Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: ICR00004560 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-81890 and IBRD-84030) ON A LOAN Public Disclosure Authorized IN THE AMOUNT OF US$30 MILLION AND THE ADDITIONAL FINANCING LOAN IN THE AMOUNT OF US$50 MILLION TO THE REPUBLIC OF AZERBAIJAN FOR THE Public Disclosure Authorized SECOND RURAL INVESTMENT PROJECT {March 31, 2020} Social Development Global Practice Europe and Central Asia Region Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective September, 30, 2019) Currency Unit = A ZN AZN 1.70= US$1 US$ 0.59= AZN 1 FISCAL YEAR July 1 - June 30 Regional Vice President: Cyril E Muller Country Director: Sebastian Molineus Regional Director: Steven N. Schonberger Practice Manager: Kevin Tomlinson Task Team Leader(s): Tara Sharafudheen ICR Main Contributor: Maria Manuela Faria ABBREVIATIONS AND ACRONYMS AF Additional Financing ARWA Azerbaijan Rural Women’s Association AZN Azeri Manat AzRIP Azerbaijan Rural Investment Project BFM Beneficiary Feedback Mechanism CBP Community Business Promoter CDD Community Driven Development CIG Common Interest Group CPF Country Partnership Framework CPS Country Partnership Strategy ERR Economic Rate of Return EMF Environmental Management Framework ExComm Executive Committees FM Financial Management GDP Gross Domestic Product GIS Geographic Information System GoA Government of Azerbaijan ICR Implementation Completion and Results Report IE Impact Evaluation ISR Implementation Status and Results Report LLC Limited Liability Company M&E Monitoring and Evaluation NPV Net Present Value OP/BP Operational Policy/Bank Procedure O&M Operations and Maintenance PAD Project Appraisal Document PAT Project Assistance Team PDO Project Development Objective PMU Project Management Unit POM Project Operations Manual PP Procurement Plan RGAC Regional Grant Approval Committee RF Results Framework SCD Systematic Country Diagnostic ROO Regional Operations Office WDEG Women’s Development and Enterprise Groups 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) ..................................... 10 II. OUTCOME .................................................................................................................... 13 A. RELEVANCE OF PDOs ............................................................................................................ 13 B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 14 C. EFFICIENCY ........................................................................................................................... 17 D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 17 E. OTHER OUTCOMES AND IMPACTS (IF ANY) ............................................................................ 18 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 20 A. KEY FACTORS DURING PREPARATION ................................................................................... 21 B. KEY FACTORS DURING IMPLEMENTATION ............................................................................. 21 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 ....................................................................................... 27 V. LESSONS AND RECOMMENDATIONS ............................................................................. 27 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 30 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 40 ANNEX 3. PROJECT COST BY COMPONENT IN US$ ................................................................ 42 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 43 ANNEX 5. BORROWER AND OTHER STAKEHOLDER COMMENTS ........................................... 45 ANNEX 6. SUMMARY OF TECHNICAL AUDIT AND EVALUATION SURVEYS.............................. 52 ANNEX 7. SUPPORTING DOCUMENTS .................................................................................. 55 ANNEX 8. REVISIONS TO RESULTS FRAMEWORK .................................................................. 56 The World Bank Second Rural Investment Project (P122944) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P122944 Second Rural Investment Project Country Financing Instrument Azerbaijan Investment Project Financing Original EA Category Revised EA Category Partial Assessment (B) Organizations Borrower Implementing Agency Republic of Azerbaijan State Service on Agricultural Projects and Credits Project Development Objective (PDO) Original PDO The Project Development Objective is to improve access to and use of community-driven rural infrastructure and expand economic activities for rural households. This would be achieved through: (i) the provision of grants to finance eligible demand-driven micro-projects in rural infrastructure; (ii) the provision of training and consultants’ services to support micro-project development by enhancing the capacity of engaged local stakeholders in all aspects of micro-project program development; (iii) building opportunities for rural employment and livelihood support services through the provision of training and consultants’ services to carry out pilot livelihood support services in six communities; and, (iv) supporting project management capacity at the Project Management Unit and its Regional Operations Offices for the purposes of effective management, implementation and monitoring and evaluation of Project activities. PDO as stated in the legal agreement The objectives of the project are to improve access to, and use of community-driven rural infrastructure, and to expand economic activities for rural households. Page 1 of 57 The World Bank Second Rural Investment Project (P122944) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 30,000,000 30,000,000 30,000,000 IBRD-81890 50,000,000 50,000,000 50,000,000 IBRD-84030 Total 80,000,000 80,000,000 80,000,000 Non-World Bank Financing 0 0 0 Borrower/Recipient 20,000,000 50,000,000 49,394,989 Local Beneficiaries 3,600,000 10,070,000 11,519,635 Total 23,600,000 60,070,000 60,914,624 Total Project Cost 103,600,000 140,070,000 140,914,624 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 05-Jul-2012 04-Dec-2012 30-Sep-2015 30-Sep-2017 30-Sep-2019 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 09-Jul-2014 21.42 Additional Financing 19-Sep-2018 79.80 Change in Loan Closing Date(s) KEY RATINGS Outcome Bank Performance M&E Quality Moderately Satisfactory Moderately Satisfactory Substantial Page 2 of 57 The World Bank Second Rural Investment Project (P122944) RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 22-Jan-2013 Satisfactory Satisfactory 1.00 02 27-Feb-2013 Satisfactory Satisfactory 2.56 03 20-Jul-2013 Satisfactory Highly Satisfactory 7.13 04 27-Oct-2013 Satisfactory Highly Satisfactory 9.38 05 22-Mar-2014 Satisfactory Highly Satisfactory 15.94 06 23-Sep-2014 Satisfactory Highly Satisfactory 26.74 07 28-May-2015 Satisfactory Highly Satisfactory 40.11 08 17-Jul-2015 Satisfactory Highly Satisfactory 44.45 09 30-Oct-2015 Satisfactory Highly Satisfactory 51.52 10 29-Feb-2016 Highly Satisfactory Highly Satisfactory 60.66 11 19-Sep-2016 Highly Satisfactory Highly Satisfactory 73.36 12 23-Mar-2017 Highly Satisfactory Highly Satisfactory 78.27 13 27-Sep-2017 Highly Satisfactory Highly Satisfactory 78.27 14 09-Apr-2018 Satisfactory Satisfactory 79.80 15 09-Nov-2018 Satisfactory Satisfactory 79.80 SECTORS AND THEMES Sectors Major Sector/Sector (%) Public Administration 5 Other Public Administration 5 Energy and Extractives 15 Energy Transmission and Distribution 15 Page 3 of 57 The World Bank Second Rural Investment Project (P122944) Social Protection 15 Social Protection 15 Transportation 50 Rural and Inter-Urban Roads 50 Water, Sanitation and Waste Management 15 Other Water Supply, Sanitation and Waste 15 Management Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Private Sector Development 100 Jobs 100 Public Sector Management 7 Public Administration 7 Administrative and Civil Service Reform 2 Municipal Institution Building 5 Social Development and Protection 7 Social Inclusion 7 Participation and Civic Engagement 7 Human Development and Gender 7 Gender 7 Urban and Rural Development 79 Rural Development 79 Rural Non-farm Income Generation 12 Rural Infrastructure and service delivery