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World Bank Document Document of Public Disclosure Authorized The World Bank Report No: 21851 PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 32.3 MILLION EQUIVALENT Public Disclosure Authorized (US$41.5 MILLION EQUIVALENT) TO THE REPUBLIC OF HONDURAS FOR A HN/COMMUNITY-BASED EDUCATION PROJECT April 10, 2001 Public Disclosure Authorized Human and Social Development Group Central America Country Management Unit Latin America and Caribbean Region Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective January 15, 2001) Currency Unit = Lempiras (L) 15.130 Lempiras = USS1.00 US$1.30 = XDR 1.0 FISCAL YEAR January 1 to December 31 ABBREVIATIONS AND ACRONTYMS ADELs Local Education Development Association (Asociaciones de Desarrollo Educativo Local) AECOs Parent School Associations (Asociaciones Educativas Comunitarias) AIF IDA- International Development Association (Asociaci6n Internacional de Fomento) APSO Agency for Personal Service Overseas CCPREB Community Based Preschool Services CEPENF Original Non-Formal/Community-Based Preschool Centers (Centros de Educacion Preescolar No Formal) CCIE Community-Based Pre-Primary Experience Program (Centros Comunitarios de Educaci6n Inicial) DCA Development Credit Agreement ECCE Early Childhood Care Education EIB Intercultural and Bilingual Education Program (Programa de Educaci6n Interculturaly Bilingiie) FHIS Honduras Social Investment Fund (Fondo Hondurefio de Inversi6n Social) FONAC National Convergence Forum (Foro Nacional de Convergencia) GOH Government of Honduras (Gobierno de Hondutras) GPAC Global Procurement Plan IEC Campaign of Informnation,Education and Communication (Campahias de Informaci6n, Educaci6n y Comunicaci6n) lNCAE Central American Management Institute (Instituto Centroarnericano de Administraci6n y Economia) IRR Internal Rate of Return LIL Learning and IrLnovationLoan Vice President: David de Ferranti Country Manager/Director. Donna Dowsett-Coirolo Sector Manager/Director: Xavier Coll Task Team Leader/Task Manager: Joel Reyes (ProyectosEducativos de Centro) PFC Life Long TeacherTraining Program (Programade Formaci6n Continua de Docen,es) PRAF Supply-sideSchool Grant ProgramFor Poor Families (Programade AsistenciaFamiliar) PROHECO HondurasCommunity Based EducationProgram (ProyectoHondureiio de Educaci6n Comunitaria) PROMEB HondurasBasic EducationProject (Proyectode Educaci6nBasica en Honduras) PRONEAH National EducationProgram for Ethnic Communities (ProgramaNacional Educativo para ComunidadesEtnicas) RRA Rapid Rural Appraisal SE Secretariatof Education (Secretariade Educaci6n) UAF FinancialAdministrative Unit UMCE ExternalEvaluation Unit of the Quality of Education (Unidad de Medici6n de la CalidadEducativa) UNDP UnitedNations DevelopmentProgram UTEN EducationTransformation Technical Unit (Unidad Tkenica de Transformaci6nde la Educaci6nNacional) Vice President: David de Ferranti Country Manager/Director: Donna Dowsett-Coirolo Sector Manager/Director: Xavier Coll Task Team Leader/TaskManager: Joel Reyes HONDURAS HN/COMMUNITY-BASEDEDUCATION PROJECT CONTENTS A. ProjectDevelopment Objective Page 1. Project developmentobjective 2 2. Key performanceindicators 2 B. StrategicContext 1. Sector-relatedCountry Assistance Strategy (CAS) goal supportedby the project 2 2. Main sector issues and Govemrnmentstrategy 3 3. Sector issuesto be addressedby the project and strategicchoices 7 C. Project DescriptionSummary 1. Projectcomponents 8 2. Key policy and institutionalreforms supportedby the project 12 3. Benefits and target population 12 4. Institutionaland implementationarrangements 14 D. Project Rationale 1. Project altemativesconsidered and reasons for rejection 15 2. Major related projects financedby the Bank and other developmentagencies 17 3. Lessons learnedand reflectedin proposedproject design 18 4. Indicationsof borrower commitmentand ownership 20 5. Value added of Bank support in this project 20 E. SummaryProject Analysis 1. Economic 20 2. Financial 22 3. Technical 23 4. Institutional 23 5. Environmental 28 6. Social 29 7. SafeguardPolicies 32 F. Sustainabilityand Risks 1. Sustainability 32 2. Critical risks 33 3. Possible controversialaspects 34 G. Main Credit Conditions 1. EffectivenessCondition 34 2. Other 34 H. Readinessfor Implementation 35 I. Compliancewith Bank Policies 35 Annexes Annex 1: ProjectDesign Summary 36 Annex 2: DetailedProject Description 44 Annex 3: EstimatedProject Costs 57 Annex4: Cost-EffectivenessAnalysis Summary 59 Annex 5: Financial Summaryand Fiscal Impact Analysis 68 Annex 6: Procurementand DisbursementArrangements 75 Annex 7: Project ProcessingSchedule 86 Annex 8: Documentsin the ProjectFile 87 Annex 9: Statementof Loans and Credits 88 Annex 10:Country at a Glance 90 Annex 11: Social Assessmentand IndigenousDevelopment Plan 92 Annex 12: Evaluation,Monitoring and InformationSystems 98 Annex 13: InstitutionalCapacity Assessment 103 MAP(S) HONDURAS HN/COMMUNITY-BASEDEDUCATION PROJECT Project Appraisal Document Latin Americaand CaribbeanRegion LCSHE Date: March 12, 2001 Team Leader: Joel E. Reyes CountryManager/Director: Donna Dowsett-Coirolo Sector Manager/Director:Xavier Coll Project ID: P007397 Sector(s): EP - Primary Education LendingInstrument: SpecificInvestment Loan (SIL) Theme(s): Education Poverty Targeted Intervention: Y ProjectFinancing Data [ ] Loan [X1Credit [] Grant [1 Guarantee [ ] Other: For Loans/Credits/Others: Amount (US$m):SDR 32.3 million equivalent ProposedTerms: StandardCredit Graceperiod (years): 10 Yearsto maturity:40 Commitmentfee: 0.5% Servicecharge: 0.75% FinancingPlan: Source Local Foreign Total BORROWER 6.30 0.00 6.30 IDA 34.08 7.42 41.50 Total: 40.38 7.42 47.80 Borrower:REPUBLIC OF HONDURAS Responsibleagency: MINISTRY OF EDUCATION Address: Ministry of Education,Tegucigalpa, Honduras Contact Person: CristobalRodriguez, Director General de la Unidad de Planeamientoy Evaluaci6nde Gesti6n Tel: 504-222-0700/220-1230/222-8586/9901277(Cellularphone) Fax: 504-220-1230 Email: rodriguezcristobal(hotmail.com Estimateddisbursements ( Bank FYIU$$M): FY 2001 2002 2003 2004 2005 2006 Annual 0.20 6.50 13.60 14.50 10.00 3.00 Cumulative 0.20 6.70 20.30 34.80 44.80 47.80 Projectimplementation period: June 2001- June 2006 Expectedeffectiveness date: 06/01/2001 Expectedclosing date: 12/31/2006 XS VAD FW- Rv U, 2X A. Project DevelopmentObjective 1. Project development objective: (see Annex 1) The objective of the Community Based Education Project is to improve the quality of preschool and lower basic education (grades 1-6) in targeted rural areas in Honduras, including the improvement of the quality of intercultural and bilingual education in indigenous communities. 2. Key performance indicators: (see Annex 1) * Increased enrollment rates in rural preschool and lower basic education by 5 and 8 percentage points, respectively. * Improved internal efficiency indicators in rural schools: (i) increased early entry and promotion; and (ii) reduced repetition and drop out rates in rural schools (baseline data 1999). * Improved performance in standardized test scores in Spanish and Mathematics for 3rd and 6th grade students from mainly rural multigrade schools (baseline data 1999). v Improved student evaluation results of social achievements and self-esteem (non-cognitive development). * Improved rural school teachers' productivity measured by attendance and days of work (baseline data 1999). * Availability and relevance of education learning materials for rural schools. * Changes in perceptions, attitude and behavior of key school-based actors: principals, teachers, students, parents and the community. B. StrategicContext 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Documentnumber: 19893 HO Date of latest CAS discussion: IDA/R99-182 (1 2/14/99)-IFC/R99/(1 9/01/0 1) The Bank's Country Assistance Strategy targets poverty reduction as its primary goal, focusing on three development themes identified by the Government: (i) reducing poverty and enhancing social development to strengthen human capital and social safety nets; (ii) reviving and accelerating growth to ensure a swift economic recovery and shift the economy into a higher growth path; and (iii) sustainability through ensuring that the Government and society's efforts are supported by macroeconomic stability, debt sustainability, state modernization and decentralization and improved governance. The CAS builds on positive Government initiatives, such as deepening of the decentralization process, improved dynamics between the Government and civil society, and a sharper focus on the govemance agenda. The proposed Project will directly support the first and third of the CAS development themes: First, this Project is designed to target poverty reduction and social development through basic education opportunities, especially in the most isolated and dispersed rural communities. The Project will expand an existing community participation strategy for involvement of parents in rural schools, called PROHECO - 2 - 800 schools in poor and dispersed rural communities, where parental committees partner with the Government to manage the provision of school services. Through PROHECO,the Project will channel funds to the most needed and poverty afflicted communitiesof Honduras, guaranteeing them education services,human capitaldevelopment and inclusioninto the overall developmentefforts of the country. In addition to expanding PROHECO,the Project will make important new investments in (i) improving pedagogicalmodels (mainly participatory,
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