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World Bank Document Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: ICR00002572 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-81480) ON A LOAN Public Disclosure Authorized IN THE AMOUNT OF US$ 60.00 MILLION TO GEORGIA FOR A REGIONAL DEVELOPMENT PROJECT Public Disclosure Authorized June 18, 2018 Social, Urban, Rural And Resilience Global Practice Europe And Central Asia Region Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective Mar 29, 2018) Currency Unit = GEL 0.41 GEL = US$1 US$ = 2.41 GEL FISCAL YEAR July 1 - June 30 Regional Vice President: Cyril E. Muller Country Director: Mercy Miyang Tembon Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez Practice Manager: David N. Sislen Task Team Leader(s): Rosanna Nitti, Vica Rosario Bogaerts, Dmitry Sivaev ICR Main Contributor: Dmitry Sivaev ABBREVIATIONS AND ACRONYMS aRAP Abbreviated Resettlement Action Plan BP Bank Policies CPF Country Partnership Framework EMF Environmental Management Framework EMP Environmental Management Plan GNTA Georgia National Tourism Agency Administration GoG Government of Georgia IFI International Financial Institution IFP Invitation for Bidding MDF Municipal Development Fund MRDI Ministry of Regional Development and Infrastructure of Georgia NACHP National Agency for Cultural Heritage Preservation NCB National Competitive Bidding O&M Operation and Maintenance OP Operational Policies PAD Project Appraisal Document PAP Project Affected Population PDO Project Development Objective PIU Project Implementation Unit RDP Regional Development Project RDP2 Second Regional Development Project RDP3 Third Regional Development Project SECHSA Strategic Environmental, Cultural Heritage, and Social Assessment TOR Terms of Reference TTL Task Team Leader TABLE OF CONTENTS DATA SHEET ...........................................................................................................................1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 6 A. CONTEXT AT APPRAISAL .........................................................................................................6 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) .......................................9 II. OUTCOME .................................................................................................................... 11 A. RELEVANCE OF PDOs ............................................................................................................ 11 B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 12 C. EFFICIENCY ........................................................................................................................... 16 D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 17 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 17 A. FACTORS DURING PREPARATION ....................................................................................... 17 1. FACTORS DURING IMPLEMENTATION ................................................................................ 18 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 21 A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................ 21 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ..................................................... 23 C. BANK PERFORMANCE ........................................................................................................... 25 D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 28 V. LESSONS AND RECOMMENDATIONS ............................................................................. 29 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 32 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 40 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 42 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 43 ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 51 ANNEX 6. SUPPORTING DOCUMENTS .................................................................................. 61 ANNEX 7. DETAILED DISCUSSION OF ACHIEVEMENT OF THE PDO AND RESULTS ATTRIBUTION62 MAP .................................................................................................................................... 79 The World Bank Regional Development Project (P126033) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P126033 Regional Development Project Country Financing Instrument Georgia Investment Project Financing Original EA Category Revised EA Category Financial Intermediary Assessment (F) Financial Intermediary Assessment (F) Organizations Borrower Implementing Agency Ministry of Finance Georgia Municipal Development Fund Project Development Objective (PDO) Original PDO The Project Development Objective is to improve infrastructure services and institutional capacity to support the development of tourism-based economy and cultural heritage circuits in the Kakheti region Page 1 of 79 The World Bank Regional Development Project (P126033) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 60,000,000 60,000,000 57,266,743 IBRD-81480 Total 60,000,000 60,000,000 57,266,743 Non-World Bank Financing Borrower 15,000,000 15,000,000 14,917,933 Total 15,000,000 15,000,000 14,917,933 Total Project Cost 75,000,000 75,000,000 72,184,676 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 20-Mar-2012 31-May-2012 26-May-2014 31-Dec-2016 31-Dec-2017 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 24-May-2016 56.16 06-Jun-2016 56.16 Change in Loan Closing Date(s) 28-Nov-2017 59.25 Change in Results Framework Reallocation between Disbursement Categories KEY RATINGS Outcome Bank Performance M&E Quality Moderately Satisfactory Satisfactory Modest Page 2 of 79 The World Bank Regional Development Project (P126033) RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 30-Mar-2013 Satisfactory Satisfactory 40.50 02 17-Dec-2013 Satisfactory Moderately Satisfactory 45.75 03 29-Jun-2014 Satisfactory Satisfactory 49.02 04 09-Feb-2015 Satisfactory Satisfactory 52.37 05 26-Aug-2015 Satisfactory Satisfactory 54.52 06 25-May-2016 Satisfactory Satisfactory 56.31 07 22-Jun-2016 Satisfactory Satisfactory 56.31 08 22-Dec-2016 Satisfactory Satisfactory 59.40 09 19-Jun-2017 Satisfactory Satisfactory 59.40 10 28-Dec-2017 Moderately Satisfactory Satisfactory 59.49 SECTORS AND THEMES Sectors Major Sector/Sector (%) Public Administration 3 Sub-National Government 3 Education 1 Workforce Development and Vocational Education 1 Transportation 45 Urban Transport 45 Page 3 of 79 The World Bank Regional Development Project (P126033) Water, Sanitation and Waste Management 45 Other Water Supply, Sanitation and Waste 45 Management Industry, Trade and Services 6 Agricultural markets, commercialization and agri- 6 business Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Private Sector Development 29 Jobs 9 Job Creation 9 Regional Integration 20 Urban and Rural Development 70 Urban Development 38 Urban Infrastructure and Service Delivery 37 Urban Planning 1 Rural Development 9 Rural Infrastructure and service delivery 9 Cultural Heritage 23 ADM STAFF Role At Approval At ICR Regional Vice President: Philippe H. Le Houerou Cyril E Muller Country Director: Asad Alam Mercy Miyang Tembon Senior Global Practice Director: Laszlo Lovei Ede Jorge Ijjasz-Vasquez Practice Manager: Wael Zakout David N. Sislen Rosanna Nitti, Vica Rosario Task Team Leader(s): Ahmed A. R. Eiweida Bogaerts, Dmitry Sivaev Page 4 of 79 The World Bank Regional Development Project (P126033) ICR Contributing Author: Dmitry Sivaev Page 5 of 79 The World Bank Regional Development Project (P126033) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL 1. In 2010, Georgia was beginning an economic recovery and looking to unlock new avenues of inclusive growth. In 2008-2009, the Georgian economy experienced a sharp economic downturn resulting from the twin shocks of the August 2008 conflict with Russia and the global financial crisis. To stimulate growth, the national authorities launched a counter-cyclical fiscal stimulus and realigned public expenditures to social and infrastructure investments. Simultaneously the country was continuing to implement ambitious economic reforms that combined a focus on macro- economic stability with efforts to stimulate foreign trade. At that time Georgia was already recognized for having one of the most competitive business environments in the world, however it wasn’t enough to drive growth in the lagging regions of the country outside rapidly developing Tbilisi, and a new seaside tourism hub, Batumi. While many of the lagging regions had clear potential for tourism and agriculture development, there was a need to identify and address the binding constraints that impeded growth of these industries. 2. Regional development became the priority of the national government and its cooperation with
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