AFRICAN DEVELOPMENT BANK

TOGO

TOGO AGRO-FOOD PROCESSING PROJECT (PTA-TOGO)

Public Disclosure Authorized Disclosure Public ADDITIONAL FINANCING FROM THE NIGERIA TRUST FUND (NTF)

Public Disclosure Authorized Disclosure Public

RDGW/AHFR DEPARTMENTS

April 2019

Translated document

Table of Contents

Currency Equivalents, Fiscal Year, Weights and Measures, Acronyms and Abbreviations, Project Profile i-v

I. SUMMARY OF THE INITIAL PROJECT (PTA-TOGO) APPROVED ON 18/07/2018...... 1 1.1 Strategic Framework ...... 1 1.2 Objectives ...... 1 1.3 Expected Outcomes ...... 1 1.4 Brief Description of Project Components ...... 2 1.5 Cross-Cutting Issues ...... 2 1.6 Implementation Arrangements...... 3 1.7 Status of the Initial Project Approved on 18 July 2018 ...... 3 II. RATIONALE AND PURPOSE OF THE NTF LOAN ...... 4 2.1 Rationale for NTF Financing ...... 4 2.2 Purpose of the NTF Funding ...... 4 III. MAIN ACTIVITIES TO BE FINANCED FROM THE NTF LOAN ...... 4 3.1 Description of Activities to be financed from the NTF Loan ...... 4 3.2 Expected Outcomes ...... 5 3.3 Compliance of Additional Activities with Environmental and Social Provisions ...5 3.4 Procedure for Implementing the Additional Funding ...... 6 IV. COST OF THE ADDITIONAL LOAN AND REVISED FINANCING PLAN ...... 8 4.1 Breakdown of the Cost of the NTF Additional Financing ...... 8 4.2 Revised Cumulative Financing Plan of the PTA-Togo (including NTF funding) ...8 V. LEGAL FRAMEWORK OF THE NTF ADDITIONAL FINANCING ...... 10 5.1 Legal Instrument ...... 10 5.2 Conditions Associated with Bank Involvement ...... 10 5.3 Compliance with Bank Policies...... 12 VI. RECOMMENDATION ...... 12

ANNEXES

Annex I: Letter from His Excellency the Minister of Finance of Nigeria, dated 31 ... August 2018, confirming the allocation of UA 4 million for the PTA-Togo. I Annex II: Detailed Description of the Revised Project (including the NTF) ...... II Annex III: Revised Results-based Logical Framework of PTA-Togo (including the .... NTF-funded components) ...... VII Annex IV: Provisional Revised Project Implementation Schedule ...... X Annex V: Procedures for Procurement from NTF Loan Resources ...... XIV Annex VI: Map of the Project Location (including the NTF components) ...... XIX

CURRENCY EQUIVALENTS – February 2019

Currency Unit : CFAF UA 1 : CFAF 799.78869 EUR 1 : CFAF 655.957

FISCAL YEAR

1 January – 31 December

WEIGHTS AND MEASURES Metric System

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ACRONYMS AND ABBREVIATIONS

ADF African Development Fund (of the Bank Group) ANGE National Environmental Management Agency APA Advance Procurement Action APD Detailed Engineering Design APS Preliminary Engineering Design AUSEPA Drinking Water and Sanitation Users’ Association AUSI Irrigation Water Users’ Association CRP Comprehensive Resettlement Plan CSP Country Strategy Paper (of the Bank) CTA Agro-Processing Centres (Village Centres) DCE Bidding Documents DPA Agricultural Policy Document (2016-2030) DREHV Regional Directorate of Water and Village Hydraulics DWS Drinking Water Supply ECOWAS Economic Community of West African States ERR Economic Rate of Return ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan HDI Human Development Index HIMO Labour Intensive HOP Human-Operated Pumps ICT Information and Communication Technologies INDC Intended Nationally Determined Contribution ISS Integrated Safeguards System ITRA Togo Institute for Agronomic Research NTF Nigeria Trust Fund PDA Public Development Assistance PGPP Pests and Pesticides Management Plan PMU Project Management Unit PPF Project Preparation Fund RAP Resettlement Action Plan SESA Strategic Environmental and Social Assessment/ SME Small and Medium-Sized Enterprise TFP Technical and Financial Partners TSF Transition Support Facility VRD Roads and Sundry Networks WB World Bank WSC Water and Soil Conservation ZTA Agro-Food Processing Zone

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PROJECT INFORMATION SHEET

Client Information ______BORROWER : Republic of Togo

EXECUTING AGENCY : Agency for Promotion and Development of Agropoles in Togo (APRODAT), established by Decree No. 2018- 036/PR of 27 February 2018

Revised Financing Plan (including NTF funding) Amount (UA Amount Amount Source Instrument M.) (CFAF M.) (USD M.) ADF (including PPF) 4 635.00 3.619.700 Grant ADF 8 040.00 6.278.830 Loan TSF (Pillar I) 8 320.00 6.497.500 Loan BOAD 12 804.92 10 000 000 Loan Saemaul Globalization Foundation 3 524.19 2.752.220 5 000 Grant (South Korean) Nigeria Trust Fund 4 000.00 3 199.160 Loan Government 7 741.95 6.046.080 Budget TOTAL COST 49 066.07 38 393.490 *PPF advance: UA 995 000 Financial Information on the NTF Additional Loan

Maturity (years) 27 Grace Period (years) 7 Principal Amount Amortisation Annual rate. Applies to the undisbursed amount. Effective 120 days from the signing of the loan agreement, with half-yearly payments on payment Dates Service Commission (%) 0.75 Payment of Commitment Fee Annual rate. Applies to the outstanding amount disbursed. Half-yearly payments on payment dates Commitment Fee (%) 0.5 Payment of Commitment Fee Annual rate. Applies on the undisbursed amount. Effective 120 days from signature, with half-yearly payments on payment dates Interest Rate (%) NA Payment of interest amounts NA Concessionnality (%) 51.4%

NPV (baseline scenario) CFAF 56 959 375 ERR (baseline scenario) 23.23% Timeframe – Key Milestones (expected) Concept Note Approval March 2018 Project Approval July 2019 Approval of the NTF Financing April 2019 Effectiveness May 2019 Last Disbursement December 2023 Completion September 2023 Last reimbursement December 2046

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RECOMMENDATION OF THE BANK MANAGEMENT TO THE BOARD OF DIRECTORS CONCERNING A PROPOSED NTF ADDITIONAL FINANCING FOR THE TOGO AGRO-FOOD PROCESSING PROJECT (PTA-TOGO)

Management hereby submits this memorandum and recommendation concerning the grant of additional funding from the Nigeria Trust Fund (NTF), not exceeding UA 4 million, to finance the activities of the Togo Agro-Food Processing Project (PTA-Togo). These supplementary financial resources will be used to develop 600 ha of irrigated areas with full water control downstream of the B1 dam, build 4 mini-drinking water supply (DWS) networks fed by the new boreholes that will be drilled and equipped, drill 30 boreholes equipped human-operated pumps and rehabilitate 8 boreholes equipped with human-operated pumps. These additional activities will be perfectly feasible in the current planning of PTA-Togo implementation, which will help increase the outcomes of this project, especially by boosting the resilience of the agro-pastoral production system to climate change, and by improving access to drinking water for rural households and small and medium-sized enterprises (SMEs) engaged in the processing activities planned for 10 agricultural processing centres (CTA).

I. SUMMARRY OF THE INITIAL PROJECT (PTA-TOGO) APPROVED ON 18/07/20181

On 18 July 2018, the Board of Directors of the Bank Group approved for the Togo Agro-Food Processing Project (PTA-Togo) a total amount of UA 20.95 million, broken down as follows: (i) ADF loan: UA 8.04 million (17.8%); ADF grant: UA 4.046 million (10.3%); and TSF loan: UA 8.32 million (18.5%). The amounts mobilized under a co-financing arrangement are approximately UA 12,804,920 (28.4%) coming from the West African Development Bank (BOAD) and UA 3,524,190 (7.8%) from the Saemaul Foundation for Globalization (Korea). The total amount is about UA 45,066,070 (nearly CFAF 35,194 billion) upon which UA 7,741,950 (17.2%) from the Togolese State as counterpart funding. The project, which covers the Kara region, is planned to span a five-year period (2019-2023).

1.1 Strategic Framework

1.1.1 The Togo Agro-Food Processing Project (PTA-Togo) is a pilot project implemented as part of the Togo Agropoles Strategic Development Plan 2017-2030 and the Feed Africa Initiative 2016-2025. The project is in line with the Bank’s Country Strategy Paper (CSP) 2016-2022, Pillar 1 of which concerns the development of inclusive growth and agribusiness competitiveness poles, through the development of agro-industrial processing zones.

1.2 Objectives

1.2.1 The overall objective of the project is to promote inclusive agricultural growth that creates jobs and reduce food imports thanks to incentive measures for private investment in key areas. The specific objectives of the project are to: (i) facilitate private investments in key areas thanks to policy support, governance and incentive measures; (ii) promote the development of priority value chains through the establishment of infrastructure to support production, storage and processing; and (iii) build the capacity of stakeholders in priority agro-industrial areas.

1.3 Expected Outcomes

1.3.1 The main expected outcomes are as follows: (i) increase in the productivity and agricultural production of import substitutes (rice, maize, soybean, broiler meat) and exports (cashew nuts and sesame); (ii) increase in the share of agricultural products processed in situ

1 See Board Resolution No. B/TG/2018/35 - F/TG/2018/53 1

(from 19% to 40%) through private investment in the Agro-park (90,000 tonnes/year of paddy rice, 15,000 tonnes/year of maize, 10,000 tonnes/year of soybean, 20,000 tonnes/year of feed, 10,000 tonnes/year of cashew nuts and 10,000 tonnes/year of sesame, production of 3 million chicks per year, slaughtering of 2 million broilers/year); (iii) strengthening of the people’s food and nutritional security; and (iv) creation of wealth and employment, including for young people and women.

1.4 Brief Description of Project Components

1.4.1 This project was prepared on the basis of reports of feasibility studies conducted with financing granted from the Project Preparation Fund (PPF) by the Bank. PTA-Togo is a pilot project consisting of 4 components: (a) Support policies, governance and incentive measures: incentive measures, land security, standardization and metrology, single window, agro-park management, support for financial and non-financial institutions, etc.; (b) Support infrastructure for processing, production and access to inputs and agricultural services: servicing of the agro- industrial park, construction of storage dams, design study on irrigated areas, rehabilitation of rural roads, creation of 10 agricultural processing centres, etc.; (c) Capacity building for agro- industrial actors: primary storage, access to agricultural inputs and services, training of actors, implementation of the Strategic Environmental and Social Assessment (SESA) (compensation, resettlement, ESMP, etc.), support for the implementation of priority sub-projects, etc.; and (d) Steering, Coordination, Management and Monitoring and Evaluation.

1.5 Cross-Cutting Issues

1.5.1 Environmental and Social Safeguards (Annex B5 of the PAR): In accordance with the requirements of the Integrated Safeguards System (ISS), the project was classified in Category 1. A strategic environmental and social assessment (SESA) was conducted to ensure that the incidence of the future activities carried out in the project area have already been taken into account and possible mitigation measures identified. The SESA was approved by the Togo National Environmental Management Agency (ANGE) on 23 February 2018. A summary of the assessment was published on the AfDB website on 27 February 2018. Lastly, in implementing the SESA, account will be taken of AfDB and BOAD safeguards policies and the environmental laws of the Republic of Togo complied with for each activity to be developed on the site.

1.5.2 Involuntary Resettlement (Annex B5 of the PAR). Resettlement action plans are being prepared for the Agro-park and rural infrastructure. Based on the estimated land area that will be affected and the value of the land in the area, a provision of CFAF 800 million has been earmarked for the compensation of affected persons. A resettlement master plan (RMP) will also be prepared as part of the project. Although it is not a tool proposed by the Bank’s ISS, the RMP is required as a precaution, to specify the procedure by which land that is not currently affected by the project will be developed subsequently.

1.5.3 Climate Change: Togo and the Kara region are facing severe deforestation related to tree- cutting for farming and alternative income-generation needs. The rate of deforestation is about 15,000 hectares/year, compared with a reforestation rate barely exceeding 3,000 hectares/year. This situation compounds the problem of climate change by depleting carbon stock. The PTA also has the potential to contribute to greenhouse gas emissions, owing to tree-cutting for farmland development, rice production and building of dams.

1.5.4 Gender: The initial project is classified in Category 2, according the Gender Marker System. The detailed gender analysis of the entire value chain has been made and measures recommended to address the main constraints faced by women, including land insecurity, access to improved seeds, access to equipment, and outlets for the marketing of agricultural products. The 2

budget for the implementation of the gender promotion and women’s empowerment component stands at UA 7.2 million. Details on gender mainstreaming support activities are provided in Annex B.7 of the PAR.

1.6 Implementation Arrangements

1.6.1 The PTA-Togo will be implemented by the Agency for the Promotion and Development of Agropoles in Togo (APRODAT), which was established by Decree No. 2018-036/PR of 27 February 2018 to develop 10 agropoles over the next 15 years and promote private investment. The Ministries responsible for Agriculture and Industry respectively will provide joint supervision of APRODAT which has two organs: (i) a Board of Directors, chaired by the Prime Minister, and comprised of seven active members (public and private) and observer members, and which meets twice a year; and (ii) a Directorate-General (DG). The essential staff necessary for the proper functioning of the DG was identified at appraisal and its profile predefined.

1.6.2 Procurement. The procurement of goods (including non-consultancy services), works and consultancy services, financed by the Bank as part of the project, will be carried out in accordance with the Procurement Framework for Bank Group-Funded Operations, October 2015 edition and the provisions set out in the Financing Agreements. The mission has defined the procurements to be carried out according to the Borrower's Procurement System and those to be made following the Bank's procurement methods and procedures. Details concerning procurements financed with TSF and ADF resources are provided in Annex B5.

1.6.3 Financial Management. The mechanism required for the operationalization of an APRODAT financial management system was defined in the Project Appraisal Report (PAR), taking into account the assessment of fiduciary risks that was deemed high. Despite finalization of the organization chart and recruitment of key personnel, some of the specific measures envisaged in the PAR are yet to be carried, including the following: (i) development of the administrative, financial and accounting procedures manual, on which its internal oversight system, covering all management cycles; (ii) development, where appropriate, of an operations manual for facilitation and financial intermediation activities); (iii) establishment of an integrated multi-project and multi- user management system to ensure the keeping of budgetary, analytical and general budget accounts of the project; and (iv) establishment of internal audit mechanisms, with the recruitment of an Internal Auditor on a competitive basis. Details of the financial management of the initial project are provided in Annex B4 of the PAR.

1.6.4 Disbursements: The three types of Bank financing (ADF Grant, ADF Loan and TSF Loan) approved for the initial project will be mobilised in accordance with the rules and procedures of the Bank Disbursement Manual through the three disbursement methods: (i) direct payment (for the procurement of works, goods and services and other relatively high-cost expenditure...); (ii) the special account (mainly for operating expenditure); and (iii) reimbursement, where appropriate.

1.7 Status of the Initial Project Approved on 18 July 2018

1.7.1 The Board of Directors of the Project Executing Agency (Agency for the Promotion and Development of Agropoles of Togo - APRODAT) is in place, key personnel are already available and start-up activities are ongoing. The signing of the three financing agreements (ADF grant, ADF loan and TSF loan) on 27 August 2018 preceded the effectiveness of the said agreements on 11 October 2018. Also, the conditions precedent to the first disbursements were fulfilled on 18 January 2019 and first disbursement was made on 1 March 2019. Lastly, the official launch of the initial project is scheduled for March 2019.

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II. RATIONALE AND PURPOSE OF THE NTF LOAN

2.1 Rationale for NTF Financing

2.1.1 As part of the PPF-financed project preparation studies, comprehensive studies had been finalized to enable the setting up of (i) 4 mini-drinking water supply (DWS) networks in four village centres, and; (ii) manually operated pumps (MOPs) in other locations in the project area. In addition, the initial project, as approved, also incorporates detailed design studies on two storage dams and 1,200 ha of irrigated land (for rice and maize/soybean crops). Due to lack of resources, a financing request had been submitted to the NTF during the project preparation process. Given that the NTF's formal response did not reach the Board before Board presentation, no provision was made for these infrastructure components (irrigated areas and DWS) in the approved initial funding.

2.1.2 That is why this NTF additional financing is fully justified, since it allows for the development of part of the irrigated areas (for sustainable increase in agricultural productivity) and also helps to guarantee access to drinking water for households and small and medium-sized enterprises (SMEs) located in village centres, particularly those involved in the processing of agricultural products and related service delivery. The NTF funding is, therefore, intended to finance the implementation of these two essential components that would increase the resilience of agro-pastoral production systems and boost agricultural processing capacities to ensure the achievement of the project’s expected outcomes.

2.2 Purpose of the NTF Funding

2.2.1 This additional funding from the Nigeria Trust Fund (NTF) is intended to finance the development of irrigated areas and drinking water supply systems in certain localities in the initial project area (Kara region). The specific objective of the NTF loan is (i) to develop gravity irrigated areas (about 600 ha) downstream of the agro-park dam; (ii) provide drinking water supply (DWS) to four village centres and secondary localities to meet the needs of households and agro-entrepreneurs.

III. MAIN ACTIVITIES TO BE FINANCED FROM THE NTF LOAN

3.1 Description of Activities to be Financed from the NTF Loan

3.1.1 The activities planned to be financed by the NTF additional financing were included in the Concept Note approved by the Country Team of 28 February 2018 and the Operations and Quality Assurance Committee (SNOC) of 9 March 2018. These activities were then removed from the PTA-Togo financing plan to cope with the lack of resources noted at appraisal. Thus, some investments were deferred, including those relating to irrigated areas and drinking water supply for households and agro-processing SMEs. As such, the summary design report on the irrigated areas is available and the detailed design studies are planned under the initial financing of the project (ADF and TSF). For DWS, detailed design reports are already available. Thus, the proposed activities to be financed by the NTF additional loan dovetail smoothly with the components initially defined in the PTA-Togo (see the table below, and the revised description of the components and logical framework in annex – shown in bold).

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Component/Sub-Component (same Cost Summary Description as original project) (UA M) Component 2: Support 2 405 (i) Development of 600 ha of gravity irrigated area with full infrastructure for processing, water control (canals Ia and IIa covered, works and production and access to equipment) downstream of the agro-park dam for rice agricultural inputs and cultivation (30%), maize/soy (60%) and market gardening services / (10%); the labour intensive (LI) approach will be  Sub-component 2.3: Support preferred; infrastructure for agricultural (ii) Control and supervision of works on the development of productions 600 ha of irrigated land (comprehensive studies are already planned under the initial project). Component 3: Capacity building for 1 595 (i) Works on the establishment of four mini-drinking water actors in priority agricultural supply (DWS) networks (detailed design study already sectors / done by PPF), including the drilling of high-flow boreholes  Sub-component 3.2: Capacity for four localities (Agbassa, Agounde, Kadjala and Leon); building for communities the labour-intensive approach will be preferred; (ii) Drilling of 30 boreholes equipped with manually operated pumps, including the construction of superstructures (detailed design study already done); (iii) Rehabilitation of eight boreholes (blowing, pumping tests, equipment replacement, water quality); (iv) Control and monitoring of DWS works (the detailed design report is already available) TOTAL NTF LOAN 4000

3.2 Expected Outcomes

3.2.1 This NTF additional financing should specifically help to achieve the following outcomes: (i) increase irrigated rice production (2,000 T/year), maize/soybeans (3,000 T/year), and market gardening (4,000 T/year), thus securing the supply of raw materials for the Broukou Agro-Park and the 10 agricultural processing centres; (ii) increase drinking water access rates for households (numbering 2,195 in total) to 75% (compared to 52% currently); (iii) secure access to drinking water for processing SMEs (around 100).

3.3 Compliance of Additional Activities with Environmental and Social Provisions

3.3.1 Environmental safeguards. In accordance with the requirements of the Integrated Safeguard System (ISS), the Project (including NTF-funded activities) has been classified in Category 1. A Social and Environmental and Strategic Assessment (SESA) has been prepared (see Annex B8 of the initial project report) in order to taken into account the impact of future activities in the project area, and the mitigation measures have been identified. The SESA was approved by the National Environmental Management Agency (ANGE) of Togo on 23 February 2018. A summary of the assessment was published on the AfDB website on 27 February 2018. In this regard, the Environmental and Social Impact Assessments (ESIAs), Resettlement Action Plans (RAPs) and Pest and Pesticide Management Plans (PIPs) that are being prepared (including as part of the DWS component) or planned in the additional studies, funded from the initial project resources, will make it possible to implement SESA recommendations (see PAR II, Annex B8, volume II). Thus, the measures planned in the initial project completely cover the potential impacts of the development of the irrigated areas and drinking water supply systems envisaged under the NTF, including the effects of waterborne diseases (schistosomiasis, bilharzia, etc.).

3.3.2 Social Safeguards. The additional benefits of the NTF funding relate to: (i) the development of intensive agricultural activities; (ii) the creation of direct and indirect jobs, especially for young people; (iii) the increase in farmers' gross income; and (iv) increase in the 5

people’s purchasing power, resulting in an improvement in the nutritional intake and living conditions of households. Moreover, the NTF will support the construction of social infrastructure to improve the people’s living conditions by: (i) financing the creation of mini- drinking water supply (DWS) networks, drilling new boreholes equipped with human-operated pumps, and rehabilitating boreholes, using the labour-intensive approach; (ii) carrying out capacity-building and IEC activities centred around this infrastructure, particularly to combat waterborne diseases (including bilharziasis).

3.3.3 Involuntary Resettlement. Resettlement Action Plans was prepared for the entire project that was initially designed, including for the irrigated areas and the drinking water supply networks financed from the NTF loan. Based on an estimate of the areas that will be affected and the value of land in the area, a total of CFAF 800 million was allocated for the compensation of affected persons. Also, a Comprehensive Resettlement Plan (CRP) will be prepared as part of the initial project. Although the CRP, as an instrument, is not proposed by the AfDB Integrated Safeguards System (ISS), it is required as a precaution to specify the process through which land that is not currently covered by the project will be subsequently developed.

3.4 Procedure for Implementing the Additional Funding

3.4.1 The project financed from the NTF additional funding will be implemented by the same entity currently implementing the PTA-Togo, namely the Agency for the Promotion and Development of Agropoles in Togo (APRODAT), which was established by Decree No. 2018- 036/PR of 27 February 2018 to develop 10 Agropoles over the next 15 years and promote private investment. The Ministries responsible for Agriculture and Industry, respectively, will jointly supervise APRODAT which has two organs: (i) a Board of Directors, chaired by the Prime Minister, and comprised of seven active members (public and private) and observer members; and (ii) a Directorate-General (DG). The essential staff necessary for the proper functioning of the DG was identified at appraisal and its profile predefined. The recruitment of key staff has just been completed. This staff is sufficient to implement the activities planned to be financed from the NTF.

3.4.2 Implementation Schedule and Supervision. The implementation of activities financed from the NTF loan will run from April 2019 to the deadline for the last disbursement of the additional loan which will be set for 31 December 2023, the same date as for the initial Bank Group loans (ADF and TSF agreements). Therefore, approval of the additional funding will not delay the completion of activities by 2023. Upon approval of the NTF additional loan, the Bank will undertake supervision missions every 6 months, concurrently with those provided for under the initial project financing agreements, in accordance with the Bank's Operations Manual.

3.4.3 Procurement for Additional Activities Financed from the NTF Loan: The procurement of goods (including non-consultancy services), works and consultancy services, financed by the NTF as part of the project, will be carried out in accordance with the Procurement Framework for Bank Group-Funded Operations, October 2015 edition, and the provisions set out in the Financing Agreement. More specifically, procurements will be carried out as follows: The mission has defined the procurement to be carried out according to the Bank's procurement methods and procedures and those to be for which the Borrower's Procurement System. Regarding the latter, a waiver will be requested from the Bank’s Board of Directors so that the Rules of Origin of the ADB Window (applicable to NTF resources) may be aligned, for the circumstance, with the Rules of Origin governing public contracts under Togolese law, and applicable to the NTF-financed contracts that will be concluded using the national system. Also, the Procurement Plan for activities covered by the additional financing was prepared by the national party and approved by the Bank (see Annex IV).

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3.4.4 Financial Management. The management system provided for in the initial project for the financial management of APRODAT is the same as the one that will be used to implement the NTF loan, as outlined in the project appraisal report (PAR) of the initial project (see Annex B4). The measures that were planned in the initial project and have already been implemented are: completion of the organization chart and recruitment of key personnel (coordinator, administrative and financial officer, accountants, internal auditor, etc.). The processes currently being implemented by APRODAT include (i) the recruitment of the consultant in charge of preparing the administrative, financial and accounting procedures manual; (ii) the ongoing selection of an integrated multi-project and multi-user management system provider to ensure the keeping of budgetary, analytical and general budget accounts; and (iii) the ongoing recruitment of independent external auditors on a competitive basis. Specific needs related to the additional financing from the Nigeria Trust Fund will now have to be incorporated into these procedures manuals, management systems and software.

3.4.5 Disbursements. The resources of the NTF Loan will be mobilized in accordance with the rules and procedures of the Bank’s Disbursement Handbook through the following two disbursement methods: (i) direct payment (for the procurement of works, goods and services and other relatively high-cost expenditure...); (ii) reimbursement, where appropriate with the Bank’s prior approval. The special account method was not chosen because the operating expenses are entirely covered by the other funds of the initial project.

3.4.6 Sustainability. The project is part of a sustainable development effort and its sustainability is based on the fact that most of the activities to be financed were identified in collaboration with stakeholders. The technical assistance provided for in the initial project will build the capacity of national and regional institutions to clarify and better assume their responsibilities in terms of the sustainable management of rural infrastructure. The initial project already comprises operations such as capacity building in entrepreneurial culture, farmer organizational dynamics and the empowerment of communities through the Irrigation Water Users’ Association (AUSI) in the management/maintenance of infrastructure (including irrigated areas), which guarantees the sustainability of project outcomes and impacts. Also, national provisions will be implemented for the operation and maintenance of the planned DWS systems funded from the NTF loan, as follows:

 In rural areas, boreholes equipped with manually operated pumps will be managed at the village level by works management committees, while mini water supply systems will be managed by the Drinking Water and Sanitation Users’ Association (AUSEPA). The establishment of these bodies is a prerequisite for benefiting from the water point.

 These Committees and AUSEPA will be controlled by the Regional Directorate of Water and Village Water Supply (DREHV), whose personnel includes support staff (training agents, 1 sociologist, and 1 mechanic in charge of training local repairmen);

 Communities are also required to meet the following conditions:

‒ Mobilize CFAF 150,000 per borehole equipped with a manually operated pump and CFAF 200,000 per standpipe;

‒ Open an account with a microfinance institution into which this amount and - after the commissioning of the works - the proceeds of water sale are deposited to ensure the security of resources; and

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‒ Provide a certificate donation of the works right-of-way.

3.4.7 Potential Risks and Mitigation Measures. The potential risks are the same as those identified in the initial project (see paragraph 4.5.1 of the PAR). The mitigation measures proposed in the initial PAR remain valid for this additional NTF financing (see revised logical framework in Annex II)

IV. COST OF THE ADDITIONAL LOAN AND REVISED FINANCING PLAN

4.1 Breakdown of the Cost of the NTF Additional Financing

4.1.1 The estimated cost, exclusive of taxes and customs duties, of the additional financing provided by the Nigeria Trust Fund (NTF) stands at UA 4 million, of which UA 2.821 million will be in foreign exchange (70.5% of the cost) and UA 1.179 million in local currency (29.5% of the cost). These costs were established on the basis of the unit prices of similar contracts recently executed, and include unallocated resources.

4.1.2 Breakdown by category of expenditure of the additional NTF financing. The breakdown of the NTF loan of UA 4 million, exclusive of taxes and customs, by expenditure category is presented in the table below:

NTF Loan (in UA million) LIST OF GOODS AND SERVICES Local Currency Foreign Exchange Total A. WORKS 1 111.45 2 593.38 3 704.83 Developments 671.55 1 566.94 2 238.49 Infrastructure 439.90 1 026.43 1 466.34 C. SERVICES 23.33 132.19 155.51 2. TECHNICAL ASSISTANCE 23.33 132.19 155.51 Unallocated 43.73 95.93 139.66 TOTAL 1 178.51 2 821.49 4 000.00

4.2 Revised Cumulative Financing Plan of the PTA-Togo (including NTF funding)

4.2.1 Financing Mechanism: The project financing comprises: (i) the initial financing for the PTA-Togo Project namely, an ADF loan and grant, a TSF loan, funding from BOAD and the Korean Fund, to the tune of UA 8.04 million (116.7%), UA 4.635 million (9.6%), including the PPF refund of UA 995,000; UA 8.32 million (17.2%), CFAF 10 billion (UA 12.8 million or 26.5%), USD 5.068 million (UA 3.52 million (UA 12.8 million or 26.5%), respectively, and the Togolese Government to the tune of CFAF 6.046 billion; and (ii) the NTF additional financing, which is the subject of this Note to the Board, to the tune of UA 4 million (6.6%). The breakdown of the revised cumulative costs (including NTF funding), by source of funding, is as follows (see table).

Summary of project cost by source of financing (including the NTF funding)

SOURCES OF (CFAF Million) (UA '000) % FINANCING L.C. F.E. Total L.C. F.E. Total ADF Loan 1 887.43 4 391.41 6 278.83 2 416.84 5 623.16 8 040.00 16.4 TSF Loan 2 250.64 4 246.86 6 497.50 2 881.93 5 438.07 8 320.00 17.0 ADF Grant 2 374.41 1 245.30 3 619.70 3 040.41 1 594.59 4 635.00 9.4 BOAD 3 331.70 6 668.30 10 000.00 4 266.21 8 538.71 12 804.92 26.1 Korean Fund 2 122.27 629.95 2 752.22 2 717.55 806.64 3 524.19 7.2 NTF (new) 942.56 2 256.60 3 199.16 1 178.51 2 821.49 4 000.00 8.2 State of Togo 3 288.99 2 757.09 6 046.08 4 211.52 3 530.43 7 741.95 15.8 Total 16 198.00 22 195.51 38 393.51 20 712.97 28 353.09 49 066.06 100.0

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4.2.2 The breakdown of the revised cumulative costs (including the NTF funding) by component and sub-component is provided in the following table.

Summary of revised project costs by component (including the NTF funding)

(CFAF Million) (UA ‘000 ) % % COMPONENTS L.C. F.E. Total L.C. F.E. Total F.E. CB. A. SUPPORT POLICY, GOVERNANCE & 2 379.97 1 457.20 3 837.17 3 047.53 1 865.94 4 913.47 38 11 INST. CAPACITY BUILDING improvement of ZTA operational framework 633.97 583.20 1 217.17 811.79 746.79 1 558.58 48 4 Establishment of ZTA governance system 488.00 672.00 1 160.00 624.88 860.49 1 485.37 58 3 Strengthening of State and non-State public institutions 1 258.00 202.00 1 460.00 1 610.86 258.66 1 869.52 14 4 B. DEVT. OF PROCESSING AND ACCESS INFR 7 762.79 16 771.49 24 534.28 9 923.67 21 436.13 31 359.80 68 67 Agro-park infrastructure 2 150.81 4 896.06 7 046.87 2 754.10 6 269.37 9 023.46 69 21 Infrast. for access to inputs agric services 1 279.64 2 975.84 4 255.48 1 638.57 3 810.54 5 449.11 70 13 Production support infrastructure /b 4 332.34 8 899.59 13 231.93 5 531.00 11 356.23 16 887.23 68 36 C. STAKEHOLDER CAPACITY BUILDING 2 785.56 1 885.18 4 670.74 3 556.04 2 387.84 5 943.88 30 10 Producers of key sectors 2 144.77 657.45 2 802.22 2 746.36 841.86 3 588.22 23 8 Rural communities 449.74 955.78 1 405.52 565.04 1 197.76 1 762.80 80 1 Central and decentralised services 191.05 271.95 463.00 244.64 348.23 592.87 59 1 D. PROJECT MANAGEMENT & COORDINATION 2 797.70 1 244.84 4 042.55 3 582.44 1 594.01 5 176.45 31 12 TOTAL BASE COST 15 726.03 21 358.71 37 084.74 20 109.68 27 283.92 47 393.60 57 100 Physical contingencies 187.83 380.95 568.78 239.97 486.52 726.49 67 2 Financial contingencies 284.13 455.84 739.96 363.31 582.67 945.98 62 2 TOTAL PROJECT COST 16 198.00 22 195.51 38 393.51 20 712.97 28 353.09 49 066.06 58 104

4.2.3 The breakdown of the revised cumulative project costs (including NTF funding) by category of expenditure is as follows:

Summary of revised project costs by expenditure category (including NTF funding)

(CFAF Million) (UA ‘000) EXPENDITURE CATEGORIES Local Foreign Local Foreign % % Currency Exchange Total Currency Exchange Total Dev. C.B. I. INVESTMENT COSTS 13 279.38 20 847.12 34 126.49 16 976.77 26 628.82 43 605.59 60 92 A. WORKS 7 059.13 16 471.30 23 530.43 9 012.35 21 028.81 30 041.16 70 60 Dams and development schemes 3 537.10 8 253.22 11 790.32 4 513.02 10 530.39 15 043.41 70 29 Infrastructure 3 312.03 7 728.08 11 040.11 4 230.42 9 870.98 14 101.40 70 29 Construction and rehabilitation 210.00 490.00 700.00 268.90 627.44 896.34 70 2 B. GOODS 431.97 867.38 1 299.35 553.14 1 110.67 1 663.81 67 4 Vehicles 57.00 171.00 228.00 72.99 218.96 291.95 75 1 Equipment. materials and inputs 374.97 696.38 1 071.35 480.15 891.71 1 371.86 65 3 Equipment 374.97 696.38 1 071.35 480.15 891.71 1 371,86 65 3 Agricultural materials a inputs ------Sub-Total C. SERVICES 3 460.93 3 508.44 6 969.37 4 431.13 4 489.34 8 920.47 50 19 1. Training 1 149.52 766.35 1 915.87 1 471.95 981.30 2 453.25 40 5 2. Technical assistance 232.41 1 316.97 1 549.38 297.03 1 683.18 1 980.21 85 4 3. Studies 1 160.25 1 088.87 2 249.12 1 485.69 1 394.29 2 879.98 48 6 Various studies 641.70 784.30 1 426.00 821.69 1 004.29 1 825,98 55 4 Preparation advance 518.55 304.57 823.12 664.00 390.00 1 054,00 37 2 4. Contractual services 885.00 295.00 1 180.00 1 133.24 377.75 1 510.98 25 3 5. Audit 33.75 41.25 75.00 43.22 52.82 96.04 55 0 D. Miscellaneous 2 327.35 - 2 327.35 2 980.15 - 2 980.15 - 6 II. RECURRING COSTS 2 446.65 511.60 2 958.25 3 132.92 655.10 3 788.01 17 8 A. PERSONNEL 1 572.00 - 1 572.00 2 012.93 - 2 012.93 - 4 B. TRAVEL EXPENSES 407.43 - 407.43 521.70 - 521.70 - 1 C. MAINTENANCE. OPERATION & REPAIRS 295.10 454.22 749.32 377.87 581.63 959.50 61 2 Vehicles 148.65 276.06 424.70 190.34 353.49 543.83 65 1 Equipment 145.40 177.72 323.12 186.19 227.57 413.76 55 1 Infrastructure 1.05 0.45 1.50 1.34 0.58 1.92 30 0 D. OVERHEAD EXPENSES 172.13 57.38 229.50 220.40 73.47 293.87 25 1 TOTAL BASE COST 15 726.03 21 358.71 37 084.74 20 109.68 27 283.92 47 393.60 57 100 Physical contingencies 187.83 380.95 568.78 239.97 486.52 726.49 67 2 Financial contingencies 284.13 455.84 739.96 363.31 582.67 945.98 62 2 TOTAL PROJECT COST 16 198.00 22 195.51 38 393.51 20 712.97 28 353.09 49 066.06 58 104

9

V. LEGAL FRAMEWORK OF THE NTF DDITIONAL FINANCING

5.1 Legal Instrument

5.1.1 The additional loan from the Nigeria Trust Fund (NTF), for the implementation of activities deemed essential for the PTA-Togo concerns a total of UA 4 million. Thus, a Loan Agreement will be signed between the Republic of Togo and the African Development Bank for the mobilization of the said NTF loan.

5.2 Conditions Associated with Bank Involvement

5.2.1 The grant of the NTF loan will be subject to the following conditions:

5.2.2 Conditions precedent to effectiveness: The effectiveness of the NTF Loan Agreement will be subject to the fulfilment by the Borrower, to the satisfaction of the Bank, of the conditions set forth in Section 12.01 of the General Conditions Applicable to the African Development Fund Loan Agreements and Guarantee Agreements (Non Sovereign Entities), as may be amended periodically.

5.2.3 Conditions precedent to first disbursement. The disbursement of the loan resources shall be subject to effectiveness of the NTF Loan Agreement.

5.2.4 Conditions precedent to disbursements relating to works involving resettlement. Subject the effectiveness of the Loan Agreement, the disbursement of the loan resources by the Bank for works involving resettlement shall be conditional on the fulfilment, by the Borrower, and to the satisfaction of the Bank, of the following conditions:

(a) Submit a works and compensation schedule prepared in accordance with the Resettlement Plan (RP) and the Bank's Safeguard Policies satisfactory in substance and form to the Bank detailing: (i) each project works area; and (ii) the timeframe for compensation and/or resettlement of all project-affected persons (PAPs) for each area; and

(b) Provide to the Bank satisfactory evidence that all project-affected persons (PAPs) in the works area have been compensated and/or relocated in accordance with the Environmental and Social Management Plan (ESMP), Resettlement Plan (RP) and/or the works and compensation schedule, as agreed and the Bank’s Safeguard Policies, prior to the commencement of such works and in any event prior to relocation of the PAPS and/or appropriation of their land and/or related assets; or

(c) In lieu of paragraph (b) above, provide satisfactory evidence that the resources allocated for the compensation and/or resettlement of the PAPs have been deposited in a dedicated account in a bank acceptable to the Fund (or deposited with a trusted third party acceptable to the Fund), where the Borrower can demonstrate, to the satisfaction of the Bank, that the compensation and/or resettlement of the PAPs, in accordance with paragraph (b) above, could not be achieved in whole or in part, for the following reasons:

(i) the identification of PAPs by the Borrower is not feasible or possible;

(ii) there are ongoing disputes involving PAPs and/or affecting the compensation and/or resettlement exercise; or

(iii) any other reason beyond the Borrower’s control, as discussed and agreed with the Bank 10

5.2.5 Undertakings: The Borrower undertakes to comply with the project objectives. In this regard, the Borrower shall implement the project and ensure that its contractors and/or agents do likewise, in accordance with the provisions of the provisions of the NTF Loan Agreement and Article IX (Project Implementation - Cooperation and Information) of the General Conditions.

5.2.6 Environmental and Social Safeguards The Borrower shall undertake and ensure that the Executing Agency and each of its contractors, subcontractors and workers also undertake to:

(a) submit to the Bank prior to the start of works the reports of environmental and social studies (Environmental and Social Impact Assessment, Environmental and Social Management Plan, Population Resettlement Action Plan and Pests and Pesticides Management Plans) for the NTF-financed components of the project, validated by the National Environmental Management Agency (ANGE)

(b) implement the Project in accordance with the ESMP, the Bank's Safeguard Policies and the applicable national legislation in a manner satisfactory to the Bank, in form and substance

(c) Prepare and submit to the Bank, as part of the Project Report mentioned in the NTF Loan Agreement, quarterly reports on the implementation of the ESMP, including identified shortcomings and corrective measures taken;

(d) Refrain from any action that would prevent or hinder the implementation of the ESMP, including any modification, suspension, waiver and/or cancellation of any provision related thereto, in whole or in part, without the prior written consent of the Bank; and

(e) Cooperate fully with the Bank in the event that the implementation of the Project or any change in its scope results in unforeseen displacement and/or resettlement of populations; and undertake to commence works in the area affected by the implementation of the Project only if all project-affected persons (PAPs) are compensated and/or resettled in accordance with the Resettlement Plan (RP) prepared.

5.2.7 Other conditions. The Borrower undertakes to:

(a) Submit to the Bank, no later than two (2) months after the effectiveness of Loan Agreement, for information purposes, the Administrative, Financial and Accounting Procedures Manual of the Project, updated and taking into account the activities to be financed from the Loan resources; and

(b) Incorporate the specific needs of the Loan into the integrated multi-project and multi- user management system to ensure the keeping of budgetary, analytical and general budget accounts of the project.

5.2.8 Integrity: The Borrower shall implement the project and ensure that the Executing Agency and each of its contractors and/or agents implement it in accordance with the provisions of anti-corruption policies.

11

5.3 Compliance with Bank Policies

5.3.1 The NTF addition financing will contribute to three of the Bank's High-Fives, namely: (i) "Feed Africa"; (ii) "Industrialise Africa"; and (iii) "Improve the quality of life for the people of Africa". It is also be consistent with the Bank's environmental and social management policies, guidelines and procedures.

VI. RECOMMENDATION

Management recommends that the Board of Directors of the Bank approve: (i) the loan of additional funding from the Nigeria Trust Fund (NTF) amounting to UA 4 million to the Republic of Togo for the Togo Agro-Food Processing Project (PTA-Togo); and (ii) that procurements of goods, works and services financed from the loan resources using the procurement procedures and methods of Togo be open to non-Member States of the Bank.

12

ANNEXES

Annexe I: Letter from His Excellency the Minister of Finance of Nigeria, dated 31 August 2018, confirming the allocation of UA 4 million for the PTA-Togo

I

Annex II: Detailed Description of the Revised Project (including the NTF-funded components)

The overall objective of the project is to promote inclusive agricultural growth that creates jobs and reduces imports thanks to incentive measures for private investment in key areas (rice, maize, soybean, sesame, broiler meat and cashew nuts).

The specific objectives of the project are to: (i) facilitate private investments in key areas thanks to policy support, governance and incentive measures; (ii) promote the development of priority value chains through the establishment of infrastructure to support production, storage and processing; and (iii) build the capacity of stakeholders in priority agro-industrial areas.

1. Description of the Components of the Initial Project

1.1 Project preparation was largely informed by the conduct of several PPF-funded studies, including the following: (i) Studies on priority agricultural sectors, potential markets, and the business environment; (ii) Study on the development of the agro-industrial park master plan; (iii) design study of dams, irrigation schemes, DWS and electrification of 6 villages; (iv) detailed designed study of electrification and access to the Agro-park ICT network. Thus, these studies underpinned the design of this pilot project which is developed as the first Agro-food Processing Zone (ZTA) in the Kara region and in the country. It includes measures to support political, regulatory and institutional reforms with a view to attracting private investment, as well as measures to improve rural infrastructure in the project area and build the capacities of stakeholders in priority areas in terms of import substitution (rice, maize, soybean, broiler meat) and exports (cashew nuts and sesame). Specifically, the project has a multidimensional approach:

1.2 At the institutional level, several measures in favour of private investment are planned under the project, including:

 Capacity building for the Agency for the Promotion and Development of Agropoles in Togo (APRODAT), established by Decree No. 2018-036/PR of 27 February 2018 to achieve the objective of implementing ten agropoles in the next 15 years (see paragraph 4)

 Support for the future semi-public company for the promotion and management of the Kara Agro-Park, to promote private investment in agro-processing and input supply. and agricultural services

 Improvement of the regulatory and institutional framework for private investment in agribusiness, in particular through:

 The operationalisation of land reform through technical assistance for the drafting of implementing decrees relating to agricultural and rural land law voted by the National Assembly on 5 June 2018, including the establishment of a single land tenure office;

 Support to the Directorates and Agencies of the Ministry of Industry in charge of the implementation of ongoing reforms in standardization and metrology, through provision of equipment (including laboratory equipment) and training;

 Improvement of access to financing, particularly for SMEs and cooperatives, by setting up a guarantee fund with financial institutions and by providing ad hoc support (IT equipment and training);

II

 The study to be carried out by the TA firm for the development of the Agro- park business plan taking into account the targeted markets (national, regional and international), the business environment, and possible desirable incentives;

 Measures to build the capacities of universities and other research, training and advisory support institutes operating in the agro-industrial sector (IT and laboratory equipment, training, etc.)

1.3 At the physical level, the infrastructure development works planned under the project to improve the private sector intervention environment will concern three major entities, namely:

 A central portion or Agro-park composed of developed land with roads and sundry networks (drinking water supply, sanitation, electricity, ICT, etc.), logistical support and specialized facilities and services (cold chain, laboratory and certification, business services, waste treatment, single window, etc.); a joint savings company will be responsible for promoting and managing the Agro-park, where private companies invest in the processing of agricultural products and the provision of services and inputs.

 Agro-processing centres (CTAs), located in 10 village centres, are multipurpose platforms for use by agricultural operators comprising: (i) a collection, sorting and primary storage centre; (ii) an input distribution centre; (iii) a service centre (agricultural credit, business centre, farm equipment rental and maintenance, zoo- sanitary clinic, etc.); (iv) a food quality control and seed certification service; (v) an education and training centre for producers.

 Agricultural production zones: They cover zones targeted to provide agricultural products to the Agro-park through the CTAs. They will benefit from public investments (dams, irrigated areas, roads, etc.) that will help to boost agricultural productivity for the selected areas. Thus, the NTF loan will finance the development of 600 ha of irrigated areas downstream of the Agro-park dam (B1), as well as the costs of the works supervision firm.

1.4 Concerning the strengthening of value chain actors to favour greater inclusion, the project will support implementation of the following measures:

 Support the establishment and capacity building of consultation frameworks of the main targeted sectors, to facilitate business relations with the private sector;

 Enhance the capacities of the Agricultural Production Organisations (OPA) of the ten (10) Agricultural Processing Centres identified in the three agricultural zones (irrigated, lowland and rain-fed) with the Saemaul Foundation for Globalization;

 Improve the capacity of village communities in participatory diagnosis, participatory local planning, and the formulation and implementation of community projects (Saemaul Foundation for Globalization). In this regard, the NTF will specifically finance the construction of four mini-DWS networks for four village centres, the drilling of 30 boreholes equipped with human-operated pumps, the rehabilitation of eight boreholes, to meet the needs about 2 195 households, and 100 SMEs /producer organizations (POs) involved in the processing of agricultural products (CTA) and the provision of local services;

III

 Support capacity building of government services and other partners involved in the implementation of project activities;

 Support the implementation of priority sub-projects in support of agricultural sectors identified by two CTAs (Saemaul Foundation for Globalization);

 Support for the implementation of risk mitigation measures as identified in the Environmental and Social Strategic Assessment (SEA): compensation of displaced/affected persons, compensation, protection of sensitive sites, etc.

1.5 The components, sub-components and activities of the project are presented in the following table.

Components Cost CFAF M) Description of the Components A/ Support policy, A1/ Improvement of the policy, regulatory and operational framework governance and  Technical assistance for the preparation of instruments for implementation incentive measures of the Land Code (voted by the National Assembly on 5 June 2018), the specifications of the Agro-park management company and operationalisation of the single window 4.98  Support for the development of a legal, regulatory and operational framework for the Strategic Environmental and Social Assessment (SESA)  Support for the national departments responsible for quality, standards and metrology (facilities, training) at the Ministry of Industry  Technical assistance for the implementation of private investment promotion measures in the Agro-park (including instruments and incentives), financial and management procedures and support for project management (APRODAT)  Convening of an investment promotion forum for the ZTA (2) A2/ Establishment of the ZTA governance system  Institutional support for APRODAT’s capacity building (staff, legal, technical and management assistance, training, etc.)  Support for the preparation of the specifications of the Agro-park management company, its recruitment (CAT) and monitoring of performance quality  Feasibility study for two new ZTAs (OTI and Haut Mono regions) A3/ Strengthening State and non-State public institutions  Support for non-financial institutions (computer and laboratory equipment and training): research institutes (Togo Institute for Agronomic Research (ITRA)), consulting (Technical Advice and Support Institute (ICAT)), training (CIDAP, INFA-Tové), Technical Advice and Support Institute (ICAT), universities, etc.) and seed control/certification  Support for financial institutions: Establishment of a risk insurance fund, procurement of equipment (computer hardware and software), and capacity building for banks and financial institutions (including in agribusiness)

IV

Components Cost CFAF M) Description of the Components B/ / B1/ Agro-park development infrastructure (Broukou)

Infrastructure  Architectural, detailed engineering design/bidding documents studies and for processing supervision of construction work and accessing  Site development works & roads and sundry networks (roads, drinking agricultural water supply, sanitation, electricity, telecommunication, fencing, etc.); inputs and drinking water supply station, water treatment, etc. services 30.91  Construction of buildings: (i) administrative and residential block; (ii) services block (training centre, conference centre, laboratories, etc.); (iii) socio-collective infrastructure block (school, health centre, hotel, etc.); (iv) etc.  MV electricity supply (CEET) and fibre optic telecommunication work  Assistance for the establishment of a business incubator (provider) B2/ Infrastructure for aggregation and access to agricultural inputs and services  Establishment of basic infrastructure for 10 CTAs located in 10 village centres covering the three agricultural production areas (irrigated, lowlands, rain-fed), under the ADF: - Technical studies and supervision of the construction of CTAs - Construction works on 10 CTAs (harvest storage stores, input storage hangars, cooperative offices) - Procurement of agricultural, cleaning and logistical equipment  Detailed design study of the main road (100 km) and secondary roads (50 km):  Work on the rehabilitation of roads (100 km) including ancillary structures  Control and supervision of rehabilitation works on the main road B3/ Support infrastructure for agricultural production  Detailed engineering design/bidding documents studies for three mini-dams and irrigated areas (1 500 hectares)  Supervision of the construction of two mini-dams (Vol>15 Mm3)  Full technical and economic studies on the B9 dam with irrigated areas  Construction of two mini-dams for agricultural use (potential of 1,500 hectares) and industrial use (4,000 - 5,000 m3/day for the Agro-park);  Development of 600 ha of irrigated land downstream of agro-park dam No. 2, NTF C/ Capacity C1/ Capacity building for agricultural producers (with the Foundation) building for  Networking of sub-sectors (rice, maize, soybean, sesame, cashew nuts and actors in broiler meat) and development of consultation frameworks (Foundation) priority 4044  Building of the technical and management capacity of 10 CTAs of villages agricultural situated in the three agricultural zones (irrigated, lowlands, rain-fed) - sectors Foundation  Establishment of an information system for use by FOs (e-farmers, e- aggregation, e-inputs, e-services, etc., ADF)  Increased access to financing by FOs (guarantee fund)  Training and TA of state workers on the Saemaul Foundation approach

V

Components Cost CFAF M) Description of the Components C3 / Capacity building for village communities  Restoration of vegetation cover, protection of natural habitats around dams and hydro-agricultural structures AFD);  Manufacture of 5 000 improved stoves (fight against deforestation, ADF)  Facilitating access to vital civil status documents (approximately 50,000 people, including at least 70% women and young people, ADF)  Construction of 4 mini-DWS networks, 30 new boreholes equipped with manually operated pumps, and rehabilitation of 8 boreholes (households and SMEs/producer organizations - OPs), for about 2,195 households, on NTF resources  Support for the implementation of priority sub-projects for 2 CTAs: (i) acquisition and input management (see ITRA/OCP soil survey); (ii) input procurement and management of equipment; (iii) crop storage and management; (iv) agricultural services (Saemaul Foundation); etc. C2/ Strengthening central and decentralised services  Training and technical assistance from State services (with ICAT) in the participatory, gender, nutrition and local development approach  Implementation of the safeguards included in the SESA: (i) Preparation of a resettlement policy framework; (ii) Preparation of a wastewater and solid waste management blueprint; (iii) Preparation of an environmental best practices manual; (iv) Implementation of the Environmental and Social Impact Assessment Plan (ESMP) and pesticide management plan; (v) Environmental and social baseline situation  Monitoring implementation of the Environmental and Social Management Plan ESMP (ANGE), RAP (ANGE) and PGPP (ANGE)  Procurement of motorcycles and computer equipment (agricultural regional administration)

D/Coordination 5.30  Steering and coordination management,  Procurement monitoring and  Administrative, financial and accounting management evaluation  Monitoring and evaluation (M&E)

VI

Annex III: Revised Results-based Logical Framework of PTA-Togo (including the NTF-funded components)

NAME: Togo Agro-food Processing Project (PTA-Togo) GOAL: Contribute to inclusive agricultural growth, which will create wealth and jobs, and to the reduction of food imports through increased private investment in priority value chains, including agricultural processing and the supply of inputs and agricultural service.

RESULTS CHAIN PERFORMANCE INDICATORS MEANS OF RISKS AND MITIGATION Indicators Baseline situation Target VERIFICATION MEASURES (including SCI) National Statistics, 1. Contribute to reducing the volume of food imports per 1. Value of food imports in USD / per capita 21.3 (2014) 16 (2030) capita Statistics of the United 2. % of population living below the poverty line Nations System 2. Contribute to reducing the poverty rate (especially in (less than USD 1.90/Day) 49.1% (2015) 25% (2030) rural areas) Demographic and Health Survey 2013-2014 IMPACT 2.1 Increase in household food security levels 2.2 Decrease in % of children affected by 32.1% (Kara region) 28.9% (2025) (Baseline situation)

chronic malnutrition (including girls)

Risk 1: Land security is not 1. The share of locally processed agricultural products has 1.1 Share of agricultural production of the 19% 36% Baseline Survey enough to attract the private increased project region processed in situ 0 and End-of-Project sector and protect farmers 1.2 Private investments catalysed in Reports Mitigation 1: SESA has 2. The living conditions of rural inhabitants of the project agribusiness in the Kara region (USD >100 identified mitigation measures, area have improved million) (i) 16%; (ii) 11%; National statistics including decrees to implement (iii) 52% (i) 43%; (ii) 22%; (iii) the Land Code and

75% establishment of the Kara one- 2.1 Rate of household access to basic stop-shop social services in the project-affected

villages has improved: (i) Electricity; 0 Risk 2: Inadequate attention to

(ii) all-weather roads (within 5 km)); 39,000 the needs of women and youth (iii) drinking water for households (i) 2; (ii) 1.5; (iii) 1; Mitigation 2: The Foundation's 2.2 Number of direct and indirect jobs created / (iv) 1.2; (v) 0.5 ; (vi) (i) 10 ; (ii) 4; (iii) 2; (iv) SESA (including RAP, ESIMP enhanced (of which 50% are held by women) 1; (vii) 0.5 3; (v) 1; (vi) 1; (vii) 1 and PDC), and gender and nutrition-sensitive participatory OUTCOMES 2.3 Crop yields of crops t/ha: (i) Irrigated rice (i) 43% ; (ii) +10% approach will have positive (double-cropping); (ii) lowland rice; (iii) effects on the population rain-fed rice; (iv) Corn; (v) soybeans; (vi) 10.5% (Kara region) 20% sesame; (vi) cashew nuts; Demographic and Health Risk 3: Climate change and Survey in Togo 2013- harmful population practices 2.4 % of children aged 6-23 months with a 2014 could degrade natural resources (NR) minimum acceptable diet Mitigation 3: Integrated NR management and the development of alternative livelihoods should scale up the project impacts.

VII

A / Support Policies, Governance and Incentives 1.1 Land Code implementing regulations are 0 1 Baseline and Project Risk: Lack of private sector 1. Support to improve the institutional framework of the enacted 0 1 Completion Surveys interest could limit investment in ZTA 1.2 SSEA-related implementing legislation is 0 1 Reports the Agro-park enacted 1.2 The national directorates of the Ministry of Mitigation: (i) Meetings have Industry in charge of food quality are equipped 0 1 been held with the private sector 2. Establishment of the ZTA Governance System and trained 0 1 (including the Kalyan Group, a key investor), and their needs 0 1 taken into account; 3. Support to non-financial and financial institutions 2.1 APRODA's capacities are built (ii) The Project will finance 2.2 The Agro-park management company is infrastructure for the operational development of the Agro-park (i) 0.3%; (ii) 10%) (i) 3% ; (ii) 15% Baseline data: year 2017 site and production areas; (ii) 3.1 The capacity of training, advisory support support for the implementation and certification structures is built of PI reforms is planned (land, B / Support infrast. for processing, production and 0 Project semi-annual standards and quality control, access to agricultural inputs and services 3.2 Percentage of partner FI portfolios invested (i) 0 ; (ii) 0 ; (iii) 0 ; 46 ha activity reports PPPs, etc.); and (iii) Technical 4. Implementation of Agro-Park development in agriculture: (i) Banks; (ii) MFIs (iv) 0 ; (v) 0 ; (vi) 0 ; (i) 90T; (ii) 15T; (iii)10T; assistance (legal, technical, infrastructure (vii) 0 ; (viii) 0 (iv) 10T; (v)10T; (vi)20T; management, PPPs, etc.) will be (vii) 2000; (viii) 3000 made available to APRODAT. 5. Infrastructure for production aggregation and access 0 to agricultural inputs & services 4.1 Area of the Agro-park and developed 0 Bank Supervision Reports (VRD+BC) 10 6. Establishment of agricultural production support 4.2 Annual capacity of Agro-park industrial units 0 100 Km Risk 5: Project delays due to infrastructure (x1000): (i) Rice; (ii) Corn; (iii) Soybean; (iv) 0 APRODAT's lack of control

Sesame; (v) Cashew nuts; (vi) Feed; (vii) Broiler 2 (Vol. >15 M.m3) over the Bank's procedures) C / Capacity building of sector actors chicken; (viii) Chicks (i) 1500 ha; (ii) 1500 ha Mitigation 5: Substantial 0 institutional support (see action 7. Capacity building of priority value chain POs 5.1 No. of CTAs built and equipped 0 ha plans) is planned for APRODAT

OUTPUTS 5.2 Total length of rehabilitated roads 00 within the framework of the 600 ha project. 6.1 Number of small dams built (capacity in m3) 0 10 8. Capacity building for communities 6.2 Area covered by studies (i) FEED of 50 irrigation schemes; (ii) Lowlands developed (ha) 0 10 000 (incl. 30% 6.3 Irrigated area developed downstream of the 0 women.) 10 000 (incl. dams 0 30% wom.)

7.1 No. of CTAs with capacity built 0 6 9. Strengthening access to state services 7.2 No. of key OPAs trained and supported 0 5000 7.3 Number of farmers with access to services 0 850 000 provided by CTAs (inputs, harvest management, 0 e-farming, etc.) 0 8.1 Number of OPA support sub-projects (i) 4; (ii)30; (iii) 8 completed (2 CTAs) 0 1 8.2 Number of improved stoves installed 0 D / Coordination, management and monitoring and 8.3 Number of civil status documents established 0 (i)) evaluation through the project 0 1 Steering and Coordination, Procurement, Financial 8.4 DWS (i) small networks (ii) boreholes and 1 Management HOPs; (iii) boreholes rehabilitated. Audit, Monitoring and Evaluation 1 9.1 Capacity building of state services in participatory approach, gender, health and 5 nutrition, etc. 10 VIII

9.2 Capacity building for SESA implementation 1 9.3 Monitoring of ESIA, ESMP, RAP and PGPP 2 (ANGE)

Financial management /accounting/procurement procedures and systems prepared and implemented Number of PM Plans submitted on time and approved Annual audit report submitted on time Number of semi-annual progress reports submitted on time Project baseline and completion surveys conducted

Components: (1) Support Policies, Governance and Resources by component: (1) Component A: UA Sources of funding: (i) ADF loan: UA 8.04 million, ADF Grant (with PPF): UA 4.635 million; (ii) TSF: UA 8.32

Incentives; (2) Support Infrastructure for Processing, 4.983 million (11%); (2) Component B: UA 30.339 million; (iii) BOAD: UA 12.80 million; (iv) Saemaul Foundation: UA 3.52 million; (v) State: UA 7.74 million; (vi) Production and Access to Agricultural Inputs and Services million (67%); (3) Component C: UA 4.440 million NTF: UA 4million.

IES KEY KEY (3) Capacity Building for Agro-industrial Sector Actors; (4) (10%); (4) Component D: UA 5.304 million (12%) ACTIVIT Coordination, Management and Monitoring and Evaluation

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Annex IV: Provisional Revised Project Implementation Schedule Year 2018 2019 2020 2021 2022 2023 Quarter 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Preparatory activities Project appraisal Loan, grant negotiations and approval Signing of loan/grant agreements and compliance with conditions precedent to first disbursement Publication of General Procurement Notice Finalisation of selection of key staff and project launch A / Support policies, governance and incentives Recruitment of the technical assistance firm at APRODAT and delivery of services: preparation of procedures manual, legal instruments, specifications of the management company, Assistant to the Contracting Authority (ACA), training, etc. Procurement of equipment and capacity building for: APRODAT, Quality Directorates in charge of quality (Min.industry),

Agricultural Technical Services, Agro-Park Management Company, etc. Recruitment of firms and feasibility study for two new ZTAs (OTI and Haut Mono) Selection of and capacity building for non-financial and financial institutions (equipment and training): guarantee funds,

IT equipment and agribusiness-oriented training II/ Support infrastructure for processing, production and facilitating access to agricultural inputs and services (i) Architectural Studies and project design and bidding documents (APD/DCE) for the Agro-park; (ii) APD/DCE for small dams and irrigated areas; (iii) complete studies on dam B9; (iv) Access roads and Agro-Processing Centres (10) Development of the Agro-park including roads and sundry networks (drinking water, electricity, sanitation, roads, etc.),

DWSS, WTP and BC: selection of service providers and works implementation Development works on irrigated areas (600 ha, NTF): selection of service providers and works implementation Rehabilitation of access roads (national budget)and construction of 10 CTAs (ADF/TSF) selection of service providers and works implementation III/ Capacity building for actors in agricultural sectors Capacity building for 10 CTA (sector structuring, technical and management training, support for input procurement/management, agricultural services including e-farmers platform, etc.)

Support for the implementation of priority sub-projects in the key sectors of 2 pilot CTAs (Saemaul Globalization

Foundation) Capacity building for rural communities: local planning, environmental management, nutrition manufacture of improved stoves, civil status documents, etc.) Capacity building for central and decentralise services (local development approach, action plans for protected areas and pesticides, ESMP/RAP, missions and training, etc.) IV/ Project coordination and management Implementation of the financial, administrative and accounting management system Establishment of the baseline situation and implementation of the monitoring and evaluation system Coordination and management, monitoring and evaluation and communication Technical assistance to APRODAT (procedures manual, engineering, legal matters, etc.) Annual audit reports Mid-term review Completion report X

Annex V: Procedures for Procurement from NTF Loan Resources

The activities of the Agro-Food Processing Project (PTA) to be financed by the NTF will be implemented in the same environment as the initial project and by the same entities in charge of activities financed from the ADF loan, the ADF grant and the TSF loan. Thus, the evaluations, risks identified and action plans proposed under the project for activities financed from the resources of the ADF loan, ADF grant and TSF loan shall be applicable to the NTF component of the project.

A) Details of Procurement Methods and Procedures (PMPs) to be used for activities funded from the NTF loan under the Project

Additional project procurements funded from the additional NTF Loan will be made according to the following procurement systems and procedures:

1. Togo's Procurement System (PS)

Eligibility

The Bank's resources earmarked for financing the project's activities come from the ADB window that provides NTF resources. Thus, the rules of origin specific to the ADB window are a priori applicable. Following the assessment of the risks and procurement capacities, it was decided that the National Procurement System could be used for part of this project. Given that the rules of origin applicable to public contracts under Togolese law are not the same as those of the ADB window, practical incompatibility should be avoided. In that regard, a waiver will be requested from the Bank's Board of Directors so that the rules of origin of the ADB window (applicable to NTF resources) may be aligned, on an ad hoc basis, with those laid down for public contracts under Togolese law, and applied to the contracts that will be concluded according to the national system and financed by the NTF. Thus, national eligibility rules will be applicable to all contracts concluded under this project using the Togolese Government Procurement System. However, if in using the national system the Borrower decides to award a contract to an entity that is subject to Bank sanction or under sanction pursuant to Chapter VII of the United Nations Charter, the resources of the Bank loans would not be used to finance such a contract. The list of companies under sanctions is available at http://www.afdb.org/debarred.

Methods and Procedures

The following contracts will be awarded following the procurement system of Togo (PS), in accordance with either Law No. 2009-013 of 30 June 2009 and Implementation Decree No. 2009- 277/PR of 11 November 2009 relating to the Public Procurement Code and several subsequent decrees and implementing legislation, using standard national competitive bidding documents (SNCBDs) or a request for quotation file (Section 16 of the Public Procurement Code and Articles 9, 10 and 12 of Decree No. 2011-059 of 4 May 2011 relating to thresholds for the award, publication, control and approval of the public contracts):

Works

 These contracts concern the construction of 30 boreholes, equipped with manually operated pumps (MOPs), and the rehabilitation of eight boreholes, for an estimated cost of UA 281 253. The works will be procured through open competitive bidding.

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2. Bank Procurement Methods and Procedures (BPM)

Eligibility

The eligibility rules applicable to NTF-financed procurements will be those described in paragraph 5 of the Bank's Procurement Policy Document.

Methods and Procedures

The following contracts will be awarded using the Bank’s procurement methods procedures, in accordance with the "Procurement Policy and Methodology for Bank Group-Financed Operations", dated October 2015, and the provisions set forth in the Financing Agreement, using the appropriate standard solicitation documents (SSDs) of the Bank.

Works

 These are contracts related to (i) the development of irrigated areas downstream of the agro- park dam (UA 2,313,614); and (ii) the construction of mini-drinking water supply networks, including the boreholes to be drilled and equipped, broken up into four lots (UA 1,225,199). The works will be procured through open competitive bidding (OCB) as described in paragraphs 8.5 (a) and (c) of the Bank's Procurement Policy Document.

Consulting Services

 They comprise the following services offered by consulting firms: (i) supervision of irrigated areas (UA 92,096); and (ii) monitoring and control of works relating to the drilling of boreholes and the construction of mini-DWS networks (UA 67,848). All these services will be procured following a selection of consulting firms using the Quality- and Cost-Based Selection (QCBS) methodology, as defined by paragraph 8.6 of the Bank's Procurement Policy Document.

The summary table of procurement procedures for NTF-funded components of the project is as follows:

Table 1: Summary of procurement procedures

UA Million

National procurement methods and Bank's procurement methods and procedures Expenditure Categories procedures OCB RFQ Others OCB Shortlisting Others Total

1. WORKS 1.1. Construction of thirty (30) boreholes equipped with HMPs 0,281 [0,281] 0,281 [0,281] and rehabilitation of eight (8) boreholes 1.2 Development works on irrigated areas downstream of the 2,314 [2,314] 2,314 [2,314] agro-park dam 1.3. Work to build mini DWS networks including boreholes to be constructed and equipped in four lots 1,245 [1,245] 1,245 [1,221]

Total Works 3,840 [3,840] 2.CONSULTANCY SERVICES

2.1. CONSULTING FIRMS 2.1.1. RecruItment of a consulting firm for monitoring of 0,092 [0,092] 0,092 [0,090] works on irrigated areas 2.1.2. Recruitment of a consulting firm in charge of the supervision and control of boreholes and mini-DWS 0,068 [0,068] 0,068 [0,068] construction works Total Consulting firms 0,160 [0,160] Total 4,000 [4,000]

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B/ Review of contracts awarded by the Borrower

(a) Control relating to the use of the Borrower’s procurement system (PS)

The use of the country's procurement system for procurement purposes will be subject to control and regulation, in accordance with the laws and regulations of the country. Audits will be conducted by the Public Procurement Regulatory Authority or by any other institution set up by the State. In addition, the audit of procurements planned for the TSF and ADF components of the project will be extended to the NTF component of the project

(b) Control relating to the Bank's procurement system

Procurements made in accordance with the Bank's methods and procedures will be subject to prior or ex-post review by the Bank as follows:

No. Procurement method Prior review thresholds Ex-post review Frequency of reviews (in UA)) thresholds (in UA) Equal to or greater than All contracts Open competitive UA 1,200,000 1. bidding Less than The initial contract UA 1 200 000 2. Direct agreement All contracts

Prior review thresholds (consulting services): Decisions on procurements subject to the Bank's prior review:

Selection method Review thresholds Ex-post review Frequency of (in UA)) thresholds (in UA) reviews

1. Competitive selection (Firm) Equal to or greater All contracts than UA 200,000 2. Competitive selection Equal to or greater All Contracts (Individual) than UA 100,000 3. Competitive selection - - All Contracts (Firm/Individual) 4. Competitive selection (Firm) Equal to or greater The initial contract than AU 100,000 5. Competitive selection Less than The initial contract (Individual) UA 100,000

The following documents shall be subject to review and approval by the Bank prior to publication:

 General procurement notice;  Specific bidding notice;  Expressions of Interest notice and shortlists;  Competitive bidding document or Requests for proposals to consultants;  Evaluation report of bids from contractors/suppliers with recommendations relating to contract award or evaluation report of technical proposals from consultants;  Draft works contracts if they have been modified and are different from the draft contracts included in the competitive bidding documents;  Evaluation reports of financial proposals by consultants, including recommendations for the award of contracts accompanied by the minutes of negotiations and the initialled draft contract.

In addition to the Bank's prior review of certain activities, it was recommended, following the evaluation of the capacity of the Executing Agency (EA), that at least one supervisory mission per year be fielded to carry out an ex-post review of the contracting activities of the Borrower.

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PROCUREMENT PLAN CONSULTANTS 1 General information Country/Organisation : TOGO Project/Programme name : Togo Agro-Food Processing Project (PTA-Togo) Projet/Programme SAP identification # : Loan/Grant No. : Executing Agency Agency for Promotion and Development of Agropoles in Togo (APRODAT) Date of approval of procurement plan 30 May 2018 Date of General Procurement Notice Period covered by this procurement plan October 2018-February 2020 2 Consultancy services: Ex ante and ex post review thresholds Ex ante review Ex post review Frequency of Selection method threshold (UA) threshold (UA) reviews

3. Methods and planned schedule for selection of consultants for 18 months

National/Regi Date of Procurement Estimated Lump sum or Procurement Pre-or Post- Ex ante or ex Lot description Lot description onal publication of Contract date Remark system amount in MUA unit price method Qualification post review preference OCB

Construction of thirty (30) boreholes equipped with HMPs Togo Single lot 0,281 Unit Cost OCB Post qualification No Ex post May 2019 February 2020 and rehabilitation of eight (8) boreholes

Bank Single lot 2,314 Unit Cost OCB Post qualification No Ex ante May 2020 January 2021 Development works on irrigated areas downstream of the agro-park dam Work to build mini DWS networks including boreholes to be constructed and equipped in four lots Bank Four lots 1,245 Unit Cost OCB Post qualification No Ex ante June 2019 March 2020

Total cost 3,840

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3 Methods and planned schedule for selection of consultants for 18 months Estimated Date of Procurement Lump sum or Time Ex ante or ex Contract Description Selection method amount in publication Remark system spent post review start date MUA CEI

Recruitment of a firm to supervise works on irrigated areas. Banque QCBS Lump sum 0,092 Ex ante 10-mai-20 6 Dec. 2020

Recruitment of a firm in charge of the supervision and control of boreholes and mini- Banque QCBS Lump sum 0,068 Ex ante 15-juin-19 29-août-19 DWS construction works Coût total 0,16

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Annex VI: Map of the Project Location (including the NTF components)

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