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World Bank Document Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: ICR00005145 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD 8267-AM AND IBRD 87860-AM) ON A LOAN Public Disclosure Authorized IN THE AMOUNT OF US$32 MILLION TO THE REPUBLIC OF ARMENIA FOR THE IRRIGATION SYSTEM ENHANCEMENT PROJECT Public Disclosure Authorized June 22, 2020 Water Global Practice Europe And Central Asia Region Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective {December 31, 2019}) Currency Unit = Armenian D ram AMD 479 = US$1 US$0.0020 = SDR 1 FISCAL YEAR January 1 – December 31 Regional Vice President: Anna Bjerde Country Director: Sebastian-A Molineus Regional Director: Steven N. Schonberger Practice Manager: David Michaud Task Team Leader(s): Wilfried Hundertmark, Arusyak Alaverdyan ICR Main Contributor: Nathan L. Engle ABBREVIATIONS AND ACRONYMS ADS Armenia Development Strategy AF Additional Finance AFD Agence Française de Développement CCW Civil Construction Works CPF Country Partnership Framework CPS Country Partnership Strategy DPO Development Policy Operation EDB Eurasian Development Bank EM Extraordinary Maintenance EMF Environmental Management Framework ERR Economic Rate of Return ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan EU European Union FIRR Financial Internal Rates of Return FM Financial Management GDP Gross Domestic Product GoA Government of Armenia GWh Gigawatt hours ICR Implementation Completion and Results Report I&D Irrigation and Drainage IDP Irrigation Development Project IFR Interim un-audited Financial Report IP Inspection Panel IREP Irrigation Rehabilitation Emergency Project IRR Internal Rate of Return ISEP Irrigation System Enhancement Project ISMP Irrigation System Modernization Project MCC Millennium Challenge Corporation MOEINR Ministry of Energy, Infrastructures and Natural Resources MTAI Ministry of Territorial Administration and Infrastructures MTR Mid-term Review NPV Net Present Value O&M Operation and Maintenance PAD Project Appraisal Document SCADA Supervisory Control and Data Acquisition SCWM State Committee for Water Management ToC Theory of Change WC Water Committee WSA Water Supply Agency WSPIU Water Sector Projects Implementation Unit WUA Water Users Association TABLE OF CONTENTS DATA SHEET ....................................................................... ERROR! BOOKMARK NOT DEFINED. I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 5 A. CONTEXT AT APPRAISAL .........................................................................................................5 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) ..................................... 11 II. OUTCOME .................................................................................................................... 15 A. RELEVANCE OF PDOs ............................................................................................................ 15 B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 16 C. EFFICIENCY ........................................................................................................................... 21 D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 24 E. OTHER OUTCOMES AND IMPACTS (IF ANY) ............................................................................ 24 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 27 A. KEY FACTORS DURING PREPARATION ................................................................................... 27 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 30 A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................ 30 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ..................................................... 31 C. BANK PERFORMANCE ........................................................................................................... 34 D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 35 V. LESSONS AND RECOMMENDATIONS ............................................................................. 36 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 39 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 50 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 53 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 54 ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 64 ANNEX 6. SUPPORTING DOCUMENTS .................................................................................. 73 ANNEX 7. MAP .................................................................................................................... 75 The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P127759 IRRIGATION SYSTEM ENHANCEMENT PROJECT Country Financing Instrument Armenia Investment Project Financing Original EA Category Revised EA Category Partial Assessment (B) Partial Assessment (B) Organizations Borrower Implementing Agency Water Committee of the Ministry of Territorial Administration and Infrastructures, Water Projects Ministry of Finance Implementation Branch of the Armenian Territorial Development Fund Project Development Objective (PDO) Original PDO The PDO is (i) to reduce the amount of energy used and to improve the irrigation conveyance efficiency in targeted irrigation schemes; and (ii) to improve the availability and reliability of important sector data and information for decision makers and other stakeholders. Page 1 of 78 The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 30,000,000 29,735,008 29,735,008 IBRD-82670 2,000,000 2,000,000 1,924,228 IBRD-87860 Total 32,000,000 31,735,008 31,659,236 Non-World Bank Financing 0 0 0 Borrower/Recipient 7,500,000 0 0 Total 7,500,000 0 0 Total Project Cost 39,500,000 31,735,008 31,659,237 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 22-May-2013 15-Jul-2013 16-Nov-2015 30-Jun-2017 31-Dec-2019 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 27-Apr-2017 27.65 Change in Loan Closing Date(s) 14-Nov-2017 29.68 Additional Financing Change in Results Framework Change in Loan Closing Date(s) 29-Jun-2018 29.93 Change in Loan Closing Date(s) 27-Jun-2019 31.55 Change in Results Framework Change in Loan Closing Date(s) Change in Implementation Schedule KEY RATINGS Outcome Bank Performance M&E Quality Moderately Unsatisfactory Moderately Unsatisfactory Modest Page 2 of 78 The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759) RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 22-Oct-2013 Satisfactory Satisfactory 5.10 02 30-Jun-2014 Satisfactory Satisfactory 6.63 03 19-Nov-2014 Satisfactory Satisfactory 7.45 04 10-Apr-2015 Moderately Satisfactory Moderately Satisfactory 9.99 05 29-Oct-2015 Moderately Satisfactory Moderately Satisfactory 12.88 06 14-Jan-2016 Moderately Satisfactory Moderately Satisfactory 15.76 07 26-Apr-2016 Moderately Satisfactory Moderately Satisfactory 21.42 08 11-Jan-2017 Moderately Satisfactory Moderately Satisfactory 25.61 09 19-Sep-2017 Satisfactory Satisfactory 28.69 10 11-May-2018 Satisfactory Satisfactory 29.93 11 04-Jan-2019 Satisfactory Satisfactory 31.27 12 23-Jun-2019 Moderately Satisfactory Moderately Satisfactory 31.55 13 22-Dec-2019 Moderately Satisfactory Moderately Unsatisfactory 31.58 SECTORS AND THEMES Sectors Major Sector/Sector (%) Agriculture, Fishing and Forestry 100 Irrigation and Drainage 90 Public Administration - Agriculture, Fishing & Forestry 10 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Page 3 of 78 The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759) Finance 3 Finance for Development 3 Agriculture Finance 3 Urban and Rural Development 48 Rural Development 48 Rural Markets 3 Rural Infrastructure and service delivery 45 Environment and Natural Resource Management 97 Climate change 48 Mitigation 48 Water Resource Management 49 Water Institutions, Policies and Reform 49 ADM STAFF Role At Approval At ICR Regional Vice President: Philippe H. Le Houerou Anna M. Bjerde Country Director: Henry G. R. Kerali Sebastian-A Molineus Director: Laszlo Lovei Steven N. Schonberger Practice Manager: Dina Umali-Deininger David Michaud Wilfried Hundertmark, Arusyak Task Team Leader(s): Giuseppe Fantozzi Alaverdyan ICR Contributing Author: Nathan Lee Engle Page 4 of 78 The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Context 1. Agriculture is a key driver for job creation, income diversification, and overall poverty reduction for the Armenian economy. The importance of agriculture for rural development was made evident at the time of Appraisal1 in the Armenia Development Strategy (ADS) 2025, which notes that by 2012, agriculture employed over 437,000 thousand people,
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