Document of
The World Bank
Report No:
Restructuring PAPER
ON A
PROPOSED Project restructuring
of THE
Rural Capacity Building Project
LOAN/CREDIT NUMBER IDA 42010 ET
APPROVED ON June 22, 2006
TO THE
FEDERAL DEMOCRATIC REPUBLIC OF eTHIOPIA
October 21, 2011
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.
ABBREVIATIONS AND ACRONYMS
ARAP / Abbreviated Resettlement Action PlanATVET / Agricultural Technical and Vocational Education Training
CIDA / Canadian International Development Agency
ECX / Ethiopia Commodity Exchange
EIAR / Ethiopia Institute for Agricultural Research
FY / Fiscal Year
IDA / International Development Association
GoE / Government of Ethiopia
M&E / Monitoring and Evaluation
MoA / Ministry of Agriculture
MoFED / Ministry of Finance and Economic Development
NARF / National Agricultural Research Funds
RARF / Regional Agricultural Research Funds
RCBP / Rural Capacity Building Project
Regional Vice President: / Obiageli Katryn Ezekwesili
Country Director: / R. Gregory Toulmin
Sector Manager / Director: / Karen McConnell Brooks
Task Team Leader: / Laketch Mikael Imru
Restructuring Status: Submitted for CD Approval
Restructuring Type: Level two
Last modified on date : 10/19/11
1. Basic Information
Project ID & Name / P079275: ET- Rural Capacity Building Project (FY06)
Country / Ethiopia
Task Team Leader / Laketch Mikael Imru
Sector Manager/Director / Karen Mcconnell Brooks
Country Director / R. Gregory Toulmin
Original Board Approval Date / 06/22/2006
Original Closing Date: / 10/31/2011
Current Closing Date / 10/31/2011
Proposed Closing Date [if applicable] / 06/30/2012
EA Category / B-Partial Assessment
Revised EA Category / B-Partial Assessment-Partial Assessment
EA Completion Date / 01/15/2004
Revised EA Completion Date
2. Revised Financing Plan (US$m)
Source / Original / Revised
BORR / 0.00 / 0.00
CIDA / 17.00 / 19.50
IDA / 54.00 / 41.00
Total / 71.00 / 60.50
3. Borrower
Organization / Department / Location
FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA / Ethiopia
4. Implementing Agency
Organization / Department / Location
Ministry of Agriculture / Ethiopia
5. Disbursement Estimates (US$m)
Actual amount disbursed as of 09/05/2011 42.99
Fiscal Year / Annual / Cumulative
2012 / 17.67 / 60.66
Total / 60.66
6. Policy Exceptions and Safeguard Policies
Does the restructured project require any exceptions to Bank policies? / N
Does the restructured projects trigger any new safeguard policies? If yes, please select from the checklist below and update ISDS accordingly before submitting the package. / N
7a. Project Development Objectives/Outcomes
Current Project Development Objectives/Outcomes
The development objective is to assist the Ethiopian Government to strengthen agricultural services and systems and make them more responsive to clients' needs.
7b. Revised Project Development Objectives/Outcomes [NA]
Ethiopia
Rural Capacity Building Project
P079275
Contents
Page
A. SUMMARY 5
B. PROJECT STATUS 5
C. PROPOSED CHANGES 5
A. SUMMARY
1. This Restructuring Paper proposes a second level restructuring of the Rural Capacity Building Project (RCBP) and accompanying amendments to the Project’s legal documents whereby the project development objective and outcomes remain unchanged. The proposed changes are: (i) an eight-month extension of the closing date of the project up to June 30, 2012; and (ii) reallocation of proceeds for Credit No. 42010. These changes would allow the Government of Ethiopia to complete some essential project activities currently underway and to carry out a rigorous evaluation of the Project’s impacts as well as to document lessons learnt.
B. PROJECT STATUS
2. After a slow start up, implementation of the Rural Capacity Building Project (RCBP) has been proceeding moderately well. Disbursements are strong, particularly on Components 2 (Strengthening Agricultural Extension Services) and Component 3 (Enhancing Institutional Capacity of the Agricultural Research System), which constitute the bulk of the Project’s funding. While implementation is slightly delayed, most activities are close to completion or the prerequisites to move quickly have been fulfilled. All indications are that the Project Development Objective: “to assist the Ethiopian Government to strengthen agricultural services and systems and make them more responsive to clients' needs” will be achieved by the extended closing date. This will be further confirmed by an impact evaluation study to be undertaken in mid FY12
C. PROPOSED CHANGES
3. Reallocations: In a letter to the Country Director on October 12, 2011 (Attachment 1), the Ministry of Finance and Economic Development (MoFED) has formally requested for a reallocation of IDA Credit No. 42010. The Task Team has reviewed budgetary requirements, by category, to allow proper completion of Project activities and proposes that proceeds for Rural Capacity Building Project, Credit No. 42010 be reallocated as follows:
Category of Expenditure / Allocation(expressed in XDR) / % of Financing /
Current / Revised / Current / Revised
(1) Goods, Works and Consultants’ Services, Audits and Training / 100% / 100%
(a) for part 1 of the Project / 1,000,000.00 / 1,000,000.00
(b) for part 2 of the Project / 10,800,000.00 / 12,434,000.00
(c) for part 3 of the Project / 3,520,000.00 / 6,469,000.00
(d) for part 4 of the Project / 800,000.00 / 420,000.00
(e) for part 5 of the Project / 4,320,000.00 / 2,233,000.00
(f) for part 6 of the Project / 530,000.00 / 1,059,000.00
(2) Grants under parts 1(b), 2(c)(i), 2(d), and 3(a) of the Project / 4,790,000.00 / 4,042,000.00 / 100% / 100%
(3) Operating Costs / 2,460,000.00 / 1,066,856.94 / 100% / 100%
(4) Unallocated / 503, 856.94 / 0.00
TOTAL / 28,723, 856.94 / 28,723,856.94 / 100% / 100%
4. The proposed reallocation is necessary to: (i) ensure that planned training and physical capacity building activities are properly implemented; and (ii) to program a small amount of unallocated funds. The RCBP Steering Committee has determined that some operating costs and grants as well as cost overruns on civil works and procurement of goods that have arisen due to inflation can be covered by an allocation from the Government treasury – while project funds are reallocated to training and physical capacity building. An audit report for the year ended 7 July, 2010 was submitted to the Bank on time and found to be of satisfactory quality albeit with a qualified opinion. The Task Team has confirmed that issues raised by the audit are currently being addressed. The next audit report is expected January 7, 2012.
5. Closing date extension: In a letter to the Country Director on May 12 2011 (Attachment 2), MoFED requested that the Project closing date be extended until March 31, 2012. In its letter of October 12, 2011, it has indicated that due to implementation delays beyond the control of the Project, some activities cannot be completed by March 31, 2012 and has asked that the Bank instead extend the closing date to June 30, 2012. The Task Team believes that most project activities will be completed by December 31, 2012 with the following exceptions. (a) long term training; (b) research projects started through the National and Regional Agricultural Research Funds (NARF/RARF); (c) construction of a livestock quarantine station at Metema; (d) delivery and installation of IT infrastructure equipment to support the Ethiopia Commodity Exchange (ECX); (e) implementation of development innovation grants in two agricultural colleges; and (e) M&E activities such as documentation of lessons learnt and evaluation of project impact. Not all of these activities will be completed by the Project; e.g., NARF/RARF research projects will be institutionalized through a national competitive agricultural research grants program; and, while the Project will take most long term training to completion, some students entered the program late with the understanding that the Ministry of Agriculture (MoA) would take over the remaining cost of training. The MoA is committed to do so. The remaining activities can be completed by June 30, 2012. The Task Team therefore agrees with the amended request from MoFED and proposes that the closing date for RCBP, Credit No. 42010 be extended from October 31, 2011 until June 30, 2012. This will be the first extension of the project.
6. The proposed extension is necessary for the following reasons:
- Under its support to market institutions component, the Project has planned the construction and equipping of a quarantine station on a major livestock trade route (through Metema) to maintain quality of Ethiopia’s livestock exports. Construction on the quarantine station was started on July 1, 2010 but, as per the Bank’s recommendation, was halted because the land for the station was acquired without an Abbreviated Resettlement Action Plan (ARAP) while 12 households have been displaced. Preparation of the ARAP is now completed and its implementation underway. Construction is expected to resume soon. Extension of the closing date would give the GoE sufficient time to complete all construction work (being carried out in two phases) once the issue of resettlement is resolved and to fully equip the station once its construction is completed.
ii. Also, under its support to market institutions component, RCBP is providing partial support to bringing information technology solutions for more effective operation of the ECX. Delays in procurement have meant that delivery and installation of IT infrastructure to the Exchange can only be completed in April, 2012. A further two months are required to test the equipment and have the supplier redress any issues before accepting the goods as delivered.
- A key aspect of making agricultural services more responsive to clients’ needs is reorienting Agricultural Technical and Vocational Education Training (ATVET). RCBP has provided institutional strengthening and development innovation grants to federal agricultural colleges towards this end. While the institutional strengthening grants are mostly completed, implementation of the development innovation grants has been slow, as it is linked to complementary activities to elaborate a new ATVET National Strategy and individual strategic plans for the colleges that are in line with the National Strategy and has faced procurement difficulties. Although complementary activities are now finalized, the development innovation grants require additional time to be properly used.
- On the Agriculture Research Component, the Project has introduced competitive grants to support broad based, innovative research projects. National and Regional Agricultural Research Funds (NARF/RARFs) have been set up and research projects awarded. The Ethiopian Institute for Agricultural Research (EIAR) that is the primary implementing agency for the Agriculture Research Component is developing a strategy for mobilizing resources from various private and public stakeholders for the competitive agricultural research grants program. The EIAR has agreed with the Task Team on a timeframe for the institutionalizing of the competitive grants program which is expected to take over from the Project only in late FY 2012. The proposed extension will allow RCBP to continue to support awarded NARF/RARF projects until the competitive agricultural research grants program can take over.
7. In addition to the above, the extension would allow sufficient time for an in depth impact evaluation and associated case studies to allow the GoE to assess the impact from the project and to draw lessons from the implementation of the RCBP for effective implementation of related Projects such as the Ethiopia Agricultural Growth Project.
8. During the most recent supervision and implementation support mission, the Task Team has reviewed and accepted an action plan that lays out remaining activities and timeframe for their completion; and, has agreed on actions to enhance implementation. No action is required for compliance with loan covenants.
ATTACHMENT 1
ATTACHMENT 2
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