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Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 64618-NI PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT Public Disclosure Authorized IN THE AMOUNT OF SDR15.8 MILLION (US$25 MILLION EQUIVALENT) TO THE REPUBLIC OF NICARAGUA FOR THE SECOND SUPPORT TO THE EDUCATION SECTOR PROJECT Public Disclosure Authorized DECEMBER 7, 2011 Human Development Department Central America Country Management Unit Latin American and Caribbean Region This document is being made publicly available prior to Board consideration. This does not Public Disclosure Authorized imply a presumed outcome. This document may be updated following Board consideration and the updated document would be made publicly available in accordance with the World Bank’s policy on Access to Information. CURRENCY EQUIVALENTS (Exchange Rate Effective November 1, 2011) Currency Unit = NIC NIC 22.82 = US$1 US$1.59 = SDR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS CPS Country Partnership Strategy DA Designated Account DGAF Administrative and Financial General Division (Dirección General Administrativa y Financiera) DGP Directorate General of Planning DL Disbursement Letter EFA Education for All EGRA Early Grade Reading Assessment ESP Education Sector Plan EU European Union FM Financial Management GDI General Directorate of Infrastructure GDP Gross Domestic Product GIS Geographic Information System GEP Global Education Partnership GoN Government of Nicaragua IDA International Development Agency IDP Institutional Development Plan IBE Intercultural Bilingual Education ISP Institutional Development Plan (Plan de Desarrollo Institucional) JSDF Japanese Social Development Fund KPI Key Performance Indicators LAC Latin America & the Caribbean MDGs Millennium Development Goals M&E Monitoring and Evaluation MIS Management Information System MTEF Medium Term Expenditure Framework MINFAM Ministry of Family MINED Ministry of Education (Ministerio de Educación) NCB National Competitive Bidding OM Operational Manual ORAF Operational Risk Assessment Framework PASEN Support to the Education Sector Project (Proyecto de Apoyo Al Sector de Educación Nacional) ii PC Project Coordinator PDO Project Development Objective PIPs Project Implementation Plans RAAN North Atlantic Autonomous Region (Region Autónoma Atlántico Norte) RAAS South Atlantic Autonomous Region (Region Autónoma Atlántico Sur) SEAR Autonomous Regions Educational System (Oficina de Enlace con el Sistema Educativo de las Regiones Autónomas) SERCE Second Regional Comparative and Explanatory Study (Segundo Estudio Regional Comparativo y Explanatorio) SIGFAPRO Integrated Financial Management System (Sistema Integrado de Gestión Financiera) SM Supervision Mission SNIGI Integrated National Information Management System (Sistema Nacional de Información Gerencial Integrado) SNIP National Public Investment System (Sistema Nacional de Inversión Pública) SPSFF Planning and Financial Monitoring System (Sistema de Planificación y Seguimiento Físico Financiero) TEPCEs Evaluation, Programming and Educational Training Workshops (Talleres de Evaluación, Programación y Capacitación Educativa) TERCE Third Regional Comparative Standardized Student Evaluation (Tercera Evaluación Regional de Estudiantes Comparativa y Estandarizada) UNESCO United Nations Educational, Scientific and Cultural Organization UNICEF United Nations Children’s Fund Regional Vice President: Pamela Cox Country Director: Carlos Felipe Jaramillo Sector Director: Keith Hansen Sector Manager: Chingboon Lee Task Team Leader: Michael Drabble/Robert Hawkins iii REPUBLIC OF NICARAGUA Second Support to the Education Sector Project TABLE OF CONTENTS I. Strategic Context ..................................................................................................................... 1 A. Country Context .................................................................................................................. 1 B. Sectoral and Institutional Context ....................................................................................... 1 C. Higher Level Objectives to Which Project Contributes ...................................................... 5 II. Project Development Objective .............................................................................................. 5 A. PDO:.................................................................................................................................... 5 1. Project Beneficiaries ..................................................................................................... 5 2. PDO Level Results Indicators ...................................................................................... 5 III. Project Description............................................................................................................... 6 A. Project Components ......................................................................................................... 6 B. Project Financing............................................................................................................ 12 1. Lending Instrument..................................................................................................... 12 C. Lessons Learned and Reflected in the Project Design ................................................... 12 IV. Implementation .................................................................................................................. 13 A. Institutional and Implementation Arrangements ............................................................ 13 B. Results Monitoring and Evaluation ................................................................................ 14 C. Sustainability .................................................................................................................. 14 V. Key Risks and Mitigation Measures ..................................................................................... 15 A. Risk Ratings Summary ................................................................................................... 15 B. Overall Risk Rating Explanation.................................................................................... 15 VI. Appraisal Summary ........................................................................................................... 16 A. Economic and Financial Analysis .................................................................................. 16 B. Technical ........................................................................................................................ 16 C. Financial Management ................................................................................................... 17 D. Procurement ................................................................................................................... 18 E. Social (including safeguards) ......................................................................................... 18 F. Environment (including safeguards) .............................................................................. 19 Annex 1: Results Framework and Monitoring.............................................................................. 20 Annex 2: Detailed Project Description ......................................................................................... 24 Annex 3: Implementation Arrangements ...................................................................................... 43 iv Annex 4: Operational Risk Assessment Framework (ORAF) ...................................................... 62 Annex 5: Implementation Support Plan ........................................................................................ 65 Annex 6: Economic and Financial Analysis ................................................................................. 68 Annex 7: Technical Matters .......................................................................................................... 73 v PAD DATA SHEEET a Republic of Nicaragua Second Support to the Education Sector Project PROJECT APPRAISAL DOCUMENT Latin America & the Caribbean Region LCSHE Basic Information Date: December 7, 2011 Sectors: Primary education (100%) Country Director: Carlos Felipe Jaramillo Themes: Education for all (100%) Sector Chingboon Lee/Keith E. Manager/Director: Hansen Project ID: P126357 EA C Category: Lending Instrument: Specific Investment Loan Team Leader(s): Michael Drabble/Robert Hawkins Does the Project include any CDD component? No Joint IFC: No . Borrower: Government of Nicaragua Responsible Agency: Ministry of Education Contact: Sra. Miriam Raudez Title: Minister Telephone 505-2265-1451 Email: [email protected] No.: . Project Start Date: March 31, End Date: March 31, 2016 Implementation 2012 Period: Expected March 31, 2012 Effectiveness Date: Expected Closing June 30, 2016 Date: vi . Project Financing Data(US$M) [ ] Loan [ ] Grant [ ] Other [ X ] Credit [ ] Guarantee Term: SDR 15.8 million (US$25 million equivalent), 4.25 year credit. The fixed-spread credit has a final maturity of 40 years, including a grace period of 10 years. For Loans/Credits/Others Total Project Cost 25.00 (US$M): Total World Bank 25.00 Financing (US$M): . Financing Source Amount(US$M) BORROWER/RECIPIENT 7.95 International Development Association (IDA) 25.00 Total Project Cost 32.95 . Expected Disbursements (in USD Million) Fiscal Year 2012 2013 2014 2015 2016 Annual 1.00 5.00 7.00 8.00 4.00 Cumulative 1.00 6.00 13.00 21.00 25.00 . Project Development