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FOR OFFICIAL USE ONLY Report No: PAD2966 FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: PAD2966 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 29.1 MILLION Public Disclosure Authorized (US$40 MILLION EQUIVALENT) TO THE INDEPENDENT STATE OF PAPUA NEW GUINEA FOR A PNG AGRICULTURE COMMERCIALIZATION AND DIVERSIFICATION PROJECT APRIL 1, 2020 Public Disclosure Authorized Agriculture and Food Global Practice East Asia and Pacific 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. CURRENCY EQUIVALENTS (Exchange Rate Effective January 31, 2020) Currency Unit = PNG Kina (PGK) PGK 2.39 = US$1 US$1.37695 = SDR 1 FISCAL YEAR January 1 – December 31 Regional Vice President: Victoria Kwakwa Country Director: Michel Kerf Regional Director: Benoit Bosquet Practice Manager: Dina Umali-Deininger Task Team Leaders: Allan Oliver, Son Thanh Vo ABBREVIATIONS AND ACRONYMS ACIAR Australian Centre for International Agricultural Research AMTDP Agriculture Medium-Term Development Plan 2020 AMTDP–2022 AROB Autonomous Region of Bougainville CB Cocoa Board CERC Contingency Emergency Response Component CFP Country Financing Parameter CIC Coffee Industry Corporation CMB Copra Marketing Board CPF Country Partnership Framework DA Designated Account DAL Department of Agriculture and Livestock DFIL Disbursement and Financial Information Letter DNPM Department of National Planning and Monitoring DoT Department of Treasury DoW Department of Works DPI Department of Primary Industry DPO Development Policy Operation EFA Economic and Financial Analysis ENB East New Britain ESMF Environmental and Social Management Framework EU European Union FAO Food and Agriculture Organization (of the United Nations) FER Functional Expenditure Review FM Financial Management FMM Financial Management Manual FGB Food and Grains Board GAP Good Agricultural Practices GBV Gender-based Violence GDP Gross Domestic Product GHG Greenhouse Gas GIS Geographic Information System GoPNG Government of Papua New Guinea GRM Grievance Redress Mechanism GRS Grievance Redress Service HACCP Hazard Analysis Critical Control Point HIV-AIDS Human Immunodeficiency Virus – Acquired Immunodeficiency Syndrome ICC Industry Coordination Committee ICT Information and Communication Technology IDA International Development Association IEC Information, Education, Communication IFAD International Fund for Agricultural Development IFC International Finance Corporation IFMIS Integrated Financial Management Information System IFR Interim Financial Report IPCC Intergovernmental Panel on Climate Change IPF Investment Project Financing IPMP Integrated Pest Management Plan IRR Internal Rate of Return KIK Kokonas Indastri Koporesen LDC Livestock Development Corporation LP Lead Partner M&E Monitoring and Evaluation MFD Maximizing Finance for Development MG Matching Grant MIS Management Information System MoU Memorandum of Understanding MSMEs Micro, Small, and Medium Enterprises MTDP III Medium-Term Development Plan III NARI National Agriculture Research Institute NPV Net Present Value PACD PNG Agriculture Commercialization and Diversification Project PCU Project Coordination Unit PDO Project Development Objective PFMA Public Finances Management Act PGK Papua New Guinean kina PGMGG Partnerships Grants and Matching Grants Guidelines PHAMA Pacific Horticultural Agriculture Market Access PIM Project Implementation Manual PIP Public Investment Program PMU Project Management Unit PNG Papua New Guinea PO Producer Organization PPAP Productive Partnerships in Agriculture Project PPSD Project Procurement Strategy for Development PSC Project Steering Committee R&D Research and Development SCD Systematic Country Diagnostic SDG Sustainable Development Goal SMEs Small and Medium Enterprises STEP Systematic Tracking of Exchanges in Procurement TAC Technical Appraisal Committee ToC Theory of Change WiP With Project WoP Without Project The World Bank PNG Agriculture Commercialization and Diversification Project (P166222) TABLE OF CONTENTS DATASHEET ........................................................................................................................... 1 I. STRATEGIC CONTEXT ...................................................................................................... 8 A. Country Context................................................................................................................................ 8 B. Sectoral and Institutional Context .................................................................................................. 10 C. Relevance to Higher Level Objectives ............................................................................................. 13 II. PROJECT DESCRIPTION .................................................................................................. 14 A. Project Development Objective ..................................................................................................... 14 B. Project Components ....................................................................................................................... 15 C. Project Beneficiaries ....................................................................................................................... 22 D. Results Chain .................................................................................................................................. 26 E. Rationale for Bank Involvement and Role of Partners ................................................................... 28 F. Lessons Learned and Reflected in the Project Design .................................................................... 28 III. IMPLEMENTATION ARRANGEMENTS ............................................................................ 31 A. Institutional and Implementation Arrangements .......................................................................... 31 B. Results Monitoring and Evaluation Arrangements......................................................................... 32 C. Sustainability ................................................................................................................................... 34 IV. PROJECT APPRAISAL SUMMARY ................................................................................... 34 A. Technical, Economic and Financial Analysis ................................................................................... 34 B. Fiduciary .......................................................................................................................................... 36 C. Safeguards ...................................................................................................................................... 37 V. KEY RISKS ..................................................................................................................... 39 VI. RESULTS FRAMEWORK AND MONITORING ................................................................... 41 ANNEX 1: Implementation Arrangements and Support Plan .......................................... 52 ANNEX 2: Detailed Project Description .......................................................................... 66 ANNEX 3: PACD Gender and Nutrition Interventions ..................................................... 78 ANNEX 4: Project’s Budget ............................................................................................ 86 ANNEX 5: PACD Economic and Financial Analysis .......................................................... 89 ANNEX 6: Greenhouse Gas Accounting .......................................................................... 95 ANNEX 7: Additional Commodities Supported under the PACD...................................... 99 ANNEX 8: Map of PNG with PACD Provinces ................................................................ 101 The World Bank PNG Agriculture Commercialization and Diversification Project (P166222) DATASHEET BASIC INFORMATION BASIC_INFO_TABLE Country(ies) Project Name Papua New Guinea PNG Agriculture Commercialization and Diversification Project Project ID Financing Instrument Environmental Assessment Category Investment Project P166222 B-Partial Assessment Financing Financing & Implementation Modalities [ ] Multiphase Programmatic Approach (MPA) [✓] Contingent Emergency Response Component (CERC) [ ] Series of Projects (SOP) [✓] Fragile State(s) [ ] Disbursement-linked Indicators (DLIs) [ ] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made Disaster [ ] Alternate Procurement Arrangements (APA) Expected Approval Date Expected Closing Date 22-Apr-2020 31-Dec-2025 Bank/IFC Collaboration No Proposed Development Objective(s) To facilitate the development of competitive and diversified agriculture value chains for selected commodities in targeted provinces. Components Component Name Cost (US$, millions) Page 1 of 101 The World Bank PNG Agriculture Commercialization and Diversification Project (P166222) Institutional Capacity Building 5.10 Agriculture Feeder Roads 13.40 Productive Partnerships 12.30 Project Management and Monitoring and Evaluation 9.20 Contingency Emergency Response Component 0.00 Organizations Borrower: Independent State of Papua New Guinea Implementing Agency: Department of Agriculture
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