with Loan Covenants 45 7. Economic Analysis 56 8. Summary of Gender Equality Results and Achievements 63 9. Calculation of Overall Project Rating 80 10. Contribution to the ADB Results Framework 81 BASIC DATA Loan 1949-LAO(SF) A. Loan Identification 1. Country Lao People’s Democratic Republic 2. Loan Number 1949-LAO(SF) 3. Project Title Smallholder Development Project 4. Borrower Government of the Lao People’s Democratic Republic 5. Executing Agency Ministry of Agriculture and Forestry 6. Amount of Loan SDR 9,092,000 ($12,000,000 equivalent) 7. Project Completion Report Number PCR:LAO 1560 B. Loan Data 1. Appraisal – Date Started 6 July 2002 – Date Completed 19 July 2002 2. Loan Negotiations – Date Started 31 October 2002 – Date Completed 1 November 2002 3. Date of Board Approval 28 November 2002 4. Date of Loan Agreement 7 February 2003 5. Date of Loan Effectiveness – In Loan Agreement 8 May 2003 – Actual 18 June 2003 – Number of Extensions 0 6. Closing Date – In Loan Agreement 31 October 2009 – Actual 18 September 2012 – Number of Extensions 3 7. Terms of Loan – Interest Rate 1% during 2003–2010, 1.5% in 2011 and thereafter – Maturity (number of years) 32 – Grace Period (number of years) 8 8. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 4 September 2003 11 July 2012 106.29 months Effective Date Original Closing Date Time Interval 18 June 2003 31 October 2009 76.51 months ii b. Amount (SDR) Category Original Allocation Last Amount Undisbursed Revised Disbursed Balancea Allocation 01 Civil Works 3,933,000 4,337,200 4,285,733 51,467 02 Equipment 668,000 487,916 477,191 10,725 03 Vehicle 245,000 263,404 263,404 0 04 Materials 135,000 265,559 263,853 1,706 05 Training and Fellowship 1,338,000 627,674 625,886 1,788 06 Consulting Services 970,000 1,524,872 1,523,295 1,577 07 Incremental Operational Cost 392,000 843,673 842,720 953 08 O&M 259,000 327,576 326,341 1,235 09 Interest Charge 327,000 327,000 295,686 31,314 10 Unallocated 825,000 87,126 0 87,126 99 Imprest Account 0 0 (418) 418 Total (SDR) 9,092,000 9,902,000 8,903,691 188,309 Total ($ equivalent) 12,000,000 13,968,287 13,678,235 290,052 ( ) = negative, O&M = operation and maintenance, SDR = special drawing rights. a cancelled on 18 September 2012. 9. Local Costs (financed by the Asian Development Bank) - Amount ($) 5.5 million - Percent of Local Costs 57% - Percent of Total Cost 40% C. Project Data 1. Project Cost ($ million) Cost Appraisal Estimate Actual Foreign Exchange Cost 6.50 8.19 Local Currency Cost 8.73 8.79 Total 15.23 16.98 2. Financing Plan ($ million}) Cost Appraisal Estimate Actual Implementation Costs Borrower Financed 3.23 3.30 ADB Financed 12.00 13.38 Total 15.23 16.68 IDI Costs Borrower Financed 0 0 ADB Financed 0.42 0.30 Other External Financing 0 0 Total 15.65 16.98 ADB = Asian Development Bank, IDI = interest during implementation. iii 3. Cost Breakdown by Project Component ($ million}) Component Appraisal Estimate Actual A. Base Cost 1. Farmer Support Services 4.60 4.87 2. Agribusiness and Marketing Development 1.38 1.87 3. Rural Infrastructure 5.26 5.58 4. Project Management 2.24 4.36 Subtotal (A) 13.48 16.68 B. Contingencies Physical Contingencies 0.61 0 Price Contingencies 0.73 0 Subtotal (B) 1.34 0 Total Project Costs 14.82 16.68 C. Interest During Implementation 0.42 0.30 Total 15.24 16.98 4. Project Schedule Item Appraisal Estimate Actual Date of Contract with Lao Consulting Group Q4 2003 7 December 2004 Completion of Engagement 31 December 2011 Date of Contract with the International Labour Q3 2003 9 March 2005 Organization Completion of Engagement 16 June 2005 Date of Contract with Bomasis Consulting Q1 2004 20 November 2008 Completion of Engagement 7 February 2010 Date of Contract with Lao Consulting Group on Farmer Q3 2007 21 July 2008 Production and Marketing Group Survey Completion of Engagement 29 January 2010 Date of Award Contract of DAFO’s Office Construction Q2 2005 9 December 2005 Completion of Works 28 August 2007 Date of Award Contract of Road from Soukhuma to Q1 2004 Mounlapamok with: Homsombath Construction Company 6 November 2006 Completion of Work 28 May 2010 Phokham Construction Company 6 November 2006 Completion of Work 10 September 2010 Date of Award Contract of Road from Mounlapamok to Q1 2004 Verngnang with: Homsombath Construction Company 6 November 2006 Completion of Work 25 September 2009 Champasack State Enterprise Irrigation 6 November 2006 Completion of Work 5 June 2009 Date of Award Contract of Road from Champhone to Q1 2004 8 November 2006 Xounbouly with Savannakhet Irrigation Construction State Enterprise Completion of Work 17 July 2008 Date of Award Contract of Road from 13 South Road to Q1 2004 9 November 2006 Thapasoum with Khounxay Paththana Construction Completion of Work 29 August 2008 Date of Award Contract of Construction of Houy Q1 2004 19 March 2008 Kadien, Houy Hin, Houy Ton and Houy Yang Bridges Completion of Work 30 June 2009 Date of Award Contract of Construction of Houy Q1 2004 14 March 2008 Khamouan Bridge iv Completion of Work 17 February 2010 Date of Award Contract of Construction of Houy Q1 2004 18 March 2008 Kanloeuang, Hout Haed, Houy Tapai and Houy La Ox Bridges Completion of Work 23 January 2010 Date of Award Contract of Saybouly Primary Market Q1 2005 12 December 2007 Construction Completion of Work 9 August 2009 Date of Award Contract of Sayphouthong Primary Q1 2005 12 December 2007 Market Construction Completion of Work 20 April 2009 Date of Award Contract of Pakxong Primary Market Q1 2005 15 January 2008 Construction Completion of Work 20 February 2009 Date of Award Contract of Phonthong Primary Market Q1 2005 15 January 2008 Construction Completion of Work 9 July 2009 Date of Award Contract of Thoulakom Primary Market Q1 2005 28 February 2008 Construction Completion of Work 20 February 2009 Date of Award Contract of Nongbok Primary Market Q1 2005 8 February 2008 Construction Completion of Work 10 March 2009 Equipment and Supplies Dates Q4 2003 First Procurement 10 February 2004 Last Procurement 28 July 2011 DAFO =District Agriculture and Forestry Office, Q = quarter.