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World Bank Document The World Bank Madagascar Agriculture Rural Growth and Land Management Project (P151469) REPORT NO.: RES29192 Public Disclosure Authorized DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF For Official Use Only MADAGASCAR AGRICULTURE RURAL GROWTH AND LAND MANAGEMENT PROJECT APPROVED ON MARCH 22, 2016 Public Disclosure Authorized TO REPUBLIC OF MADAGASCAR AGRICULTURE AFRICA Public Disclosure Authorized Regional Vice President: Makhtar Diop Country Director: Mark R. Lundell Senior Global Practice Director: Juergen Voegele Practice Manager/Manager: Dina Umali-Deininger Public Disclosure Authorized Task Team Leader: Ziva Razafintsalama, Andre Teyssier, Giuseppe Fantozzi The World Bank Madagascar Agriculture Rural Growth and Land Management Project (P151469) I. BASIC DATA Product Information Project ID Financing Instrument P151469 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 22-Mar-2016 30-Jun-2021 For Official Use Only Organizations Borrower Responsible Agency Republic of Madagascar MINISTERE DE L’AGRICULTURE Project Development Objective (PDO) Original PDO The proposed development objective is "to improve rural land tenure security and access to markets of targeted farming households in selected agricultural value chains in the Project Areas, and to provide immediate and effective response to an Eligible Crisis or Emergency". Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-57750 22-Mar-2016 08-Apr-2016 05-Sep-2016 30-Jun-2021 53.00 6.09 47.61 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The World Bank Madagascar Agriculture Rural Growth and Land Management Project (P151469) A. Project Status 1. The Madagascar Agriculture Rural Growth and Land Management Project (CASEF) has been effective since September 5, 2016, with PDO and implementation progress rated as moderately satisfactory. To-date the following key activities have been completed within the agreed timeframe: (i) submission to the World Bank of the annual work plan and budget for the first year of project implementation; (ii) establishment of a procurement complaint handling mechanism; (iii) finalization and validation of the National Land Tenure Program; (iv) establishment of the PIU and two regional coordination units in Toamasina and Antsirabe - albeit the latter are not fully staffed; and (v) achievement of the conditions for disbursement of the first tranche of the Partial Guarantee Fund to agriculture financing for eligible agribusinesses (US$1.5 million). On the development of agriculture value chains, the commodity studies are now completed and the activities to support to development of selected commodities will start in the coming weeks. Regarding the land component, the project has made good progress in the implementation of activities including capacity building of land services with 110 communal land offices established and 2,200 land certificates issued. For Official Use Only 2. The Procurement and Financial Management are presently rated as unsatisfactory and moderately satisfactory respectively. On the Procurement front, some delays have been registered associated with the quality of some terms of reference and technical specifications of bidding documents, inconsistencies on appraisal reports, and failure to meet Bank standards on the quality of procurement documents, which are being addressed. Furthermore, project technical staff do not participate in evaluations nor are members of a bid evaluation committee. An action plan has been put in place to strengthen as recommended at implementation support missions, including the recruitment and strengthening of procurement staff, recruitment of additional temporary technical staff for quality control of terms of references and technical specifications and evaluation of bidding documents, and revision of the operation manual to alleviate the procurement process. On Financial Management, the accounting needs to be updated and the data integrated into the project accounting information system to enable more efficient monitoring, in addition to expediting the recruitment of regional accountants and auditors (internal and an external). 3. With regards to Monitoring and Evaluation, the baseline study has been significantly delayed and measures have been taken to accelerate the recruitment process of the consulting firm to complete the study by June 2017. 4. The project includes a Contingency Emergency Response Component (CERC) governed by an Immediate Response Mechanism (IRM) Operation Manual. This component has not been activated until now. The IRM allows IDA countries to rapidly access up to 5 percent of their undisbursed IDA investment project balances following an eligible crisis or emergency. B. Rationale for Restructuring 5. The proposed Project Restructuring is in response to the request of the Government of Madagascar, through its letter of July 13, 2017, to activate the IDA Immediate Response Mechanism (IRM) to address emergency needs related to the Tropical Cyclone Enawo. 6. All conditions of IDA IRM activation effectiveness have been met, as described below: (a) Eligible emergency: Intense Tropical Cyclone Enawo made landfall in north-eastern Madagascar on March 7, 2017 at around 12:00 UTC as a category 4 cyclone, and then moved southward as a tropical depression to pass west of Antananarivo before exiting the island west of Taolagnaro on March 10, 2017 between 18:00 and 24:00 (UTC). While The World Bank Madagascar Agriculture Rural Growth and Land Management Project (P151469) the north-east regions suffered from wind damage and widespread flooding, the central and southeastern parts of the country were affected by heavy rains and flooding. Enawo is the strongest cyclone to strike Madagascar since 2004, with maximum wind speeds (1-minute sustained) of 230 km/h at landfall. In addition to high wind speeds and heavy rainfall, occurrence of flooding and landslides have caused damage to housing and the agriculture sector mainly in the northern and eastern regions Diana, Sofia, Sava, Analanjirofo, Aloatra-Mangoro, Atsinanana, Itasy, Bongolava, Analamanga, Vakinankaratra and Betsiboka. Field assessments conducted by the Government and partners estimated that close to 434,000 people have been affected. In addition, 81 deaths and 250 injuries have also been reported. Reported damages to infrastructures are high, with more than 40,000 houses, 3,300 classrooms and 100 health centers damaged. The World Bank has prepared a report using quantitative risk modelling approach to estimate economic losses resulting from direct damage to buildings and infrastructure, which are valued to be around US$ 208 million (2015 currency) with a standard deviation of +/- 69 million, and corresponds to a mean return period of 11 years +5/-3 years. This is comparable to Cyclone Gafilo in 2004, which caused serious damage, more than US$ 250 million, to both agricultural production and capital stock of Madagascar. For Official Use Only (b) Approval of IRM Operations Manual: On April 11, 2017, the Bank approved the Operations Manual to enable consistency among the implementation arrangements; this document was subsequently adopted by the Government. (c) Activation request by the Government: The Bank received the IRM Activation Request on July 13, 2017, which included a preliminary damage and needs assessment and the Contingent Emergency Response Implementation Plan (CERIP). The Plan has been reviewed by the Bank’s fiduciary and safeguards specialists and found to be satisfactory. (d) Implementation arrangements in place: The Ministry of Finance and Budget, through the Directorate of Public Debt and Directorate of Budget (Direction de la Synthèse Budgétaire), will be the IRM Coordination Authority, responsible for coordinating the implementation of Enawo response emergency activities. The Fonds d’Intervention pour le Développement – FID, which is an executing agency attached to the Prime Minister’s Office will act as the Special Implementation Unit (IRM-SIU), and will be responsible for fiduciary management and implementation of activities. (e) Emergency activities: The priority sectors for immediate assistance in the affected area are agriculture, education and health, therefore interventions will be focused on providing agriculture recovery ($1.9 million), and rehabilitation and reconstruction of education infrastructure ($4.2 million) and health infrastructure ($5.2 million), as detailed in the CERIP. The World Bank will set up a cross Global Practice team to support the preparation and the implementation of the emergency activities in selected intervention areas. (f) Safeguards: Activities financed under the IRM will be limited to provision of critical goods and services, as well as installation, repair or reconstruction of damaged infrastructure as outlined in the CERIP. Land acquisition leading to involuntary resettlement and/or restrictions of access to resources and livelihoods is not anticipated. It is also unlikely that changes to the existing safeguards instruments of the CERC projects will be required. It is unlikely that emergency works will trigger new safeguards policies, however, if required, new instruments will be prepared, consulted upon and disclosed prior to the initiation of works. 7. On July 20, 2017
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