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World Bank Document Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD722 Public Disclosure Authorized INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED {LOAN/CREDIT} Public Disclosure Authorized IN THE AMOUNT OF SDR 6.26 MILLION (US$ 9.67 MILLION EQUIVALENT) AND A PROPOSED LOAN IN THE AMOUNT OF US$ 23 MILLION TO THE Public Disclosure Authorized REPUBLIC OF ARMENIA FOR A SECOND COMMUNITY AGRICULTURAL RESOURCE MANAGEMENT AND COMPETITIVENESS PROJECT May 28, 2014 Sustainable Development Department South Caucasus Country Unit Europe and Central Asia 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 March 31, 2014) Currency Unit = Armenian Dram (AMD) US$1 = AMD 413.31 US$ 1.55 = SDR 1 = AMD 640.63 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS APIU Agricultural Projects Implementation Unit CARD Center for Agriculture and Rural Development CARMAC Community Agricultural Resource Management and Competitiveness Project CPAR Country Procurement Assessment and Reforms CPMLDC Community Pasture Management and Livestock Development Committee CV Community Veterinarian DCFTA Deep and Comprehensive Free Trade Agreement EMF Environment Management Framework EMP Environment Management Plan EU European Union FAO Food and Agriculture Organization of the United Nations FBO Food Business Operator FM Financial Management GAO Gross Agricultural Output GAP Good Agricultural Practices GDP Gross Domestic Product GNI Gross National Income HACCP Hazard Analysis and Critical Control Points IBRD International Bank for Reconstruction and Development ICB International Competitive Bidding IDA International Development Association IDF Institutional Development Fund IFAD International Fund for Agriculture Development IPM Integrated Pest Management IRR Internal Rate of Return M&E Monitoring and Evaluation MASC Marz Agricultural Support Center MOA Ministry of Agriculture MST Marz Support Teams MTEF Medium Term Expenditure Framework NCB National Competitive Bidding NGO Non-Government Organization ii PDO Project Development Objective PEFA Public Expenditure and Financial Accountability PMLDP Pasture Management and Livestock Development Plan PMP Pest Management Plan POM Project Operational Manual PUC Pasture Users Cooperative RAP Resettlement Action Plan RESCAD Rural Enterprise and Small Scale Commercial Agriculture Development Project RPF Resettlement Policy Framework SCVIC Scientific Center for Vegetable and Industrial Crops SDR Special Drawing Rights SNCO State Non-Commercial Organization SPS Sanitary and Phytosanitary Standards SSFS State Service for Food Safety USDA United States Department of Agriculture VSC Veterinary Service Centers WTO World Trade Organization Regional Vice President: Laura Tuck Country Director: Henry G. R. Kerali Sector Director: Laszlo Lovei Sector Manager: Dina Umali-Deininger Task Team Leader: Nicolas Ahouissoussi iii ARMENIA Second Community Agricultural Resource Management and Competitiveness Project TABLE OF CONTENTS Page I. STRATEGIC CONTEXT .................................................................................................1 A. Country Context ............................................................................................................ 1 B. Sectoral and Institutional Context ................................................................................. 1 C. Higher Level Objectives to which the Project Contributes .......................................... 4 II. PROJECT DEVELOPMENT OBJECTIVES ................................................................4 A. PDO............................................................................................................................... 4 B. Project Beneficiaries ..................................................................................................... 4 C. PDO Level Results Indicators ....................................................................................... 5 III. PROJECT DESCRIPTION ..............................................................................................5 A. Project Components ...................................................................................................... 5 B. Project Financing .......................................................................................................... 8 C. Lessons Learned and Reflected in the Project Design .................................................. 9 IV. IMPLEMENTATION .....................................................................................................11 A. Institutional and Implementation Arrangements ........................................................ 11 B. Results Monitoring and Evaluation ............................................................................ 12 C. Sustainability............................................................................................................... 12 V. KEY RISKS AND MITIGATION MEASURES ..........................................................13 A. Risk Ratings Summary Table ..................................................................................... 13 B. Overall Risk Rating Explanation ................................................................................ 13 VI. APPRAISAL SUMMARY ..............................................................................................14 A. Economic and Financial Analyses .............................................................................. 14 B. Technical ..................................................................................................................... 15 C. Financial Management ................................................................................................ 15 D. Procurement ................................................................................................................ 16 E. Social (including Safeguards) ..................................................................................... 17 F. Environment (including Safeguards) .......................................................................... 18 iv G. Other Safeguards Policies Triggered .......................................................................... 18 H. Policy Exemptions and Readiness for Implementation .............................................. 19 Annex 1: Results Framework and Monitoring .........................................................................20 Annex 2: Detailed Project Description .......................................................................................28 Annex 3: Implementation Arrangements ..................................................................................38 Annex 4: Operational Risk Assessment Framework (ORAF) .................................................52 Annex 5: Implementation Support Plan ....................................................................................57 Annex 6: Financial and Economic Analysis ..............................................................................61 Annex 7: Map ...............................................................................................................................68 v . PAD DATA SHEET Armenia Second Community Agriculture Resource Management and Competitiveness Project (P133705) PROJECT APPRAISAL DOCUMENT . EUROPE AND CENTRAL ASIA ECSAR Report No.: PAD722 . Basic Information Project ID EA Category Team Leader P133705 B - Partial Assessment Nicolas Ahouissoussi Lending Instrument Fragile and/or Capacity Constraints [ ] Investment Project Financing Financial Intermediaries [ ] Series of Projects [ ] Project Implementation Start Date Project Implementation End Date 21-Jun-2014 31-May-2020 Expected Effectiveness Date Expected Closing Date 30-Nov-2014 31-May-2020 Joint IFC No Sector Manager Sector Director Country Director Regional Vice President Dina Umali-Deininger Laszlo Lovei Henry G. R. Kerali Laura Tuck . Borrower: Ministry of Finance Responsible Agency: Agriculture Project Implementation Unit Contact: Gagik Khachatryan Title: Director Telephone No.: 37410297301 Email: [email protected] Responsible Agency: Ministry of Agriculture Contact: Armen Harutyunyan Title: Deputy Minister Telephone No.: 37410235468 Email: [email protected] . Project Financing Data(in USD Million) [ X ] Loan [ ] Grant [ ] Guarantee [ X ] Credit [ ] IDA Grant [ ] Other Total Project Cost: 42.67 Total Bank Financing: 32.67 vi Financing Gap: 0.00 . Financing Source Amount BORROWER/RECIPIENT 10.00 International Bank for Reconstruction and 23.00 Development International Development Association (IDA) 9.67 Total 42.67 . Expected Disbursements (in USD Million) Fiscal 2014 2015 2016 2017 2018 2019 2020 0000 0000 Year Annual 0.00 3.50 7.50 7.50 6.50 5.00 2.67 0.00 0.00 Cumulati 0.00 3.50 11.00 18.50 25.00 30.00 32.67 0.00 0.00 ve . Proposed Development Objective(s) The Project Development Objective (PDO) is to (i) improve productivity and sustainability of pasture and livestock systems in targeted communities and (ii) increase the marketed production from selected livestock and high value agri-food value chains. Components Component Name Cost (USD Millions) Component 1: Community/Pasture Livestock Management 27.87 System Component 2: Value
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