Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: ICR00005113 IMPLEMENTATION COMPLETION AND RESULTS REPORT IDA 5517-LK AND IDA 5516-LK ON A CREDIT Public Disclosure Authorized IN THE AMOUNT OF SDR65.70 MILLION (US$101.5 MILLION EQUIVALENT) TO THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA FOR A SKILLS DEVELOPMENT PROJECT Public Disclosure Authorized June 15, 2020 Education Global Practice South Asia Region Public Disclosure Authorized 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 Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective April 17, 2020) Currency Unit = Sri Lanka n Rupee ( LKR) LKR181.19 = US$1 US$1.38 = SDR1 FISCAL YEAR July 1 – June 30 ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank CBA Cost-Benefit Analysis CGTTI Ceylon-German Technical Training Institute CMP Center Management Plan CoE Center of Excellence CPF Country Partnership Framework DLI Disbursement-linked Indicator DLR Disbursement-linked Result DP Development Partner DTET Department of Technical Education and Training EOP End of Project ERD External Resources Department ETA Employment-linked Training Agreement FM Financial Management GDP Gross Domestic Product GoSL Government of Sri Lanka HR Human Resource ICT Information and Communication Technology IMSCC Inter-Ministerial Sector Coordination Committee IO Intermediate Outcome ICR Implementation Completion and Results Report IESC International Executive Service Corps IPF Investment Project Financing IRR Internal Rate of Return ISR Implementation Status Report ISSC Industry Skills Sector Council KPI Key Performance Indicator LFS Labor Force Survey M&E Monitoring and Evaluation MIC Middle-income Country MIS Management Information System MSDELR Ministry of Skills Development, Employment and Labor and Industrial Relations MSDVT Ministry of Skills Development and Vocational Training MTR Midterm Review MYASD Ministry of Youth Affairs and Skills Development NAITA National Apprentice and Industrial Training Authority NIFNE National Institute of Fisheries and Nautical Engineering NPV Net Present Value NVQ National Vocational Qualification NYSC National Youth Service Council PAD Project Appraisal Document PBF Performance-based Funding PDO Project Development Objective PMU Program Management Unit PPP Public-Private Partnership QIS Quality Improvement System QMS Quality Management System RBL Results-based Lending RPL Recognition of Prior Learning SDD Skills Development Division SDP Skills Development Project SSDP Skills Sector Development Program SLGTI Sri Lanka-German Training Institute STEP Skills Toward Employment and Productivity TA Technical Assistance TPV Third-party Verification TVEC Tertiary and Vocational Education Commission TVET Technical and Vocational Education and Training UNIVOTEC University of Vocational Technology VTA Vocational Training Authority Regional Vice President: Hartwig Schafer Country Director: Idah Z. Pswarayi-Riddihough Regional Director: Lynne D. Sherburne-Benz Practice Manager: Mario Cristian Aedo Inostroza Shobhana Sosale, Elizabeth Ninan Dulvy, Task Team Leader(s): Kinley Clemens Salmon ICR Main Contributor: Tashmina Rahman TABLE OF CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 5 A. CONTEXT AT APPRAISAL .........................................................................................................5 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) ..................................... 11 II. OUTCOME .................................................................................................................... 12 A. RELEVANCE OF PDOs ............................................................................................................ 12 B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 13 C. EFFICIENCY ........................................................................................................................... 20 D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 21 E. OTHER OUTCOMES AND IMPACTS (IF ANY) ............................................................................ 21 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 22 A. KEY FACTORS DURING PREPARATION ................................................................................... 22 B. KEY FACTORS DURING IMPLEMENTATION ............................................................................. 24 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 26 A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................ 26 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ..................................................... 28 C. BANK PERFORMANCE ........................................................................................................... 29 D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 31 V. LESSONS AND RECOMMENDATIONS ............................................................................. 31 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 34 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 46 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 48 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 49 ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 56 ANNEX 6. SUPPORTING DOCUMENTS (IF ANY) ..................................................................... 57 ANNEX 7. SUPPORT TO SSDP FROM OTHER DEVELOPMENT PARTNERS ................................ 59 ANNEX 8. DETAILED DESCRIPTION OF RESULTS-BASED COMPONENT 1 ................................. 63 ANNEX 9. PROPOSED RESTRUCTRING .................................................................................. 65 ANNEX 10. ACHIEVEMENT OF DLIS UNDER SRI LANKA SKILLS DEVELOPMENT PROJECT ......... 67 ANNEX 11. STUDENTS RECRUITED AND GRADUATED FROM PUBLIC TRAINING INSTITUTIONS68 ANNEX 12. REVIEW OF THE SDP CHOICE OF KEY PERFORMANCE INDICATORS ...................... 69 ANNEX 13. SUMMARY OF BORROWER’S PROJECT COMPLETION REPORT ............................. 71 ANNEX 14. CHANGES IN LEADERSHIP DURING SSDD IMPLEMENTATION ............................... 76 The World Bank Skills Development Project (P132698) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P132698 Skills Development Project Country Financing Instrument Sri Lanka Investment Project Financing Original EA Category Revised EA Category Partial Assessment (B) Partial Assessment (B) Organizations Borrower Implementing Agency Ministry of Skills Development, Employment and Labour Ministry of Finance, Economic and Policy Development Relations Project Development Objective (PDO) Original PDO The Project Development Objective is to expand the supply of skilled and employable workers by increasing access to quality and labor market relevant training programs. Page 1 of 77 The World Bank Skills Development Project (P132698) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 21,700,000 2,380,603 0 IDA-55160 79,800,000 56,123,462 47,812,019 IDA-55170 Total 101,500,000 58,504,065 47,812,019 Non-World Bank Financing 0 0 0 Borrower/Recipient 417,000,000 0 0 Asian Development Bank 100,000,000 0 0 KOREA, Govt. of 26,000,000 0 0 GERMANY: German Technical Assistance 17,000,000 0 0 Corporation (GTZ) Total 560,000,000 0 0 Total Project Cost 661,500,000 58,504,065 47,812,019 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 20-Jun-2014 23-Oct-2014 29-Nov-2017 31-Dec-2019 31-Dec-2019 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 23-Sep-2019 47.81 Change in Implementing Agency Change in Components and Cost Cancellation of Financing Reallocation between Disbursement Categories Change in Institutional Arrangements Change in Implementation Schedule Page 2 of 77 The World Bank Skills Development Project (P132698) KEY RATINGS Outcome Bank Performance M&E Quality Moderately Unsatisfactory Moderately Unsatisfactory Modest RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 06-Oct-2014 Satisfactory Satisfactory 0 02 17-Apr-2015 Satisfactory Satisfactory 0 03 19-Nov-2015 Satisfactory Moderately Satisfactory 6.58 04 03-Jun-2016 Satisfactory Moderately Satisfactory 6.58 05 31-Dec-2016 Satisfactory Moderately Satisfactory 21.84 06 26-Jun-2017 Moderately Satisfactory Moderately Satisfactory 34.66 Moderately 07 16-Jan-2018 Moderately Satisfactory 41.24 Unsatisfactory Moderately 08 27-Jul-2018 Moderately Unsatisfactory 45.65 Unsatisfactory 09 30-Jan-2019 Unsatisfactory Unsatisfactory 45.65 10 16-Aug-2019 Unsatisfactory Unsatisfactory 47.81 SECTORS AND THEMES Sectors Major Sector/Sector (%) Education 100 Tertiary Education 30 Workforce Development and