Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 5 1925-MX PROJECT APPRAISAL DOCUMENT ON A Public Disclosure Authorized PROPOSED LOAN IN THE AMOUNT OF US$ 100 MILLION TO THE UNITED MEXICAN STATES FOR A COMPENSATORY EDUCATION PROJECT Public Disclosure Authorized February 24,2010 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 Public Disclosure Authorized Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective January 26,2010) Currency Unit = Mexican Peso MX$1.00 = US$O.OS US$1 = MX$12.93 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS AGES Support for School Management (Apoyo a la Gestidn Escolar) APECs Associations of Community Members in Support of Community Education (Asociaciones Promotoras de la Eduacidn Cornunitaria) APFs Parent Associations (Asociaciones de Padres de Familia) API Mobile Pedagogical Support (Asesoria Pedagdgica Itinerante) APL Adaptable Program Loan CDI National Commission for the Development of Indigenous Peoples (Comisidn Nacional para el Desarrollo de 10s Pueblos Indigenas) CONAFE National Council for Education Development (Consejo Nacional de Foment0 Educativo) CONAPO Consejo Nacional de Poblacidn CPS Country Partnership Strategy DAF Direccidn de Administracidn y Finanzas DGEI General Directorate for Indigenous Education DP Planning Directorate (Direccidn de Planeacidn) ECD Early Childhood Development ENLACE Evaluacidn Nacional del Logro Acadkmico en Centros Escolares FORTALECE Fortalecimiento Comunitario para la Educacidn GDP Gross Domestic Product IBRD International Bank for Reconstruction and Development IDA International Development Association IMSS Instituto Mexican0 del Seguro Social NEE Instituto Nacional para la Evaluacidn de la Educacidn IPP Indigenous Peoples Plan MEEO Municipal Educational Equity Office NAFIN Nacional Financiera, S.N.C. OECD Organisation for Economic Co-operation and Development OM Project Operational Manual PAN National Action Party (Partido Accidn Nacional) PAS Procurement Accredited Staff PAREIB Programa para Abatir el Rezago en Educacidn Inicial y Bdsica PISA Program for International Student Assessment PND National Development Plan (Plan Nacional de Desarrollo) PRI Institutional Revolutionary Party (Partido Revolucionario Institucional) 1 FOR OFFICIAL USE ONLY PSE Sectoral Program for Education (Programa Sectorial de Educacidn) SBM School-Based Management SBD Standard Bidding Documents SEP Secretaria de Educacidn Pziblica SEPA Sistema de Ejecucibn de Planes de Adquisiciones SEPEs State-Level Secretariats of Public Education (Secretarias Estatales de Educacidn Pziblica) SHCP Secretaria de Hacienda y Cre'dito Pziblico SIL Specific Investment Loan SNTE National Syndicate for Education Workers (Sindicato Nacional de Trabajadores de la Educacidn) UCE State Coordinating Units (Unidades Coordinadoras Estatales) UPC Compensatory Programs Unit (Unidad de Programas Compensatorios) Vice President: Pamela Cox Country Director: Gloria M. Grandolini Sector Director: Evangeline Javier Sector Manager: Chingboon Lee Task Team Leader: Peter Anthony Holland This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. ii MEXICO COMPENSATORY EDUCATION PROJECT CONTENTS Page I. STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 A . Country and sector issues.................................................................................................... 1 B. Rationale for Bank involvement ......................................................................................... 6 C . Higher level objectives to which the project contributes .................................................... 7 I1. PROJECT DESCRIPTION ................................................................................................. 7 A . Lending instrument ............................................................................................................. 7 B. Project development objective and key indicators.............................................................. 7 C . Project components ............................................................................................................. 8 D. Lessons learned and reflected in the project design............................................................ 9 E. Alternatives considered and reasons for rejection ............................................................ 10 I11. IMPLEMENTATION.................................................................................................... 11 A . Institutional and implementation arrangements ................................................................ 11 B. Monitoring and evaluation ofoutcomes/results.. .............................................................. 12 ... C . Sustainability ..................................................................................................................... 14 D. Critical risks and possible controversial aspects. .............................................................. 14 E. Loadcredit conditions and covenants ............................................................................... 17 IV. APPRAISAL SUMMARY ............................................................................................. 17 A . Economic and financial analyses ...................................................................................... 17 B. Technical ........................................................................................................................... 18 C . Fiduciary ........................................................................................................................... 19 D. Social................................................................................................................................. 20 E. Environment ...................................................................................................................... 20 F. Safeguard policies ............................................................................................................. 20 G. Policy Exceptions and Readiness...................................................................................... 21 ... 111 Annex 1: Country and Sector or Program Background......................................................... 22 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ................. 29 Annex 3: Results Framework and Monitoring ........................................................................ 31 Annex 4: Detailed Project Description...................................................................................... 47 Annex 5: Project Costs ............................................................................................................... 60 Annex 6: Implementation Arrangements ................................................................................. 61 Annex 7: Financial Management and Disbursement Arrangements..................................... 67 Annex 8: Procurement Arrangements ...................................................................................... 77 Annex 9: Economic and Financial Analysis ............................................................................. 80 Annex 10: Safeguard Policy Issues ............................................................................................ 88 Annex 11: Project Preparation and Supervision ................................................................... 100 Annex 12: Documents in the Project File ............................................................................... 101 Annex 13: Statement of Loans and Credits ............................................................................ 103 Annex 14: Country at a Glance ............................................................................................... 106 Annex 15: Maps......................................................................................................................... 109 iv MEXICO COMPENSATORY EDUCATION PROJECT APPRAISAL DOCUMENT LATIN AMERICA AND CARIBBEAN LCSHE Date: February 24,2010 Team Leader: Peter Anthony Holland Country Director: Gloria M. Grandolini Sectors: Pre-primary education (40%); Sector ManagedDirector: Chingboon Lee Primary education (40%); Secondary education (20%) Themes: Education for all (100%) Project ID: P101369 Environmental category: Not Required Lending Instrument: Specific Investment Loan Joint IFC: Joint Level: Project Financing Data [XI Loan [ 3 Credit [ ] Grant [ ] Guarantee [ ] Other: Source Local Foreign Total Borrower 66.70 0.00 66.70 International Bank for Reconstruction and 98.60 1.40 100.00 Development Total: 165.30 1.40 166.70 Borrower: United Mexican States Responsible Agency: Consejo Nacional de Foment0 Educativo (CONAFE) Avenida de 10s Insurgentes Sur No. 421 Torre B Colonia Hip6dromo Condesa. MCxico, 06100, D. F.Te1: (52-5) 5241-7400 FY 10 11 12 13 14 Annual 5.00 25.00 25.00 25.00 20.00 Cumulative1 5.00 I 30.00 I 55.00 I 80.00 I 100.00 I Project implementation period: Start May 1, 2010 End: June 30, 2014 Expected effectiveness date: May 1, 20 10 Expected closing date: October 30, 2014 vi Does the project depart from the CAS in content or other