Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) Report Number: ICRR0023595 1. Project Data Project ID Project Name P150930 MA: Large Scale Irrigation Modernization Country Practice Area(Lead) Morocco Water L/C/TF Number(s) Closing Date (Original) Total Project Cost (USD) IBRD-85140 31-Dec-2022 125,877,589.20 Bank Approval Date Closing Date (Actual) 08-Jul-2015 31-Dec-2022 IBRD/IDA (USD) Grants (USD) Original Commitment 150,000,000.00 0.00 Revised Commitment 150,000,000.00 0.00 Actual 125,877,589.20 0.00 Prepared by Reviewed by ICR Review Coordinator Group Hassan Wally Ebru Karamete Ramachandra Jammi IEGSD (Unit 4) 2. Project Objectives and Components DEVOBJ_TBL a. Objectives The Project Development Objective (PDO) of the Large Scale Irrigation Modernization Project (PMGI) as articulated in the Loan Agreement (LA, page 5) was identical to the one stated in the Project Appraisal Document (PAD, paragraph 20) and aimed to: "(i) for the Doukkala ORMVA*, the Gharb ORMVA, the Haouz ORMVA and the Tadla ORMVA, to provide an improved water service to Page 1 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) farmers; and (ii) for targeted farmers in the Project Area, to have better access to improved irrigation technologies." *ORMVAs are autonomous agencies tasked with developing the potential of agricultural land through constructing new irrigation schemes. Parsing the PDO. The PDO will be parsed based on the following two objectives: 1. To provide an improved water service to farmers in Doukkala, Gharb, Haouz and Tadla ORMVAs. 2. To have better access to improved irrigation technologies for targeted farmers in the project area. b. Were the project objectives/key associated outcome targets revised during implementation? No c. Will a split evaluation be undertaken? No d. Components The PDO was supported by the following three components: 1. Improving Irrigation Network Infrastructure (appraisal estimate: US$135.00 million, actual cost: US$119.65 million). Under this component, specific investments were made to (i) build pressurized irrigation networks to replace existing gravity networks (Tadla, Haouz); and (ii) renovate existing pressurized irrigation networks (Doukkala, Gharb). Component activities, included detailed studies, including topographic works and laboratory tests; technical assistance for monitoring and control of works; upgrading main irrigation canals and constructing reservoirs to install flow-regulation systems; constructing feeder pipes for areas that benefit from gravity pressurization and modernizing pumping stations for areas that need artificial pressurization; constructing filtration stations; constructing distribution piped networks to replace existing canals and installing outlets and associated devices, including meters, at the block and farm levels, to regulate, measure, and control water delivered to farmers. 2. Supporting Farmers’ Access to Improved Irrigation Technologies (appraisal estimate: US$6.00 million , actual cost: US$4.42 million). This component strengthened farmers’ knowledge and awareness in accessing improved irrigation technologies (mainly drip irrigation) and supported applications for the Agricultural Development Fund (FDA) subsidies to Water User Associations on behalf of farmers. Activities included technical assistance provided to ORMVAs to support farmers by: (i) developing agreements to secure markets for high value crops; (ii) implementing a Market Information System (iii) using the new irrigation equipment and improving their agricultural practices; (iv) monitoring performance of the new irrigation systems; (v) establishing an irrigation alert system; and (vi) carrying out awareness campaigns for the sustainable use of groundwater by farmers. 3. Supporting the Project Implementing Entities to Manage the Irrigation Network and to Implement the Project (appraisal estimate: US$9.00 million, actual cost: US$1.80 million). This component facilitated Project implementation and improved the sustainable O&M of the new hydraulic assets financed Page 2 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) by the Project through training and technical assistance, acquisition of computer equipment, software and associated tools, rehabilitation of selected buildings and the acquisition of office equipment. e. Comments on Project Cost, Financing, Borrower Contribution, and Dates Project Cost. The total project cost at appraisal was estimated at US$187.5 million. The actual cost was US$170.85 million (ICR Data Sheet, page 2). The difference was mainly due to lower loan disbursement as explained below. Financing. The project was an Investment Project Financing (IPF). World Bank financing was a through Loan worth US$150.00 million, corresponding to total project costs excluding taxes. The actual amount disbursed was US$125.88 million or about 84% of the original Loan amount (ICR, Data Sheet, page 2). The project closed with an undisbursed balance of US$24.69 million. The ICR (paragraph 61) noted that a partial cancellation of US$20.00 million that was agreed in principle between the Government and the Bank in 2022, but the Government chose not to proceed with the partial cancellation. Borrower Contribution. The Borrower was expected to provide US$37.50 million of counterpart funds. The actual amount contributed was US$44.98 million, which included US$25.10 million in taxes and US$19.80 million that financed on-farm equipment through the Agricultural Development Fund (FDA) subsidies (ICR, paragraph 44). Dates. The project was approved on July 8, 2015, and became effective seven months later on February 8, 2016. The Mid-term Review (MTR) was conducted on March 4, 2019, or about three years after effectiveness, which was in-line with the PAD estimate to conduct the MTR 36 months after effectiveness. The project closed on its original closing date on December 31, 2022. 3. Relevance of Objectives Rationale Context at Appraisal. Morocco continues to experience significant spatial and inter-annual variability in water availability. The situation was worsened by climate change and growing demand for water. To address this challenge, Morocco launched the National Program of Water Saving in Irrigation to promote a more productive use of water in irrigation through, among others, the modernization of 550,000 ha of the irrigation schemes (of which 220,000 ha were large scale irrigation-LSI- schemes) to provide a water service that met the standards of more efficient irrigation technologies (i.e., drip irrigation). At the time of appraisal, only 66,800 ha of the 220,000 ha in LSI were modernized to more efficient irrigation. This project aimed to support the targeted ORMVAs in Gharb, Doukkala, Haouz and Tadla in providing individual, on- demand, reliable, and equitable access to water for the LSI perimeters, as well as to support farmers to have better access to improved irrigation technologies, which was critical to improve farmers’ income and livelihoods and ensure a significant reduction in aquifer withdrawals. Previous Bank Experience. The Bank has had a long history of cooperation with Morocco in irrigation. This included supporting large scale irrigation improvement projects including the Large-Scale Irrigation Improvement Projects, LSII1 and LSII2, 1985-2000; and Oum er Rbia Basin Irrigated Agriculture Page 3 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) Modernization project, PROMER, 2010-2016. The Bank was also involved in the Water Resources Management Project (1999-2004) which included a significant component regarding the Oum er Rbia basin. The Bank also supported the water sector reform in general, and irrigation in particular through the Water Sector Development Policy Loan, DPL, 2006; Morocco Green Plan (PMV) DPL series, 2011 and 2013. Finally, this project is part of a package of integrated operations supported by the World Bank in the Oum er Rbia basin, including water supply and sanitation projects and grant-funded activities to build the capacity of the Oum er Rbia Basin Agency to adapt to climate change. All this makes the Bank well- positioned to support this project. Consistency with Bank Strategies. At appraisal, the PDO was in line with World Bank's the Country Partnership Strategy for Morocco (CPS, FY2014-FY2017). The project contributed to the Strategic Outcome 1.3: Increase the productivity and value-added of the agri-food sector under Result Area 1: Promoting Competitive and Inclusive Growth. At completion, the PDO continued to be in line with the World Bank Group’s Country Partnership Framework for Morocco (CPF, FY2019-FY2024). Specifically, the project contributed to the achievement of Objective 9: Improve access to sustainable water resources, of the Focus Area C: Promoting Inclusive and Resilient Territorial Development. The CPF set several indicators directly linked to the outcomes of the project, including: 9.1.1: Area of irrigated perimeters adopting efficient irrigation technologies and 9.2: Improve water productivity of the irrigation water service. The PDO was also consistent with the Bank's support to Government in adapting Water Resources Management policies to improve water productivity and the sustainability of service delivery, as well as engaging to improve the efficiency of key water institutions in charge of irrigation, namely ORMVAs. Consistency with Government Strategies/Priorities. At appraisal, the PDO was in line with Morocco's Green Plan (PMV) that aimed to double the agriculture sector’s value-added and create 1.5 million jobs by 2020. The PDO was also in line with the National Programme for Saving Water in Irrigation (PNEEI) which aimed to promote more productive water use by introducing more efficient irrigation technologies (mainly drip irrigation) on 555,000 ha of the country’s irrigated land by 2020. At completion, the PDO continued to be in line with the Government’s strategic priorities reflected in the agriculture strategy: Green Generation 2020-2030. This strategy consolidated the achievements of the previous strategy (Green Morocco Plan) in investing in human capital, improving efficiency in value chains, and promoting a resilient and eco-efficient agriculture. The strategy also aimed to double water efficiency (the added value per cubic meter of water) and improve the resilience of agriculture to climate hazards. This would be achieved through the continuation of the efforts to convert to localized irrigation (namely drip irrigation) and the mobilization of non-conventional water resources. Finally, the PDO was in also line with aligned with the National Program for Water Supply and Irrigation (2020– 2027), which aimed to invest US$1.3 billion to support water productivity in irrigation and modernization of irrigation (switching to localized irrigation) up to 2027. Summary of Relevance of Objectives. The PDO statement was specific and pitched at an adequate level of ambition. At completion, the PDO continued to be in line with Bank strategy and the Government priorities. Therefore, Relevance of Objectives is rated High. Rating Relevance TBL Rating Page 4 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) High 4. Achievement of Objectives (Efficacy) EFFICACY_TBL OBJECTIVE 1 Objective To provide an improved water service to farmers in Doukkala, Gharb, Haouz and Tadla ORMVAs. Rationale Theory of Change (ToC). To achieve the stated objective, the project supported the following activities: build/renovate irrigation networks, establish and implement operation rules for water delivery on demand, and established maintenance rules for the irrigation network. The expected outputs were: water delivered to individual farmers, water delivered to farmers on-demand, and water delivered to farmers in a reliable and fair manner. These activities combined would result in the project's ORMVAs providing farmers with an improved water service. Anticipated long-term outcomes were: farmers have less need to complement surface water with ground water, and aquifers withdrawals to be reduced. The achievement of the PDO was underpinned by one critical assumption: the project areas do not experience a prolonged drought. The ToC reflected activities that were directly connected to the outputs and the outcome in a plausible causal chain. The stated critical assumption was logical and realistic. However, the achievement of the PDO could have been potentially underpinned by other critical assumptions, including the willingness of farmers to pay sufficient water tariffs so that financial capacity of ORMVAs is improved, and the willingness of farmers to cooperate and adopt on-demand irrigation. Furthermore, there was no indicator measuring support on O&M efforts (trainings for ORMVAs) and financial sustainability. In a further communication, the project team explained that O&M efforts were tracked through an indicator measuring “client days of training provided, gender-disaggregated”. The team also explained that according to the PAD (page 30), the targets of these trainings were both ORMVA’s staff and the directorate of irrigation (DIAEA) on Operation and Maintenance topics. Outputs/Intermediate Results Share of clients per metering system reached 0.96 clients per metering system exceeding the target of 0.78. This intermediate indicator assessed the individual access to water by measuring the number of clients divided by the number of metering systems. The target was achieved (from 12.97 value as baseline to 0.96 at project closing); this corresponds to 1 in Doukkala,1 in Tadla, 0.87 in Gharb, and 1 in Haouz. Progress of works on irrigation network reached 99% by completion almost achieving the target of 100%. However, the project M&E system did not track the details of the physical infrastructure supported by the project under component 1. In a further communication, the project team explained that "this tracking was carried out and was reported in the Aide Memoires and the biannual reports of the borrower." Page 5 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) 98% of outlets with flow in line with technical specifications in peak period exceeding the target of 90%. 37,000 client days of training provided exceeding the target of 29,789 client days, of which women received 1,962 client days which was below the target of 4,460 client days. Interruptions in water service in peak period exceeding 48 hours reached 1.95 interruptions which was below the target of one interruption, but an improvement over the baseline of 2.75. However, it was not clear how this was measured and reflected which project area results. Operation rules for water delivery on-demand established and implemented (target achieved). Maintenance rules for water delivery on-demand established and implemented (target achieved). Outcome Improvement of water service is defined by the ICR as individual access to water (rather than collective), on-demand (rather than on rotation), reliable (in case of shut-downs, service is re- established within one to two days, rather than seven to ten days), and is equitable (optimal flow and pressure is maintained throughout the irrigation network, rather than the flow and pressure drop in specific areas / times) (ICR, paragraph 24). By project completion, the number of ORMVA clients who benefitted from the off-farm modernized works and who are likely to receive an improved water service exceeded the overall target (9,274 vs. the achieved 9,814). This indicator was at the output level and showed how many beneficiaries were covered via the modernized works, but did not show how many beneficiaries actually received improved irrigation service (specifically individual and on-demand irrigation service). In addition, the project partially achieved the target for female beneficiaries (751 women, against the target of 1,124). The partial achievement was due to the disconnect between the number of female beneficiaries estimated at appraisal and the realities on the ground. This resulted in a revised number of female beneficiaries from 1,124 to 725 (ICR, paragraph 25). According to the ICR, 98% of the project area (30,000 hectares in the regions managed by the four ORMVAs) had access to water on-demand in peak period substantially achieving the target of 100% (PDO outcome indicator 2). However, the ICR also noted that at project completion measurement was possible only for the Gharb perimeter, where 100 percent of the target was achieved. For the irrigation schemes in Doukkala, Haouz and Tadla, it was not possible to measure the achievement of this indicator target at the time of the project closing of the due to the protracted water shortage (ICR, paragraph 27). Thus, it is not clear how this result was measured. The ICR noted that this was achieved through the accomplishment of the modernization of the irrigation network which included the installation of technologies for filtration, water conveyance and distribution, as well as associated digital tools for operations provision of improved water service and meeting the technical requirements of more efficient irrigation technologies. As for reliability and equity of service, the project achieved its targets as stated by the related intermediate indicators that the interruptions in water service in peak period exceeding 48 hours reached 1.95 interruptions, which was below the target of one interruption, but a notable improvement over the baseline of 2.75. Also, 98% of outlets with flow in line with technical specification in peak period which translate the equitable access to water exceeding the target of 90%, and the responsiveness in addressing water service-related grievances, a crucial aspect of the quality of water service significantly improved from a baseline of 16.25 days to 8 days at completion, exceeding the target of 10 days. Page 6 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) On the other hand, the ICR (paragraph 27) noted that measurement of the PDO indicator “the share of areas with access to water on-demand in peak period” at project closing was only possible for the Gharb perimeter. For the irrigation schemes in Doukkala, Haouz and Tadla, it was not possible to measure the achievement of this indicator target at the time of the project closing due to the protracted water shortage. In the case of Tadla and Doukkala, the measurement of this indicator reached 100% before the water shutdown, while it reached 90% for Haouz before the shutdown. Summary of Efficacy Assessment. The project supported the modernization of the irrigation network infrastructure by replacing the existing gravity networks in Tadla and Haouz and by renovating the existing pressurized irrigation networks by sprinklers in Doukkala and Gharb to ensure the delivery water at the block and farm levels; and also established O&M rules for the management of the modernized irrigation network to achieve on-demand, reliable and equitable access to irrigation water. The project completed modernization of irrigation works and thus exceeded its target for direct beneficiaries who are likely to access water (PDO outcome indicator 1). The project also met or exceeded most of its intermediate results targets, except for one indicator. That said, while the project achieved its PDO outcome targets, as mentioned above, the various elements of improved water service at the farmer beneficiary level could not be verified at completion due to the prevailing drought conditions. Particularly, the share of areas with on demand access to water could not be verified in three out of four project ORMVAs due to the drought and water restrictions. The ICR noted that due to the draught between 2019 and 2022, water allocation rates for the ORMVAs of Gharb, Tadla, Haouz, and Doukkala were 65%, 27%, 19%, and 4%, respectively. On the other hand, the ICR also noted that the government's massive ongoing investments in large water infrastructures such as desalination plants, water transfer systems, and large dams are expected to lead to increased availability of water for irrigation in the targeted areas in the near future, allowing water allocations to return to their historic pre-drought levels (ICR, paragraph 68). The task team reported that the basin transfer between the Sebou basin to the Bouregreg basin will allow to re-allocate water for irrigation purposes (as it was in the pre-drought conditions). This basin transfer is already operational at 50% of its final capacity and will reach 100% in February 2024. This transfer will positively impact the Doukkala and Tadla irrigation schemes. The team also added that the desalinization plants and the transfer between basin (from the northern regions not affected by drought to the southern regions) will increase the water allocation even in conditions of drastic droughts. IEG takes this information provided by the project team in good faith that these additional investments will create the conditions for the irrigation schemes to receive their pre-drought water allocations, as early as February 2024, so that improved water service delivery in project areas are continued. Thus, the efficacy with which this objective was achieved is rated Substantial given the reasonable expectation of the benefit stream being realized with better water availability. Rating Substantial OBJECTIVE 2 Objective To have better access to improved irrigation technologies for targeted farmers in the project area. Page 7 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) Rationale Theory of Change (ToC). To achieve the stated objective, the project supported the following activities: established and implemented a training program and an advisory service for farmers, supported farmers to have access to improved irrigation technologies, supported ORMVAs to review the irrigation subsidies in place, and supported putting an irrigation information system in place. The expected output was the timely provision of subsidies for improved irrigation technologies to farmers. These activities would result in having better access to improved irrigation technologies for targeted farmers in the project area. Anticipated long- term impacts included: farmers adopting improved irrigation technologies, farmers increase production and switch to higher value crops, farmers realize higher income and afford paying their water bill; which would result in financially sustainable ORMVAs with sufficient budget allocation to O&M. The achievement of the PDO was underpinned by one critical assumption: the project areas do not experience a prolonged drought. The majority of activities in the ToC were directly connected to the output and the outcome in a plausible causal chain. However, all the stated activities had one output, which was not comprehensive enough to accommodate the number of activities supported by the project. The stated critical assumption was logical and realistic. However, the achievement of the PDO could have been potentially underpinned by other critical assumptions, including the willingness of farmers to adopt new irrigation technologies. Outputs/Intermediate Results 40.86 % of clients formalized their request for improved irrigation technologies which was below the target of 70%. 46.36% of clients signed a delivery agreement with the ORMVA which was below the target of 61.95%. Outcome The project only achieved 42% of the target for the share of areas with a request for improved irrigation technologies approved (8,670 ha targeted compared to a target of 20,700 ha). The level of achievement varied between different ORMVAs: 8% in Doukkala; 36% in Gharb; 44% in Haouz; and 65% in Tadla. The low achievement of the PDO outcome indicator was attributed to three challenges that the project faced during implementation: (i) severe drought in the project areas, which is considered by this Review the main reason for the underachievement, resulting in water shutdowns, as well as the lack of availability of groundwater resources, which led the farmers and ORMVAs to respectively put on hold and delay the processes of acquiring on-farm equipment with drip irrigation to avoid installing equipment for which the was no immediate use; (ii) the expiration of the joint ministerial decree setting the terms of the state subsidy for hydro-agricultural developments; and (iii) increase in the prices of PVC and other equipment related materials due to the global inflation following the COVID-19 pandemic. The ICR (paragraph 32) explained that farmers and ORMVAs voluntarily slowed down the processing of on-farm equipment because of the interruption in the water supply, which was beyond the project control. That said, the ICR (paragraph 37) stated that the pace of installation of on-farm equipment Page 8 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) was expected to increase once the irrigation service was restored and could potentially reach the target within two years after project closing. Summary of Efficacy Assessment. The project supported strengthening farmers’ knowledge and awareness in accessing improved irrigation technologies (mainly drip irrigation) and facilitated their access to FDA subsidies for the installation of on-farm equipment and efficient management of irrigation systems. However, the project only achieved 42% of its PDO outcome indicator target as noted above. The project also partially achieved its two intermediate indicators. The under achievement was mainly due to the drought conditions and severe water shortages that impacted the project areas, as well as the expiration of state subsidy and increased prices of irrigation technologies. Therefore, the efficacy with which this objective was achieved is rated Modest. Rating Modest OVERALL EFF TBL OBJ_TBL OVERALL EFFICACY Rationale Overall Efficacy is rated Substantial. The project was successful in completing modernization of irrigation structures in targeted project areas and providing on-demand water service to farmers in the Gharb water perimeter. However, the elements of improved water service could not be verified at completion for the irrigation schemes in Doukkala, Haouz and Tadla due to the protracted water shortage that resulted from the prevailing drought conditions. However, the project team provided information that additional investments by the government will create the conditions for the irrigation schemes to receive their pre-drought water allocations soon. Thus, achievement of the first objective is rated Substantial given the reasonable expectation of the benefit stream being realized with better water availability. The project partially achieved its second objective to have better access to improved irrigation technologies for targeted farmers in the project areas, with only 42% of its PDO outcome indicator achieved. Overall Efficacy Rating Substantial 5. Efficiency Economic and Financial Analysis (EFA) Ex-ante Analysis: The EFA at appraisal did not include an overall economic rate of return for the whole project. The analysis provided estimates for the economic internal rate of return (EIRR) for each ORMVA as Page 9 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) follows: Tadla: 18.8%; Haouz: 11.6%; Doukkala: 17.1%; and Gharb: 32.2%. The achievement of full benefits was assumed to occur four years after the completion of the off-farm works. The increase in agricultural water productivity would be realized as a consequence of increase in yield, increase in cropping intensity, and / or switching to high value crops. The economic analysis revealed that the economic justification was the most robust in Gharb and Tadla, based on the projected increase in cropping intensity combined with the introduction and/or expansion of high value crops. The economic internal rate of return (EIRR) was higher in Gharb, due to the lower conversion costs of the network which was already pressurized compared to the gravity network of Tadla; and the higher water availability than in Tadla which allows for the introduction of high value crops like melon, artichoke, and tomato. In Doukkala, the conversion costs were low (similar to Gharb), but returns were expected to be lower than in other areas targeted by the project as only limited change in the cropping pattern is expected. The economic justification in Haouz was the weakest, which was to be expected due to the low water availability along with high conversion costs of the gravity system. A financial analysis was carried out taking the net benefit per hectare as a proxy for the farmers’ income. The increase in net benefit was two-fold in Haouz, three-fold in Tadla and Doukkala, and up to six times in Gharb (PAD, table 26). However, the distribution of financial benefits was skewed, partly because land distribution was highly uneven and partly because different farming systems would benefit differently. Sensitivity analysis. The analysis showed that the economic viability of the project depends strongly on achieving the projected increase in yields under the new cropping pattern. This was particularly evident in Doukkala, where a decrease in 20% of the projected yield makes the EIRR drop to 4% and to 6%. Overall, the ex ante EFA included enough details with realistic assumptions to justify the project investments. Ex-post Analysis: A cost-benefit analysis was conducted at completion to reassess the project’s ex post economic viability, using the methodology adopted at appraisal. The ex post EIRRs for Tadla, Doukla and Gahrb were 12%, 13.7%, 22.9%, respectively, which were all below the ex ante estimates as mentioned above. The analysis did not include an estimate for Haouz ORMVA. A Financial analysis was carried out using the net profit per hectare as a proxy for farmers' incomes showed that the increases in net margin almost tripled in Tadla, 3.5 times in Doukkala and 4.7 times in Gharb (ICR, table 6). Sensitivity analysis. The analysis examined changes in the EIRR as expected returns decrease. The expected returns continued to be the primary factor that could potentially lead to a decline in the project’s profitability. The threshold values for the decline in returns for an EIRR of 12% were also determined by sector. A 20% drop in projected returns caused the EIRRs of Tadla, Doukla and Gharb to fall to levels below 10%. Implementation efficiency. The project closed on its original closing date on December 31, 2022. The project benefitted from competitive bidding, which resulted in an estimated US$5.2 million in savings on Component 1 works compared to the appraisal estimates. The project closed with an undisbursed balance of US$24.69 million due to the postponement of: construction works of the reservoir in the Haouz (a saving of US$8 million) as alternative technical designs were being assessed to meet storage needs; the rehabilitation the Doukkala Bas Service canal (resulting in an undisbursed amount of US$2 million); and the construction of the second part of the Tadla basin. Also, hiring individual expertise/consultants for technical assistance under component 3, Page 10 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) instead of consulting companies, as well as the activities (mainly TA) to be implemented by the DIAEA, resulted in savings of US$4.2 million. Overall, the project was implemented in an efficient manner. Summary of Efficiency Assessment. The ex post EIRRs for Tadla, Doukla and Gahrb were all lower when compared to the appraisal estimates. Lower EIRR estimates at completion were mainly a result of the slowdown in the process of installing on-farm drip equipment, and this was exacerbated by the reduction in water allocation observed in certain perimeters due to drought conditions. Consequently, the projected increase in yields under the new cropping pattern were not achieved as envisioned. Therefore, efficiency is rated Modest. Efficiency Rating Modest a. If available, enter the Economic Rate of Return (ERR) and/or Financial Rate of Return (FRR) at appraisal and the re-estimated value at evaluation: Rate Available? Point value (%) *Coverage/Scope (%) 0 Appraisal 0 Not Applicable 0 ICR Estimate 0 Not Applicable * Refers to percent of total project cost for which ERR/FRR was calculated. 6. Outcome Relevance of Objectives was rated Substantial. Overall Efficacy was rated Substantial. The project completed the planned irrigation infrastructure works to deliver irrigation water, and achieved its objective of providing improved water service to farmers in the Gharb water perimeter, however, improved water service delivery could not be verified at completion in the Doukkala, Haouz and the Tadla ORMVAs. That said, the ICR and the project team confirmed that additional investments by the government will create the conditions for the irrigation schemes to receive their pre-drought water allocations as early as February 2024. The project did not meet the targets set for to measure the achievement of the second objective to have better access to improved irrigation technologies for targeted farmers in the project areas, with only 42% of its PDO outcome indicator achieved. Efficiency was rated Modest. The ex-post EIRRs for Tadla, Doukla and Gahrb were all lower when compared to the appraisal estimates due to limited water availability for irrigation and partial uptake of irrigation technologies as a result of the prolonged draught in the project areas. Based on the assigned ratings for the three Outcome criteria, Outcome is rated Moderately Satisfactory. a. Outcome Rating Page 11 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) Moderately Satisfactory 7. Risk to Development Outcome The following risks may potentially impact the Development Outcome: 1. Institutional risk. While the recent creation of a National Office of Agricultural Advisory (ONCA) offers numerous benefits, such as enhancing the advisory capacity for farmers to access improved irrigation technologies and substantial budgets, there is still a residual risk as the newly established institution lacks the accumulated experience of the ORMVAs. 2. Technical risk. While the project addressed aquifer depletion by raising awareness among farmers on sustainable groundwater usage, sustainable groundwater management is closely related to large-scale hydraulics. There is still a need to increase efforts towards sustainable groundwater management. Morocco is currently building significant infrastructure, such as water transfer and desalination plants, which will secure the availability of surface water in the coming years and contribute to the sustainable management of groundwater resources. 3. Financial risk. To sustain improving water productivity, a significant budget must be allocated. With advancements in technology, it may prove profitable in the future to better utilize the irrigation support services provided by start-ups that offer smart and targeted solutions. These innovations have the potential to significantly improve water productivity, enabling farmers to do more with less. Financial sustainability is also a concern given that it remains unclear whether the farmers will pay sufficient water tariffs so that ORMWA's can cover their operational and maintenance costs. The following risk is emphasized by IEG: 4. Environmental risk. The project areas continue to be prone to climate change impacts, which results in decreased precipitation. The benefits of the project investments cannot be realized except when adequate water allocations are secured for the project ORMVAs. Also, irrigation projects need to reflect more efficiency through a climate-smart design. 8. Assessment of Bank Performance a. Quality-at-Entry Strategic relevance and approach. The project was strategically relevant and in line with the goals of the Government of Morocco to ensure greater returns at the farm and overall economy level in light of increasing water scarcity. The PDO was clearly defined and realistic, and in line with the Bank strategies and Government priorities (see section 3 for details). Technical, financial, and economic aspects. The project design adopted an integrated approach through combining structural and nonstructural measures. It included an appropriate mix of works, technical assistance, and capacity building, with an implementation period of seven Page 12 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) years to allow sufficient time for implementing irrigation network investments and to provide adequate support to ORMVA and the farm level. The project financed the off-farm investments, while the national system of subsidies (FDA) was used for on-farm irrigation investments. This emphasized the role of State in funding the main conveyance system, and the responsibility of the farmers to finance on-farm irrigation equipment and maintenance, which was expected to ensure their sustainable commitment. The PAD included an economic and financial analysis that lacked an overall estimate of an economic rate of return. Poverty, gender, and social development aspects. The poor farmers in project areas would benefit from improved water services and technical support to access better irrigation technologies and agricultural advice, which was expected to improve their productivity and income. No specific gender analysis was conducted during project appraisal to identify existing gaps between men and women related to project activities. The project included a sub-indicator on the number of the female beneficiaries. Environmental and fiduciary aspects. The project design included appropriate environmental and social risk assessments with adequate mitigation strategies. The environmental and social focal points were key to successfully managing the grievance systems and responding to the various information and assistance needs of the project affected people (PAPs) and beneficiaries. Design featured adequate procurement and financial management (FM) arrangements which were based on the use of the existing accounting and financial systems and procedures in the ORMVAs. Implementation arrangements. The Directorate of Irrigation and Rural Infrastructure (DIAEA) and the Doukkala, Tadla and Haouz ORMVAs had significant experience of Bank project requirements from their prior experience with the Bank-funded Oum er Rbia Basin Irrigated Agriculture Modernization Project (PROMER). The El Gharb ORMVA, received support from the DIAEA to ensure its on-boarding in the Project. The project relied on the ORMVAs to provide advisory service to farmers through private technical assistance. Implementation arrangements also benefited from the early launch of the technical assistance to farmers; clear and simplified administrative procedures for accessing to FDA subsidies to accelerate farmers’ access to improved irrigation technologies; and allocation of sufficient resources for capacity building of ORMVAs in the O&M of pressurized systems to ensure a successful transition from gravity to pressurized networks. Risk assessment. The overall risk to achieving the PDO was rated Substantial. Eight main risks were identified at appraisal with risks related to the technical design of project, the institutional capacity for implementation and sustainability, and stakeholders all rated substantial. Risk assessment included adequate mitigation plans. However, the risk of an extended drought during implementation was not anticipated. A more climate informed design and embedding proper water accounting in the investment studies and to ensure intersectoral water allocation to secure water supply for irrigation was necessary to mitigate climate related risks. M&E arrangements. The M&E system for this project was built on the system that was used for the PROMER using the information system of DIAEA to monitor the implementation of project activities. M&E design had significant shortcomings as the RF lacked indicators to track the relevant intermediate outcomes as well as the physical infrastructure financed by the project (see section 9 a for details). Summary of QAE Assessment. The project was strategically relevant, with a clearly defined and realistic PDO. Design adopted an integrated approach through combining structural and nonstructural measures and reflected adequate environmental and fiduciary aspects. Implementation arrangements Page 13 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) were adequate and risk assessment was thorough. However, the risk related to the probability of an extended drought was not anticipated at appraisal, a climate informed design is needed to mitigate such risks in water scarce countries such as Morocco. Finally, M&E arrangements were adequate, but M&E design was deficient. Overall, Quality at Entry is rated Moderately Satisfactory. Quality-at-Entry Rating Moderately Satisfactory b. Quality of supervision The project was implemented under challenging environmental conditions due to the extended drought in the project areas that resulted in a cumulative decline in precipitation by up to 40% (ICR, paragraph 67). The Bank conducted ten implementation support missions. Missions were well staffed with experts in irrigation, rural engineering, water resources management, M&E, FM, procurement, environmental and social safeguards. During the COVID-19 pandemic, supervision missions were conducted virtually with DIAEA and the ORMVAs. The approval of the follow-on operation, the Resilient and Sustainable Water in Agriculture Project (RESWAG) in 2022 enabled the efficient use of both World Bank and Government resources through combined supervisions of both operations. RESWAG design was also informed by the experience and lessons learned from this project. The Bank conducted support missions for the operationalization of the M&E system in 2019, 2021 and 2022 under the FAO-World Bank cooperation framework to benefit the staff of the Regional Project Management Units, the Central Project Management Unit, and to support technical assistance under component 2. The Bank team could have attempted to reformulate the PDO outcome indicator "area with access to water on-demand in peak period” to better assess the achievement of the objective in light of the prevailing drought conditions. Summary of Quality of Supervision Assessment. The Bank team successfully guided the project implementation under challenging environmental conditions to partially achieve the project outcomes due to the prevailing drought. Overall, Bank performance is rated Satisfactory. Based on the assigned ratings to QAE and Quality of Supervision, Overall Bank Performance is rated Moderately Satisfactory. Quality of Supervision Rating Satisfactory Overall Bank Performance Rating Moderately Satisfactory Page 14 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) 9. M&E Design, Implementation, & Utilization a. M&E Design The PAD (Annex 3, figure 6) included a theory of change (ToC) that reflected the relationship between the project activities, intermediate results, objectives and higher-level objectives in a plausible causal chain. The PDO was measured by three PDO outcome indicators: 1. Direct project beneficiaries, 2. Area with access to water on-demand in peak period, and 3. Area with a request for improved irrigation technologies approved. While the outcome indicators were connected to the objectives, they were pitched at the intermediate outcome level rather than the outcome level. The Results Framework (RF) also included ten intermediate results indicators (IRIs) to track the progress of the different project activities. The IRIs were measurable, included baseline data where relevant, had reasonable targets, and were connected to the project activities. However, the RF lacked indicators to measure indicators at the beneficiary level such as: on demand water received by beneficiary farmers, the improvement in agricultural water productivity, the improvement in the percentage of farmers paying for water service, as well as the increase in the area of high value crops, all of which were elements reflected in the ToC reported in the PAD and were connected to the project activities. Also, the physical infrastructure financed by the project was not tracked by detailed indicators. In a further communication, the project team explained that "these high-level objectives have been monitored throughout the project (as well as the evolution of the high-level objectives changes relative to the predecessor project, the PROMER), but they were not included in the RF as it was unlikely that any improvement would be observable until after several years of use of modernized assets." Overall, the M&E design was deficient as it lacked critical indicators to comprehensively assess the achievement of the PDO. b. M&E Implementation Implementation relied on two types of data monitoring: (i) during the first three of implementation the project used the system developed under the PROMER through the information system of DIAEA to monitor the implementation of project activities (such as calls for tenders, equipment, technical assistance, and purchase of materials; and (ii) a results-oriented monitoring system for the indicators in the results chain. In addition to tracking the implementation of this project's activities and results. The project strengthened the monitoring of activities in a homogeneous manner between ORMVAs. However, the establishment of baselines for the different Project indicators was completed only in 2019 (for the ORMVAs of Tadla and Haouz) and in 2021 (for the ORMVAs of Doukkala and Gharb) during the update of land tenure status in the irrigation schemes. The ICR (paragraph 74) reported that while some indicators were revised, these revisions were not formal. This included the number of female beneficiaries. The PDO indicator “Area with access to water on-demand in peak period” could have been reformulated to better assess the achievement of the objective in light of the prevailing drought conditions (ICR, paragraph 74). Page 15 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) The ORMVAs conducted several surveys to assess the impact of modernization of irrigation in the targeted perimeters. c. M&E Utilization The M&E system provided inputs for the ORMVAs of Tadla and Haouz on the quality and quantity of surface and groundwater. This enabled them to anticipate issues on the use of water resources for irrigation, and prompted the ORMVAs to organize trainings and workshops for farmers to raise their awareness of good agriculture practices for the preservation of natural resources (ICR, paragraph 77). The M&E reports were used by the DIAEA and ORMVAs to review and adjust implementation plans. Also, M&E data allowed the identification of performance issues, which enabled the project management to propose corrective measures to enhance project effectiveness. Two notable examples were: first, the FDA subsidy decree was not only renewed with a specific emphasis on small farmers, but it also considered the adjustment of the subsidy ceiling to address inflation and rising prices; and second, to expedite the acknowledgement of on-farm equipment work completion, the ORMVA of Tadla engaged a consultant. According to the ICR (paragraph 76) "these measures played a crucial role in improving overall project outcomes." The ICR (paragraph 78) noted the design of the M&E system of the follow-on project (RESWAG) was informed by the M&E experience of this project. Summary of M&E Quality. M&E design lacked relevant indicators to assess critical elements of the project. Implementation was adequate, but design weaknesses were not addressed. Utilization was demonstrated in guiding management decisions and informing the design of the follow-on project. Overall, M&E Quality is rated Modest. M&E Quality Rating Modest 10. Other Issues a. Safeguards The project was classified as an environmental Category B as no major negative irreversible environmental impacts were foreseen as a result of the project activities. The project triggered two environmental safeguards: Environmental Assessment (OP/BP 4.01) and Safety of Dams (OP/BP 4.37), and one social safeguard: Involuntary Resettlement (OP/BP 4.12). OP 4.37 on Safety of Dams was triggered because the irrigation sectors targeted by the project were dependent on existing dams. National legislation for monitoring and management of dams was reviewed by the World Bank and found it to be fully in line with the requirements of the policy. The Borrower prepared an Environmental and Social Impact Assessment (ESIA), including an Environmental Management Plan (EMP), a Resettlement Policy Framework (RPF) and a Framework Land Acquisition Plan (FLAP). Page 16 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) Compliance with Environmental Safeguards. According to the ICR (paragraph 81) "EMP implementation in the Doukkala, Haouz, Tadla and Gharb offices was satisfactory." Compliance with Social Safeguards. At Project closing, 94 Project Affected People (PAPs) out of 135 were fully compensated. The remaining 41 PAPs will need to follow a judicial process because they could not be compensated due to land title disputes, non-agreement on compensation price, and non- responsiveness (ICR, paragraph 84). The project had a fully functional Grievances Redress Mechanism (GRM). The compensation amount for these PAPs is in an escrow account awaiting the final resolution of the cases. The legal departments of the ORMVAs are monitoring this process. b. Fiduciary Compliance Financial Management (FM). The project complied with Bank financial reporting and external audit reports were timely submitted with unqualified audit opinions. However, FM faced some challenges at the beginning of the project due to the lack of harmonized financial reporting formats and models. This resulted in difficulties in preparing the financial statements. FM benefitted from capacity-building actions provided by the Bank. The overall performance of the project's financial management was satisfactory as reported in the final ISR. Procurement. Procurement Post Reviews (PPRs) were conducted annually with no major issues raised. There were no cases of fraud or corruption reported or identified during the PPRs. The recommendations of the PPRs were timely addressed by the implementation agencies. However, some contracts faced delays mainly due to the drought in the final years of the project. Also, some companies did not invite the ORMVAs for monthly site visits to check on the progress of the work and did not submit monthly invoices. Field visits by the Bank fiduciary team and information sessions on disbursements helped to address this issue. Procurement in the last ISR was rated Satisfactory. c. Unintended impacts (Positive or Negative) None. d. Other None. 11. Ratings Reason for Ratings ICR IEG Disagreements/Comment Moderately Outcome Moderately Satisfactory Satisfactory Page 17 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) QAE was rated Moderately Bank Performance Satisfactory Moderately Satisfactory Satisfactory. Design had significant Quality of M&E Substantial Modest shortcomings. Quality of ICR --- Substantial 12. Lessons The ICR included six lessons. the following three are emphasized with some adaptation of language: 1. Water efficiency in agriculture can be effectively supported not only via infrastructure investments but also by involving technical assistance, digital innovations, and agricultural advisory services to farmers. The project experience showed that digital solutions, including precise irrigation using irrigation sensors, need to be embedded in the design of an irrigation modernization project to enable the most efficient and economical way of watering crops. Also, modernization in irrigation should be complemented by strengthening the capacities of the agricultural advisory services to farmers. Furthermore, flexible management of water allocations for farmers (such as providing farmers with water quotas information at the beginning of the season and allowing for the exchange of quotas) as well as the joint management of groundwater and surface water resources, given the high interrelation between the two are needed. 2. To alleviate climate risks related to water scarcity, it is important that irrigation projects comprise a climate-informed design. The project experience showed that when irrigation modernization projects are impacted by the drought their technical and economic benefits can be jeopardized. These operations would be more efficient if their designs were more climate informed. Proper water accounting should also be embedded in the investment studies. In addition, ensuring intersectoral water allocation management is key to secure water supplies for irrigated agriculture to effectively execute the desired cropping patterns. 3. Establishing a collaborative leadership for the development approach is key to achieving an efficient results-oriented implementation process. The project experience showed that involving all parties in the planning and execution stages, namely the Directorate of Irrigation and Rural Infrastructure (DIAEA) and the Regional Agricultural Development Offices (ORMVAs) as well as the Water Users Associations (WUAs), the project-built consensus, enhanced coordination, and ensured the ownership on the part of the actors. Also, effective collaboration between central and regional actors helped to prevent implementation lags. This also ensured compliance with Environmental safeguards; the involvement of the Regional Project Management Unit (RPMU) members; sharing of work schedules with the environment focal points (EFPs), support to the EFPs in the resolution of the non-conformities, and involvement of the EFPs at the temporary and final approvals of the works. 4. A participatory process that includes farmer beneficiaries, as well as institutional stakeholders from the beginning of irrigation projects is more likely to ensure ownership for improved irrigation technologies. The project experience showed that irrigation modernization projects remain highly dependent on the commitment of farmers to sustain the momentum by investing in on-farm equipment. However, in many cases, projects start the engagement with the farmers only after the commencement or even completion of construction. As noted in the Page 18 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) beneficiary survey, the need for a proactive and early involvement of farmers in the process is a key requirement for ensuring ownership of the irrigation technologies. The users’ involvement needs to start from the beginning, to enable participatory discussions on agribusiness models, irrigation demand, service agreements and beneficiaries’ responsibilities, and to inform irrigation system planning, design, construction, and O&M. In addition to the farmers, it is essential for an irrigation modernization project to also engage institutional water management stakeholders, particularly River Basin Organizations, at an early stage. 13. Assessment Recommended? Yes ASSESSMENT_TABLE Please Explain The project experienced a severe shortage in water allocations for irrigation due to the prevailing drought condition. An accurate assessment of the project outcomes needs to be verified on the ground at a better time when the ORMVAs receive adequate water allocations. This would allow verifying the project investments and ensure that the improvement in water service to farmers was achieved. 14. Comments on Quality of ICR Quality of Evidence. While the ICR provided an evidence base to support the achievements reported, it was barely enough to assess the project outcomes. Quality of Analysis. The ICR provided clear linking between evidence and findings and used the evidence base to serve the arguments under the different sections. However, the assessment of outcomes was not comprehensive enough due to M&E design weaknesses. Lessons. Lessons reflected the project experience and were based on evidence and analysis. Consistency with guidelines. The ICR used the available data to justify most of the assigned ratings. Conciseness. The ICR provided adequate coverage of project activities and candidly reported on most shortcomings in a concise form. Summary of the Quality of ICR Assessment. While the ICR’s assessment of outcomes particularly for the first objective was not comprehensive enough, the lessons drawn by the ICR were very relevant. Most sections were concise and reflected relevant information. Overall, the Quality of the ICR is rated Substantial. a. Quality of ICR Rating Substantial Page 19 of 20 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review MA: Large Scale Irrigation Modernization (P150930) Page 20 of 20