8an'k The World UsEONrLY iOR OPpjuL Public Disclosure Authorized 10968 RepottN0 REpoR CT02PLETIV PROJ_CT OF TUNISIA REPUBLIC Public Disclosure Authorized pR~OJECT 2865-CRUD)CREDIAT FOJRI ACRICUTUL- (LOAN 1992 JULtY28, Public Disclosure Authorized COPY MICROFICHE Cov.F Type(PCR)PROJECT No: 10968 CREDIT Report AGRICULTURAL FOURTH T90oEq/ OEDD1 / MAA E.B./ X31755 E;y: RICE, : 19920724 Date Ent. peratOn Dvtlo Public Disclosure Authorized Agriculture t I L~icaRgin Norh Af outrYdDePRartmenMlddeEat an douent eWtddsduinadmIVb-~~~~fii1d CURRENCYEQUIVALENTS CurrencyUnit = Tunisian Dinar (TD) At Appraisal(Nov./Dec. 1986) US$1 = TD 0.87fTDI = US$1.15 ImplementationAverage (19&8-1991) US$1 = TD 0.88/TD1 = US$1.14 GLOSSARYOF ABBREVIATIONS ASAL - Pret6 I'Ajustementdu secteuragricole (Agricultural Sector Adjustment Loan) BCT - Banquecentrale de Tunisie(Central Bank of Tunisia) BNA - Banquenationale agricole (NationalBank of Agriculture) BNDA - Banquenationale de d6veloppementagricole (National Bank for AgriculturalDevelopment) BNT - Banquenationale de Tunisie (NationalBank of Tunisia) CSA - Cooperativede service agricole (ServiceCooperative) EEC/EIB - Communaut66conomique europeenne/Banque europdenne d'investissement(European Economic Community/EuropeanInvestment Bank) FIDA/IFAD- Fonds internationalde ddveloppementagricole (International Fund for Agricultural Development) FNG - Fonds nationalde garantie(National Guarantee Fund) FOSDA - Fonds spdcialde d6veloppementagricole (Special Fund for AgriculturalDevelopment) FOSEP - Fonds speciald'encouragement de la p6che(Special Fund for FisheriesDevelopment) MOA - Ministarede l'agriculture(Ministry of Agriculture) MOF - Ministbredes finances (Ministryof Finance) MOPDR - Minist6redu plan et du d6veloppementr6gional (Ministry of Planningand Regional Development) OMV - Office de mise en valeur (IrrigationDevelopment Agency) ONP - Office nationaldes peches(National Fisheries Agency) SCMA - Soci!td de caution mutuelleagricole (AgriculturalMutual Guarantee Society) WEIGHTSAND MEASURES Metric System FISCALYEAR OF BORROWER January 1 - December31 FOROFFKXAL USE ONLY THE WORLD BANK Wasnghh D.CQ2o433 U.SA Office of Director-General Operations Evaluation July 28, 1992 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project CompletionReport on TUNISIA - Fourth Agricultural Credit Proiect (Loan 2865-TUN) Attached, for information,is a copy of "Project a report entitled Completion Report on Tunisia: Fourth Agricultural Project (Loan Credit 2865-TUN)" prepared by the Middle East Africa and North Regional Office. No audit of this project the has been made by Operations EvaluationDepartment at this time. Attachment Tbb document I ha * restreited dbsdb*uton ad may be and by rtdpanb on I. | the perfenmum of teir Om dulle&Its contets may not otberw be disoused without World Bak authorUen. | FOR OMFCL USE ONLY PROJECT COMPLETION REPORT REPUBLIC OF TUNISIt FOURTH AGRICULTURAL CREDIT PROJECT (LOAN 2865-TUN) TABLE OF CONTENTS Paae No. Preface S . i Evaluation Summary l PART I PROJECT REVIEW FROM BANK'S PERSPECTIVE . 1 1 Project Identity . 1 2. Project Background . 1 3. Project Objectives and Description . 2 4. Project Design and Organization . 3 Design . &* 3 Preparation, Appraisal and Negotiations . 4 5. Project Implementation . 5 Loan Effectiveness and Project Start-Up . 5 Project Risks . 5 Implementation .................. 5 On-Lending Component . .. 5 Institutional Component . 6 Project Costs and Disbursements . 7 6. Project Results . 7 Progress on Agricultural Credit Policy and Institutional Reforms . .. .... 8 Financial Performance o . .. 10 Loan Recovery . o . o . 11 7. Project Sustainability . 11 8. Const.lting Services . o o . o . 12 9. Project Documentation and Data o . 12 10. Bank Performance . o . 12 11. Borrower and Guarantor's Performance . o o . a . 12 12. Project Relationship . o o . a . o . 13 13. Lessons Learned.................. 13 PART II PROJECT REVIEW FROM BORROWER'S PERSPECTIVE . 15 1. Overview of the Project o 6.. 16 2. Project Development and Implementation . 17 3. World Bank Performance during the Project . 25 4* Conclusion . o. o . o. a 27 This document has a restricted distribution and may be used by recipients only in the perfor'mance of their offcial duties. Its contents may not otherwise be disclosed without World Bank authorization. Paae No. ANNEXES: I. Project Cost . 28 II. Lending by Year . .. .......... ... .... 29 III. Disbursement by Year . 30 Disbursement by Category .o. * .. ... .. .o. 30 IV. BRA Training Budget . a . * . 31 V. Agricultural Credit Recovery . 32 VI. Recovery Rates by Year . 33 PART III STATISTICAL INFORMATION (tables) . 34 1. Related Bank Loans and/or Credits . 34 2. Project Timetable . 34 3. Loan Disbursements: Cumulative Estimated and Actual Disbursements . 35 3(a)o Comparison between Appraisal and Actual Disbursements by Category of Disbursements . 36 3(b). BRA's Project Related Subloans Commitments . 37 BNA's Project Related Subloans Disbursements . 37 3(c). BNA's Project Related Subloans at Year-end and Cumulative . .a . 38 3(d). Project Lending Program: Medium- and Long-Term Credit . 38 4(a). Project Implementation- Key Performance Indicators: BNA's Loan Recovery 1987-91 for Agricultural Lending and Risk Assumed . .. 39 4(b). Financial Ratios . .. 39 5(a). Project Costs and Financing . 40 5(b). Project Financing . 40 6. Status of Covenants . .. .. 41 7(a). Use of Bank Resources: A. Staff Inputs . 42 7(b). Use of Bank Resources: B. Missions . 43 8(a). BRA's Financial Position, Summary of Balance Sheet 1987-1991 as of December 31 . 44 8(b). BRA's Financial Position, Income Statements, 1987-1991 as of December 31 . 45 Map IBRD 149211 PROJECT COMPLETIONREPORT REPUBLIC OF TUNISIA FOURTHAGRICULTURAL CREDIT PROJECT (LOAN 2865-TUN) PREFACE This is the Project Completion Report for the Fourth Agricultural Credit Project (Loan 2865-TUN) for which a loan equivalent to US$30 million to the National Bank of Tunisia-/(BNT, the Borrower) with the guarantee of the Republic of Tunisia, was approved on July 7, 1987. The legal documents were signed on July 22, 1987 and the loan became effective on January 22, 1988. The original closing date was December 31, 1991. The loan was fully disbursed and closed on November 19, 1991, six weeks ahead of schedule. The Project CompletionReport was jointly prepared by the Agricultural OperationsDivision for the Maghreb of the Middle East and North Africa Regional Office (Preface,Evaluation Summary, Parts I and III) and the Borrower (Part II). Preparationof this PCR was started followinga mission to Tunisia in February 1992. Parts I and III were prepared on the basis of information available in the Division's and the Bank's central files. The main sources of informationwere: the appraisalreport No. 6622-TUN, dated June 1, 1987; the Loan Agreement;supervision reports; correspondence between the Bank and the borrower; internal Bank memoranda;and consultationwith implementationofficials and staff during the completion mlssion. This report was also based on the borrower's Project Completion Report dated February 20, 1992 (Part II). In October 1989, BNT (Bauquenationale de Tunslie - the borrower),which Is a majorcommercal bank, merged with BNDA (Banque nationale de ddveloppement agricole - a development bank with no branch network,which benefittedfrom the support of the EEC and EIB) and became Banque nationale agricole (BRA). In this text, BNT and BNA.are used interchangeably, referring to BUT before merger in 1989 and BRA after the merger. - iii - PROJECT COMPLETIONREPORT REPUBLIC OF TUNISIA FOURTHAGRICULTURAL CREDIT PROJECT (LOAN 2865-TUN) EVALUATIONSUMMARY Obiectives 1. The main objectives of the Fourth Agricultural Credit Project in Tunisia were to promote development of a financially sound rural credit system and to finance credit to the agriculturesector in response to market demand and in support of the Government's medium-term adjustment program (1987-1991) formulated in connection with the Agricultural Sector Adjustment Loan (ASAL - Loan 2754-TUN). The Project aimed to: (a) encourage the Banque nationale de Tunisie (BNT) and the banking sector to increase their roles in mobilizing resourcesand in financingagricultural activities by addressingsectoral issues such as on-lendinginterest rates; (b) restructurethe complex institutionaland credit systems; (c) improve the financial viability of agricultural credit operations and harmonize credit terms and conditions; (d) assist Government and BNT in their efforts to develop private investmentin the sector; and (e) promote savings schemes tied to eligibility for credit (3.01). lmglementation Experience 2. During implementation,good progress was made on both BRA's (BNT: see Preface, footnote -1)credit program and the policy and institutionalreforms to which the Government and BRA had agreed. The project started off well with the creation of the agricultural credit reform committee immediately after loan effectiveness,and the loan was fully disbursedon a timely basis. The loan was closed on November 19, 1991, six weeks ahead of the original closing date (paras. 5.01 and 5.03). 3. Except for a reduced pace of lending in 1988 and 1989 due to two consecutive droughts, BNA's lending to farmers was on appraisal targets throughoutthe life of the project, and the number of small-scalefarmers reached exceeded appraisal estimates by 76 percent (increased demand for small loans after the drought, and reduced Government funding from other programs). For cooperativesand agro-industriesthe