Document of The World Bank

Public Disclosure Authorized Report No: ICR00003515

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-78470 IDA-42380 IDA-45480 IDA-50710)

ON A

Public Disclosure Authorized LOAN AND CREDITS

IN THE TOTAL AMOUNT OF SDR 33.7 MILLION (US$51 MILLION EQUIVALENT)

TO

THE REPUBLIC OF ARMENIA

FOR A

SOCIAL INVESTMENT FUND III PROJECT Public Disclosure Authorized

September 30, 2015

Social Protection and Labor Global Practice South Caucasus Country Unit Public Disclosure Authorized Europe and Central Asia Region

CURRENCY EQUIVALENTS (Exchange Rate Effective: September 25, 2015)

Currency Unit = Armenian Dram (AMD) AMD 1.00 = US$0.0021 US$1.00 = AMD 475.35

FISCAL YEAR January 1 – December 31

ABBREVIATIONS AND ACRONYMS

ASIF Armenian Social Investment Fund AF Additional Financing ATDF Armenian Territorial Development Fund BA Beneficiary Assessment FM Financial Management ICR Implementation Completion Report IDA International Development Association IRR Internal Rate of Return KfW Kreditanstalt für Wiederaufbau M&E Monitoring and Evaluation MIS Management Information System MP Micro-Project MTR Mid-Term Review NGO Non-Governmental Organization PAD Project Appraisal Document PDO Project Development Objective PHC Primary Health Care PHRD Policy and Human Resources Development PIC Project Implementation Committee O&M Operation and Maintenance QALP Quality Assessment of the Lending Portfolio RF Results Framework SIF Social Investment Fund SILD Social Investment and Local Development USAID United States Agency for International Development

Senior Global Practice Director: Arup Banerji Global Practice Manager: Andrew D. Mason Project Team Leader: Ivan Drabek ICR Team Leader and Lead Author: Richard Florescu ICR Co-Author: Kathryn Steingraber

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REPUBLIC OF ARMENIA Social Investment Fund III Project

CONTENTS

A. BASIC INFORMATION ...... V

B. KEY DATES ...... V

C. RATINGS SUMMARY ...... V

D. SECTOR AND THEME CODES ...... VI

E. BANK STAFF ...... VI

F. RESULTS FRAMEWORK ANALYSIS ...... VII

G. RATINGS OF PROJECT PERFORMANCE IN ISRS...... XII

H. RESTRUCTURING (IF ANY) ...... XII

I. DISBURSEMENT PROFILE ...... XIV

1. Project Context, Development Objectives, and Design ...... 1

2. Key Factors Affecting Implementation and Outcomes ...... 7

3. Assessment of Outcomes ...... 14

4. Assessment of Risk to Development Outcome ...... 24

6. Lessons Learned ...... 28

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ...... 29

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Annexes

Annex 1. Projects Cost and Financing ...... 30

Annex 2. Outputs by Component...... 35

Annex 3. Economic and Financial Analysis ...... 38

Annex 4. Bank Lending and Implementation Support/Supervision Processes ...... 43

Annex 5. Beneficiary Survey Results ...... 45

Annex 6. Stakeholder Consultations ...... 47

Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ...... 50

Annex 8. Comments of Co-financiers and Other Partners/Stakeholders ...... 55

Annex 9. List of Supporting Documents ...... 56

MAP: IBRD 33364

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A. Basic Information Country: Armenia Project Name: Social Investment Fund III IBRD-78470,IDA- Project ID: P094225 L/C/TF Number(s): 42380,IDA-45480,IDA- 50710 ICR Date: 07/28/2015 ICR Type: Core ICR Lending Instrument: Specific Investment Loan Borrower: REPUBLIC OF ARMENIA Original Total US$25.00 million Disbursed Amount: US$51.92 million Commitment: Revised Amount: US$50.99 million Environmental Category: B Implementing Agencies: Armenia Social Investment Fund (ASIF) Cofinanciers and Other External Partners:

B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 04/03/2006 Effectiveness: 12/20/2006 12/20/2006 02/24/2009 02/25/2010 05/12/2011 Appraisal: 07/13/2006 Restructuring(s): 02/14/2012 03/15/2012 02/05/2014 Approval: 10/26/2006 Midterm Review: 05/15/2009 05/06/2010 Closing: 06/30/2011 03/31/2015

C. Ratings Summary C.1. Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Moderate Bank Performance: Moderately Satisfactory Borrower Performance: Satisfactory

C.2. Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Satisfactory Government: Satisfactory Implementing Quality of Supervision: Moderately Satisfactory Satisfactory Agency/Agencies: Overall Bank Overall Borrower Moderately Satisfactory Satisfactory Performance: Performance: v

C.3. Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments (if Indicators Rating Performance any) Potential Problem Project at Quality at Entry No any time (Yes/No): (QEA): Problem Project at any time Quality of No None (Yes/No): Supervision: DO rating before Satisfactory Closing/Inactive status:

D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) General education sector 22 54 General water, sanitation and flood protection sector 22 8 Health 22 8 Other social services 14 2 Sub-national Government administration 20 28

Theme Code (as % of total Bank financing) Decentralization 14 12 Municipal finance 14 12 Municipal governance and institution building 29 27 Participation and civic engagement 14 15 Rural services and infrastructure 29 34

E. Bank Staff Positions At ICR At Approval Vice President: Cyril Muller Shigeo Katsu Country Director: Mercy Tembon D-M Dowsett-Coirolo Practice Manager: Andrew D. Mason Hermann A. von Gersdorff Project Team Leader: Ivan Drabek Caroline Mascarell ICR Team Leader: Richard Florescu ICR Co-Author: Kathryn Steingraber

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F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document)

The objective of the project is to support the Government's policy to raise the living standards of the poor and vulnerable groups through: (a) improving the quality and access, and increasing the coverage of community infrastructure and services in poor communities and for the most vulnerable groups in response to critical emerging needs; and (b) promoting complementary institutional capacity building at the community and municipal levels so as to improve the quality and sustainability of service delivery and municipal investments, increase accountability, and enhance greater stakeholder empowerment at the local level.

Revised Project Development Objectives (as approved by original approving authority)

The objective of the project is to support the Government's policy to raise the living standards of the poor and vulnerable groups through: (a) improving the quality and access, and increasing the coverage of community infrastructure and services in poor communities and for the most vulnerable groups in response to critical emerging needs; (b) promoting complementary institutional capacity building at the community and municipal levels so as to improve the quality and sustainability of service delivery and municipal investments, increase accountability, and enhance greater stakeholder empowerment at the local level; and (c) creation of employment associated with the provision of community infrastructure and services.

The Project Development Objective (PDO) was revised with the First Additional Financing (1st AF) (approved by the Board on February 24, 2009, on an emergency basis) to reflect the objective of creating temporary employment during a time of economic stress.

(a) PDO Indicator(s)

Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised Target approval Completion or Values documents) Target Years Increased community infrastructure and services providing higher quality and better Indicator 1: access in poor and vulnerable communities targeted under the project. Value 0 micro projects (MPs) in 170 MPs in ASIF 283 MPs in ASIF (Quantitative or 319 MPs in ASIF III ASIF III. III III Qualitative) Date achieved 12/20/2006 06/30/2011 03/31/2015 03/31/2015 Targets revised to reflect additional activities under AFs (1–3). Comments Revised Target exceeded by 36 MPs (approx. 12.7 percent). First two Implementation (incl. % Status and Results Reports (ISRs) reported on the number of beneficiaries to measure achievement) this indicator. Then the reporting switched to the number of MPs.

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Capacity building at the municipal level to train municipal officials directly involved in Indicator 2: community MPs in financial management (FM). Value 1,000 officials 715 officials 716 officials (Quantitative or 0 officials trained under trained under trained under trained under ASIF Qualitative) ASIF III ASIF III ASIF III III Date achieved 12/20/2006 06/30/2011 03/31/2015 03/31/2015 Comments (incl. % Targets revised to reflect the diminished allocation of funds for the training of achievement) municipal officials. Revised target fully achieved. Strengthened social service delivery systems through integrated social service centers, Indicator 3: specialized centers for vulnerable groups. Value (Quantitative or 0 3 centers 3 centers Qualitative) Date achieved 12/20/2006 06/30/2011 03/31/2015 Comments (incl. % Target fully achieved. achievement) Empowerment of beneficiary communities through capacity building to effectively plan Indicator 4: and manage their investments on a sustainable basis and strengthen partnerships with the local Governments. Value 0 communities under ASIF 150 communities 158 communities 184 communities (Quantitative or III under ASIF III under ASIF III under ASIF III Qualitative) Date achieved 12/20/2006 06/30/2011 01/16/2012 03/31/2015 Comments Target reflects the number of communities trained and was revised to reflect additional (incl. % activities under AFs (1–3). achievement) Revised target exceeded by 26 communities (approximately 17 percent). Enhancement of poverty targeting through a community mapping and profiling exercise Indicator 5: designed to identify the neediest communities in Armenia. Value (Quantitative or 0 communities 930 communities 911 communities 911 communities Qualitative) Date achieved 12/20/2006 06/30/2011 01/16/2012 03/31/2015 Original target revised to 911 communities due to exclusion of Yerevan's districts, as Comments they were deemed ineligible due to their low vulnerability levels, and communities in (incl. % Gyumri and Vanadzor from mapping (four communities ceased to exist and one was in achievement) conflict area). Revised target fully met (details para 98). Indicator 6: Project beneficiaries, of which number of female beneficiaries Total Total beneficiaries: beneficiaries: Total beneficiaries: Value Total beneficiaries: 0 1,250,627 1,508,000 1,681,562 (Quantitative or Female beneficiaries: 0 Female Female Female beneficiaries: Qualitative) beneficiaries: beneficiaries: 829,909 657,388 751,000

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Date achieved 12/20/2006 12/31/2011 03/31/2015 03/31/2015 Comments This is a core indicator. Original and revised target values represent actual values (incl. % reported at various stages of project implementation. achievement)

(b) Intermediate Outcome Indicator(s)

Original Target Actual Value Formally Values Achieved at Indicator Baseline Value Revised Target (from approval Completion or Values documents) Target Years Indicator 1: Number of social and economic MPs completed. Value (Quantitative 0 MPs 170 MPs 283 MPs 319 MPs or Qualitative) Date achieved 12/20/2006 06/30/2011 03/31/2015 03/31/2015 Comments (incl. % Target revised to reflect additional activities under AFs (1–3). achievement) Target was exceeded by 36 MPs (approximately 12.7 %). REVISED INDICATOR. Percentage of rural population in targeted communities Indicator 2: benefiting from improved social/economic infrastructure and social services. Value (Quantitative 0% 22.7% 27.6% 35.5% or Qualitative) Date achieved 12/20/2006 02/14/2012 03/31/2015 03/31/2015 Comments (incl. % The definition was revised with the 3rd AF to reflect RURAL population. Target achievement) exceeded by 7.9 percentage points. Indicator 3: Number of jobs to be created from completed MPs. Value 535,000 job- (Quantitative 0 job-days 285,190 job-days 668,738 job-days days or Qualitative) Date achieved 12/20/2006 12/31/2011 03/31/2015 03/31/2015 Comments (incl. % Original target set with the 1st AF and revised with the 3rd AF. achievement) Target exceeded by 133,738 job-days (approx. 25%). Indicator 4: Number of jobs to be created from the local manufacturing of new school furniture. 40,600 job-days Value 34,300 job-days in 52,099 job-days in 0 job-days in school in school (Quantitative school furniture school furniture furniture manufacturing furniture or Qualitative) manufacturing manufacturing manufacturing Date achieved 12/20/2006 12/31/2011 03/31/2015 03/31/2015 Comments (incl. % Original target set with the 1st AF and revised with the 3rd AF. achievement) Target exceeded by 11,499 job-days (approximately 28.3%).

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Indicator 5: Total value of wage income generated from completed MPs. Value US$4.3 million US$8.2 million US$11.2 million (Quantitative 0 wage income generated wage income wage income wage income or Qualitative) generated generated generated Date achieved 12/20/2006 12/31/2011 03/31/2015 03/31/2015

Comments (incl. % Original target set with the 1st AF and revised with the 3rd AF. achievement) Target exceeded by US$3.0 million (approximately 36.6%). Indicator 6: Total value of income generated from the local manufacturing of new school furniture. US$0.44 US$0.61 million US$0.57 million million wage Value 0 wage income generated in wage income wage income income (Quantitative school furniture generated in school generated in school generated in or Qualitative) manufacturing furniture furniture school furniture manufacturing manufacturing manufacturing Date achieved 12/20/2006 12/31/2011 03/31/2015 03/31/2015 Comments (incl. % Original target set with the 1st AF and revised with the 3rd AF. achievement) Target exceeded by US$0.13 million (approximately 29.5%). Number of schools and kindergartens benefiting from types of school and kindergarten Indicator 7: furniture and equipment. Value 700 schools and 822 schools and 846 schools and (Quantitative 0 schools and kindergartens kindergartens kindergartens kindergartens or Qualitative) Date achieved 12/20/2006 06/30/2011 03/31/2015 03/31/2015 Comments Target was revised with the 3rd AF to avoid double counting of the schools that (incl. % received furniture and equipment in two rounds. The revision also added kindergartens. achievement) Revised target exceeded by 24 educational units (approx. 29.2%). Indicator 8: Number of community centers benefiting from new furniture Value (Quantitative 0 11 centers 40 centers 65 centers or Qualitative) Date achieved 12/20/2006 06/30/2011 03/31/2015 03/31/2015 Comments (incl. % The target was revised to reflect additional activities under AFs (1–3). achievement) Target exceeded by 25 community centers (approximately 62.5%). Indicator 9: Satisfaction rate of beneficiaries on the quality of infrastructure and services received. Value 70% satisfaction (Quantitative n.a. 85% satisfaction rate rate or Qualitative) Date achieved 12/20/2006 06/30/2011 03/31/2015 03/31/2015 Comments (incl. % Target exceeded by 15 percentage points, according to the last Beneficiary Assessment achievement) conducted in 2014.

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Number of key stakeholders (that is, municipal officials, village council members, and Indicator 10: community leaders) trained in FM, budgeting, accounting, and asset management and number of training modules developed. 715 key 1,000 key Value stakeholders to 716 key stakeholders 0 key stakeholders trained stakeholders to be (Quantitative be trained under trained under ASIF trained under ASIF or Qualitative) ASIF III and III and the 3 AFs III the 3 AFs Date achieved 12/20/2006 06/30/2011 03/31/2015 03/31/2015 Comments (incl. % Target was revised to reflect the budget allocated for this activity. achievement) Revised target was achieved. Regular technical, financial, procurement audits and supervision mission reports are Indicator 11: Satisfactory (S). Value (Quantitative n.a. Satisfactory Satisfactory or Qualitative) Date achieved 12/20/2006 06/30/2011 03/31/2015 03/31/2015 Comments (incl. % Target achieved. achievement) DROPPED. Number of municipalities that received training and technical assistance to Indicator 12: plan and implement investment programs more effectively and transparently and to deliver quality social services at the local level. Value (Quantitative n.a. – – – or Qualitative) Date achieved 12/20/2006 – – – Comments This indicator was dropped with the 3rd AF as it was no longer relevant. It referred to (incl. % the municipalities that received training and technical assistance under the ASIF II achievement) Project. Indicator 13: Health facilities constructed, renovated, and/or equipped. Value (Quantitative n.a. – – 23 or Qualitative) Date achieved 12/20/2006 – 03/31/2015 03/31/2015 Comments (incl. % This indicator had no target value, as the MPs being demand driven were selected achievement) during the project implementation. It was tracked only at project closing date. Indicator 14: People in project areas with access to improved water sources Value (Quantitative n.a. – – 38,221 or Qualitative) Date achieved 12/20/2006 – –03/31/2015 03/31/2015

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Comments (incl. % This indicator had no target value, as the MPs being demand driven were selected achievement) during the project implementation. It was tracked only at project closing date. Piped household water connections that are benefitting from rehabilitation works Indicator 15: undertaken by the project Value (Quantitative n.a. – – 1,182 or Qualitative) Date achieved 12/20/2006 – 03/31/2015 03/31/2015 Comments (incl. % This indicator had no target value, as the MPs being demand-driven were selected achievement) during the project implementation. It was tracked only at project closing date.

G. Ratings of Project Performance in ISRs

Date ISR Actual Disbursements No. DO IP Archived (US$ millions) 1. 06/18/2007 Satisfactory Satisfactory 5.50 2. 05/30/2008 Satisfactory Satisfactory 13.74 3. 05/01/2009 Satisfactory Satisfactory 21.41 4. 10/08/2009 Satisfactory Satisfactory 27.03 5. 04/12/2010 Satisfactory Satisfactory 29.84 6. 12/25/2010 Satisfactory Satisfactory 34.10 7. 07/09/2011 Satisfactory Satisfactory 35.75 8. 03/30/2012 Satisfactory Satisfactory 39.82 9. 11/19/2012 Satisfactory Satisfactory 42.58 10. 06/24/2013 Satisfactory Satisfactory 44.95 11. 02/09/2014 Satisfactory Satisfactory 49.17 12. 10/07/2014 Satisfactory Satisfactory 51.54 13. 03/30/2015 Satisfactory Satisfactory 51.90

H. Restructuring (if any)

ISR Ratings at Amount Board Restructuring Restructuring Disbursed at Reason for Restructuring & Key Approved PDO Date(s) Restructuring Changes Made Change DO IP in US$ millions 1st AF (US$8 million). Responding to the Government request, in the context of the financial crisis. Key changes 02/24/2009 Y S S 19.69 included: (a) PDO revision to include an additional objective related to ‘creation of employment associated with the provision of community infrastructure and

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ISR Ratings at Amount Board Restructuring Restructuring Disbursed at Reason for Restructuring & Key Approved PDO Date(s) Restructuring Changes Made Change DO IP in US$ millions services’; and (b) Results Framework (RF) amendment by revising project targets and including new indicators to reflect the additional activities agreed for the AF. 2nd AF (US$7 million). The RF was amended by revising project 02/25/2010 N S S 29.48 targets and including new indicators to reflect the additional activities agreed for the 2nd AF. ASIF III (Main). Level Two restructuring. Closing date extension from 06/30/2011 to 03/31/2012 to allow the 05/12/2011 N S S 35.25 completion of the ongoing MPs (some of which were initiated using the savings obtained during project implementation). 3rd AF (US$11 million). The RF was revised to reflect new targets 02/14/2012 N S S 39.76 for the outcome and results indicators. 2nd AF. Level Two restructuring. Closing date extension from 03/31/2012 to 03/15/2012 N S S 39.82 10/31/2012 to allow the completion of several large ongoing MPs. 3rd AF. Level Two restructuring. Closing date extension from 03/31/2014 to 03/31/2015 to allow the 02/05/2014 N S S 49.08 completion of several large ongoing MPs and to bridge with the Social Investment and Local Development (approved by the Board on March 13, 2015).

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If PDO and/or Key Outcome Targets were formally revised (approved by the original approving body) enter ratings below:

Outcome Ratings Against Original PDO/Targets Satisfactory Against Formally Revised PDO/Targets Satisfactory Overall (weighted) rating Satisfactory

I. Disbursement Profile

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1. Project Context, Development Objectives, and Design

1. The Armenia Social Investment Fund (ASIF) III Project (Main Credit) was approved by the World Bank’s Board of Executive Directors on October 26, 2006; became effective on December 20, 2006; and was closed on March 31, 2012. It was followed by three Additional Financings (AFs) approved as follows: 1st AF on February 24, 2009; 2nd AF on February 25, 2010; and 3rd AF on February 14, 2012, the latter being closed on March 31, 2015.

1.1 Context at Appraisal

2. Armenia is a small, landlocked, mountainous country in the Caucasus Region, with limited natural resources and an estimated population of 3.2 million (at the time of appraisal). The poverty rate decreased from 56.1 percent in 1998/1999 to 34.6 percent in 2004 and the severity of poverty decreased from 7.2 percent to 2.4 percent over the same period. In absolute numbers, almost 700,000 people were lifted out of poverty, in the five years preceding project preparation.

3. However, still over 1 million people were living in poverty—including vulnerable groups such as orphans, refugees, and disabled persons—and among them, 200,000 were considered very poor. Although the registered unemployment rates stood at around 10 percent of the labor force, some survey data indicated rates three times higher. At the same time, regional disparities in income suggested that the benefits of growth did not reach some of the regions, and around 145 communities living in high mountainous areas continued to lack basic social and economic infrastructure as well as key social services.

4. Among the Government’s development programs, improvement of the social sectors became a medium- and long-term priority with particular focus on three main subsectors: health, education, and social services. Each of these subsectors witnessed significant progress during the years before appraisal, but further challenges remained.

5. Health sector. High priority has been assigned to primary health care (PHC) as reflected in the Government’s ‘2003–2008 Strategy for Primary Health Care of the Population of Republic of Armenia’. However, better access to quality health care services for the poor remained a challenge due to shortage of funds, which prevented proper maintenance of medical facilities and the replacement of outdated medical equipment. The shift in focus to PHC supported by increased health expenditures relative to gross domestic product and improved access to drinking water became important priorities. The Poverty Reduction Strategy Paper envisaged achieving 24-hour water supply from centralized services to 98 percent of the urban population and 70 percent of the rural population by 2015.

6. Education sector. The main goals of the Poverty Reduction Strategy Paper were to ensure the availability of education facilities and to improve the quality of education while prioritizing the area of general education. To meet these goals, public expenditures on education were significantly raised during 2003–2005, also supporting the increase in teacher salaries and the improvement of school facilities. Despite these achievements, further efforts were needed for improving school heating systems and for the proper endowment of better furniture, teaching materials, science laboratories, and libraries. Another perceived need was related to special

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furniture for children entering elementary schools at the age of five and a half years. Also, in the area of early childhood education, increasing the number of kindergartens was identified as a priority to cover the increased demand for such services.

7. Social services. A wide variety of social services were mostly provided by local, national, and international non-governmental organizations (NGOs), being supported in certain areas of the country by public funds, sometimes in partnership with local governments. Small communities were virtually unable to provide social services apart from occasional ad hoc support. Although the communities had the legal power to provide social services, the state was not able to adequately provide the necessary funding.

8. Among the vulnerable groups identified as being in need of social services, the following groups were considered to be of priority: (a) the elderly and disabled; (b) children at risk; and (c) internally displaced persons and refugees. Several local initiatives were launched with donor financial and technical support in partnership with the Government by establishing integrated social service centers (including ‘one-stop’ shops) and social assistance centers for beneficiaries from these vulnerable groups. The promising results of these initiatives paved the way for further increased support in the development and provision of social services on a sustainable basis.

9. Institutional capacity. The territorial administrative organization of Armenia comprises 10 regions (marzes). Yerevan, the capital, also has the status of a marz in addition to the other 10. Marzes are further subdivided into 930 communities or local self-Government units. Although specific legislation was enacted by the Government through the Law on Local Self-Government (2002 and subsequent amendments in 2004) to advance the decentralization process, its effectiveness was still in the early stages at the time of appraisal. A new Law on Municipal Service (2005) brought more transparent provisions regarding the hiring, qualifications, terms of reference, and security of tenure for municipal employees. These laws opened the doors for enhancing decentralization but the effectiveness and efficiency of the process depended on the institutional capacity of the local administrative units to properly implement the legal, functional, and financial aspects of their daily duties, which were still limited at that time.

10. The delivery and provision of social services depended on the institutional capacity available at the local Government and community levels, which continued to be a major issue at the time of project appraisal as they were inadequate. In broad terms, institutional capacity at the local levels was negatively affected by: (a) institutionally weak local Governments with limited financial resources and skills needed for the decentralized management of service delivery; (b) inadequate systems of accounting, financial planning, and budgeting at the local level; (c) lack of effective partnerships at the local level; and (d) inadequate involvement of local institutions, village councils, and citizens in the decision-making process and in service provision.

11. Armenian Social Investment Fund (ASIF). The ASIF was selected as implementing agency for ASIF III project given its experience acquired since its establishment in 1996, good performance in implementing its predecessor Bank financed projects (ASIF I and ASIF II) and its demonstrated ability to reach out remote, isolated and vulnerable communities, obtain their residents’ consensus on development priorities and help mobilizing collaborative efforts to implement them. ASIF’s activities complemented those of the Government, as the Government was not involved in small and medium-scale infrastructure works. Thus, ASIF was mandated with

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the task of supporting the Government’s efforts to improve the living conditions of the poor and improve their access to basic social services in rural and isolated vulnerable communities.

12. ASIF’s institutional framework went through several transformational phases during its life. Initially ASIF was established an autonomous organization through a Government Decree. After close to three years in operation ASIF got the status of a regular project implementation unit for projects financed by the Bank with the status of Closed Joint Stock Company. Beginning with the ASIF II project (2000), ASIF was established as Fund operating as an autonomous entity governed by a Board, with full authority to manage and administer its program in accordance with the operating guidelines and procedures agreed with the Bank.

13. For the purpose of ASIF III project, ASIF maintained the status of an autonomous public organization, and improved its organizational structure and procedures to properly cope with the emerging implementation requirements of the new project. ASIF continued to be governed by a Board, chaired by the Prime Minister. At the time of project appraisal, the Board included: (i) representatives of the line ministries (Finance and Economy, Territorial Administration and Infrastructure Operation, Urban Development, Education and Science, Labor and Social Issues (ii) the Mayor of Yerevan; (iii) representatives from NGOs; and (iv) the Executive Director of ASIF. ASIF’s activity is financed from the Bank’s loan/credit, Government transfers, and contributions of the beneficiary communities, and from other bilateral and international donors. Details about recent institutional developments and financing opportunities of ASIF are presented in Sections 2.5 and 5.2 (b) of the report.

1.2 Original Project Development Objectives (PDOs) and Key Indicators

14. The objective of the project is to support the Government's policy to raise the living standards of the poor and vulnerable groups through: (a) improving the quality and access and increasing the coverage of community infrastructure and services in poor1 communities and for the most vulnerable groups in response to critical emerging needs; and (b) promoting complementary institutional capacity building at the community and municipal levels so as to improve the quality and sustainability of service delivery and municipal investments, increase accountability, and enhance greater stakeholder empowerment at the local level.

1 The PDO refers to poor communities and the wording is maintained unaltered to be consistent with the legally approved documents (original and revised). However, the funds allocation was done based on the vulnerability of communities defined through an econometric analysis of a national community survey, which identified 13 indicators strongly statistically correlated with a community’s predisposition to fall into the nationally defined poverty level. Communities were then ranked on this vulnerability assessment and clustered into three categories (most vulnerable, vulnerable and least vulnerable). Thus, the ICR refers to these communities as vulnerable, instead of poor, throughout the document.

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15. The key indicators identified to measure progress toward achieving project outcomes were the following:

 Increased community infrastructure and services providing higher quality and better access in poor and vulnerable communities targeted under the project, measured by the number of micro projects (MPs) completed  Capacity building at the municipal level to train municipal officials directly involved in community MPs in financial management (FM), measured by the number of officials trained  Strengthened social service delivery systems through integrated social service centers, specialized for vulnerable groups, measured by the number of centers established for persons in difficulty  Empowerment of beneficiary communities through capacity building to effectively plan and manage their investments on a sustainable basis and strengthen partnerships with the local Governments, measured by the number of beneficiary communities included in the project and the number of municipalities that received training and technical assistance  Enhancement of poverty targeting through a community mapping and profiling exercise designed to identify the neediest communities in Armenia, measured by the number of communities included in the poverty mapping exercise

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and Reasons/Justification

16. The objective of the project is to support the Government's policy to raise the living standards of the poor and vulnerable groups through: (a) improving the quality and access and increasing the coverage of community infrastructure and services in poor communities and for the most vulnerable groups in response to critical emerging needs; (b) promoting complementary institutional capacity building at the community and municipal levels so as to improve the quality and sustainability of service delivery and municipal investments, increase accountability, and enhance greater stakeholder empowerment at the local level; and (c) creation of employment associated with the provision of community infrastructure and services.

17. The PDO was revised with the (emergency) 1st AF, which was in response to a Government request in the context of the financial crisis (approved by the Board on February 24, 2009), by adding an additional outcome—the creation of employment associated with the provision of community infrastructure and services. This reflected the Government’s intention to combine social assistance to the poor in the form of MPs with job creation of paid employment. In order to measure this new objective, new indicators were introduced, first in the level of PDO indicators, later transferred to the level of intermediate indicators, as follows:

 Contribution to short-term employment and income generation in poor participating communities as measured by the number of jobs created and income generated from completed MPs and local manufacturing of new school furniture

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18. At the same time, the opportunity was taken to revise and adjust the targets of some original indicators.

1.4 Main Beneficiaries

19. The ASIF III Project (including the three AFs) targeted the following main beneficiaries: (a) vulnerable communities in the rural and urban areas of Armenia; (b) children and their teachers from kindergartens and elementary, primary, and secondary schools in urban and rural areas; (c) patients from vulnerable communities and medical staff providing medical care in health facilities (d) lone or homeless elderly from residential care institutions; (e) local Government staff (village councils, mayors, and selected professional staff); and (f) locally based training providers. Local businesses and the private sector also benefited through competitive tendering for the small works contracted under the project.

1.5 Original Components

20. The project design comprised three components:

(a) Component 1: Community Investments (total estimated base cost, US$24.97 million). This component was designed to continue the work of the ASIF II Project, with improved procedures regarding the quality of works, sustainability, participation, and targeting of project funds for the MPs for the provision of social and economic infrastructure in vulnerable communities, under a participatory framework. These MPs were intended to respond to emerging priority infrastructure needs through construction and/or rehabilitation of schools, including libraries; science laboratories; gymnasiums and playgrounds; specialty schools (arts/music, sports); health clinics; multipurpose community-based centers; small- scale water supply, sewerage, and rural electrification systems; minor irrigation works; and access roads.

To support the Government’s priorities in the delivery of social services, some specific investments such as the rehabilitation or reconstruction of an integrated social service center (one-stop shop) in Aratgatson, a center for elderly (shelter for homeless) in Yerevan, and a kindergarten for children with disabilities in Gyumri were identified and agreed during the preparation phase. Also, the improvement of school heating systems and the endowment of school furniture and teaching materials for elementary schools were identified as priorities for financing under the project.

(b) Component 2: Local Level Institutional Strengthening, Monitoring, and Evaluation (total estimated base cost, US$0.60 million). This component aimed at complementing the community investments component through the provision of technical assistance, training, and support services designed to increase the competence and accountability of the municipal administration in support of the Government’s decentralization initiatives. Building upon the findings of the institutional assessment carried out under the ASIF III Policy and Human Resources Development (PHRD) Grant (US$316,000), in consultation with

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Government counterparts, key donors, and Bank staff involved in the municipal development, this component was designed to support capacity-building efforts focusing specifically on the provision of basic training in FM, budgeting, accounting, and asset management. The training was to be provided for mayors, finance officers, accountants, and village council members in those communities where the ASIF implemented projects (small and medium), having thus a strong comparative advantage.

Monitoring and evaluation (M&E). Special studies, technical assessments, formal reviews, and workshops to support and enhance the M&E capacity at the local level were included among the activities eligible for financing under this component. Also, study tours to provide training and learning opportunities to the ASIF’s technical staff in the areas of local development, institution building, and M&E were included under this component.

(c) Component 3: Project Management (total estimated base cost, US$3.14 million). This component was designed to provide institutional support to the ASIF to effectively implement local programs and projects under an integrated development framework, in line with the Government’s poverty reduction agenda and its decentralization program. This component financed operating costs, including salaries, utilities, office equipment, training, financial audits, and management information system (MIS) maintenance.

1.6 Revised Components

21. No revision was made to the project components of the ASIF III Project (Main Credit) during the implementation.

1.7 Other Significant Changes

22. The Emergency Additional Financing (1st AF) amounted to US$8 million and helped scale up the activities under Component 1 (community investments)—with specific focus on small-scale infrastructure and the associated manufacturing of furniture, special equipment, and teaching materials for schools—as a short-term solution to the crisis through immediate temporary work opportunities.

23. The Second Additional Financing (2nd AF) amounted to US$7 million (approved on February 25, 2010) topped-up allocations for Components 1 and 3.

24. The Third Additional Financing (3rd AF) amounted to US$11 million (approved on February 14, 2012) added resources for all three components.

25. Table 1 summarizes the loan and credit funds allocation among the project components as initially and subsequently approved. (Note: figures from the below table differ from the figures in Section 1.5, which presents the total estimated base costs of the Project at Appraisal by components).

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Table 1. Loan/Credit Funds Allocation among Project Components (US$, millions) Loan/Credit Approval Project Component 1 Component 2 Component 3 Total Date ID IDA-42380 P094225 22.0 0.5 2.5 25.0 26-Oct-2006 (original) IDA-45480 P115743 8.0 8.0 24-Feb-2009 (1st AF) IBRD-78470 P118158 6.56 0.44 7.0 25-Feb-2010 (2nd AF) IDA-50710 P128740 10.14 0.13 0.73 11.0 14-Feb-2012 (3rd AF)

TOTAL 46.84 0.63 3.53 51.0

26. Several small closing date extensions were approved by the Bank for the Main Credit and two of the AFs to either complete the advanced ongoing projects or to bridge with the follow-up operations:

 IDA-42380 - nine months, from June 30, 2011 to March 31, 2012  IBRD-78470- seven months, from March 31, 2012 to October 31, 2012  IDA-50710 - nine months, from June 30, 2014 to March 31, 2015

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design, and Quality at Entry

27. The project was expeditiously and thoroughly prepared in slightly more than seven months from the review of the Project Concept Note (March 2006) to the approval by the Bank’s Board of Executive Directors (November 2006). The ASIF III Project preparation overlapped with the last months of the preceding ASIF II implementation (closed on August 31, 2006). Also, the design of the project benefited from the Bank’s experience of having covered 110 social fund projects in the Europe and Central Asia Region and 58 countries from other regions since 1987.

28. It also benefitted from the technical support provided under a PHRD Grant amounting to US$316,000 (Grant No 055130) that financed two important studies for the project preparation: Institutional Assessment (April 2006) and Social Service Assessment (March 2006).

29. An advance payment facility amounting to US$1.5 million was approved in May 2006 to provide early financial support for project preparation; for piloting new techniques related to enhancing the quality of works (norms, standards, design, and supervision), sustainability, and community participation in 20 MPs; and for supporting the ASIF office in project preparation.

30. Since ASIF III was a repeater project, following ASIF II, there was no Quality at Entry Review. However, the Second Quality Assessment of the Lending Portfolio (2nd QALP) in 2010 selected ASIF III among the projects to be reviewed and commented on the Quality of Design.

31. The report appreciated that: (a) ASIF III was strategically relevant to the Government’s poverty reduction and decentralization strategies and later to the Government’s initiative to offset

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the impact of the economic crisis from 2008; and (b) the design drew on lessons from earlier generations of the project and improved the project’s focus on vulnerable communities with better targeting of subprojects and strengthened the capacity of procurement.

32. However, several weaknesses were identified relating mainly to the: (a) relevance of the RF to the assessment of PDO achievement; and (b) inability to assess other aspects related to the community’s ability to pay for infrastructure and services, measurement of benefits from prior operations, and the nature of national poverty and how this project would reduce vulnerability. Given these weaknesses, the 2nd QALP report rated the Quality of Design as Moderately Satisfactory.

33. The implementation previous projects in Armenia fell short on poverty targeting, quality of works, sustainability and institution building. The ASIF III project acknowledged them during the preparation phase and incorporated several features in the project design to address these weakness, based on the experiences of other similar operations as detailed further on.

34. Objective poverty targeting criteria are critical to the proper identification of the neediest beneficiaries. The fact that a clearly formulated poverty targeting and an allocation mechanism based on objective criteria and poverty data ensures the flow of project benefits to the neediest segments of the population and mitigates political pressures in the allocation of funds was acknowledged. As a result, following the 1st AF the ASIF III Project design incorporated an improved targeting strategy using a two-stage process—tested under social fund programs in Europe and Central Asia—consisting of geographical targeting of project funds by region followed by the identification of the needy communities within each region through a community mapping and profiling exercise, based on a set of detailed criteria.

35. Adequate quality of works is a prerequisite for sustainability and client satisfaction. A good quality of community works for the projects identified as priorities by participating communities is considered to be critical for obtaining clients’ satisfaction with the services received. It also contributes to the increase of contractors’ accountability and to the mitigation of the corruption risks. The ASIF III project design included the development of a comprehensive set of procedures by the ASIF to ensure proper preparation of the bidding documents, competitive selection of contractors, and adequate works supervision mechanisms and quality control monitoring techniques. To improve community awareness regarding the implementation of MP activities, the new procedures previously developed introduced for testing under the ASIF III Project, with an aim to actively involve the engineers in charge of civil works in informing to community citizens on the status of affairs on the respective construction sites.

36. Sustainability and institutional building. Past experience under social investment funds (SIFs) and community-driven developments revealed that the sustainability of such operations can be best achieved through innovative designs by integrating multisector community-based projects with capacity building and self-management of local institutions. Thus, the design of ASIF III paid specific attention to local institutional capacity-building activities, innovation in poverty targeting, promotion and outreach activities, and systematic and continuous M&E.

37. Clearly articulated sectoral policies and investment priorities are enabling factors for successful implementation of the programs. The success of similar SIF-type interventions

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implemented in the past revealed their dependence on observance and coordination with social sector strategic priorities, Government reforms programs, and municipal development plans, as well as with other programs carried out by various donor agencies and NGOs. It was therefore important to ensure that projects were focused on greater coordination of social-fund-type activities with relevant sectoral polities (mainly in health and education) and investment priorities. During project preparation, several meetings were held with representatives of Bank-financed projects (ASIF II and Water Supply projects) and bilateral and international donors active in Armenia, such as the Kreditanstalt für Wiederaufbau (KfW), International Fund for Agricultural Development (IFAD), and the United States Agency for International Development (USAID), to learn from their experience and to avoid unnecessary overlap.

38. For the implementation period, the ASIF Board was mandated to ensure that project activities were consistent with the social sector strategy priorities and the Government’s reform programs in the relevant sectors. Under the ASIF III Project, a Technical Committee was established to provide guidance to the ASIF for effective implementation of municipal FM training programs. Also, the project design included information and outreach activities meant to explain priority setting mechanisms to beneficiaries within the framework of a comprehensive communication strategy.

2.2 Implementation

39. The ASIF III Project (Main Credit) was approved by the Bank’s Board of Executive Directors on October 26, 2006; became effective on December 20, 2006; and was closed on March 31, 2012. It was followed by three AFs approved as follows: 1st AF on February 24, 2009; 2nd AF on February 25, 2010; and 3rd AF on February 14, 2012, the latter being closed on March 31, 2015. The aggregated period for the ASIF III Project implementation and its subsequent AFs was close to eight and a half years from the Board approval of ASIF III to the closure of the 3rd AF

40. The Mid-Term Review (MTR) Mission (April 26 – May 06, 2010) was delayed by about one year, as to the original time plan. The delay was mainly due to the fact that the first AF was just approved before the originally envisaged date, and it was deemed to be better to wait with the MTR until one year into its implementation. The MTR rated the project performance as Satisfactory for both overall project implementation and achievement of development objectives. At MTR, the project disbursed US$22.05 million (88.2 percent of the total loan funds). The MTR also revealed the need to make some adjustments and introduce new activities to improve project performance in the areas of M&E of outcomes and observance of environment safeguards.

41. Evaluative studies. An agreement was reached for the ASIF to further conduct four new additional assessments under the project, covering: (a) beneficiary assessment (BA); (b) assessment of infrastructure maintenance and labor impact of the MPs; (c) civil works cost- effectiveness assessment; and (d) quality of civil works assessment. These studies helped in properly filling out the M&E framework.

42. Environmental safeguards compliance. Although no environment problems were reported, the observance of the Revised Environmental Guidelines was needed to be enforced. For this, the ASIF’s environmental capacity was upgraded by hiring additional environment specialists and by delivering in-depth, on-the-job training to related staff.

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43. The performance of both fiduciary-related activities, procurement and FM, was rated as Satisfactory at MTR and maintained as such thereafter.

44. The project was never formally declared ‘at risk’. However, at some point, the implementation of Component 2 was hampered due to the Government’s decision to spend less credit/loan funds for technical assistance activities. As a result, the training for capacity building at the local administration level was temporarily put on hold. Finally, when an agreement was reached to conduct the training, the selection of the trainers was done at a slow pace and the training was delivered to the targeted number of officials, however, at a slightly reduced scope.

2.3 Monitoring and Evaluation (M&E) Design, Implementation, and Utilization

45. M&E design. Though the project did not explicitly define living standards, they are assumed here to relate to access to social and economic services, including education and health, as well as access to income-generating opportunities. This theory of change is implicit in the following seven intermediate objectives drawn from the PDO: (1) improved quality of community infrastructure and services in vulnerable communities; (2) improved access to community infrastructure and services in vulnerable communities; (3) improved coverage of community infrastructure and services in vulnerable communities; (4) improved sustainability of community infrastructure and services in vulnerable communities; (5) increased accountability at the local level; (6) increased stakeholder empowerment; and (7) creation of employment associated with the provision of community infrastructure and services. These intermediate objectives were considered sufficient to support Government efforts to improve living standards for poor and vulnerable groups.

46. The results framework of the Project was designed based on the assumption that increased provision of social infrastructure and services, and job creation combined with capacity development for these communities in matters related to the management of their own investments and building partnerships with local authorities, and capacity building for local Government officials to enable them to better deliver and maintain social services, would count as proxy for improved living standards of the people living in vulnerable communities.

47. The original project M&E framework allowed for detailed tracking of the physical progress of the MPs and the number and types of beneficiaries who benefitted as well as the number of officials who received capacity-building training. The indicators are adequate to measure most of the intermediate outcomes listed above (1–3 and 7). The original project M&E framework allowed for detailed tracking of outputs, including the MPs; beneficiaries of the MPs; officials receiving training; number of villages mapped for poverty; and job hours and wages. The project also measured beneficiary satisfaction and both increased access to and quality of social infrastructure, as well as assessed the technical quality of the infrastructure.

48. The main weakness of the RF is that there is that it is not outcome oriented and that there is a lack of baseline data and most of the indicators are output oriented. In addition, outcomes 4– 6 lacked results indicators that would allow the project to track progress on their achievement.

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Outcome 6 was particularly weak, the corresponding outcome indicator from the RF2 measuring an output (number of communities) and making an untested assumption that participation in the project would be inclusive and lead to empowerment of community members.

49. The RF would have been partially strengthened through the inclusion of indicators measuring the relevant impact of the intermediate objectives, such as: Increased sanitation safety and health prevention as a result of improved access to water and sewage or facilitation of employment for parents whose children are enrolled in early childhood education in kindergartens.

50. M&E implementation. The project supported the creation and strengthening of an M&E Unit under the newly created Management Information, Monitoring, and Evaluation Department. This unit held primary responsibility for data collection, analysis, and information dissemination with support from the MIS officers. The M&E design and function was well-embedded in the implementing agency and by all accounts there was sufficient stakeholder ownership. The staff in charge of M&E reporting at the implementing agency have been with the project since inception and have strong institutional understanding and memory. The MIS software was upgraded during implementation to strengthen the monitoring and reporting capacity. As a result of these factors, the M&E plan was fully implemented and quality data were collected on time.

51. As part of the MTR, the Bank and the ASIF team agreed on the need to carry out a comprehensive evaluation strategy to go beyond the monitoring indicators. Supplemental studies and assessments were commissioned and undertaken, including the following: BAs, the MPs’ sustainability and infrastructure maintenance and labor impact, civil works cost-effectiveness assessment, and quality of civil works assessment.

52. Also, some of the weaknesses in M&E design were addressed through the addition of indicators that measured intermediate outcomes that were directly linked to the number of jobs created and the wage income generated.

53. M&E utilization. The completion of the poverty mapping exercise allowed project management staff to more accurately target the project activities to communities along three groupings: most vulnerable, vulnerable, and least vulnerable. Financing for the MPs under the 2nd and 3rd AFs was to be allocated as follows: at least 40 percent of the funds to the most vulnerable communities and no more than 20 percent to the least vulnerable communities.

54. Although the ASIF’s MIS database contains a significant amount of information; only a small part of it is online and publicly disclosed. The ASIF’s website may be improved by providing more individual MP-related information, not only for the sake of transparency but also for the promotion of the MPs’ performance and results.

2 Empowerment of beneficiary communities through capacity building to effectively plan and manage their investments on a sustainable basis and strengthen partnerships with the local Government.

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2.4 Safeguard and Fiduciary Compliance

55. The ASIF managed the fiduciary (procurement and FM) and safeguards (social and environment) responsibilities in a satisfactory manner throughout the project implementation.

56. FM. The FM arrangements that the ASIF has in place were adequate in relation to: (a) human resources with extensive experience in Bank-financed projects; (b) the internal control procedures and filing systems, which were considered to be properly designed and implemented; and (c) the results of the annual audits which rated the FM-related performance as Satisfactory.

57. Interim financial reports were regularly produced and submitted to the Bank on time. There are no pending audits at the project closing date.

58. Overall, the FM was rated as Satisfactory during the entire project implementation. There was only one exception in February 2014, when the rating was downgraded to Moderately Satisfactory because of some shortcomings observed in contract management and monitoring, but the situation was remedied shortly thereafter and the Satisfactory rating was restored.

59. Procurement. As an implementing agency, the ASIF has substantial experience in managing similar projects in Armenia and is familiar with the Bank’s procurement rules and procedures. No major procurement-related issues were acknowledged during the project implementation for the procurements conducted centrally by the ASIF.

60. Also, for many small contracts, selected communities were involved in the various stages of the procurement cycles under the ASIF’s supervision. Given the large number of small contracts locally executed, the interest of bidders was limited and this resulted in a small number of bids for each procurement. Overall, the contracts that were subject to post review were found to be in compliance with Bank procedures.

61. The ASIF’s procurement capacity was weakened from time to time due to the turnover of procurement specialists, some of them leaving the ASIF for better opportunities in other public sector agencies or private sector companies.

62. However, periodically, the adequacy of procurement capacity was restored each time so that, overall, procurement-related activities did not suffer. The Bank also supported the temporary lack of procurement experts by hiring short-term consultants who worked with the ASIF and also provided on-the-job training to the newly hired staff.

63. In the future when the ASIF’s procurement workload will significantly increase, recruitment of additional staff is envisaged and more proactive involvement in the development and revision of the technical specifications for goods and works and the terms of reference for consulting services.

Social (including safeguards)

64. Participatory approach and gender inclusiveness. Under ASIF II a Beneficiary Assessment was conducted and produced the recommendations that were considered in the

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preparation of ASIF III. However, findings from the last BA under ASIF III in 2014 still showed potential areas of improvement, including low levels of community awareness on who funded the MPs; low levels of participation of direct beneficiaries (community members); and questions about the level of effectiveness and representativeness of the Project Implementation Committees (PICs).

65. As part of preparation for the follow-up transformational Armenia Social Investment and Local Development Project (SILD) the Bank conducted an analysis of Beneficiary Engagement in ASIF III and made recommendations for improvement. The report looked at beneficiary engagement across four phases of the MP cycle (identification, preparation, implementation, and post completion) and found that there were a number of practices, including participatory approaches and information dissemination activities that were practiced in the past but had been discontinued under ASIF III. Additionally, the PICs were supposed to share information with community members but they were not doing so in a systematic manner.

66. There is limited data on gender inclusiveness and participation under ASIF III. Anecdotally, the beneficiary engagement report noted that in some villages a majority of the PICs consisted of mainly women because the men seasonally migrate out of the village for work. Out of the total number of 57,358 community members who participated in community general meetings, 37,226 were women. In relative terms, women’s participation was higher in ASIF III (64.9 percent) than in ASIF II (44.6 percent).

67. The SILD includes plans for better tracking and monitoring of the extent to which the project is gender inclusive, including indicators for the number of female participants in meetings. The project documentation also specifies that activities should be organized in such a way as to promote participation of women and vulnerable groups.

68. Beneficiary feedback and grievance mechanisms. Feedback from project beneficiaries indicated that in some cases there was a lack of awareness of project activities. In response, the project staff increased the number of required community meetings from one to two. A significant issue identified in ASIF III (and addressed in the SILD) is the lack of a formal grievance mechanism. In the SILD, there are provisions for a grievance officer in each PIC a telephone feedback line, and a committee in the ASIF. Additionally, there is an indicator tracking grievances that were registered and addressed.

69. Resettlements. No MP susceptible to resettlement or land acquisition was approved for financing and no need for resettlement or land acquisition (permanent or temporary) occurred during project implementation. So no MP had to be canceled for this reason.

70. Environment. The ASIF III Project was classified as an Environmental Category ‘F1’ project as no major environmental issues were anticipated at preparation time, given the relatively small size and rehabilitation nature of the MPs. Its Operational Manual included adequate procedures and implementation arrangements, consistent with the Bank’s guidelines.

71. The ASIF’s capacity for supervising compliance with the environmental requirements was increased and adequately maintained throughout project implementation. The environmental assessments were enforced and their frequency increased for each MP at various stages of implementation using predefined check lists (including photos) which were properly filed and

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maintained in the MP archives. No major environment related issues were recorded during project implementation.

72. The Bank’s environmental specialist regularly supervised the environment-related aspects of the MPs, visiting selected implementation sites 3–4 times a year.

2.5 Post-completion Operation/Next Phase

73. All the MPs were properly completed by the project closing date (March 31, 2015), except for two larger MPs (music school in Martuni and health center in Chambarak), for which the works were delayed due to financial difficulties encountered by the contractor (same for both MPs) and which continued beyond this date with financial support from the ASIF’s own funds.

74. Given the Government’s commitment to continue supporting development of more infrastructure for the delivery of social services, the Bank already approved a follow-up operation: the SILD amounted to US$30 million, ensuring thus financial support for the continuity of SIF type of programs in Armenia in the absence of the availability of Government’s own funds.

75. For the purpose of the SILD implementation, and in line with the Government’ Strategy for ASIF’s evolution approved in April 2014, ASIF was transformed into Armenian Territorial Development Fund (ATDF), with responsibilities expanded to the (entire or partial) implementation of other programs financed by the Government of Armenia or by other bilateral or international donors. These new programs are listed in section 5.2 (b).

76. The implementation arrangements and procedures from the ASIF III Project served as the basis for the development of a new Operational Manual that was adapted to fit the requirements of the follow-up project (SILD).

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

77. The seven ASIF III Project objectives supported the Government’s ongoing policy to raise the living standards of the poor and vulnerable groups; therefore, the project was highly relevant for its entire life cycle (from design to closure) to Armenia’s programmatic development programs and priorities and consistent with the objectives included in the Country Assistance/Partnership Strategies, as approved in 2004, 2009, and 2013.

78. Relevance of Objectives. Country Partnership Strategy for 2014–2017 envisages providing selective support to the Armenia Development Strategy (2012–2025) that aims to build on the progress achieved to date in reducing poverty and improving access to quality social services, with particular focus on continuing the promotion of community-driven approaches to develop basic infrastructure for social service delivery. Thus, the ASIF III Project continued to be consistent also with the current Country Partnership Strategy (CPS), supporting its second cluster ‘Improving Efficiency and Targeting of Social Services’

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79. Relevance of Design. The Project was prepared and approved within the time frame of the 2004 Country Assistance Strategy (CAS) for Armenia supporting its Third Goal—Reduction of Non-Income Poverty. Its design included small scale investments in community infrastructure related to education, health and social services, considered as priority areas also by the Armenia Poverty Reduction Strategy Paper approved in 2003. Over time, the Project continued to be relevant, to the country priorities, as acknowledged by the 2009 CAS for Armenia, mainly supporting the Strategic Objective 1 (Addressing Vulnerabilities), Results Area 2 related to poverty, social protection and job creation.

80. Relevance of Implementation. During its implementation the Project continued to be relevant to the country needs, particularly when Armenia was severely hit by the global economic crisis. The Bank approved the 1st AF on emergency basis, expanding the development objective to include the job creation element. Two subsequent AFs were approved, toping-up financial resources for scaling up the program.

Rating: High

3.2 Achievement of Project Development Objectives

81. The overall PDO indicator achievement was ‘Satisfactory’, consistent with all the Implementation Status and Results Report ratings during the entire project’s life cycle.

82. This ICR assesses the extent to which the project achieved its objective of supporting the Government’s policy to improve living standards by examining the seven intermediate outcomes stated in the PDO.

(a) Improved quality of community infrastructure and services in vulnerable communities - Achieved

83. The project provided quality community infrastructure, with evidence of the quality of civil works found in an Assessment of Civil Works Quality from 2010. This assessment found that, in general, the quality of the 55 sampled civil works MPs and corresponding building materials and related items was satisfactory and that there were some works of high and excellent quality. The shortcomings on quality were related to repair and the materials and items had nothing to do with the soundness and durability of the buildings.

84. Enforcing compliance with seismic safety standards and permitting rehabilitation works only for buildings that were not overly damaged (beginning with the 3rd AF) contributed to the quality and safety of community infrastructure.

85. Additional evidence on quality is found in community perceptions on quality of MP construction, as measured in the three BAs (2008, 2011, and 2014). These assessments show that the project exceeded its target of 70 percent beneficiary satisfaction rate on the quality of infrastructure and services received. The 2008 BA reported a general finding of overall positive views from beneficiary communities on the quality of the infrastructure. However, there were a few examples of communities that were not satisfied. The 2011 assessment queried about perceptions on the quality of the different types of works and found that for each type of project

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(health care, school, potable water pipe, community center, and community area) at least 70 percent of the beneficiaries were satisfied with the quality of the MPs. Potable water pipes, community areas, and community centers had the highest satisfaction rates and health centers had the lowest. The 2014 assessment found that direct project beneficiaries and heads of infrastructure showed a satisfaction rate of 76–85 percent. The report indicated that in some cases it was challenging to distinguish whether reported flaws were due to poor construction quality or due to improper operation and maintenance of infrastructure.

(b) Improved access to community infrastructure and services in vulnerable communities - Achieved

86. The project increased access to community infrastructure for approximately 1.7 million Armenians (against a target of 1.5 million) through the provision of 319 MPs (against a target of 283) in all regions of Armenia. The majority of MPs selected by communities were schools (35 percent), community centers (28 percent), and kindergartens (13 percent), followed by health care facilities (7 percent), special schools, potable water, environmental, elderly houses, irrigation, and sewage systems (less than 5 percent each).

Table 3. MP Type and Number of Beneficiaries Total Number of MP Type Number Beneficiaries Schools 112 156,421 Community Centers 88 424,200 Kindergartens 44 100,587 Health Care Facilities 23 606,483 Special Schools 18 118,040 Potable Water 17 34,830 Environmental 9 234,909 Elderly Houses 5 1,153 Irrigation 2 2,639 Sewage Systems 1 2,300 Total 319 1,681,562

87. The project financed rehabilitation works for 1,182 piped household water connections which provided access to improved water sources for 38,221 people in rural areas. The targets for schools and kindergartens benefitting from furniture and equipment and for community centers benefitting from furniture were exceeded.

88. Additional evidence on improved access is found in an assessment commissioned as part of the preparation for the SILD project. The ASIF team compiled data on the use of social infrastructure, before and after the ASIF III intervention, from different sources on the following infrastructure types: health care facilities (logbooks), schools (absence hours), kindergartens (enrollment rates), and water supply (project MIS). Data are reported for a three-year period and for a one-year period that includes the period immediately before and after the ASIF intervention.

89. Table 4 summarizes the reported use data gathered for this assessment. In addition to the data in table 4, the assessment also reported that the quantity of potable water supplied increased

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on average by 66.9 percent for 17 MPs of potable water systems completed and that the number of irrigated hectares increased by 86 percent for 2 irrigation MPs completed under ASIF III.

Table 4. Use of Social Infrastructure

Number of % Change for three- % Change for one- Infrastructure Type Infrastructures year Period year Period Reporting 18% decrease in 12% decrease in Schools absence hours per absence hours per 75 student student 24% increase in 21% increase in Kindergartens 32 enrollment enrollment 27.9% increase in 17.8% increase in Health Care Facilities number of primary number of primary 12 visits per month visits per month

(c) Improved coverage of community infrastructure and services in vulnerable communities - Achieved

90. The project exceeded its target of reaching 27.6 percent of the rural population in the targeted areas: 35.5 percent of the targeted group benefitted from improved infrastructure and services. As shown in a 2015 multidimensional poverty analysis in Armenia, this was a particularly relevant indicator that served as a proxy for reaching the poor and vulnerable in the country. This analysis showed that over the period 2008–2013, the rural areas of Armenia had a greater share of the population that is multi-dimensionally poor (generally they are worse off on housing, heating, and education dimensions and relatively less deprived on the employment dimension). Though this has been improving over time, the rural areas of Armenia were shown to have a consistently higher share of the population that is multi-dimensionally poor compared to the national and urban levels.

91. Poverty targeting. Reaching poor and vulnerable villages was key to achieving the intermediate objectives 1–3. Following the first AF, it was agreed to implement a community targeting exercise to improve the project’s reach in poor and vulnerable villages. The exercise consisted of a two-step process. In the first step, fund allocations were considered at the marz level and in the second step, the needy communities within each marz were targeted based on vulnerability tests.

92. This exercise was completed by the start of the 2nd AF and the ranking of the communities was updated for the 3rd AF when the requirement was introduced that no less than 40 percent of the loan/credit funds be allocated to the most vulnerable communities and no more than 20 percent to the least vulnerable communities. Though the distribution of total project funds (original credit plus all three AFs) to the most vulnerable communities improved after the new requirement was added, the project still fell short of meeting this requirement overall. The distribution after the 2nd AF, however, largely met the requirement and is as follows: most vulnerable (40.5 percent), vulnerable (38.4 percent), least vulnerable (16.1 percent), and Yerevan, Gyumri and Vaandzor (5 percent). Yerevan, Gyumri and Vaandzor were not included in the mapping exercise due to their

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low poverty levels and thus were only to receive a very limited amount of funds. This exercise greatly improved poverty targeting of the final two AFs. Given the moderate targeting performance prior to this exercise and the improvement following it, the project has been moderately satisfactory in targeting vulnerable villages through the poverty mapping exercise.

Table 5. Vulnerability Level Before and After the AFs Target Distribution of MP Distribution of Total Distribution of MPs funds BEFORE the MP funds AFTER funds under AF2 AFs (% of total the AFs (% of total &AF3 (as % of total Vulnerability Level budget for budget for budget for community community community investments)* investments)** investments)*** Most vulnerable 40 13 34 41 Vulnerable 40 31 34 38 Least vulnerable 20 21 22 16 Unclassified: 35 10 5 Yerevan/Gyumri/Vanadzor Source: ASIF Project Reports. * The denominator is the funding for ASIF III plus the AF1 ** The denominator is the funding for ASIF III plus the AFs 1, 2 and 3 *** The denominator is only the AF2 and AF3 funding

93. The mapping exercise also allowed the ASIF to identify the communities eligible for reduction of the mandatory community contribution from 10 percent to 5 percent of the MP works (maintaining the minimum requirement of 4 percent for the most vulnerable communities) following the impact of the 2009 global economic and financial crisis that affected Armenia too. This also allowed the more vulnerable communities to propose more comprehensive MPs to properly address their needs.

(d) Improved sustainability of community infrastructure and services in vulnerable communities - Partially achieved/limited reporting evidence

94. The project financed an assessment on sustainability, infrastructure maintenance, and labor impact in 2012. This analysis found that, overall, measures to promote the sustainability of the investments (such as planning and estimates for operation and maintenance costs and regular maintenance work) were lacking. Operation and maintenance plans for assets rehabilitated by the ASIF were available only for 44 percent of the sampled facilities. The evaluation noted that at the time of the analysis the current state of most infrastructures was good or excellent, but the lack of systematic planning and budgeting for operations and maintenance raises concerns about the long- term sustainability of infrastructure constructed under the project. Community feedback indicates that they place a high value on MP infrastructure. Lack of operations and maintenance is attributed to insufficient resources in the vulnerable communities served by the project. However, the ICR team visits to various types of MPs that were completed several years ago revealed adequate maintenance of the facilities and their proper functioning.

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(e) Increased accountability at the local level - Partially achieved/limited reporting evidence

95. The project financed capacity development at the municipal and local levels. The target of the number of officials trained was met—716 local officials received FM training. In addition, there was training for local community members; 184 communities received capacity-building training against a target of 158. This training was delivered to 3,331 community members (PICs and Elderly Councils), of whom 1,138 (18.8 percent) were women.

96. Knowledge acquisition due to training of local Government officials was measured through tests of knowledge related to the training topics before and after the program. According to the ASIF data, improvements in acquired knowledge ranged from 37 percent to 44 percent in the five marzes (Syuniq', Vayots' Dzori, Armavir, Ararat, and Kotayq where pre and post testing was administered.

97. There is limited evidence on accountability at the local level. However, overall, the project performed well on procurement and FM and there were no misprocurements or issues reported on fraud and corruption. This may indicate that there was some level of accountability at the local level. The 2011 BA reported that almost all contractors thought that the process of contractor selection was entirely transparent and that the majority of contractors thought that the implementing agencies at the community level performed detailed and scrupulous supervision and control.

(f) Increased stakeholder empowerment - Lack of evidence

98. The project aimed to increase stakeholder empowerment through provision of capacity building and training and also through participatory selection, operations, and maintenance of infrastructure. The number of communities was also not a good proxy indicator to measure empowerment. Thus, there is limited evidence on empowerment. A better method would have been to evaluate the impact of this training on empowerment and develop indicators accordingly. The 2014 BA provides some evidence on community perceptions on the impact of the project on social capital generation. This assessment found that community members felt that the implementation of the projects had a positive impact on the interrelations of the community members by creating a climate of partnership, trust, and respect.

(g) Creation of Employment - Achieved

99. The project achieved and exceeded all of its targets on creation of employment related to MP and school furniture.

 The target for creation of jobs from the MPs was 535,000 job-days. This was exceeded as 668,738 job-days were created. The target of US$8.2 million for total value of wage income generated from completed MPs was also exceeded. The total value of11.2 million.  The target for creation of jobs from manufacturing of school furniture was 40,600 job- days. This was exceeded as 52,099 job-days were created. The total value of wages

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generated from these jobs also exceeded the target of US$0.44 million. The total value of wages created was US$0.57 million.

100. An assessment of the labor impacts of the ASIF MPs found the following:

 On average, eight temporary jobs were provided per MP  The MPs provided temporary employment for around five months longer per person and the compensation amount was equal to that of the average monthly wage in Armenia  Thirty percent of the surveyed respondents who were temporarily employed indicated that the income received had a significantly positive impact on the living standards and well-being of their families. Another 63 percent said it had a positive but small impact. Forty-eight percent of those temporarily employed indicated that their temporary employment had a positive impact on entering the labor market at a later stage or gave them experience that helped them start their own business.

Additional Impacts

101. Decentralized approach. The BA highlighted the positive impact the project had with regard to supporting the Government’s decentralization program at the local level and, in particular, strengthening local institutions and empowering communities. More importantly, it revealed that community infrastructure MPs served as effective frameworks for promoting the institutionally strengthened local Governments, mobilized community members, and created linkages with their constituents under the ASIF MPs, which enhanced interpersonal trust and strengthened intra- community bonds and cooperation.

Rating: Substantial

3.3 Efficiency

102. At project preparation, no calculations on net present value, economic rate of return, or financial rate of return were conducted. This was attributed to the demand-driven nature of the project whereby MP selection is unknown at the time of preparation, therefore preventing the use of ex ante traditional methods of cost-benefit analysis. The basis of the assessment of efficiency for this ICR comes from two cost-effectiveness studies (2008 and 2010) of civil works and a review of comparable Bank-financed projects that was conducted in preparation for the SILD Project, to determine the estimated internal rate of return (IRR).

103. Though no traditional ex-ante economic and financial analyses were undertaken, there is evidence on the quality and cost-effectiveness of the ASIF MPs. For the ASIF III Project, efficiency is evidenced in four ways: utilization of funds, percentage of output targets met, construction cost comparisons, and quality of civil works.

104. Estimation of IRR for MPs. An analysis of the IRR for three of the MP types in Armenia and in comparator countries was conducted as part of the preparation for the SILD (details in Annex 3, Table 3.4.). The IRR was pulled from the economic analysis undertaken for Bank-

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financed projects in the water, kindergarten, and school sectors. Inclusion of projects in other countries allows for a comparison of the IRR across countries. The IRR for similar water supply projects in Armenia (comprising 5 percent of the total ASIF III MPs) was calculated at 26.1 percent, and for kindergartens (14 percent of ASIF III MPs) and high schools (35 percent of ASIF III), the cost benefit was reported at 3.3 and 3.2, respectively. The estimated IRR and cost-benefit calculations were relatively higher in Armenia when compared to similar projects in Moldova and Guinea-Bissau.

105. Cost-effectiveness comparisons. Each assessment of cost-effectiveness used different types of civil works to assess the extent to which ASIF III MPs were cost effective relative to similar constructions by other actors. The 2008 assessment found that, relative to comparator organizations, the ASIF III MPs had the lowest budget cost per square meter for renovations, reconstructions, new constructions, and, in almost all cases, for heated buildings. The 2010 assessment also looked at relative costs when compared with comparator organizations and found that the unit cost for a final product per square meter for ASIF III MPs was 1.24 times less than comparators.

106. Quality of civil works. The Assessment of Civil Works Quality conducted in 2010, concluded that in general, the quality of civil works and of the used building materials was satisfactory. As a rule better quality (high to even excellent) was observed for all the newly built, rehabilitated or reinforced constructions. However, for the repair works the observed quality was lower, and the recommendation for strengthening the site supervision, was made.

107. Other efficiency criteria. The time for implementation (8.75 years) for the Main Credit and its three AFs was below the limit of “old” projects which is 11 years for projects with AFs. The disbursement performance was notable. It was ahead of schedule for most of project implementation life, with no recorded lags. At MTR, the projects disbursed 88 percent of the funds.

Rating: Substantial

3.4 Justification of Overall Outcome Rating

Rating: Satisfactory

108. The project achieved its development objectives by effectively delivering benefits to targeted vulnerable communities. Building on the strong track record of its two predecessor projects, ASIF III continued to support the Government’s efforts of improving the living conditions of poor and vulnerable groups and strengthen institutions at the local level. The project aligned with Government and Bank strategy goals and is therefore relevant in its objectives and design. The community-driven approach was particularly relevant, given the Government’s stated aim of using these approaches to develop basic infrastructure for social service delivery.

109. While targeting mechanisms continued to improve and the project ensured that the infrastructure and related activities benefitted those designated as most vulnerable, the targets for resource allocation to the most vulnerable communities in remote or isolated areas; socially vulnerable persons, including the elderly and refugees; and those living in high mountainous

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communities, earthquake zone communities, and border-zone communities, were only partially met.

110. In general, the project achieved the majority of its objectives. The record on achieving PDO and intermediate indicators was excellent: all were achieved or exceeded. Additional evidence showed that the real benefits of improved access to quality social and economic infrastructure for communities resulted in related project impacts, including increased school attendance, improved access to water, and increased health center visits. In addition, there is evidence of high quality of construction of infrastructure projects, cost efficiency of the MPs, and overall beneficiary satisfaction with both the project process and social and economic infrastructure.

3.5 Overarching Themes, Other Outcomes, and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

111. Poverty impacts. The project supported the Government’s efforts to improve living standards and to increase access to the basic social services in the neediest communities that were identified by the poverty mapping exercise.

112. At the same time, the MPs implemented during the project life had labor-intensive components related to the civil works, thus maintaining a certain critical level of employment in the contracted companies from the construction sector (severely hit by the crisis). The MPs also provided temporary employment for community members enrolled in the implementation.

113. Beginning with the 1st AF, the project provided support for the procurement of furniture for a large number of schools and kindergartens. This prevented large layoffs from the furniture manufacturing industry during the crisis and the fall into poverty of an even higher number of people.

114. Gender and social development. Community participation in MP-related decisions has been observed and enforced during the entire project implementation. A mandatory second round of community consultations was introduced beginning with the 3rd AF. Women were represented in a proportion of 64.9 percent in the community general meetings. Details are provided in section 2.4. However, the overall participation in general community meetings was smaller in ASIF III (57,358 participants) when compared with ASIF II (155,000 participants). One reason for this may be that the communities under ASIF III were smaller due to the vulnerability criteria, which correlated strongly with small rural communities.

(b) Institutional Change/Strengthening

115. At the central level, the ASIF was the implementing agency for ASIF III and for previous similar types of projects (ASIF I and ASIF II). In18 years of activity, it became a strong institution with sound technical expertise and efficient administrative capacity.

116. The experience in MP management from design throughout implementation up to completion, and even post-completion sustainability issues, made the ASIF the most suitable

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implementing agency for the follow-up Bank-financed, recently approved operation (March 2015), the SILD, amounting to US$30 million.

117. Moreover, the ASIF was transformed into the ATDF, maintaining its autonomous status but with extended prerogatives and responsibilities in the implementation of other projects supporting the Government’s priority of achieving balanced geographical development by reducing territorial disparities.

118. In addition, the ASIF/ATDF became the implementing agency (entirely or partially) for other infrastructure projects financed by other bilateral and international donors such as USAID, Swiss International Cooperation Office, Asian Development Bank, European Investment Bank, or the World Bank.

119. At the local level, capacity building was supported by the second component of the ASIF III Project and detailed information is presented in section 3.2.

(c) Other Unintended Outcomes and Impacts (positive or negative)

120. Mainstreaming children with different abilities into regular kindergarten Early Childhood Development programs. The inclusion of classes for these children into the same establishment for regular classes, combined with early enrollment and provision of specialized education, contributed to a faster and more effective recovery and inclusion of these children in regular Early Childhood Development educational programs.

121. Adequacy of staffing in the rehabilitated medical and educational units. The interviews with direct and indirect beneficiaries revealed the improved working conditions, both with regard to physical rehabilitation and equipment endowment, contributed to the retention of existing staff or attraction of new staff in these units.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

122. Three BAs were financed by the project, in 2008, 2011, and 2014. The sequencing of the BAs allowed proper monitoring of the relevant indicators from the RF and verification if the recommendations of previous assessments had been implemented. Several important results of these assessments are presented below; annex 5 presents more details on these aspects.

 These assessments found that the participants were well-informed of project activities and that the MPs targeted priority needs.  Beneficiaries perceived a positive impact on the living standards of community residents (88 percent of the respondents from the 2012 BA) and highly valued the positive impact of the MPs on the improvement of the social and economic conditions of residents.  On the whole, satisfaction with the quality of projects was high (the 2014 BA rate of satisfaction with procedures, quality, and duration exceeds 80 percent). The MPs generated temporary employment for community members, which had a positive impact on living standards (62.6 percent of the respondents in the 2012 survey).

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 The training received through the ASIF was felt to have a positive impact on local Government capacity.  In general, though there was awareness of the need for operations and maintenance, responses around the practice of operations and maintenance were inadequate (2012 survey - 44 percent had plans for operations and maintenance).

4. Assessment of Risk to Development Outcome

Rating: Modest

123. Of the four risks identified at the appraisal stage: (a) the potential rise of construction costs; (b) the Government’s capacity to ensure the agreed counterpart funding; (c) the availability and sustainability of funding for capacity-building activities at the municipal level; and (d) potential corruption threats). Out of them, the only one risk that materialized was the counterpart funding and it was adversely affected by the global financial and economic crisis, and had consequences on co-financing for MPs implementation and subsequently on operation and maintenance.

124. This threat was mitigated when the 2nd Additional Financing was approved by reducing the community contribution to 5 percent, with a minimum of 4 percent for most vulnerable communities. This reduced contribution requirement was also applied to the communities having micro-projects financed by ASIF III Main Credit and 1st AF.

125. Going forward, the risk of counterpart funding to continue supporting ASIF remains. Armenia’s current economic outlook is poor and this could definitely impact counterpart funding. The new SILD project, however, mitigates much of the risk of the financial sustainability of the ongoing operation of ASIF. In addition, multiple other donors have commitments or are planning to commit additional funding to ASIF. This, however, does not ensure independent, self-financing of ASIF and this risk will continue to be monitored by the SILD team.

126. Also the lack of adequate counterpart fund affects operations and maintenance (O&M) of the infrastructure by communities. This was an issue identified by studies under ASIF III and thus the follow-up Bank financed project (SILD) has taken several measures to ensure better O&M, including requiring the cost of O&M to be included in the project proposal, requiring communities to periodically report on the current status of their infrastructure and sign a commitment to O&M following completion of the works, and making any community not maintaining their current investment ineligible for future ASIF projects.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry

Rating: Moderately Satisfactory

127. The Bank’s team leader who led the project preparation and supervised the first phase of ASIF III project implementation was also the team leader for the ASIF I and ASIF II Projects.

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This continuity was beneficial for the establishment of a good working relationship with Government counterparts and provided an institutional memory for the project and its lessons. It also enabled fast project preparation and implementation take-off.

128. There was no Quality at Entry review, but as previously mentioned, the 2nd QALP report from 2010 made some constructive observations related to the: (a) RF, which was considered too output-oriented; and (b) inability of assessing other results arising from project implementation regarding the sustainability, quality of works, or safeguards compliance and rated the Bank’s performance for this criteria as Moderately Satisfactory.

129. The ICR acknowledges that the team attempted to address these observations following the MTR and during the implementation of the subsequent three AFs. The revision of the RF was less successful, but the issues related to the sustainability, quality of works, and safeguards compliance were carefully analyzed by the studies commissioned and were subsequently addressed.

130. Retroactively analyzing the features of the initial RF and taking into account the traditional M&E approach (output based) of counterpart partners, it can be concluded that at the preparation phase it was not easy for the Bank team to convince the client to accept a stronger outcome-based approach. However, this issue was not neglected during the implementation phase—when the client’s sophistication gradually increased and enabled increased acceptance for an outcome-based approach—as currently is the case with the new Bank-financed SILD Project. This is a process that took time but changed the approach for a longer term in the future.

(b) Quality of Supervision

Rating: Moderately Satisfactory

131. With three AFs, the project supervision can be considered as a continuously combined activity of supervision with preparation.

132. During the entire project implementation, supervision was conducted by two team leaders, both of them exercising their TTL-ship prerogatives diligently. The transition from one to another was properly overseen by the sector manager and was smoothly put in practice with good impact on project implementation and the overall relationship with the Government and the implementing agency. The responsiveness with which the Bank responded to the Government’s requests was highly appreciated by the counterparts that the ICR team met.

133. The project supervision documents—Implementation Status Reports (Bank internal) and Aide Memoires—were produced on time and properly covered all the main aspects of project implementation, providing useful information to the Bank’s management and to the counterparts.

134. The fiduciary aspects regarding procurement (prior and post review) and the FM were adequately reviewed by the Bank’s experts and related reports were regularly produced. No major issues were flagged from this point of view.

135. Similarly, compliance with social and environmental safeguards was constantly evaluated by the Bank’s specialized staff, having adequate resources allocated for this purpose. No major issues were reported from this point of view, either.

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136. The fact that for the last six years of the project life the team leader was based in the region enabled a high number of supervision missions and field visits to MP sites, and a good interconnectivity with the implementing agency, facilitating the resolution of most of the issues deriving from implementation in real time. This also contributed significantly to the quick preparation and approval of the three AFs.

137. The supervision team was proactive in early identification of project implementation bottlenecks and quickly implemented appropriate remedial measures. For example, when the ASIF’s procurement-related capacity was endangered by the exit of one staff member, the Bank’s team hired a short-term consultant who provided temporary technical support to the ASIF to fill the gap and delivered on-the job training for the newly hired staff. Also, for the 3rd AF, when there was a need to increase the civil engineering capacity the Bank hired a consultant who complemented the ASIF’s capacity to review the technical designs of the new MPs from the seismic safety point of view and to check compliance with the requested standards in the field.

138. The Bank’s office in Yerevan provided valuable support both with regard to technical aspects of sector-related issues and fiduciary responsibilities. The continuous support and real- time communication with Government counterparts enabled efficient and early identification of issues arising from implementation and their quick resolution.

139. The team, however, was not able to secure agreement of the government to improve the PDO and results framework as recommended by the QALP assessment.

(c) Justification of Rating for Overall Bank Performance

140. Overall Bank performance is rated Moderately Satisfactory based on the ratings of Bank performance in ensuring Quality at Entry and Quality of Supervision.

5.2 Borrower Performance

(a) Government Performance

Rating: Satisfactory

141. The Government of Armenia was highly supportive of the ASIF III program both during the project preparation and implementation phases. The Ministry of Finance adequately budgeted and provided the borrower’s counterpart financing to the ASIF on time. The Ministry of Territorial Administration and Emergency Situations, which incorporated the Ministry of Territorial Development, provided the strategic regional development framework that enabled the implementation of the ASIF III project activities at the community levels.

142. The Government diligently searched for additional sources of financing to support the development and implementation of ASIF type projects, thus creating conditions for the expansion of such programs to cover as many vulnerable and needy communities as possible.

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143. The fact that the prime minister chaired the ASIF’s Board throughout project implementation reflects the importance attached by the Government to this project and its continuous commitment to secure proper conditions for its successful implementation.

144. The Board comprises members of Government, representatives from NGOs and civil society, and representatives from elected local Governments. The Board meets biannually for regular meetings or whenever there is a need to take strategic or critical decisions or for routine implementation procedures. In the context of the ASIF III Project, the Board approved 74 MPs, exceeding the ceiling of AMD 100 million; 206 contracts awarded through national competitive biddings; and all routine quarterly and annual implementation reports.

(b) Implementing Agency or Agencies Performance

Rating: Satisfactory

145. The ASIF was the implementing agency for ASIF III and previous similar types of projects (ASIF I and ASIF II). With 18 years of experience, the ASIF (created in 1996) implemented over 900 local social and economic MPs and became a strong institution with sound technical expertise and efficient administrative capacity. It became a highly respected and trustworthy institution, being considered by most of the beneficiary communities as a partner and even a friend (quoting the BAs) rather than just a financing agency.

146. Gradually, the ASIF gained experience in MP management from design throughout implementation up to completion, and even post-completion sustainability issues.

147. The fact that the ASIF’s Board is chaired by the Prime Minister gives it strong leverage in acknowledging the issues arising during project implementation at the Government level and mobilizing the necessary Government actions to quickly resolve them.

148. Given all these credentials, the ASIF was selected to be the implementing agency for the follow-up Bank-financed, recently approved project (March 2015), the SILD. Moreover, the ASIF was transformed into the ATDF, maintaining its autonomous state but with extended prerogatives and responsibilities in the implementation of other projects supporting the Government’s priority of achieving balanced geographical development by reducing territorial disparities.

149. Besides the SILD Project amounting to US$30 million, the following programs financed by international or bilateral donors are likely to be implemented (entirely or partially) by the ASIF/ATDF over the coming years:

 Swiss International Cooperation Office - Grant amounting to CHF 2.88 million to support implementation of intercommunity infrastructure projects in seven consolidated communities (Syounik and Vayots Dzor regions)  USAID - Grant amounting to US$8.6 million to support intercommunity projects in 14 pilot clusters in the Kotayq, Syounik, Vayots Dzor, Shirak, Lory, Tavoush, and Ararat regions.

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 Asian Development Bank (US$107 million) and European Investment Bank (US$125 million) to support the upgrade of the seismic safety of public schools in Armenia  World Bank - Local Economy and Infrastructure Development Project (US$66 million) to support infrastructure investments as prerequisites for future tourism developments

150. Under these circumstances, the ASIF’s workload and responsibilities will significantly increase and additional staff with various specializations will need to be hired.

151. Also, since remuneration of staff remained flat in the ASIF in the last ten years, some experts left the agency for better-paid jobs in the market and had to be replaced, which was not always easy. To prevent future staff attrition and to retain existing qualified staff in the agency, staff motivation should not be neglected.

(c) Justification of Rating for Overall Borrower Performance

Rating: Satisfactory

152. Overall borrower performance is rated Satisfactory based on the ratings for Government performance and implementing agency performance.

6. Lessons Learned

153. Poverty targeting. The experience of implementing the ASIF III Project revealed that clearly formulated poverty targeting enables equitable and adequate allocation of project funds to the neediest communities, avoiding possible political interference in the selection process. ASIF’s III targeting approach used a two-stage process, combining the geographical targeting of project funds by region (marz) with the identification of the neediest communities within each marz through a community mapping and profiling exercise based on a set of detailed, previously agreed criteria. This resulted in the classification of needy communities into three clusters (most vulnerable, vulnerable, and less vulnerable), which proved to be effective in the beneficiary community selection process.

154. Technical designs have to be adequately adapted to the specificity of local conditions. Being a country with high seismic risk and vast, high mountainous areas (where the winters are long and cold), Armenia has some specificities that have to be taken into account at the technical design phase. The technical design, complying with high seismic safety standards, and subsequent delivery of good quality and cost-effective community works projects were important factors for ensuring affordable sustainability costs both with regard to infrastructure maintenance and functioning (mainly heating costs) and for obtaining beneficiaries’ satisfaction for the services delivered.

155. Operations and maintenance requirements have to be enforced and properly budgeted. Despite the efforts taken to improve community involvement and develop capacity in operation and maintenance of infrastructure, this is still problematic mainly due to the lack of adequately secured financial resources. The 2012 study commissioned by the project found that 44 percent of sampled projects had operation and maintenance cost planning and estimates for 2011.

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156. The report made several recommendations on improving operations and maintenance, including: (a) adding additional criteria for review before approval of project proposals, including separate items or annexes to show operation, maintenance, and sustainability costs for assets; (b) giving priority to and encouraging applicants who conduct operations and maintenance on existing assets at an appropriate quality and level; (c) evaluating the operation and maintenance of assets previously improved by the ASIF in the case of communities that are applying for additional ASIF funding after receiving a project in the past; and (d) providing enhanced training on operations and maintenance. These recommendations translated into inclusion of more strict requirements in the follow-up operation (SILD).

157. Adequacy of the Results Framework. The RF was acknowledged to be inappropriate for the proper monitoring and evaluation of the PDO, as it was output based instead of outcome based. This generated difficulties on the justification of the PDO achievement and sometimes even created confusion. This was the main reason for rating the Bank’s performance as Moderately Satisfactory. Thorough consideration was given to this lesson during the preparation of the follow- up SILD, which has a much more outcome-based results framework and PDO and a more evaluation-based Monitoring and Evaluation plan.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

(a) Borrower/implementing agencies

(b) Co-financiers. Not applicable.

(c) Other partners and stakeholders. Not applicable.

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Annex 1. Projects Cost and Financing

Annex 1.1 Total Project Costs and Financing (Main ASIF III + AFs)

(a) Total Cost by Component (in US$, millions equivalent)

Appraisal Estimate Actual/Latest Estimate Percentage of Components (US$ millions) (US$ millions) Appraisal

Component 1. Community Investments 55.97 62.91 112.4

Component 2. Local Level Institutional 0.77 0.20 25.4 Strengthening, M&E

Component 3. Project Management 5.46 5.89 107.9

Total Baseline Cost 62.20 69.00 110.9

Physical Contingencies 2.01 0.00 0.00 Price Contingencies 2.58 0.00 0.00 Total Project Costs 66.79 69.00 103.3 Front-end fee Project Preparation 0.00 0.00 0.00 Facility (PPF) Front-end fee IBRD 0.02 0.02 100.00 Total Financing Required 66.81 69.02 103.3

(b) Financing

Actual/Latest Appraisal Estimate Percentage of Source of Funds Type of Co-financing Estimate (US$ millions) Appraisal (US$ millions) Borrower 12.40 12.46 100.5 Local Communities 3.28 4.17 101.7 IDA/IBRD 51.00 51.88 127.2 Local Sources of Sponsors 0.13 0.50 382.5 Borrowing Country

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Annex 1.2. Credit/Loan Funds (Main ASIF III + 3 AFs), by Components

(a) Total Credit/Loan Allocation by Component (in US$, millions equivalent)

Appraisal Estimate Actual/Latest Estimate Percentage of Components (US$ millions) (US$ millions) Appraisal Component 1. Community Investments 44.16 48.57 109.98 Component 2. Local Level Institutional 0.60 0.15 25.00 Strengthening, M&E Component 3. Project Management 2.78 3.15 113.31 Total Baseline Cost 47.54 51.87 109.10

Physical Contingencies 1.51 1.51 100.00 Price Contingencies 1.94 1.94 100.00 Total Project Costs 50.99 55.32 101.72 Front-end fee PPF 0.00 0.00 0.00 Front-end fee IBRD 0.02 0.02 0.02 Total Financing Required 51.01 55.34 101.72

(b) ASIF III (Main) Credit/Loan Allocation by Component (in US$, millions equivalent)

Appraisal Estimate Actual/Latest Estimate Percentage of Components (US$, millions) (US$, millions) Appraisal Component 1. Community Investments 19.48 24.05 123.45

Component 2. Local Level Institutional 0.47 0.13 27.65 Strengthening, M&E Component 3. Project Management 1.61 1.92 119.25 Total Baseline Cost 21.56 26.10 121.10

Physical Contingencies 1.51 0.00 0.00 Price Contingencies 1.94 0.00 0.00 Total Project Costs 25.01 26.10 104.44 Front-end fee PPF 0.00 0.00 0.00 Front-end fee IBRD 0.00 0.00 0.00 Total Financing Required 25.01 26.10 104.44

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(c) 1st AF Credit/Loan Allocation by Component (in US$, millions equivalent)

Appraisal Estimate Actual/Latest Estimate Percentage of Components (US$, millions) (US$, millions) Appraisal Component 1. Community Investments 8.00 7.99 99.87 Component 2. Local Level Institutional 0.00 0.00 0.00 Strengthening, M&E Component 3. Project Management 0.00 0.00 0.00 Total Baseline Cost 8.00 7.99 99.87

Physical Contingencies 0.00 0.00 0.00 Price Contingencies 0.00 0.00 0.00 Total Project Costs 8.00 7.99 99.87 Front-end fee PPF 0.00 0.00 0.00 Front-end fee IBRD 0.00 0.00 0.00 Total Financing Required 8.00 7.99 99.87

(d) 2nd AF Credit/Loan Allocation by Component (in US$, millions equivalent)

Appraisal Estimate Actual/Latest Estimate Percentage of Components (US$, millions) (US$, millions) Appraisal Component 1. Community Investments 6.54 6.51 99.54 Component 2. Local Level Institutional 0.00 0.00 0.00 Strengthening, M&E Component 3. Project Management 0.44 0.48 109.10 Total Baseline Cost 6.98 6.99 100.00

Physical Contingencies 0.00 0.00 0.00 Price Contingencies 0.00 0.00 0.00 Total Project Costs 6.98 6.99 100.00 Front-end fee PPF 0.00 0.00 0.00 Front-end fee IBRD 0.02 0.02 100.00 Total Financing Required 7.00 7.01 100.00

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(e) Third AF Credit/Loan Allocation by Component (in US$, millions equivalent)

Appraisal Estimate Actual/Latest Estimate Percentage of Components (US$ millions) (US$ millions) Appraisal Component 1. Community Investments 10.14 10.02 98.81 Component 2. Local Level Institutional 0.13 0.02 15.38 Strengthening, M&E Component 3. Project Management 0.73 0.75 102.73 Total Baseline Cost 11.00 10.79 98.00

Physical Contingencies 0.00 0.00 0.00 Price Contingencies 0.00 0.00 0.00 Total Project Costs 11.00 10.79 98.00 Front-end fee PPF 0.00 0.00 0.00 Front-end fee IBRD 0.00 0.00 0.00 Total Financing Required 11.00 10.79 98.00

Annex 1.3. Credit/Loan Funds (Main ASIF III + 3 AFs), by Expenditure Category

(a) Main credit

Amount of the Loan Financing Percentage Expenditure Category Allocated (in US$) (%) Civil Works 16,560,000 78

Goods 3,500,000 78 Consulting Services, Study Tours, 2,050,000 78 Training, and Studies Incremental Operating Costs 1,390,000 50

PPF 1,500,000 78 Total 25,000,000 –

(b) First Additional Financing

Amount of the Loan Financing Percentage Expenditure Category Allocated (in US$) (%) Civil Works 7,500,000 78 Goods 300,000 78 Consulting Services 200,000 78 Total 8,000,000 –

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(c) Second Additional Financing

Amount of the Loan Percentage of Expenditures Category Allocated (in US$) to be Financed Goods, Works, and Consultants’ 6,542,500 85 Services Operating Costs 440,000 50 Front-end Fee 17,500 Total 7,000,000 –

(d) Third Additional Financing

Category Amount of the Credit Percentage of Expenditures Allocated (in US$) to be Financed Goods, Works, Training, and 10,292,000 78 Consultants’ Services Operating Costs 708,000 50 Total 11,000,000 –

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Annex 2. Outputs by Component

Output Target Actual Component 1. Community Investments Financing US$55.97 million US$62.8 million (112% of plan) US$44.2 million US$48.8 million (110% of plan)

Community Contributions US$3.28 million US$4.2 (127.2% of plan) Sponsors US$0.13 million US$0.50 million (382.5% of plan) Completed MPs 170 original/283 revised 319 Schools 113 (35% of total) Community centers 88 (28% of total) Kindergartens 44 (14% of total) Health facilities 23 (7% of total) Special schools 18 (6% of total) Potable water 17 (5% of total) Other (environmental, elderly houses, 17 (5% of total) irrigation, and sewage systems) Integration social service centers, specialized centers for vulnerable 3 3 groups (elderly) 700 schools and kindergartens 846 schools and kindergartens Number of schools, kindergartens, and (original)/822 (revised) community centers benefitting from new furniture 11 community centers 65 community centers (original)/40 (revised) Number of jobs to be created from 285,190 job-days 668,738 job-days completed MPs (original)/535,000 (revised) Total: 1,681,562 (134.5% of the Number of beneficiaries Total: 1,250,627 (original) plan) Female beneficiaries Female: 657,388 Female: 829,909 (126.2% of the plan) Component 2. Local Level Institutional Strengthening, M&E US$0.77 million US$0.19 million (25% of plan) Financing US$0.60 million US$0.15 million (25% of plan) Number of officials at the municipal 1,000 officials (original)/715 716 officials level receiving FM training (revised) Component 3. Project Management US$5.46 million US$5.88 million (107% of plan) Financing US$2.78 million US$3.15 million (113.3%) Regular technical, financial, and procurement audits and supervision Satisfactory Satisfactory mission reports are Satisfactory

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A. Component 1. Community Investments

The project successfully met its infrastructure goals and expanded on the success of previous ASIF projects. This was accomplished through the provision of 319 MPs financed with IDA credit, local contributions, and financial support from sponsors. Disbursements of IDA credit for this component totaled US$48.8 million, 110 percent of the US$44.2 estimated at appraisal. Community contributions and sponsor contributions for overall project financing were larger than anticipated (127 percent and 382 percent of planned, respectively). The ASIF financed projects selected by the targeted communities; these were mostly schools, community centers, and kindergartens.

School and Kindergarten MPs and Furniture

Most of the projects selected by communities were schools (35 percent) and kindergartens (14 percent. In addition, the project financed the provision of school equipment and furniture to 846 schools and kindergartens (59,768 units of furniture were provided to schools and 4,905 units were provided to kindergartens). According to the BAs and the ICR mission interviews, there were several positive impacts associated with school and kindergarten MPs and the provision of furniture and equipment. Some of the reported impacts include increased attendance, reduced transport time, and increased morale.

Community Center MPs and Furniture

A large proportion of selected MPs (28 percent) were community centers. The project also financed new furniture for community centers; there were 65 community centers that benefited from new furniture—16,994 armchairs and other types of furniture were provided to assembly halls and cultural centers. There were some related impacts associated with provision of community centers and new furniture, including increased ease of doing necessary business; reduced travel time; and increased authority of community Government.

Health Care Facilities

Some communities selected the MPs to the rehabilitation of health care facilities (PHC, ambulatory, or even small hospitals). Almost US$4.2 million, representing 8 percent of the total costs for works (US$53.9 million) under Component 1 of the project, was spent for the rehabilitation or construction of 23 health care units, thus providing improved access to better quality health services for 606,483 potential beneficiaries.

Capacity Building and Community Participation

Capacity building was provided to community councils, school boards, and the PICs to help them effectively plan and manage their MPs, as well as strengthen relationships with the local Government. Around 5,331 community members of the PICs and Elderly Councils participated in the training, of which 1,138 (21.3 percent) were women. The total number of participants in the community general meetings was 57,358 persons, out of which 37,358 (64.9 percent) were women.

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Creation of Employment

By hiring local beneficiaries to assist with the construction of civil works and furniture for schools and community centers, the project provided much needed employment opportunities during the financial crisis. For the construction of the MPs, this resulted in 668,738 job-days and US$11.2 million of wage income being generated. The local manufacturing of new school furniture resulted in 52,099 job-days and US$0.57 million of wage income being generated. Assessments undertaken reflect the positive impact of the local construction and manufacturing related to the project. Almost all respondents surveyed in the 2011 BA indicated that the employment opportunities had a positive impact on their well-being.

B. Component 2. Local Level Institutional Strengthening, M&E

Institutional Strengthening

The project met its goal of the number of local officials trained; this cost US$0.15 million instead of the planned US$0.60 million due to the decision to use less loan/credit funds for this activity. These trainings benefitted mayors, finance officers, accountants, and village council members who received municipal FM training. The training was completed by 716 local Government officials from 145 communities from all regions of Armenia and they demonstrated knowledge through assessments given before and after completion of the training.

Monitoring and Evaluation

The project financed special studies, technical assessments, formal reviews, and workshops to support and enhance the M&E of activities and to allow for adjustments and mid-course corrections as indicated. The following M&E activities were undertaken:

 Three BAs (2008, 2011, and 2014)  Two assessments of the cost-effectiveness of the MPs (2008 and 2010)  Assessment of the sustainability, maintenance, and labor impact of the MPs  Assessment of the quality of civil works projects

C. Component 3. Project Management

This component used US$3.15 million in IDA Credit to finance institutional support for the ASIF to effectively implement local programs and projects. This was achieved through the financing of operating costs, including salaries, utilities, office equipment, training, financial audits, and MIS maintenance.

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Annex 3. Economic and Financial Analysis

No net present value or economic rate of return calculations were undertaken at project preparation. This was attributed to the demand-driven nature of the project; the selection of the MPs was unknown when the project was prepared. There is more information available now, which allows for a more extensive economic and financial analysis.

Development impact.3 Almost 91 percent of the project financing for community investments (US$62.9 million), went for MPs supporting social infrastructure in least vulnerable, vulnerable, and most vulnerable communities according to the community mapping exercise. These MPs provided increased access to potable water, kindergarten and education, health care, and community and cultural facilities. The provision of these facilities is highly likely to contribute to human development. There is insufficient data to provide a quantitative analysis of the benefits of improved quality and access to social infrastructure. However, there is evidence on the quality of infrastructure as well as the impact of the project on access to services (found in earlier sections of the ICR). Though there is also no data on what would have happened in the absence the project (for example, in vulnerable communities that did not receive the ASIF), it is very likely that this project contributed to human development in targeted communities though the exact impact cannot be completely quantified.

Cost-effectiveness comparisons. There were two cost-effectiveness assessments of civil works (2008 and 2010). Each used different types of civil works to examine the extent to which the ASIF III MPs were cost-effective relative to similar constructions by other actors.

The 2008 assessment looked at multiple dimensions to determine cost-effectiveness, including the unit cost of the final product and duration of civil works. This assessment found that only 44.4 percent of the projects were completed within the time limit stipulated in the contract; in the remaining 55.6 percent of the cases, the works were completed between 12 and 175 days after the deadline. The main reasons for extension were severe weather conditions and changes in project design. The extensions are of concern because they affect costs incurred for technical supervision and quality of the works.

Project design was assessed and found to be generally satisfactory. However, there were some examples of projects with imperfections and omissions that significantly influenced the quality of civil works. The most common error in project designs was inaccuracy in measurements and estimation. In comparison with other organizations, the share of project design cost spent by the ASIF in construction budget estimates did not differ significantly from comparator organizations.

3 Definition: A project is expected to contribute to development if expected benefits justify the expected costs and included benefits that can be realistically stated in monetary terms or other benefits that are more difficult to monetize or sometimes even to quantify but can be demonstrated to be important as project outcomes. Expected benefits and costs attributable to a project are measured by comparing the situation with the project to the situation without the project. Where plausible alternatives exist, the selected project should be shown to be the preferred design (OPCS 2014).

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Additional analysis was undertaken on final product costs and cost-effectiveness by comparing costs of civil works per square meter with NGO and Government projects. The analysis found that for renovations, the budget costs per square meter for the ASIF MPs were the lowest (1.1– 1.48 times less than comparators). For reconstructions, the ASIF III MPs were also the lowest (1.04–3 times less). For new constructions, they were 1.06 times less than an NGO (exempt from tax) project and 1.12 times lower than the ones financed by Government line ministries. An additional analysis of budget costs per square meter surface of heated building found that, with the exception of two cases, the ASIF MPs are lower by 6 to 51 percent.

Table 3.1. Ratio of Budget Costs of Civil Works

Ratio of Budget Costs of Civil Works on 1 m2 Ratio of Budget Costs of Civil Works on 1 m2 (in Surface of Heated AMD/m2, including VAT) Name of Client Building (in AMD/m2, including VAT) Renovation Reconstruction New construction All Armenian – 73,000 – 6,500 Foundation

Ministry of Urban 45,000 130,000 180,000 13,000 Development

Education Department – 115,000 – 6,000 of Yerevan Municipality

Judicial Department of – 210,000 – 13,300 RA Linsy Foundation – 118,000 170,000 12,600 (VAT exempted) United Nations 67,000 – – 7,200 Development Program USAID 65,000 – – – Armenian Renewable Resources and Energy – – – 5,800 Efficiency Fund

Shelter 50,000 – – –

ASIF 45,000 70,000 165,000 6,800 Note: VAT = Value-added Tax.

The 2010 assessment measured cost-effectiveness along similar dimensions. Again, the assessment found that projects were exceeding their estimated duration; in 70 percent of the cases the project dates were not adhered to.

This assessment also conducted an analysis of the final product costs of civil works, comparing the costs with 10 organizations. As seen in table 3.2, for capital construction, the ASIF’s unit cost of final product was lower in all cases in comparison with the unit costs of other donors. Notably,

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for capital constructions, it was 1.24 times less than other donors’ figures; for internal heating system installment (with the exception of the judicial reform project), 1.9 times less; and for heating with internal combustion, 1.9 times less than similar figures of other donors.

Table 3.2. Unit Cost of Capital Construction

Unit cost of heating system normalized to 1 m2, Unit Cost of Capital VAT included (AMD/m2) Construction of 1 m2, Comparator VAT included (AMD/m2) Heating Heating System with Boilers System of Internal Combustion

ASIF 200,000 3,970 6,000

Health System Modernization 242,000 – 11,200 Project Implementation Unit

Armenian Renewable Resources and Energy – 5,400 9,000 Efficiency Fund – All Armenia Foundation 277,000 10,000 – Mayoral office of Yerevan 224,000 7,100

Enterprises Incubator of – – 6,500 Foundation* – Department of Coordination of Investment Projects of Water and Wastewater Closed 278,000 16,900 Joint Stock Company of Armenia – USAID* – 9,200 – Judicial Reform Project 249,350 3,930

Ministry of Urban – 218,000 13,000 Development Note: * This organization is exempt of VAT.

The MIS of the project allows for tracking of estimated costs per beneficiary by MP type. These are presented in table 3.3.

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Table 3.3. Estimated Costs Per Beneficiary Average Cost per Type Number % Cost, US$ % Cost by Beneficiaries * % Beneficiary Type * (US$) Schools 112 35.1 17,505,605 32.7 156,300 156,421 9.3 111.91 Community 88 27.6 15,614,687 29.2 177,440 424,200 25.2 36.81 Centers Kindergartens 44 13.8 7,897,511 14.8 179,489 100,587 6.0 78.51 Health care 23 7.2 4,212,029 7.9 183,132 606,483 36.1 6.95 Facilities Special 18 5.6 3,600,293 6.7 200,016 118,040 7.0 30.50 Schools Potable 17 5.3 2,047,639 3.8 120,449 34,830 2.1 58.79 Water Area 9 2.8 1,289,234 2.4 143,248 234,909 14.0 5.49 Rehabilitation Elderly 5 1.6 765,418 1.4 153,084 1,153 0.1 663.85 Houses Irrigation 2 0.6 397,175 0.7 198,588 2,639 0.2 150.50 Sewage 1 0.3 132,618 0.2 132,618 2,300 0.1 57.66 System Total 319 100.0 53,462,208 100.0 167,593 1,681,562 100.0 31.79 Source: ASIF MIS. Note: * Number of beneficiaries is computed as the share of the population of the targeted community that is supposed to use a specific service during a year according to their age. For example, for schools, the number of beneficiaries is computed as the share of population of school-age children in one year. This number is reported without repetitions in case of >1 MP in a community.

Estimation of the IRR for the MPs. As part of preparation for the SILD Project, a more detailed analysis of the IRR for relevant MP typologies was conducted (summary of this analysis is presented in the below Table 3.4. This analysis estimated the IRR of kindergarten MPs (using data from SIF III and a comparator project in Armenia) and found that the estimated IRR for this type of project was 18 percent. Additional analysis on comparable projects in Armenia (potable water and secondary schools) yielded additional data points that can be used to estimate the economic returns to these MPs. The rehabilitation of secondary schools in Armenia was estimated to have a cost-benefit ratio of 3.3 per student, and building potable water connection is estimated to have an IRR of between 10 and 26 percent for different projects.

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Table 3.4: IRR reported in other PAD Economic Analysis

Project Type Country/Specific Main Costs Main Benefits IRR Project Guinea-Bissau/Water Time saved by having the well Investment cost 22.81% wells close to home - Lower private costs of water - Investment cost - Increase in water consumption Moldova/Water - Cost of household - Health conditions 10% supply connections improvement - Maintenance cost - Higher attractiveness of the Water village for investment - Increase in the average consumption per customer per month Armenia/Water Investment cost - Increase in the hours per day 26.1% supply supplied - incremental revenues assuming constant tariffs - Investment cost - Higher enrollment rate of - Maintenance cost children aged 5–6 years Cost- Kindergarten Armenia/Preschools - Students continuing - More years of schooling benefit: 3.3 education - Lower repetition rates Guinea- Increment in per Increment in student output of Bissau/Primary student cost of 45 46 percent education percent - Reduction in heating costs - Increase of teachers’ presence - Increase in net enrollment by 15 percent - Increase in the average class Moldova/School time by 20 percent and Investment cost 12–60% heating student attendance by two days per child-year - Increase in student’s educational attainment Schools - Increase in the communities’ capacity for solving problems - Increase in graduations rates from 80 percent to 85 percent - Decrease in repetition rates - Investment cost from 10 percent to 5 percent - Increase in the unit - Increase in the proportion of cost per student by Cost- Armenia/High school students that transition to 20 percent benefit: 3.2 tertiary education from 40 - Maintenance cost percent to 45 percent and depreciation - Better labor market outcomes: higher productivity, lower unemployment

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Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Lending Nancy N. Agwu Finance Analyst WFAFO Alexander Astvatsatryan Consultant GGODR Hilarian M. Codippily Sr. Country Economist EASPR - HIS Olena Fadeyeva Sr. Operations Officer LLIOP Mariana T. Felicio Social Development Specialist GSURR Junko Funahashi Lead Counsel LEGEN Maria E. Gracheva Sr. Operations Officer GHNDR Susanna Hayrapetyan Lead Health Specialist GHNDR Nicole L. La Borde Program Assistant MNSHD - HIS Caroline Mascarell Operations Adviser and TTL EAPDE Aleksandra Posarac Program Leader EACPF Sr. Financial Management Arman Vatyan GGODR Specialist Supervision/ICR Ivan Drabek Sr. Operations Officer GSPDR Alexander Astvatsatryan Consultant GGODR Aleksan Hovhannisyan Sr. Operations Officer ECCAR Darejan Kapanadze Sr. Environmental Specialist GENDR Vahan Danielyan Consultant GSPDR Anarkan Lilly Counsel LEGCF Sr. Financial Management Arman Vatyan GGODR Specialist Richard Florescu Sr. Operations Officer GSPDR Anna Goodman Program Assistant GSPDR Satik Nairian Program Assistant ECCAR Kathryn Steingraber Consultant GSPDR

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(b) Staff Time and Cost

Staff Time and Cost (Bank Budget Only) Stage of Project Cycle US$ thousands No. of staff weeks (including travel and consultant costs) Lending FY06 105.11 FY07 87.56 FY08 0.00 Total: 192.67 Supervision/ICR FY06 0.00 FY07 55.47 FY08 70.73 FY09 18.18 69.98 FY10 26.68 77.86 FY11 30.37 76.64 FY12 10.61 40.83 FY13 19.14 97.04 FY14 5.82 31.98 FY15 11.63 57.38

Total 577.91

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Annex 5. Beneficiary Survey Results

The main results of the three BAs conducted during project implementation are presented below.

2008 BA

 The ASIF projects are aimed at resolving the needs and problems that are top priority and the positive impact of the projects in sampled settlements is evident.  On the whole, almost all stakeholder representatives are satisfied with the ASIF MPs and the quality of work done. However, some communities complained about the unfavorable weather conditions and some shortcomings revealed during the work.  Representatives of the community and organizations’ primary stakeholders were informed about the projects to be implemented. In particular, the local Government representatives, initiative associations members, and those providing services had clear information on the projects in contrast with the users of those services.  The benefits of the ASIF projects are available to almost all the community members with the exception of the Tazagjugh Piped Water Project, where not all members have access to the water pipeline.  SIF MPs have provided short-term jobs to some community residents by giving them an opportunity to be involved in construction activities.  The participation of community members in the activities within the framework of the MPs had a positive impact both on the efficiency of the project as well as community functioning.  To some extent, ASIF MPs also add to community solidarity and collaboration by mobilizing community members to solve common problems and to preserve what already exists. Renovated infrastructures, particularly cultural and community centers, and improvement projects create favorable conditions for the community members to meet and organize different events.

2011 BA

 The vast majority of community leadership was aware of the ASIF, but only about 60 percent of direct beneficiaries had heard of the project.  Awareness of the project varied—only about 50 percent of direct project beneficiaries were aware of the details of the project. This varied by type of project; for example, because a water project involved most of the village there was more awareness surrounding these types of projects.  With regard to relevance to needs, about a half of the direct beneficiaries felt that the project was generally needed and the initiative was collective, but the other half thought that the initiative came from community leadership. However, almost all respondents thought that the project was fully relevant to the needs of the community.  Generally speaking, satisfaction with the quality of projects and project duration and timelines was good.  About 70 percent of direct project beneficiaries thought that the implementation of the ASIF projects had a positive impact on cooperation and solidarity in their community or institution.

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 Regardless of group affiliation, all respondents thought that accessibility (including affordability) to services through the infrastructure provided had improved.  In the case of all projects, a majority of both direct and other beneficiaries believed that the projects had a positive influence on a number of indicators such as effectiveness, attendance rate, accessibility, improvement of service quality, and improvement of sanitary conditions.

2014 BA

 The ASIF projects improved small-scale public infrastructure and also instilled a sense of responsibility for public property in the beneficiaries.  The ASIF resolved issues deemed as priorities of the community—beneficiaries surveyed confirmed that the ASIF selected the most urgent issue, calling for immediate resolution.  The ASIF implemented its projects with social consent and broad involvement. The inclusion of two general community meetings, panels, and PICs enabled all community members to participate in the process. The communities fulfilled their co-financing obligation and this instilled a sense of care and responsibility for their own efforts.  The ASIF project is renowned and has a good reputation. Community leaders view the ASIF as a mechanism for solving some of the social problems in their communities.  The ASIF provided partners with experience and professional expertise—participants reported that their experience in the ASIF helped them gain knowledge and experience related to procurement and FM. Communities have been able to use their experience to establish ties and implement projects with other donor organizations.  Beneficiaries expressed high levels of satisfaction and comprehension of benefit.  Although the majority of beneficiaries know who is responsible for operation and maintenance of the infrastructure rehabilitated by ASIF, in only two thirds of communities, the entities managing the infrastructures included in their budget expenses for maintenance and operation activities. Moreover, even such funds are budgeted, half of the beneficiaries considered that the allocated funds were not sufficient. In such cases the responsible entities attempt to attract funds from other sources.

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Annex 6. Stakeholder Consultations

The ICR team paid several field visits to the MP sites, meeting local authorities, members of local initiative groups, and direct and indirect beneficiaries. Table 6.1 presents the main findings that were reported.

Table 6.1. Main Findings from Field Visits to MP Sites

Marz Village MP Summary Aragatsotn Tsaghkashen Reconstruction of The old school (secondary education) built in 1976 school building and with a capacity of 192 pupils was reconstructed installation of heating under the project, improving the teaching and system learning conditions. Overall quality of works is satisfactory. However, some small areas on the ground floor were affected by existing humidity from the old walls, and the builder has made the necessary repairs within the warranty period. Aragatsotn Chknagh Completion of the This was identified by the community as the 3rd construction of priority. The multifunctional center was completed community center in 2010. Currently, it hosts the mayor’s office, a building public library, a health facility (nurse level), a computer room, a sports hall, and a community meeting hall for social and cultural events. The center is fully functional and properly maintained. Ararat Ararat Renovation of the Two of the three buildings (constructed in 1985) kindergarten and were renovated under the project. Currently, the installation of new facility hosts five groups of children (in total about heating system 150 children) in excellent educational and accommodation conditions. In two groups, special early childhood education is successfully provided for children with autism. Some of these children have already been included in the regular educational programs. Ararat Urtsadzor Renovation of The building (constructed in 1983) was renovated community center (second phase initiated in 2009) under the project. building Beyond the mayor’s office, the building includes a cultural community center and a PHC facility. Quality of works and materials used is rated as high. Operational and maintenance funds were always secured since the completion of the MP. Vayots Dzor Rind Reconstruction of the The MP was considered the main priority of the drinking water community and was included in the four-year external network development plan. The project financed the renovation of five spring water catchments, sanitation, replacement of main water pipe (8 km), and the rehabilitation of the village internal distribution network (1 km). The MP was completed in 2013 and currently provides clean running water 24 hours/7 days week to 1,600 beneficiaries. System maintenance is ensured by the two staff members. A

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Marz Village MP Summary small user fee per family is charged mainly to change their mentality and social behavior. Shirak Azatan Completion of the Though other alternatives were proposed, construction of the beneficiaries reported majority support for kindergarten for 140 completion of the kindergarten started with children in Azatan Government funds. Beneficiaries reported one hour reduction in transit time required to take children to the kindergarten and a much higher quality of education. Currently, 120 children attend full-day kindergarten. Beneficiaries are happy with the quality of the facilities and the project process. They reported a feeling of responsibility and ownership and have plans to provide for operation and maintenance expenses through local revenue and from external sources. Aragatsotn Talin Reconstruction of the The special art school was previously in very bad children’s art school shape. The project financed its reconstruction. and installation of the Parents and community members are happy with the heating system in new facility; with heating it can be used all year Talin round. Capacity for the facility increased from 50 to 74 (room for more) and there is demand from neighboring villages. Lori Hartagyugh Completion of The community center includes a performance and construction works sports area, a library, a nurse’s office, and for community center administrative offices. Before the new construction, the administrative offices were in a wooden structure. The community center provides a place for youth activities, a place for the community (especially the elderly) to socialize, a centralized location to conduct administrative business, and a library. Lori Vahagnadzor Rehabilitation of a The previous school was in a house with an unstable school structure—dirt walls and a crumbling ceiling. There were multiple needs but the village agreed that the school was a priority; they had received computers and had nowhere to put them. Constructing the school was also a thought to prevent out migration. Beneficiaries are happy to have the school and there have been multiplier effects—the school qualified for World Food Program assistance because of improved school kitchen facilities. Some minor issues with the design of school facilities and improper draining pipes could lead to water damage. Lori Shahumyan Overhaul of the The project financed the repair of an old building. Shahumyan health The clinic now provides primary care and has three center nurses and one full-time doctor who sees 17–20 patients a day. The municipality pays operation and maintenance costs; salaries come from the state budget. The upgraded health center has made accessing the PHC easier and more convenient. The

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Marz Village MP Summary mayor also provided a lot of support and continues to do so on a need basis. Lori Teghut Construction of a The kindergarten financed under the project provides kindergarten early childhood education to 60 children who in the past had to go to other neighboring localities by bus. The facility also provides permanent employment to seven teaching and non-teaching staff who were all recruited from the village. The quality of works and materials used are of very high standard. Gegharqounq Chambarak Completion of The old depleted building of the health center overhaul of health (hospital and ambulatory) was completely center overhauled. The project financed the last phase of the works. The new health facility will provide emergency, reanimation, surgical, general therapeutic, and obstetric/gynecological services, and will have a capacity of 30 beds. Of the 120 medical staff, 25 doctors will provide medical care. More doctors are expected to join the facility after graduation.

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Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR

Implementation Completion Report ON THE CREDIT/ LOAN No. IDA 42380-AM; 1st AF (IDA 45480-AM) 2nd AF (IBRD-78470-AM); 3rd AF (IDA-50710-AM) FOR THE ARMENIAN SOCIAL INVESTMENT FUND III PROJECT Borrower’s Contribution to ICR

I. Introduction

The ASIF III Project (hereinafter ASIF III) commenced its activities in December 2006. The ASIF III’s goal was to support the Government in its continuing commitment to raise the living standards of the poor and vulnerable groups within the Government’s evolving social policies and programs. The ASIF's ideology and approaches were based on the principle that the communities should identify their problems and participate in all the stages of the MP implementation.

According to the Credit and Loan Agreements with the Bank and the AFs it was anticipated that at least US$66.8 million would be disbursed from 2006 for activities of the ASIF III. This amount comprises US$51 million Bank credit, contribution from the Government of Armenia, private entities’ and individuals’ contribution, and contributions of beneficiary communities.

The distribution of the ASIF funds by regions was figured out on the basis of a two-stage poverty targeting strategy. The first level of targeting defines broad allocations for the marzes and is based on a methodology, which includes population size, and indicators of poverty and special regional factors. The second stage of targeting consists of identifying the needy communities within each marz. Using the special selection criteria relating to social, demographic, economic, financial, geographic, and infrastructure conditions, the 918 communities outside Yerevan are ranked marz by marz, starting from the neediest to those with the least priority needs. As a result of the mapping exercise, the communities of a marz are classified into three clusters: Cluster A - most vulnerable communities; Cluster B - moderately vulnerable communities; and Cluster C - least vulnerable communities. The list of potential applicants is compiled in the first instance from the most vulnerable communities in Cluster A and from those included in the list of priorities of a marz regional development plan.

II. Assessment of Project Objectives, Design, Implementation and Operational Experience

1. Objectives of the ASIF III

The objective of the ASIF III Project was to support the Government’s policy to raise the living standards of the poor and vulnerable groups through:

 improving the quality and access, and increasing the coverage of community infrastructure and services in vulnerable communities and for the most vulnerable groups in response to emerging critical needs; and

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 promoting complementary institutional capacity building at the community and municipal levels so as to improve the quality and sustainability of community investments and service delivery, increase accountability, and enhance greater stakeholder empowerment at the local level.

All the objectives were fully achieved.

2. Design

The ASIF Project had three components:

 Community Investments  Local Level Institutional Strengthening, M&E  Project Management

The ASIF III Project is rated as Satisfactory.

3. Implementation and Operational Experience

Community Investments

Since December 2006, the ASIF received 517 MP proposals from communities of which 319 MPs have been completed (in 184 administrative units of Armenia). Data on the MPs completed, by typology, are presented in table 7.1.

Table 7.1. Data on the MPs Completed, by Typology

Total Cost of Total Number of MP Type Total Number of MPs Accomplished Works by Beneficiaries* Types (in US$) Schools 112 17,505,605 156,421

Community centres 88 15,614,687 424,200

Kindergartens 44 7,897,511 100,587

Health care facilities 23 4,258,688 606,483

Special schools 18 3,600,293 118,040

Potable water 17 2,047,639 34,830

Environmental 9 1,289,234 234,909

Elderly houses 5 765,418 1,153

Irrigation 2 397,175 2,639

Sewage systems 1 132,618 2,300

Grand Total 319 53,508,868 1,681,562 Note: * Without repetitions in case of more than one MP in a community.

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Provision of school furniture was one of the features of the ASIF III Project. In the course of ASIF III, a total of 58 contracts were signed for the procurement of furniture at a total cost of about AMD 2.55 billion (US$6.97 million). Within these contracts 61,853 units of furniture were provided for 814 educational facilities in Armenia; 4,905 units of furniture were provided to 32 kindergartens; 262 units of furniture were provided to four health care facilities; and 16,994 armchairs and other type of furniture were provided to assembly halls of 65 community and cultural centers rehabilitated by the ASIF MPs.

Strengths

The ASIF’s activity covered all regions of the Republic of Armenia. The main strength of the ASIF is its capacity to penetrate into remote, isolated, and vulnerable communities; induce effective discussion on their perceived priorities; and bring to fruition project proposals to serve their needs. By the completion of the project, about 1.7 million community members benefited from the project and the ASIF’s response to their community's demand for priority social needs.

The updated ranking of all Armenian communities, based on the community mapping and profiling exercise carried out in 2007 and 2011, served as the roadmap for monitoring of the requirement instituted under the Main Credit and AFs. The final allocation of ASIF III funds for the MPs with regard to targeting of the communities according to their vulnerability has therefore met all the requirements set in the project papers.

Weaknesses

The drop in US dollar-AMD exchange rate and the increase in the prices of building materials led to the breaching of a number of construction contracts. New bids were announced to complete the MPs.

Despite the efforts made by the ASIF to improve communities’ involvement in and development of their capacity in operation and maintenance of infrastructures, the latter is still problematic mainly due to lack of financial resources.

Local Level Institutional Strengthening, M&E

The third project included a large and well-designed component of local-level institutional strengthening aimed to strengthen collaboration between local authorities and community organizations as well to develop local institutional capacity.

Local Government training includes training of local community officials (mayors, finance officers, and council members) of the communities that have implemented the ASIF III MPs.

Topics covered by the training included: (a) general structure of the central and local Government; (b) detailed analysis of the local Government system; (c) community assets, enterprises, and business activity; (d) community social and economic development programs; (e) local Government budget; (f) management and operation of the community property and infrastructure; and (g) intercommunity unions. The training sessions were delivered in 12 working days, with

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each session lasting six hours. The municipal FM training has been successfully implemented with 716 local Government officials (mayors, finance officers, and council members) from 145 communities from all regions of Armenia having completed the training.

Community council and community members training. Capacity building is provided for community councils, school boards, and the PICs to effectively plan and manage their investments and strengthen partnerships with local Governments. Currently, there are a total of 6,434 community members who have participated as members of the PICs and community councils, of which 1,933 are women and 2,728 are local Government officials. This component is appreciated by the Government of Armenia.

Project Management

This component supports the ASIF through the provision of equipment, vehicles, salaries, operating costs, training, technical assistance, and M&E.

The ASIF Executive Office is capable of implementing, on average, 60 MPs a year. The employees selected on a competitive basis attended special courses and gained significant experience during the years of the ASIF's operation. The powerful computerized accounting and MIS based on a high-speed computer network enable the generation of not only any necessary report but also the follow-up of the progress of each MP. In 2008, 2010, and 2014, three sociological studies were conducted aimed at the assessment of the impact of the ASIF activity.

Strengths

The main strength of this component is the existence of the ASIF Executive Office with experienced employees.

Weaknesses

The main weakness is low staff remuneration which has stagnated and remained the same since 2006. If more attention had been paid on staff remuneration, there would have been lower attrition of highly qualified staff.

III. Evaluation of Borrower and Bank Performance Bank

The overall Bank performance in preparing and supervising the project was Satisfactory. The project’s primary objectives were well defined from the beginning and project components fit well with those objectives and responded to the Armenian Government’s reforms. During project implementation, the Bank team was highly professional and committed, providing continuous assistance on all implementation-related issues, and worked efficiently in close contact with the ASIF team and Government officials. The MTR provided the Government and other interested parties with detailed and useful information on project implementation.

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Borrower

The borrower’s performance is rated as Satisfactory. Strong Government commitment and interest was continuously expressed for the ASIF. A valuable endorsement of this is the fact that the prime minister of Armenia is heading the ASIF Board.

The ASIF Executive Office was the main coordinating unit for project implementation and worked extremely diligently on all aspects of project execution. The ASIF team worked enthusiastically on project implementation, was dedicated to ensuring essential community participation in the project, and worked extremely well with the Bank and other donors and sponsors who also participated in the project. The consultants hired under the ASIF III Project presented themselves in a positive light.

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Annex 8. Comments of Co-financiers and Other Partners/Stakeholders

Not applicable.

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Annex 9. List of Supporting Documents

1. Poverty Reduction Strategy Paper for Armenia (October 2003) and Progress Report (2006)

2. Armenia Country Assistance Strategies (May 2004, May 2009, and October 2013)

3. PHRD Grant for the Preparation of ASIF III (Grant No. 055130); Institutional Assessment (April 2006) and Social Service Assessment (March 2006) conducted under the grant

4. Project Appraisal Document for ASIF III (September 27, 2006)

5. Operational Manual for ASIF III (2006) and subsequently amended versions for the purposes of Additional Financings (1–3)

6. Beneficiary Assessments (2008, 2011, and 2014)

7. Assessment of Civil Works Quality (2010)

8. Civil Works Cost-effectiveness Assessment (2010)

9. Second Quality Assessment of Lending Portfolio, QAG Report on ASIF III (2010)

10. Sustainability Assessment (2012)

11. Project Papers for 1st Additional Financing (February 9, 2009), 2nd Additional Financing (February 2010), and 3rd Additional Financing (January 16, 2012)

12. Mid-Term Report (2010)

13. ASIF III Annual Reports (2007–2014)

14. Monitoring Poverty in Armenia using Multidimensional Poverty Indicators (2015)

15. Supervision Reports: Implementation Status Reports and Aide Memoires (2007–2015)

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Table 7.2. List of Completed Micro-projects under ASIF III

Contract Beneficiaries Adult Credit/ Vulnerab. Region Type Name cost (US) (No.) women Loan index Aragatsotn Potable water Reconstruction of potable water system in 109,335 909 285 Main 2 Lusagjugh village Aragatsotn Community Reconstruction of the community center in 296,194 958 277 Main 2 center Irind village Aragatsotn Community Reconstruction of the community center in 13,228 - Main 2 center Irind village Aragatsotn Community Reconstruction of the community center in 119,534 1,203 401 AF 1 1 center Geghadzor village Aragatsotn Community Renovation of school-community center's 53,052 - - AF 1 1 center building in Geghadzor Aragatsotn Healthcare Completion of construction of Health care 142,268 15,825 13,880 AF 1 3 center building in the vil. of Arteni Aragatsotn Community Reconstruction of community center and its 184,705 703 296 AF 1 2 center expansion in Yernjatap' village Aragatsotn Environmental Rehabilitation of recreation zone in Aparan 57,259 7,950 3,400 AF 1 3 town Aragatsotn School Renovation of school building and 72,874 642 212 AF 1 1 reconstruction of sewage system Aragatsotn Potable water Construction of DRR in the village of Mulqi 88,158 700 272 AF 1 2 Aragatsotn Potable water Reconstruction of DRR in the village of 8,350 721 202 AF 1 2 Nigavan Aragatsotn Potable water Rehabilitation of the potable water distribution 143,616 944 369 AF 1 2 net in Ashnak village Aragatsotn Kindergarten Strengthening and overhaul of kindergarten in 274,172 5,400 1,412 AF 1 3 the village of Oshakan Aragatsotn Potable water Construction of DRR of potable water system 86,818 1,658 503 Main 2 of Katnaghbyur village Aragatsotn Kindergarten Overhaul of kindergarten in the village of Ujan 146,040 4,299 1,196 AF 1 3 Aragatsotn School Overhaul of school in the village of Zovasar 96,026 670 230 AF 1 1 Aragatsotn School Replacement of floors and partial renovation of 97,942 591 205 AF 2 1 school building in Gegharot village Aragatsotn Community Completion of construction of cultural center in 242,624 - 112 Main 2 center the village of Chqnagh Aragatsotn School Gym renovation in the village of Aruch 58,784 1,215 435 Main 2 Aragatsotn School Gym construction for school in Agarak 155,258 1,852 643 AF 2 2 Aragatsotn School Gym renovation of school in Getap village 37,490 270 115 Main 1 Aragatsotn School Installation of heating system and replacement 111,786 245 88 AF 2 2 of windows of school in Chqnagh village

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Contract Beneficiaries Adult Credit/ Vulnerab. Region Type Name cost (US) (No.) women Loan index Aragatsotn Irrigation Reconstruction of irrigation reservoir in 322,207 2,309 724 AF 2 2 Hnaberd Aragatsotn School Overhaul of Ashnak's school hall building and 219,749 1,500 530 AF 3 2 warm passage Aragatsotn Potable water Reconstruction of potable water system and 32,470 1,365 553 AF 3 2 overhaul if intake Aragatsotn Kindergarten Reconstruction of kindergarten building and 174,555 1,200 425 AF 3 1 installation of its heating system Aragatsotn School Reconstruction of Talin's art school and 253,214 - 3,070 AF 3 2 installation of its heating system Aragatsotn School Recinstruction of Tsaghkashen's school and 249,899 860 323 AF 3 1 installation of its heating system Armavir Special school Renovation and boiler-room construction for 219,123 1,384 401 Main 2 Armavir town No. 1 gym school Armavir Special school Renovation of the Armavir town youth center 96,358 1,468 453 Main 2 gymnasium Armavir Community Renovation and reconstruction of heating 173,471 4,000 1,156 Main 2 center system of Armavir community center Armavir Community Reconstruction of cultural center in 162,803 3,470 1,260 Main 2 center Aghavnatoun village Armavir Community Renovation of community center (cultural 236,016 6,080 2,137 Main 2 center center) in Hoktember (Sardarabat) Armavir Special school Renovation of No. 1 gym school in Echmiadzin 283,941 1,702 612 Main 3 Armavir Community Reconstruction of cultural center in the village 185,586 3,000 1,198 AF 1 2 center of Aratashen Armavir Community Renovation of the hall building of the 286,269 1,906 761 Main 1 center community center in Ajgeshat village Armavir Community Thorough repair of Araqs village community 96,474 1,886 796 Main 1 center center roof and hall Armavir Community Renovation of community center building in 197,185 3,635 1,483 AF 1 2 center Voskehat village Armavir School Reconstruction of school #4 in Ejmiazsin 126,610 2,796 876 Main 3 Armavir School Overhaul of the 1st building of school in 192,518 1,112 445 AF 2 1 Vanand village Armavir Kindergarten Overhaul of the 2nd building of school in 257,869 1,118 447 AF 3 1 Vanand village (incl. kindergarten) Armavir Community Installation of heating system and partial Center renovation of cultural center in Voskehat 52,221 - 1,465 AF 3 2 village Ararat Environmental Rehabilitation of city park in Ararat. 202,066 21,801 6,200 Main 3 Ararat School Lavatory renovation of No. 1 school in Vedi 39,271 1,290 311 Main 3 58

Contract Beneficiaries Adult Credit/ Vulnerab. Region Type Name cost (US) (No.) women Loan index Ararat Kindergarten Renovation of the kindergarten in Dimitrov 101,105 1,572 634 Main 2 village Ararat School Reconstruction of a roof and heating system for 91,318 1,947 847 Main 2 school of Baghramyan village Ararat School Reconstruction of the heating system, windows 135,673 3,506 1,253 Main 2 replacement in Norashen school village Ararat Community Renovation of a building and a roof of Verin 137,634 4,750 1,862 Main 3 center Artashat village cultural center Ararat Community Renovation/construction of local heating 147,493 2,910 1,119 Main 2 center system of cultural center in Nor Kjanq village Ararat Kindergarten Reconstruction of a roof and lavatory 95,051 - 3,132 Main 3 renovation of Ararat village kindergarten Ararat School Roof reconstruction and floor renovation of 105,923 1,019 389 Main 2 Berdik village school Ararat School Construction of the heating system and 135,476 1,547 665 Main 2 reconstruction of the school Ajgepat village Ararat Kindergarten Renovation of the kindergarten in Mkhchjan 115,456 - 2,017 Main 3 village Ararat Community Reconstruction and reinforcement of 362,026 3,177 1,052 Main 2 center community center building In Urtcadzor village Ararat Environmental Reconstruction of Artashat townlake territory 338,049 25,200 11,622 Main 3 Ararat School Renovation of gymnasium and lavatory of No.3 76,603 - 340 Main 3 school in Artashat Ararat School Windows replacement of No. 4 school in 121,976 - 536 Main 3 Artashat Ararat School Replacement of external doors and wondows in 145,430 - 322 AF 1 3 school No.6 in Artashat Ararat Kindergarten Renovation of thekindergarten in Pokr Vedi 125,399 3,260 1,311 Main 2 village. Ararat Community Renovation of the cultural center in Kanachut 118,199 996 440 Main 2 center village Ararat Community Renovation of the cultural center in Narek 202,566 1,200 441 Main 2 center village Ararat Kindergarten Area improvement of kindergarten in 47,080 5,173 2,031 AF 1 3 Mkhchyan village Ararat Kindergarten Reconstruction of kindergarten #8 and 283,132 - 13,300 AF 1 3 installation of heating system in Artashat Ararat Kindergarten Reconstruction of the internalheating system 23,129 422 9,569 AF 1 3 for #1 kindergarten in Masis

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Contract Beneficiaries Adult Credit/ Vulnerab. Region Type Name cost (US) (No.) women Loan index Ararat Kindergarten Reconstruction of the internalheating system 21,238 459 9,569 AF 1 3 for #2 kindergarten in Masis Ararat Community Overhaul of community cnetre in Urtsadzor 226,538 3,177 1,259 AF 1 2 center village Ararat Community Overhaul of Qaghcrashen's cultural center 229,042 3,202 1,268 Main 2 center Ararat Kindergarten Overhaul of kindergarten in Vanashen 201,589 2,521 1,009 Main 2 Ararat Kindergarten Renovation of kindergarten in Aygestan village 212,279 2,408 992 AF 2 2 Ararat School Reconstruction of school gym in Lanjazat 224,239 1,670 698 AF 2 2 village Ararat Kindergarten Completion of construction of warm passage 285,703 10,308 3,996 AF 3 3 for the 2nd building of Ayntap kindergarten Ararat Community Installation heating system of Regional library 7,524 4,050 1,500 AF 3 3 Center in Artashat Ararat Kindergarten Reconstruction of 2 buildings of Ararat village 207,952 8,559 3,121 AF 3 3 kindergarten and installation of heating system Ararat Community Construction of the Book-Depositary and center reception of “Paruir Sevak Museum” in 67,072 1,218 488 AF 3 1 Zangakatun village Ararat Community Construction of the Book-Depositary and center reception of “Paruir Sevak Museum” in 3,139 1,218 488 AF 3 1 Zangakatun village School Renovation of No. 179 school in Yerevan 71,167 1,672 447 Main School Construction of the heating system for school 47,170 1,310 444 Main #121 in Yerevan Yerevan School Construction of boiler-room and heating system 75,890 960 400 Main for Yerevan B4 block school Yerevan School Construction of heating system and renovation 149,767 2,328 533 Main of Mushegh Ishkhan school #5 Yerevan Yerevan School Roof reconstruction for school #163 in Yerevan 157,756 2,415 980 Main Yerevan School Partial renovation and reconstruction of the 160,135 1,561 559 Main heating system school #106 in Yerevan Yerevan School Reconstruction of heating system and 127,834 3,764 1,200 Main construction of a boiler-room for school #166 Yerevan School Construction of the boiler and renovation of the 118,152 2,490 870 Main heating system for school #142 Yerevan Yerevan School Construction of boiler-room and heating system 92,889 1,425 400 Main for school #164 in Yerevan Yerevan School Construction of the heating system for school 116,346 3,363 1,427 Main #37 in Yerevan

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Contract Beneficiaries Adult Credit/ Vulnerab. Region Type Name cost (US) (No.) women Loan index Yerevan School Construction of heating system for school #54 103,065 1,442 552 Main in Yerevan Yerevan School Construction of heating system for school #82 67,504 3,500 1,600 Main in Yerevan Yerevan School Construction of heating system and lavatory 108,040 889 320 Main renovation of school #129 in Yerevan. Yerevan School Construction of heating system for school #145 69,956 2,990 1,235 Main in Yerevan Yerevan School Construction of the boiler and renovation of the 93,859 5,210 2,300 Main heating system of143 school in Yerevan Yerevan School Construction of boiler-room and heating system 91,566 1,480 500 Main for Yerevan No. 148 school Yerevan Healthcare Windows replacement and partial renovation of 216,608 165,000 55,770 Main Yerevan “Grigor Lusavorich" policlinic Yerevan Kindergarten Construction of boiler-room and renovation of 68,609 1,126 368 Main heating system of kindergarten #20 Y Yerevan Special school Reconstruction of No. 1 gym school in Avan 238,431 1,093 368 Main block, Yerevan Yerevan Kindergarten Construction of heating system and renovation 135,705 539 191 Main of Yerevan No 5 kindergarten Yerevan Elderly house Construction of the local heating system and 232,254 430 240 Main renovation of N 1 boarding-school, Yerevan Yerevan School Reconstruction of the heating system and 151,916 3,048 1,136 Main windows replacement for school #7 in Yerevan Yerevan School Rehabilitation of gym of No 29 school in 95,909 1,509 568 AF 1 Yerevan Yerevan School Renovation and heating system construction for 125,884 2,198 2,500 Main school #20 school in Yerevan Yerevan School Reconstruction of the heating system for school 79,775 944 251 Main #122 in Yerevan Yerevan School Reconstruction of heating system and construction of boiler-room, school # 77, 50,384 2,100 675 Main Yerevan Yerevan School Reconstruction of heating system and construction of boiler-room, school #77, 33,029 - - Main Yerevan Yerevan School Reconstruction of heating system and construction of boiler-room, school #153, 126,381 1,100 350 Main Yerevan Yerevan School Reconstruction of heating system and 126,659 1,527 483 Main construction boiler-room, school #197, Yerevan 61

Contract Beneficiaries Adult Credit/ Vulnerab. Region Type Name cost (US) (No.) women Loan index Yerevan School Windows replacement and reconstruction of the 215,141 2,100 859 Main heating system, school #118, Yerevan Yerevan School Construction of heating system for school #94 91,975 574 148 AF 1 school in Yerevan Yerevan Special school Renovation of the chess school “Tigran 161,674 350 - Main Petrosyan” in Yerevan Yerevan Museum Renovation of “Isahakyan” museum in Yerevan 108,965 4,000 1,562 Main Yerevan School Windows replacement for school #36 in 91,319 2,133 816 Main Yerevan Yerevan Kindergarten Reconstruction of the heating system for kindergarten #310 in district Ajapniak 119,114 673 266 AF 1 (Yerevan) Yerevan Healthcare Renovation of the roof of dermato-venerologic 79,305 8,000 960 Main dispensary in Yerevan Yerevan Community Reconstruction of the heating syst and center renovation of Nubarashen athletic cultural 278,572 9,953 3,752 Main center Yerevan Healthcare Construction of new operating and sterilization 293,183 11,149 4,254 Main rooms in medical center in Norq-Marash Yerevan Museum Renovation of the Russian art museum in 116,441 4,000 1,562 Main Yerevan Yerevan School Reconstruction of the roof and lavatory for 99,590 529 189 Main school #57 in Yerevan Yerevan Special school Construction of the local heating system for 43,341 1,650 450 Main musical school “Saradjan” Yerevan Special school Construction of the local heating system for 8,921 - - Main musical school “Saradjan” Yerevan School Reconstruction of the roof and lavatory for 192,238 2,992 1,157 AF 1 school #147 in Yerevan Yerevan Kindergarten Overhaul of kindergarten #6 in Qanaqer-Zeytun 153,416 796 323 AF 1 district in Yerevan Yerevan Community Overhaul of “Kh.Abovyan” Museum 9,026 1,500 343 AF 1 center Yerevan Community Overhaul of “Kh.Abovyan” Museum 17,343 AF 1 center Yerevan Healthcare Reconstruction of the roof of Oncology center 172,871 18,560 8,615 AF 1 “Prof. Fanarjyan” Yerevan Special school Construction of the local heating system for 50,811 834 60,095 AF 1 musical school “S.Jrbashyan” in Shengavit Yerevan Healthcare Renovation of policlinics of "S.Grigor" 128,979 - 46,500 AF 1 Medical Center 62

Contract Beneficiaries Adult Credit/ Vulnerab. Region Type Name cost (US) (No.) women Loan index Yerevan Kindergarten Construction of the heating system for 71,009 2,465 60,095 AF 1 kindergarten #7 in Shengavit dstrict of Yerevan Yerevan Elderly house Reconstruction of the heating system of #1 64,931 351 200 AF 1 Elderly house in Yerevan Yerevan School Partial renovation of the school #55 “Chekhov” 95,101 4,854 1,700 AF 1 in Yerevan Yerevan Community Renovation of coverage of Main entrance of 93,341 4,450 1,800 Main center Museum “Aram Khachatryan” Yerevan School Reconstruction of heating water supply and 113,164 3,700 1,300 Main sewage systems, school #162,Yerevan Yerevan Healthcare Renovation of the 3rd floor of policlinics of 97,882 145,600 46,500 Main "S.Grigor" Medical Center Yerevan Environmental Rehabilitation of city park “Vahagn Davtyan” 6,663 132,525 59,030 Main in Yerevan Yerevan Elderly house Partial renovation of the 1st building of Nor- 95,507 290 120 Main Norq dormitory Yerevan Special school Installation of heating system of Chess 20,025 1,508 527 AF 1 Academy “Tigran Petrosyan” Yerevan Elderly house Renovation of the 1st floor reception of the 1st 63,735 - 56 AF 3 building of Nor-Norq dormitory Gegharqouniq Potable water Reconstruction of potable water supply system 160,509 1,521 467 Main 2 in the lusakunq village Gegharqouniq Potable water Reconstruction of external potable water 203,617 2,800 860 Main 2 pipeline of Tazagjugh village Gegharqouniq Community Renovation of community center in Madina 250,521 1,107 338 Main 1 center village Gegharqouniq Special school Reconstruction of Art school in Gavar 331,736 575 12,336 Main 3 Gegharqouniq School Renovation of the Gavar No. 3 school’s second 104,282 738 150 Main 3 building, roof, lavatory and hall Gegharqouniq Community Renovation of the cultural center in Vaghashen 74,975 - 1,531 Main 2 center village Gegharqouniq Community Renovation of the community center in 162,959 4,700 1,559 Main 2 center Dzoragjugh village Gegharqouniq Community Reconstruction of the roof and heating system 310,052 - 5,830 Main 2 center of the cultural center in Martuni Gegharqouniq School Reconstruction of the heating system for school 62,936 5,038 1,707 Main 3 #2 school in V. Getashen village Gegharqouniq Special school Renovation of the roof for musical school in 51,888 11,050 3,987 Main 3 Vardenik village Gegharqouniq Community Renovation of a roof of the cultural center in 91,500 6,825 2,359 Main 2 center Zolakar village 63

Contract Beneficiaries Adult Credit/ Vulnerab. Region Type Name cost (US) (No.) women Loan index Gegharqouniq Community Renovation of the community center in 152,324 2,445 846 Main 2 center Kartchaghbyur village. Gegharqouniq Healthcare Overhaul of policlinics in Sevan 269,129 26,513 10,522 AF 1 3 Gegharqouniq Community Reconstruction of Cultural center and its roof in 227,421 - 1,436 AF 1 2 center Vaghashen village Gegharqouniq Potable water Reconstruction of water distribution system in 73,475 6,453 2,465 AF 1 3 Noratus village Gegharqouniq Community Completion of overhaul of Community cnetre 65,587 - 863 AF 1 2 center in Karchaghbiur village Gegharqouniq Special school Construction on heating system in the Art 29,815 36,400 13,400 AF 1 3 school in Gavar Gegharqouniq Kindergarten Overhaul of kindergarten in Geghhovit village 205,887 6,518 2,354 AF 2 3 Gegharqouniq Potable water Reconstruction of the initial sector of potable 36,112 430 107 AF 2 1 water system in Vanevan village Gegharqouniq Healthcare Renovation of Polyclinics in Sevan town and 230,932 26,513 33,000 Main 3 facility reconstruction of its heating system Gegharqouniq Community Reconstruction of roof and assembly hall of 340,540 15,000 5,896 AF 2 2 center cultural house in Vardenis Gegharqouniq Kindergarten Renovation of #4 kindergarten "Galiq" in 171,830 510 180 AF 2 3 Sevan Gegharqouniq Special school Re- enforcing and overhaul of Music school in 239,714 - 14,500 AF 3 2 Martuni Gegharqouniq Special school Re- enforcing and overhaul of Music school in 59,786 - - AF 3 2 Martuni Gegharqouniq Potable water Construction of DRR and external pipelines of 128,025 3,300 1,194 AF 3 2 Artsvanist village Gegharqouniq Kindergarten Overhaul of 2 buildings, warm passage of kindergarten in Geghamavan (incl heating 242,340 2,038 675 AF 3 2 syst) Gegharqouniq Community Completion of renovation and heating syst 38,156 4,286 1,728 AF 3 2 center installation for cultural center in Vaghashen Gegharqouniq School Installation of heating system in school of 67,133 2,045 777 AF 3 2 Tsovazard village Gegharqouniq Healthcare Overhaul of Health CJSC in Chambarak town 51,031 6,800 2,860 AF 3 1 facility (completion) Gegharqouniq Healthcare Overhaul of Health CJSC in Chambarak town 210,243 - - AF 3 1 facility (completion) Kotayq Community Completion of construction of cultural center in 242,369 30,600 10,983 Main 2 center Charentsavan Kotayq School Renovation of No. 4 school in Abovyan town 59,127 2,624 2,624 Main 3

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Contract Beneficiaries Adult Credit/ Vulnerab. Region Type Name cost (US) (No.) women Loan index Kotayq School Construction of heating system and renovation 83,136 3,492 1,013 Main 3 of No. 2 school in Abovyan town Kotayq School Construction of boiler-room of No. 6 school in 90,759 1,665 552 Main 3 Abovyan Kotayq School Construction of heating system and renovation 95,364 2,967 907 Main 3 of No. 7 school in Abovyan town Kotayq Community Reconstruction of community center in Nor 264,732 6,500 2,075 Main 3 center Geghi village Kotayq Community Capital renovation of the community center in 189,443 5,715 2,195 AF 1 3 center Aringe village Kotayq Community Construction of heating system and boiler 49,512 - 2,919 AF 1 3 center house for community center in Nor Geghi Kotayq Community Rehabilitation of heating system for community 103,709 - 10,680 AF 1 2 center center in Charentcavan town Kotayq Healthcare Roof reconstruction of T.B.clinic in Abovyan 253,646 45,750 17,842 AF 1 3 town Kotayq Community Renovation of Sport-cultural center in 61,759 17,502 8,277 AF 1 2 center Yeghvard Kotayq Community Overhaul of cultural house in the village of 350,333 9,219 5,844 Main 2 center Qasakh Kotayq Kindergarten Overhaul of kindergarten #8 in Charentsavan 288,156 473 10,680 Main 2 Kotayq Elderly house Reconstruction of social house in Qasakh 97,293 - 2,114 AF 2 2 Kotayq Elderly house Reconstruction of social house in Qasakh 106,489 - AF 2 2 Kotayq Kindergarten Overhaul of kindergarten in Alapars village 231,561 2,470 1,007 AF 2 2 Kotayq Potable water Completion of construction of potable water 125,781 4,349 1,779 AF 2 2 supply sistem in the village of Geghashen Kotayq Kindergarten Construction of new kindergarten for 2 groups 277,820 1,116 444 AF 3 1 in the village of Artavaz Kotayq Kindergarten Reconstruction of kindergarten "Hrashq+C19" 244,799 473 175 AF 3 2 in Charencavan Lory School Reconstruction and enlargement of school 280,313 365 143 AF 1 1 building in the village of Vahagnazdor Lory Elderly house Renovation of the old age people's home in 168,945 82 50 Main Vanadzor Lory School Renovation of No. 24 school in Vanadzor, marz 250,037 1,911 787 Main of Lori Lory Community Renovation of the cultural center in Toumanyan 107,391 2,204 952 Main 1 center village Lory Community Renovation of cultural center in the village of 278,982 5,592 2,316 Main 3 center Odzum

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Contract Beneficiaries Adult Credit/ Vulnerab. Region Type Name cost (US) (No.) women Loan index Lory Environmental Rehabilitation of Jiliza village electricity supply 110,260 200 93 AF 1 1 network and street lighting Lory Community Renovation of the cultural center in Dsegh 190,751 2,606 1,053 Main 2 center village, marz of Lori Lory Potable water Renovation of the potable water pipeline in 145,245 6,830 2,650 Main 3 Gugark village, marz of Lori Lory School Construction of school gym in the village of 71,693 2,454 788 Main 2 Gyulagarak Lory School Construction of school gym in the village of 188,616 Main 2 Gyulagarak Lory Special school Construction of school gym in the village of 283,422 713 9,000 AF 1 2 Gyulagarak Lory School Construction of #6 school gym in Spitak town 274,097 861 320 AF 1 3 Lory Special school Renovation of the youth sport school in Tashir 203,374 12,318 5,053 Main 2 Lory Community Construction of the community center in 355,152 2,002 779 Main 2 center Lernapat village Lory Community Construction of the community center in 355,809 2,585 999 Main 2 center Shirakamut village Lory Healthcare Overhaul of Alaverdy medical CJSC 265,932 8,891 AF 1 3 Lory Kindergarten Completion of construction of kindergarten in 182,301 2,365 960 AF 1 3 the village of Darpas Lory Healthcare Reconstruction of the ambulance building in 24,759 3,007 1,146 AF 1 3 the village of Shahumyan Lory Health center Completion of medical center’s renovation in 263,055 48,816 20,380 Main 3 Alaverdy and installation of heating system Lory School Installation of heating system of School #30 in 94,004 1,192 431 AF 1 Vanadzor Lory Kindergarten Overhaul of kindergarten #2 in Alaverdy 230,821 200 55 Main 3 Lory School Installation of heating system o of sport school 51,064 - 9,286 Main 2 in Stepanavan Lory School Reconstruction of heating system o of sport 25,958 943 313 Main 1 school in the village of Geghasar Lory Community Completion of the community center 325,074 1,672 920 AF 2 2 Centre construction in the village of Gyulagarak Lory Potable water Reconstruction of DRR of Shirakamut village 91,735 2,632 1,067 AF 1 2 Lory Healthcare Renovation of semi-basement of Hospital #2 in 83,506 3,793 1,563 Main facility Vanadzor Lory Community Overhaul of cultural center in Khnkoyan village 166,813 326 170 AF 2 1 Center Lory School Reconstruction of the heating system and 74,661 545 212 Main 3 overhaul of roof and toilets of#4 in Alaverdy 66

Contract Beneficiaries Adult Credit/ Vulnerab. Region Type Name cost (US) (No.) women Loan index Lory School Overhaul of school building in Teghut village 298,281 900 295 AF 2 1 Lory Healthcare Overhaul of healthcare center in Shahumyan 298,898 3,007 1,146 AF 2 3 facility Lory Community Completion of construction of community 309,728 4,229 1,628 AF 3 2 center center in Arevashogh village Lory Community Completion of construction of community 292,401 1,383 487 AF 3 1 center center in Hartagyugh village Lory Community Installation of heating system, thermo/ hydro 20,044 - 877 AF 3 2 center isolation for Museum “H.Tumanyan in Dsegh Lory Healthcare Construction of morgue for Alaverdy hospitak 183,940 7,204 - AF 3 3 facility Lory School Stregthening, reconstruction and heating of 281,159 755 329 AF 3 1 school in Haghpat village Lory School Gym construction for school in Vahagni village 172,722 1249 494 AF 3 1 Lory School Gym construction for school in Vahagni village 22,678 AF 3 1 Lory School Renovation of school gym in Yeghegnut village 115,937 830 338 AF 3 1 (heating included) Lory Kindergarten Reconstruction of kindergarten in Dzoragyugh 37,851 337 154 AF 3 1 village Shirak Community Completion of the "Meghvik" center 457,398 - 164 Main center construction in Gyumry Shirak Community Capital rehabilitation of the center for work center rehabilitation and specialized orientation for 374,682 5,000 3,380 Main persons with disabilities in Gyumry Shirak School Overhaul of school building in the village of 275,073 293 97 AF 1 1 Sizavet Shirak School Overhaul of school building in the village of 2,663 - AF 1 1 Sizavet Shirak School Gym construction for School #26 school in 351,795 1,357 2,000 Main Gyumri Shirak School Renovation of school building in Shirakavan 244,368 852 314 Main 1 village Shirak School Gym and heating system construction for 364,600 729 294 Main 2 school in Aygabats village Shirak Potable water Construction of potable water system in the 154,201 218 110 Main 1 village of Poqrashen Shirak School Renovation of the school building in Jrapi 342,916 1,059 376 Main 1 village Shirak School Renovation of the heating system of No. 5 45,853 - 373 AF 1 2 school in Town of Artik

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Contract Beneficiaries Adult Credit/ Vulnerab. Region Type Name cost (US) (No.) women Loan index Shirak School Renovation of the heating system of School # 4 50,266 - 386 AF 1 2 school in Town of Artik Shirak Environmental Rehabilitation of city park in Maralik town 186,928 7,742 2,775 AF 1 2 Shirak Museum Construction of heating system in the museum 31,179 150,917 63,026 AF 1 “Merkurov” Shirak Environmental Rehabilitation of city park in Artik town 184,294 17,475 8,130 AF 1 2 Shirak Kindergarten Renovation of the internal heating system of 17,501 - 8,400 AF 1 2 kindergarten #1 in Town of Artik Shirak Kindergarten Renovation of the internal heating system of 18,371 - 8,400 AF 1 2 kindergarten #4 in Town of Artik Shirak Kindergarten Renovation of the internal heating system of 12,998 - 8,400 AF 1 2 kindergarten #3 in Town of Artik Shirak Kindergarten Renovation of the internal heating system of 17,501 - 8,400 AF 1 2 kindergarten #2 in Town of Artik Shirak School Reinstallation of heating system and area 58,272 688 235 AF 1 1 improvement for the school in Lusaghbyur Shirak Kindergarten- Overhaul of community center-kindergarten community building in Anasia 274,884 - 871 Main 2 center Shirak Community Overhaul of Art school in Lanjik village 247,896 1,050 325 Main 2 center Shirak School Overhaul of school building in Goghovit 341,520 375 129 AF 2 1 village Shirak Healthcare Reinstallation of heating system for 3 buildings 18,665 30,108 18,950 Main of Family med-care center in Gyumry Shirak Community Installation of heating system for museum of 11,799 4,200 1,110 Main center “Hovhannes Shiraz” in Gyumry Shirak School Partial renovation of school building in the 99,899 - 270 AF 2 1 village of Lusaghbyur Shirak Healthcare Overhaul of Healthcare facility in Anasia 242,340 2,328 998 AF 2 2 facility Shirak Community Installation of heating system in museum of 5,211 8,700 2,950 Main center “Mher Mkrtchyan” in Gyumry Shirak Community Reconstruction of community center in 104,038 191 75 AF 2 1 center Hartashen village Shirak Kindergarten- Overhaul of kindergarten in Ashotsq and community installation of its heating system 167,577 2,978 1,211 AF 3 2 center Shirak Kindergarten- Reconstruction of kindergarten in Pemzashen community village 171,835 3,955 1,923 AF 3 2 center 68

Contract Beneficiaries Adult Credit/ Vulnerab. Region Type Name cost (US) (No.) women Loan index Shirak Kindergarten Construction of Azatan's kindergarten 311,846 5,936 2,355 AF 3 3 Shirak Healthcare Renovation of health center in Maralik 314,936 - 2,500 AF 3 2 facility Shirak Community Construction of sport-cultural complex in 322,205 - 802 AF 3 2 center Amasia Shirak Heathcare Construction of Pathologic Laboratory in 286,061 - 61,000 AF 3 facility Gyumry Shirak School Construction of the school in Njuvadi village 205,176 161 53 Main 1 Syouniq School Construction of a school in Vardanidzor 181,827 295 100 Main 1 village Syouniq Environmental Rehabilitation of city square and alongside area 156,636 16,843 6,982 Main 3 of Sisian Syouniq Community Renovation of community center in Brnakot 216,933 2,429 894 Main 2 center village Syouniq Sewage Renovation of the sewerage in Meghri town 132,618 2,300 960 Main 1 Syouniq School Construction of joint school/community center 354,422 113 49 Main 1 building in Srashen village Syouniq School Reconstruction of Basic college building and its 365,784 917 317 Main 3 heating system in Goris town Syouniq Community Overhaul of Cultural center in Sisian and 280,009 - 6,725 AF 1 3 center installation of heating system Syouniq Community Rehabilitation of community center in the 144,132 95 36 AF 1 1 center village of Tadzatap Syouniq Community Construction of the heating system and 341,457 - 15,300 Main 3 center renovation of the music hall building in Kapan Syouniq School Construction of school in the village of 177,785 255 87 AF 1 1 Ishkhanasar fro 60 students Syouniq Special school Reconstruction of the state art college heating 67,213 46,700 15,300 Main 3 system in Kapan Syouniq Community Construction of community center in the village 344,851 1,250 520 Main 2 center of Kornidzor Syouniq School Overhaul of the school in the village of 336,562 - 964 Main 2 Shinuhayr Syouniq Community Installation of heating system of theatre in 96,581 23,200 12,061 Main 3 Center Goris Syouniq Community Overhaul of cultural center in the village of 201,322 5,294 2,303 AF 1 1 center Agarak Syouniq Potable water Reconstruction of potable water system in the 173,556 - 2,231 AF 1 1 Araxashen district of Meghry town Syouniq School Overhaul of 2 school buildings in the village of 196,423 2,902 964 AF 1 2 Shinuhayr 69

Contract Beneficiaries Adult Credit/ Vulnerab. Region Type Name cost (US) (No.) women Loan index Syouniq Community Overhaul of community center in Angeghakot 285,945 2,054 720 AF 2 2 Center village Syouniq Community Overhaul of community center in Khndzoresk 269,068 2,156 760 AF 2 2 Center village Syouniq Community Installation of heating system and area Center improvement of community center in 40,192 - 520 AF 2 2 Kornidzor Syouniq School Fencing and area improvement for the #4 29,467 - 8,360 Main 3 college in Goris town Syouniq School Installation of heating system and replacement 62,546 640 172 Main 1 of windows of school in Qarashen village Syouniq School Overhaul of school building in Khnatsakh 259,326 1,073 448 AF 2 1 village Syouniq School Renovation of school gym in Geghanush 46,839 378 173 AF 2 1 village Syouniq School Renovation of gym of School #1 school in 126,253 1,059 424 AF 2 1 Meghry and roof reconstruction Syouniq School Completion of school building construction in 266,838 285 110 AF 2 1 Bnunis village Syouniq School Reconstrcution of Art school in Agarak and its 271,821 - 2,054 AF 3 1 heating system Syouniq School Overhaul of school in Gorayq village 275,165 560 235 AF 3 2 Syouniq School Completion of construction of school in Darpas 302,068 456 185 AF 3 village of Shamb community Syouniq School Overhaul of school building in Tsghuk village 298,864 450 194 AF 3 2 and installation of its heating system Syouniq Community Reconstruction of “Hamo Sahyan” Museum in 78,049 420 173 AF 3 1 Center Lor village Syouniq School Reconstruction of 3-storey school building in 286,139 932 333 AF 3 1 Tatev village Syouniq Community Installation of heating system for Museum “A. 15,744 - 8,417 AF 3 3 Center Bakunts” and renovation of its fencing Syouniq School Reconstruction of school building in Halidzor 124,778 590 221 AF 3 1 village Syouniq School Reconstruction of school building in Halidzor 135,661 - - AF 3 1 village Tavoush School Capital renovation of the roofing and toilets of 97,278 932 361 AF 1 1 the school in Baghanis village Tavoush Community Overhaul of community cnetre in the village of 261,957 1,372 541 AF 1 1 center Chinar

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Contract Beneficiaries Adult Credit/ Vulnerab. Region Type Name cost (US) (No.) women Loan index Tavoush School Overhaul of gym of School #6 in Dilijan and 261,441 444 137 AF 1 3 installation of heating system Tavoush Special school Recosntruction of Music school in Ijevan town 248,312 1,803 8,360 AF 1 3 Tavoush School Gym construction and area improvement of #2 336,705 1,057 2,708 Main 1 school in Berd Tavoush Healthcare Construction of heating system for Primary 59,983 31,738 11,216 AF 1 3 Healthcare facility in Ijevan town Tavoush Healthcare Construction of heating system for Healthcare 23,877 6,772 1,964 AF 1 3 center's new building in Dilijan town Tavoush School Reinstallation of heating system in School #1 in 21,638 5,095 1,843 Main 3 Koghb village Tavoush Community Completion of construction of community 305,919 908 334 AF 2 1 Center center in Vazashen village Tavoush School Completion of constrcution of gym building in 101,371 3,566 1,260 AF 2 2 the village of Aygehovit Tavoush School Reconstruction of #6 school building in Dilijan 355,230 727 285 AF 2 3 Tavoush School Reconstruction of School #6 school in Dilijan 7,781 - 285 AF 2 3 Tavoush School Gym renovation of school in Gandzaqar village 61,965 3,850 1,275 AF 2 3 Tavoush School Renovation of school gym in Navur village 117,803 1,350 459 AF 2 2 Tavoush School Overhaul of school gym in Ptghavan village 172,692 1,163 333 AF 2 1 Tavoush School Gym renovation, replacement of external doors 88,789 - 248 AF 2 1 and windows of school in Baghanis Tavoush Community Overhaul of cultural house in Paravaqar village 271,602 1,706 701 AF 2 2 center Tavoush School Completion of renovation of school in 193,495 - 345 AF 3 1 Baghanis village Tavoush Community Construction of community center in Voskepar 154,517 1,055 368 AF 3 1 center village Tavoush Kindergarten Construction of kindergarten in Voskevan 289,109 1,532 625 AF 3 1 village Tavoush Kindergarten Overhaul of #2 Kindergarten #2 in Berd and 272,471 8,050 2,400 AF 3 1 installation of heating system Tavoush Community Community center construction in Nerqin 300,203 1,189 426 AF 3 1 center Karmiraghbjur village Tavoush School Overhaul of school building in Berqaber and 297,140 528 235 AF 3 1 installation of heating system Tavoush Kindergarten Construction of kindergarten in teghut village 295,745 1,710 554 AF 3 2 Tavoush Kindergarten Completion of construction of kindergarten in 297,517 1,720 741 AF 3 1 Verin Karmir Aghbyur village Tavoush School Gym reconstruction for school and its heating 215,966 638 281 AF 3 1 system in the village of Aygepar 71

Contract Beneficiaries Adult Credit/ Vulnerab. Region Type Name cost (US) (No.) women Loan index Tavoush Irrigation Completion of irrigation system of Kirants 74,968 330 148 AF 3 1 village Vayots Dzor Community Reconstruction of the cultural center roof in 56,838 1,410 483 Main 1 center Yelpin village Vayots Dzor Community Reconstruction of the roof for cultural center in 83,004 1,301 579 Main 2 center Vernashen village Vayots Dzor Community Reconstruction of the cultural center roof in 89,222 1,689 676 Main 2 center Rind village Vayots Dzor Community Reconstruction of the roof for community 39,651 263 94 Main 1 center center in Sers village Vayots Dzor Community Rehabilitation of the roof for community center 28,850 298 100 AF 1 1 center in Gomq village Vayots Dzor Community Overhaul of community center in Vardahovit 128,010 211 80 Main 1 center village Vayots Dzor Community Construction off community center in Taratumb 207,828 675 218 Main 1 center village Vayots Dzor School Construction of school-community center 28,695 211 81 AF 2 1 building in Zedea village Vayots Dzor School Overhaul of two school buildings in Khachik 340,104 1,028 250 AF 2 1 village Vayots Dzor Kindergarten Reconstruction of the kindergarten in the 269,011 2,731 1,216 AF 3 3 village of Gladzor, and heating system Vayots Dzor Kindergarten Reconstruction of kindergarten and installation 294,012 2,400 1,180 AF 3 3 of its heating system in Getap village Vayots Dzor Potable water Reconstruction of potable water system in Rind 286,637 - 617 AF 3 2 village Vayots Dzor Kindergarten Reconstruction of 2 buildings of Kindergarten 276,129 5,950 1,960 AF 3 3 #2 in Malishka village (incl heating system) Vayots Dzor Community Reconstruction of community center in 94,829 519 200 AF 3 1 center Khdzorut village

Source. ASIF MIS.

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