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Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: ICR00003490 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA 4101-MAG, 4399-MAG) ON A CREDIT Public Disclosure Authorized IN THE AMOUNT OF SDR107.6 MILLION (US$165 MILLION EQUIVALENT) TO THE REPUBLIC OF MADAGASCAR FOR THE INTEGRATED GROWTH POLES PROJECT Public Disclosure Authorized JUNE 15, 2015 Trade & Competitiveness Global Practice Eastern and Southern Africa Department Africa Region Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. i CURRENCY EQUIVALENTS (Exchange Rate Effective June 15, 2015) Currency Unit = SDR SDR0,7121 = US$1 US$1.4044 = SDR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS ADEMA Aéroports de Madagascar AFD Agence Française de Développement AfDB African Development Bank AGOA African Growth and Opportunity Act APMF Agence Portuaire Maritime et Fluviale BDS Business Development Services BOO Build, Own, Operate CAS Country Assistance Strategy CCI Chamber of Commerce and Industry CGA Centre de Gestion Agréé CMU Country Management Unit CNaPS Caisse Nationale de Prévoyance Sociale CRDA Commission pour la Réforme du Droit des Affaires CTHT Centre de Technique Horticole de Tamatave DBI Doing Business Indicators EDBM Economic Development Board of Madagascar ERR Economic Rate of Return EOI Expression of Interest ESMF Environmental and Social Management Framework EU European Union FDI Foreign Direct Investment GDP Gross Domestic Product GoM Government of Madagascar GP Global Practice IC Investment Climate ICT Information and Communication Technology IDA International Development Association IFC International Finance Corporation IG2P Madagascar Integrated Growth Poles Project IMF International Monetary Fund INSTAT Institut National de la Statistique de Madagascar IPF Investment Project Financing IRR Internal Rate of Return ISN Interim Strategy Note ISO International Organization for Standardization M&E Monitoring and Evaluation ii MFI Micro Finance Institutions MNP National Parks of Madagascar MSME Micro, Small and Medium-sized Enterprise NGO Non-Governmental Organization NPV Net Present Value OCAI Opération Communale d’Appui Intégré OFID OPEC Fund for International Development ONTM Madagascar National Tourism Office OP/BP Operational Policy/Bank Procedure ORT Regional Tourism Office OSS One Stop Shop PAD Project Appraisal Document PCGS Partial Credit Guarantee Scheme PCN Project Concept Note PDO Project Development Objective QER Quality Enhancement Review PIC2 Second Integrated Growth Poles and Corridors Project PIU Project Implementation Unit PPD Public Private Dialogue PMP Pest Management Plan PPP Public Private Partnership PPP Purchasing Power Parity PRSP Poverty Reduction Strategy Paper QMM QIT Madagascar Minerals RAP Resettlement Action Plan RN National Road SADC Southern African Development Community SDR Special Drawing Rights SME Small and Medium-Sized Enterprise TA Technical Assistance VC Value Chain TMP Tourism Master Plan TVET Technical and Vocation Education and Training WBG World Bank Group Regional Vice President: Makhtar Diop Country Director: Mark R. Lundell Senior Global Practice Director: Anabel Gonzalez Practice Manager: David Bridgman Project Team Leader: Michael Olavi Engman ICR Team Leader: Nikola Kojucharov iii MADAGASCAR INTEGRATED GROWTH POLES PROJECT CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design ................................................................1 2. Key Factors Affecting Implementation and Outcomes ...............................................................8 3. Assessment of Outcomes ...........................................................................................................15 4. Assessment of Risk to Development Outcome ..........................................................................27 5. Assessment of Bank and Borrower Performance ......................................................................29 6. Lessons Learned.........................................................................................................................32 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ............................35 Annex 1. Project Costs and Financing ...........................................................................................36 Annex 2. Outputs and Outcomes by Component ...........................................................................39 Annex 3. Economic and Financial Analysis ..................................................................................58 Annex 4. Bank Lending and Implementation Support/Supervision Processes ..............................71 Annex 5. Beneficiary Survey Results ............................................................................................74 Annex 6. Results Framework and Outcome Indicators .................................................................77 Annex 7. Summary of Rio Tinto/QMM’s Development Impacts in Fort Dauphin .......................82 Annex 8. Summary of Borrower’s ICR and/or Comments on Draft ICR .....................................86 Annex 9. List of Supporting Documents .......................................................................................88 MAP iv A. Basic Information Country: Madagascar Project Name: Integrated Growth Poles Project ID: P083351 L/C/TF Number(s): IDA-41010,IDA-43990 ICR Date: 06/15/2015 ICR Type: Core ICR MINISTRY OF Lending Instrument: SIL Borrower: FINANCE ECONOMY & BUDGET Original Total XDR 85.90M Disbursed Amount: XDR 107.31M Commitment: Revised Amount: XDR 107.56M Environmental Category: A Implementing Agencies: National Project Secretariat Cofinanciers and Other External Partners: None B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 02/20/2004 Effectiveness: 09/28/2005 09/28/2005 12/13/2007 09/29/2010 Appraisal: 05/10/2005 Restructuring(s): 12/09/2011 12/04/2012 Approval: 07/12/2005 Mid-term Review: 07/12/2008 03/07/2008 Closing: 12/31/2010 12/31/2014 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Moderate Bank Performance: Satisfactory Borrower Performance: Moderately Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Moderately Quality at Entry: Moderately Satisfactory Government: Unsatisfactory Implementing Quality of Supervision: Satisfactory Highly Satisfactory Agency/Agencies: Overall Bank Satisfactory Overall Borrower Moderately Satisfactory v Performance: Performance: C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments (if Indicators Rating Performance any) Potential Problem Project Quality at Entry Yes None at any time (Yes/No): (QEA): Problem Project at any time Quality of Supervision Yes None (Yes/No): (QSA): DO rating before Satisfactory Closing/Inactive status: D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) General energy sector 10 10 General industry and trade sector 20 20 General public administration sector 25 25 General transportation sector 20 20 Other industry 25 25 Theme Code (as % of total Bank financing) Infrastructure services for private sector development 40 40 Micro, Small and Medium Enterprise support 40 40 Other urban development 20 20 E. Bank Staff Positions At ICR At Approval Vice President: Makhtar Diop Gobind T. Nankani Country Director: Mark R. Lundell James P. Bond Senior Global Practice Director: Anabel Gonzalez Practice Manager/Manager: David Bridgman Demba Ba Project Team Leader: Michael Olavi Engman Ivan Rossignol ICR Team Leader: Nikola Kojucharov ICR Primary Author: Nikola Kojucharov vi F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The overall purpose of the proposed project is to help provide the adequate business environment to stimulate and lead economic growth in three selected regional poles. The specific objectives are to assist the GOM to: (i) construct and rehabilitate critical infrastructure essential for sustained economic activity in the tourism, manufacturing, agribusiness and mining sectors; (ii) put in place appropriate incentive measures to achieve rapid growth; (iii) develop the instruments to ensure equitable, sustainable growth; and (iv) strengthen the capacity of local authorities to formulate, prepare, implement, and manage medium- and long-term integrated regional development projects in the future. Revised Project Development Objectives (as approved by original approving authority) The project development objective is to increase business and formal job creation in particular in the mining, tourism and agribusiness sectors in the Nosy Be and Taolagnaro regions. (a) PDO Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Indicator 1 : Number of businesses registered in Nosy Be (cumulative) Value 1,933 at end-2012; quantitative or 400 650 1,800 2,957 at end-2014 Qualitative) Date achieved 07/12/2005 12/31/2012