Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00005830 IMPLEMENTATION COMPLETION AND RESULTS REPORT IDA-58010 ON A CREDIT IN THE AMOUNT OF SDR 3.7 MILLION (US$ 5 MILLION EQUIVALENT) TO THE REPUBLIC OF CABO VERDE FOR THE COMPETITIVENESS FOR TOURISM DEVELOPMENT November 18, 2022 Finance, Competitiveness, and Innovation Global Practice Western and Central Africa Region CURRENCY EQUIVALENTS (Exchange Rate Effective [May 31, 2022]) Currency Unit = CVE 0.74 SDR = US$1 US$1.35 = SDR 1 FISCAL YEAR July 1 – June 30 Regional Vice President: Ousmane Diagana Country Director: Nathan M. Belete Regional Director: Abebe Adugna Dadi Practice Manager: Consolate K. Rusagara Task Team Leader: Cristina Navarrete Moreno ICR Main Contributor: Hiran Herat ABBREVIATIONS AND ACRONYMS 3C Cabo Verdean Community for Cruise Tourism (Comunidade Cabo-Verdiana de Cruzeiros) ADEI Agency for the Development of Enterprises and Innovation ADR alternative dispute resolution ARAP Public Procurement Authority (Autoridade Reguladora das Aquisição Públicas) CI-ATIC Cabo Verde Investments-Agency of Tourism and Investments (Cabo Verde Investimentos-Agência do Turismo e Investimentos de Cabo Verde) BCV Central Bank of Cabo Verde (Banco de Cabo Verde) CPS Country Partnership Strategy CQS selection based on consultants’ qualifications CRM customer relationship management CVI Cabo Verde Investments (Cabo Verde Investimentos) CTD Competitiveness for Tourism Development Project DA designated account DDI direct domestic investment DGA Directorate General for the Environment (Direcção Geral do Ambiente) ERR expected rate of return FDI foreign direct investment FM financial management GDP gross domestic product GoCV Government of Cabo Verde GPRSP Growth and Poverty Reduction Strategy Program GRM Grievance Redress Mechanism IBRD International Bank for Reconstruction and Development IC selection of individual consultants ICB International Competitive Bidding IDA International Development Association IFR Interim Financial Report IGQPI Institute for Quality Management and Intellectual Property (Instituto De Gestão da Qualidade e da Propriedade Intelectual) IPI Investment Promotion Intermediary IRMS Investor Relationship Management System IT Information Technology KPI Key Performance Indicator M&E monitoring and evaluation MEE Ministry of Economy and Employment MFP Ministry of Finance and Planning (Ministério das Finanças e do Planeamento) MSME micro, small, and medium enterprise MTIBD Ministry of Tourism, Investment, and Business Development (Ministério do Turismo, Investimentos e Desenvolvimento Empresarial) MTT Ministry of Tourism and Transport NPL nonperforming loan NPV net present value PDO project development objective PIM Project Implementation Manual PIU Project Implementation Unit POT tourism management plan (Plano de ordenamento turístico) PSC project steering committee PPD public-private dialogue PTC Project Technical Committee ROI returns on investment SESA Strategic Environmental and Social Assessment SOP standard operating procedure SSA Sub-Saharan Africa TMP tourism master plan TOR terms of reference UGA Procurement Management Unit UGPE Unit for Implementation of Special ProjectsUnidade de Gestão de Projetos Especiais NOTE • In April 2016, the Ministry of Tourism, Investment, and Business Development (MTIBD) was restructured as Ministry of Economy and Employment (MEE) • In January 2018, MEE was further restructured to have MEE and a new Ministry of Tourism and Transport (MTT) • In 2019, a Tourism Institute was established (the main project implementing partner) and a dedicated investment promotion agency was also created— Cabo Verde TradeInvest TABLE OF CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 5 A. CONTEXT AT APPRAISAL .........................................................................................................5 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION .............................................................. 10 II. OUTCOME .................................................................................................................... 13 A. RELEVANCE OF PDOs ............................................................................................................ 13 B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 14 C. EFFICIENCY ........................................................................................................................... 24 D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 26 E. OTHER OUTCOMES AND IMPACTS (IF ANY) ............................................................................ 26 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 27 A. KEY FACTORS DURING PREPARATION ................................................................................... 27 B. KEY FACTORS DURING IMPLEMENTATION ............................................................................. 28 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 29 A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................ 29 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ..................................................... 30 C. BANK PERFORMANCE ........................................................................................................... 31 D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 32 V. LESSONS AND RECOMMENDATIONS ............................................................................. 32 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 34 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 45 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 48 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 49 ANNEX 5. BORROWER, CO-FINANCIER, AND OTHER PARTNER/STAKEHOLDER COMMENTS .. 51 ANNEX 6. THEORY OF CHANGE, CHANGES AND RESULTS TO KEY INDICATORS ...................... 53 ANNEX 7. INVESTMENT CATALYZED AND SURVEY RESULTS .................................................. 56 The World Bank Competitiveness for Tourism Development (P146666) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P146666 Competitiveness for Tourism Development Country Financing Instrument Cabo Verde Investment Project Financing Original EA Category Revised EA Category Partial Assessment (B) Partial Assessment (B) Organizations Borrower Implementing Agency Ministério das Finanças Unidade de Gestao de Projectos Especiais (UGPE) Project Development Objective (PDO) Original PDO The project development objective is to create the conditions necessary to increase investment into and diversification of the tourism sector. Page 1 of 57 The World Bank Competitiveness for Tourism Development (P146666) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 5,000,000 5,000,000 4,973,510 IDA-58010 Total 5,000,000 5,000,000 4,973,510 Non-World Bank Financing 0 0 0 Total 0 0 0 Total Project Cost 5,000,000 5,000,000 4,973,510 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 10-May-2016 15-Nov-2016 31-Oct-2019 31-May-2021 31-May-2022 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 29-Nov-2018 1.18 Change in Implementing Agency Change in Institutional Arrangements 11-Jun-2020 3.28 Change in Results Framework 16-Apr-2021 4.06 Change in Loan Closing Date(s) Change in Implementation Schedule 28-Jan-2022 4.74 Change in Loan Closing Date(s) KEY RATINGS Outcome Bank Performance M&E Quality Moderately Satisfactory Satisfactory Substantial Page 2 of 57 The World Bank Competitiveness for Tourism Development (P146666) RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 09-Aug-2016 Satisfactory Satisfactory 0 02 11-Feb-2017 Satisfactory Satisfactory 0 03 05-Dec-2017 Satisfactory Satisfactory .40 04 25-Jun-2018 Satisfactory Moderately Satisfactory .77 05 31-Dec-2018 Satisfactory Moderately Satisfactory 1.42 06 22-Jun-2019 Satisfactory Moderately Satisfactory 1.62 07 12-Dec-2019 Satisfactory Satisfactory 2.81 08 30-Jun-2020 Satisfactory Satisfactory 3.28 09 28-Jan-2021 Satisfactory Moderately Satisfactory 3.92 10 11-Aug-2021 Satisfactory Satisfactory 4.23 11 22-Feb-2022 Satisfactory Satisfactory 4.78 SECTORS AND THEMES Sectors Major Sector/Sector (%) Financial Sector 16 Banking Institutions 12 Other Non-bank Financial Institutions 4 Industry, Trade and Services 84 Public Administration - Industry, Trade and Services 55 Other Industry, Trade and Services 29 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Page 3 of 57 The World Bank Competitiveness for Tourism Development (P146666) Private Sector Development 175 Business Enabling Environment 50 Regulation and Competition Policy 50 Jobs 100 Enterprise Development 25 MSME Development 25 Finance 25 Financial Infrastructure and Access 25 MSME Finance 25 ADM STAFF Role At Approval At ICR Regional Vice President: Makhtar Diop Ousmane Diagana Country Director: Louise J. Cord Nathan M. Belete Director: Anabel Gonzalez Abebe Adugna Dadi Practice Manager: Jean Michel Noel Marchat Consolate K. Rusagara Penelope Demetra Fidas, Kofi- Task Team Leader(s): Cristina Navarrete Moreno Boateng Agyen, Julian Casal ICR Contributing Author: Hiran Herat Page 4 of 57 The World Bank Competitiveness for Tourism Development (P146666) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Context 1. Located off the west coast of Africa, the Republic of Cabo Verde is an archipelago of ten islands, of which nine are inhabited. The country has around 520,000 inhabitants. Only 10 percent of its territory is classified as arable land and the country possesses limited mineral resources. Despite the arid climate and mountainous terrain, Cabo Verde has been developing rapidly, in large part thanks to its flourishing tourism industry. 2. In December 2007, Cabo Verde graduated from the United Nations list of least developed countries. Good governance, sound macroeconomic management, trade openness and increased integration into the global economy, as well as the adoption of effective social development policies, underpinned an impressive development trajectory. 3. The Republic of Cabo Verde experienced robust economic growth and poverty reduction during the beginning of the new millennium. Growth in real gross domestic product (GDP) per capita averaged 7.1 percent between 2005 and 2008, well above the average for Sub-Saharan Africa (SSA) and for small island states. Between 2002 and 2008, extreme poverty (at US$1.25 per day) dropped by 7.3 percentage points to 13.7 percent. The share of income of the bottom 40 percent increased from 12.4 percent to 15.3 percent over the same period. Moreover, Cabo Verde was one of the few countries on track to achieve all Millennium Development Goals by 2020. Strong institutions have supported these achievements. In 2015, Cabo Verde continued to share the highest Country Policy and Institutional Assessment score (3.9) among International Development Association (IDA) countries. Strong democratic institutions were arguably Cabo Verde’s most precious asset, having both facilitated accountability—important for pro-poor policies—and attracted considerable foreign direct investment (FDI). 4. Sustaining and building on these achievements has turned increasingly difficult for this small open island economy, vulnerable to persistent global economic headwinds and natural disasters. Cabo Verde’s rapid economic ascent that had facilitated immense poverty reduction between 2002 and 2008 came to a sudden halt with the global financial crisis, given the country’s close linkages with European economies and persistent economic weakness in the Eurozone. Economic growth in real terms fell from an average of 7 percent between 2002 and 2007 to 2 percent between 2008 and 2013, as FDI dropped from a peak of 13 percent of GDP in 2007 to 2 percent in 2013. Growth in 2014 was 1.8 percent and the estimate for 2015 was 3.5 percent. Expansionary fiscal policy, focusing exclusively on public investment, provided some support to the economy, but given the small multiplier, its short-term stimulus effect was limited, although it increased macro fiscal vulnerabilities as public debt surpassed 100 percent of GDP in 2014. In 2014, Cabo Verde experienced a drought, negatively affecting the harvest. Moreover, on November 23, 2014, Cabo Verde declared a national emergency when a volcano erupted on Fogo Island, the country’s second poorest island and home to about 8 percent of Cabo Verde’s population. Rationale for World Bank assistance 5. The Competitiveness for Tourism Development (CTD) Project was well anchored within the World Bank Country Partnership Strategy (CPS) for the period of FY2015–2017 (Report No 92248-CV). The project was expected to directly contribute to the objective of the second pillar of the CPS, ”Improving Competitiveness and Private Sector Page 5 of 57 The World Bank Competitiveness for Tourism Development (P146666) Development.”1 The project was expected to support the efforts of the Government of Cabo Verde (GoCV) to achieve the long-term goals of its Growth and Poverty Reduction Strategy Program (GPRSP III), which identified tourism as the economy’s main engine of growth, with the public sector as a catalyst and facilitator of an inves tment and business- fostering environment and the private sector as its driver. In addition, increasing FDI-driven growth and improving access to finance for local micro, small, and medium enterprises (MSMEs) in the tourism value chain was deemed critical for long-term growth and for progress toward the World Bank’s twin goals of poverty reduction, and shared prosperity. Based on a World Bank study,2 tourism in Cabo Verde had the potential to lift people out of poverty through employment, remittances, and linkages with the primary sectors, implying the need to both increase investment and expand the participation by domestic companies in the tourism value chain. Beyond remittances and direct jobs, it was also important to create opportunities for Cabo Verdeans to enter the tourism value chain as entrepreneurs and suppliers of services and goods, increasing their upward mobility and extending the benefits of tourism investment beyond resort employment and taxes. Theory of Change (Results Chain) 6. A Theory of Change was not prepared at appraisal. However, a Theory of Change can be inferred from the project description and results framework (see figure I.1). Project activities aimed to contribute to the government’s competitiveness and inclusive growth agenda in the tourism sector. It was to do so by addressing the binding constraints that inhibit the competitiveness of the tourism sector: (i) the current low capacity to proactively promote investment; (ii) the lack of coordination and a strategic vision for the development of the sector; and (iii) the limited ability of local firms to participate in the tourism value chain. Figure I.1: Theory of Change (original) Main activities Key outputs Intermediate outcomes Outcomes Component 1: Enhancing governance framework of the tourism sector Technical assistance (TA) • CI-ATIC started activities to strengthen the operations and business institutional framework for plan developed Increased attraction of tourism management and • Enhanced capacity of CI- medium to large diversification ATIC investments that bring • Key legal and regulatory Increased client capacity employment, taxes, and reform instruments for to effectively carry out growth to the the tourism sector the country’s tourism economy at large drafted diversification agenda • SESA drafted and applied and to better • Communication strategy attract, facilitate, retain, Enhanced regulatory and developed and grow investment governance framework TA activities to improve the • Tourism outreach conditions for the tourism ability to attract tourism strategic plan designed diversification agenda investment • Tourism management plans for designated tourism zone designed 1 This second pillar specifically focused on three areas with direct linkages to tourism sector, these were (i) improving investment climate, (ii) enhancing the performance of tourism sector and agricultural productivity, and (iii) supporting enabling sectors (energy and roads). 2 World Bank. 2012. Mapping Poverty in Cabo Verde. Page 6 of 57 The World Bank Competitiveness for Tourism Development (P146666) •Marketing outreach campaigns and investor relationship management implemented • Standard operating procedures for investor promotion, facilitation, and aftercare developed Component 2: Diversify tourism sector and increase inclusiveness of tourism-led growth by strengthening the competitiveness of local MSMEs Design and implementation • Quality label for small Increased occupancy of a quality label for small accommodations created rates, interest, and accommodation and rolled out wiliness to stay in small establishments accommodations TA for private sector • Capacity of private sector Enhanced support by organizations and MSMEs organization for private sector delivering TA to MSMES associations to MSMEs Increased competitiveness improved to enter the overall of MSMEs to benefit • Capacity of MSMEs to tourism value chain, from tourism growth respond to tourism especially in market opportunities implementing tourism enhanced products TA to improve the business • Insolvency and secured Improved business environment to increase transaction regulatory environment for access access to finance for framework updated to credit for MSMEs MSMEs • Public and private capacity on insolvency procedures improved • Online movable collateral registry operational Source: Authors' elaboration Note: CI-ATC = Cabo Verde Investments-Agency of Tourism and Investments; MSMEs = micro, small, and medium enterprises; SESA = Strategic Environmental and Social Assessment. 7. A Theory of Change was nonetheless prepared at the Mid-Term stage to show the causal link between the objectives and outcomes. This results chain was expected to help the project team explain the plausible attribution in the absence of a rigorous impact evaluation. This Theory of Change is shown in Annex 6. Page 7 of 57 The World Bank Competitiveness for Tourism Development (P146666) Project Development Objectives (PDOs) 8. The project development objective (PDO) was to create the conditions necessary to increase investment into and diversification of the tourism sector. Key Expected Outcomes and Outcome Indicators 9. The PDO consisted of two development outcomes supported by two outcome indicators: a. Objective 1: “Increase investment into tourism sector” with its key outcome indicator: Increased investment generated; and b. Objective 2: “Increase diversification of tourism sector” with its key outcome indicator: Increased bed nights at beneficiary small accommodation establishments. Project Beneficiaries 10. The project beneficiaries were both the public as well as the private sector actors. In the public sector, especially the Cabo Verde Investments-Agency of Tourism and Investments (CI-ATIC), as well as other agencies involved in the tourism sector (Agency for the Development of Enterprises and Innovation [ADEI] and Central Tourism Authority [CTA]). At the national level, support was to be provided to the Ministry of Tourism, Investment, and Business Development (MTIBD) on policy development and monitoring and project coordination, as well as in starting up the operations of CI- ATIC. The project was also to benefit ADEI, in coordination with the Central Bank of Cabo Verde (Banco de Cabo Verde [BCV]) to implement business environment reforms, including the setup of an insolvency framework and facilitate the establishment of a movable collateral registry. In the private sector, the project was to benefit MSMEs that are part of the tourism value chain, including accommodation, services, and others, such as artisans and creative industries. Moreover, the project was to target a minimum of 100 small accommodation establishments, as part of the quality label activity, in all nine inhabited islands. An indeterminate number of workers in the tourism value chain was also directly or indirectly expected to benefit from the project interventions. As workers, women faced a higher rate of economic inactivity than men; accordingly, the project was expected to benefit female employees and provide more job openings in general, some of which would be filled by women. Components 11. The project had the following three components. Component 1: Enhancing governance framework of the tourism sector (US$2.27 million at appraisal, US$2.02 million at project completion) 12. The objective of this component was to support the start-up of operations of CI-ATIC to effectively carry out the country’s tourism diversification agenda and to help the GoCV to better attract, facilitate, retain, and grow investment. This was to be accomplished through support to the start-up of operations of CI-ATIC, born out of the restructuring of the Cabo Verde Investments (CVI) in late 2015. Cabo Verde had suffered a decline in FDI from 2008 through 2013, with only a slight increase of 6.5 percent in 2014. The government had to be proactive in attracting, managing, and retaining both FDI and direct domestic investment (DDI), through both institutional and regulatory reforms. On the other hand, tourism made important contributions to the economy that consequently improved the poverty rate from 37 percent in 2000 to 27 percent in 2010. Tourism investments had been mainly in large resorts, which, while creating jobs and tax Page 8 of 57 The World Bank Competitiveness for Tourism Development (P146666) revenue, had weak links to the local economy, hence the need for diversification and increased competitiveness of the local supply. This component financed two categories of activities: a. The carrying out of a program of technical assistance activities to strengthen the recipient’s institutional framework for tourism management, investment promotion, and diversification, including through (i) advice to CI-ATIC to start its operations, including development of a business plan; (ii) support for drafting the legal and regulatory reform instruments for the tourism sector; (iii) carrying out capacity-building sessions for staff and management of CI-ATIC and other relevant tourism stakeholders; (iv) preparing and applying a Strategic Environmental and Social Assessment (SESA) for the tourism sector; (v) design of a tourism strategy for the period 2017–2027 and an associated action plan for the period 2017–2019, including development of a comprehensive supply-demand market intelligence study for tourism; and (vi) development of an online communications strategy. b. The carrying out of a program of technical assistance activities to improve the ability of the recipient to attract tourism investment, including through (i) design of a tourism investor outreach strategic plan, consistent with the tourism strategy; (ii) support for the design Tourism Zoning Management Plans (Planos de Ordenamento Turistico – POTs) for designated tourism zones; (iii) carrying out of capacity building activities to design new or improve existing information packages for tourism development opportunities for hotels/resorts; (iv) carrying out marketing and outreach campaigns to attract potential tourism investors; (v) designing and implementing an investor relationship management system and providing relevant software for an analysis of investment proposals; (vi) developing standard operating procedures for investor promotion, facilitation, and aftercare; and (vii) carrying out workshops on effective investment promotion, including on investor outreach, facilitation, and aftercare. Component 2: Diversify tourism sector and increase inclusiveness of tourism-led growth by strengthening the competitiveness of local MSMEs (US$2.24 million at appraisal, US$2.28 million at project completion) 13. The objective of this component was to increase the competitiveness of MSMEs to benefit from tourism growth. The component was to support both sides of the value chain through a small accommodation quality label as well as to support private sector organizations and address access to finance constraints for MSMEs. Technical assistance and capacity building was to be provided to improve the competitiveness of small accommodations and to obtain the quality label. The activity aimed to increase occupancy rates through the design and implementation of a label that will be easily recognizable by tourists, thereby increasing their interest and willingness to stay in small, locally run accommodations. The support to private sector associations and organizations was expected to raise their capacity to attend to the skills needs of member MSMEs and hence support them in entering the overall tourism value chain, especially in implementing tourism products identified in the MTIBD inventory of current and potential products. Support was also to be provided to put in place key financial infrastructure to address access to credit constraints faced by MSMEs. This component financed the following two categories of activities: a. The design and implementation of a quality label for small accommodation establishments; and support for private sector organizations and MSMEs through (i) carrying out capacity building activities for private sector organizations to improve capacity for conducting technical training for MSMEs; and (ii) providing technical training to MSMEs to enhance capacity to respond to market opportunities in the tourism value chain. b. The carrying out of a program of technical assistance activities to improve the business environment to increase access to finance for MSMEs, including through (i) supporting the review and update of the legal and regulatory framework on insolvency; (ii) carrying out an outreach campaign on insolvency procedures; Page 9 of 57 The World Bank Competitiveness for Tourism Development (P146666) (ii) supporting Camara de Comercio de Sotavento in identifying, training, and certifying arbitrators and mediators for its alternative dispute resolution center; (iv) creating a pilot committee with technical experts to lead the public-private dialogue (PPD) on insolvency procedures; (v) providing training to relevant stakeholders on insolvency procedures; (vi) drafting a legal and regulatory framework for a movable collateral registry; (vii) developing and launching an electronic centralized registry for moveable collateral, including provision of software and equipment for said registry; (viii) evaluating and proposing reforms for a secured lending regime; and (ix) carrying out capacity building activities and outreach campaigns on secured lending. Component 3: Project implementation (US$0.49 million at appraisal, US$0.67 million at project completion) 14. The objective of Component 3 was to provide support to the Unit for Implementation of Special Projects (UGPE) in managing and coordinating the project and building its procurement, financial management, safeguards management, and monitoring and evaluation capacity, through the provision of technical advisory services, susch as, training, operating costs, goods, and audits. B. SIGNIFICANT CHANGES DURING IMPLEMENTATION 15. At the government’s request, the CTD project was subject to the following four restructurings (table I.1): Table I.1: Status of disbursements and project PDO and IP rating at project restructuring Date Amount PDO Project Key revisions disbursed in rating implementation US$ million rating 11/29/2018 1.18 S MS Change in implementation agency; Change in institutional arrangements 06/11/2020 3.28 S S Changes to the results framework 04/16/2021 4.06 S MS Change in project closing date; Changes to the implementation schedule 01/28/2022 4.74 S S Change in project closing date Source: Authors' elaboration Revised PDOs, PDO Indicators, and Outcome Targets First Restructuring—Level 2 (November 29, 2018) Rationale for Level 2 restructuring 16. Changes in implementation agency and institutional arrangements: After the effectiveness on November 15, 2016, several Government reorganizations took place, which affected and delayed the implementation arrangements for the project. Seeking to harmonize and streamline the implementation of projects financed by development partners, the Government decided to move and centralize its main implementation unit, the UGPE, from the line Ministry for Economy and Employment into the Ministry of Finance. This effectively brought together the procurement and fiduciary responsibilities under one unit, the UGPE, which at that time was handling several projects across sectors, including this Page 10 of 57 The World Bank Competitiveness for Tourism Development (P146666) project. The UGPE kept the same teamthat handled other World Bank (WB) projects, and hence this change was not expected to affect its fiduciary capacity, which remained adequate to implement the project. Second Restructuring— Level 2 (June 11, 2020) Rationale for Level 2 restructuring 17. Changes to the results framework: While the PDO-level indicator focusing on increasing investment and diversification remained highly relevant, the original premises and target assumptions were deemed unrealistic due to the following factors: (i) delays in launching the project (see above) and institutional changes to the investment promotion and tourism agenda in the government;3 (ii) the actual duration of an investment cycle in the country (from granting of license to actual opening), which was deemed longer than originally calculated; (iii) the negative impact of the COVID-19 crisis on business and investment in particular in the tourism sector; and (iv) the efforts to certify and build capacity in MSMEs that were expected to take longer to produce effects, resulting in a proposed finetuning toward shorter-term goals. In addition to the changes to the PDO indicators and related targets, the restructuring added additional intermediate results indicators and targets, strengthening the results chain rationale (Theory of Change was introduced as part of this restructuring). New indicators in measuring outputs, such as island masterplans, tourism zoning plans, and the creation of a national certification service provider, were added to substantiate PDO achievements, arising from the activities and outputs of the project (see Annex 6 for details on revised indicators). 18. Change in components: This restructuring revised selected project activities and associated indicators to make them realistic, impactful and better aligned with the project’s objective. 19. PDO-level Indicator 1—increased investment generated ($35 million): According to the original project appraisal document (PAD), this indicator measured the actual investment made by investors. In reality, the length of time between the moment the investment license is granted, or investment is committed, and the actual groundbreaking, completing construction, fitting the interior, and so forth, were beyond the control of the project team or its counterpart. The team recommended revising this indicator to “investment catalyzed” to reflect the nature of the project activities, which enable or catalyze investments. The team further suggested evidence of investment catalyzed be based on the official records of signed investment conventions or tourism utility licenses, rather than on actual investment on the ground, as initially assumed. Also, the team suggests breaking down investment by islands to demonstrate a “diversification” effect. There were no changes to the target value which was assessed as realistic. 20. PDO-level Indicator 2—increased bed nights at beneficiary small accommodations (18 percent): This indicator was deemed unrealistic due to (i) the first MSMEs or small accommodations to get certified with a quality seal was likely to happen in mid-2020 only, potentially even beyond that due to the COVID-19 crisis, leaving limited time before project closure for improvements to take place and translate into additional bed nights; and (ii) other efforts to increase the country’s visibility and attract further tourists were also still ongoing and would have taken time to complete, notably a new rapid-response “safe & clean” certification activity in the context of the COVID-19 response. Therefore, the team suggested using a more short-term and broader outcome as a PDO-level indicator—the suggested indicator was “Number 3 After the new government was elected in April 2016, tourism and investment promotion agencies were separated, and the governance framework underwent important changes. The Ministry of Economy and Employment assumed the tourism regulatory and policy mandate (later inherited by the Ministry of Tourism and Transports in 2018 and a subsequent Tourism Institute established in 2019), and a dedicated investment promotion agency was also created, Cabo Verde TradeInvest. Page 11 of 57 The World Bank Competitiveness for Tourism Development (P146666) of MSMES certified (with Quality Seal or ISO/HACCP or Safe & Clean),” disaggregated by MSMEs owned or managed by women. 21. Intermediate indicators: Through the process of developing the results chain (Theory of Change), some important intermediate results which were not captured at that point in the results framework were identified and proposed— number of island tourism masterplans approved; number of tourism zoning plans approved; number of investment forums organized; tourism code enacted by the government; number of small accommodations which benefited from technical assistance from the project; technical and feasibility study of Mindelo’s oceanarium; establishment of a national certification service provider; and approval of the legal framework for insolvency and collateral registry. In addition, intermediate indicators related to small accommodation and MSME trainings were adjusted to help capture additional training activities expected to take place as part of the GoCV’s COVID-19 response programs. The team suggested monitoring these to substantiate the PDO achievements. Third Restructuring—Level 2 (April 16, 2021) Rationale for Level 2 restructuring: 22. Extension of the closing date to January 31, 2022, and implementation schedules. In order to optimize and extend the ongoing COVID-19 response activities, authorities had requested a seven-month extension of the closing date of the project, from May 31, 2021, to January 31, 2022. Considering that the border closing was expected to extend well into 2021, beyond the original scenarios, authorities were looking to expand COVID-19–related measures to support affected MSMEs in the tourism sector. According to the National Statistics Institute, about 83 percent of firms in Cabo Verde suffered a reduction in business turnover following the declaration of a state of emergency in March 2020, whereas 43 percent reduced the effective workforce during the second quarter of 2020. In the tourism sector, 77 percent of firms reported being temporarily closed during the same period. 23. Under Component 2, the establishment of a movable collateral registry, accessible online, was underway but had not yet been concluded. This ambitious and potentially transformative activity involved the streamlining and digitization of the registration process workflow for movable assets; the backbone information technology (IT) solution was in advanced stages of development and early testing but was likely to need additional time for full deployment and live testing. Finally, the national certification company had not yet been established, and it was not clear whether this indicator would be achieved by the project's closure. 24. Under Component 2 of the project, authorities were also looking to expand and conclude a series of activities in the added timeframe, including, inter alia: (i) expanding the Clean and Safe Certification Program nationwide (beyond the islands of Sal and Boa Vista), including respective promotional and outreach material for recovery and safe opening after COVID-19; (ii) building local capacity by training local consultants to provide continuous support to the Safe & Clean Program; (iii) revamping the National Tourism Marketing Strategy for the post-pandemic context; and (iv) tourism industry professional training courses (tour guides, taxi drivers, chefs, and bakers). In addition, under Component 1, the project was to include additional technical support to the Tourism Institute of Cabo Verde, especially in the context of a new national tourism strategy and the COVID-19 changes to the tourism sector. Fourth Restructuring—Level 2 (January 28, 2022) 25. Extension of the project closing date: To ensure full completion of key project activities, authorities requested a four-month extension of the closing date of the project, from January 31, 2022, to May 31, 2022. Considering that the tourism arrival restrictions extended well into 2021, beyond the original scenarios, authorities continued to prioritize response measures such as health and safety activities as communication linked to the resumption of tourism. Inevitably, Page 12 of 57 The World Bank Competitiveness for Tourism Development (P146666) some of the project legislative and operational targets were also delayed, and the government’s ability to push through some of the reforms and capacity building activities had been constrained in this adverse context. 26. The extension was requested to allow for completion of important ongoing project activities, concurrent with the intermediate result targets. The activities to be implemented in the ensuing four months included (i) the effective operationalization of the online-based movable collateral registry through the approval of the necessary interministerial legal decrees and subsequent rollout of dissemination and contractor support activities (specifically capacity building, training, and awareness building to practitioners and operators); (ii) cabinet-level approval and publication of the tourism island-level tourism masterplans (through an integrated national Tourism Operational Plan decree); (iii) the approval and publication of the two remaining project-supported Tourism Zoning Plans (Santa Maria Oeste in Sal and Praia Grande in São Vicente); (iv) additional capacity building and technical assistance activities to beneficiaries of the small accommodation quality seal program; and (v) the publication and dissemination of the Tourism Code White Paper to lay the basis for subsequent tourism regulatory framework reform and upgrades based on international best practices. Rationale for Changes and Their Implication on the Original Theory of Change 27. The PDO was unchanged because it remained relevant throughout the life of the project; however, the two PDO indicators were revised as mentioned above. In addition, the “Theory of Change,” which was not required at the time of appraisal of this project, was introduced during the midterm review. These changes were necessary to ensure that the project achieved better outcomes and results. Adjustments to the associated results indicators were also necessary to enable proper tracking of results of the revised components. Details are provided in the restructuring section above. II. OUTCOME A. RELEVANCE OF PDOs Overall Rating: High Assessment of Relevance of PDOs and Rating 28. The relevance of the project development objective (PDO) is high. The project’s objective remains highly consistent with the country’s current development priorities and with current World Bank country and sectoral assistance strategies. At the time of appraisal, the Competitiveness for Tourism (CTD) Development Project was to support the efforts of the Government of Carbo Verde (GoCV) to achieve the long-term goals of its Growth and Poverty Reduction Strategy Program (GPRSP) III, which identified tourism as the economy’s main engine of growth, with the public sector as a catalyst and facilitator of an investment and business-fostering environment and the private sector as its driver. The project was to support the implementation of the country’s vision for the tourism sector to be the catalyst of a new phase of inclusive growth. The project was well anchored within the World Bank Country Partnership Strategy (CPS) for the period of FY2015–2017 (Report No 92248-CV). The project directly contributed to the objective of the second pillar of the CPS, ”Improving Competitiveness and Private Sector Development.“ The project also aligns with the World Bank Group’s Country Partnership Framework (CPF) 2020–2025 for Cabo Verde (report number 127164) Objective 4 on improving the foundations for private sector growth. Rating—High Page 13 of 57 The World Bank Competitiveness for Tourism Development (P146666) B. ACHIEVEMENT OF PDOs (EFFICACY) Overall rating: Substantial Assessment of Achievement of Each Objective/Outcome 29. The project development objective was to create the conditions necessary to increase investment into and diversification of the tourism sector. There were two main PDO indicators: (i) increased investments generated; and (ii) increased bed nights at beneficiary small accommodation establishments. As mentioned, and explained under the restructuring section above, while the PDO-level indicator focusing on increasing investment and diversification remained highly relevant, the original premises and target assumptions were deemed unrealistic. Based on the restructuring the PDO indicators were revised to reflect (i) Increased investment catalyzed; and (ii) number of MSMEs certified with a quality seal or ISO/HACCP. The restructuring of the results framework was also expected to gain from additional intermediate results indicators and targets, strengthening the results chain rationale. 30. The PDO was successfully achieved, as measured by the revised results framework and indicators, meeting most of the original targets and those revised during the second Level 2 restructuring. Given the fact that the two PDO indicators were revised following the midterm review (restructuring) and a Theory of Change was also introduced at the same time, the implementation completion and results report (ICR) includes a “split rating” to evaluate the achievement of both the original targets (pre-restructuring) and revised targets (post-restructuring), while highlighting further achievements through the restructured indicators. Given changes to the original PDO indicators in June 2020, a split evaluation has been carried out. Objective 1:Increase Investment into the Tourism sector PDO indicator 1: increased investments catalyzed4 31. The objective of this PDO was to create the conditions necessary to increase investment in the tourism sector. The project had several interventions5 to support the outcome of this PDO, such as (i) supporting the start-up of operations of the Tourism Institute of Cabo Verde (ITCV) created in 2019 to strengthen the institutional framework for tourism governance under the Ministry of Tourism and Transport (MTT); (ii) development of a National Tourism Strategy; (iii) development of a tourism code to be enacted by the government, and post-restructuring; (iv) development and adoption of tourism master plans (TMPs); and (v) development and adoption of Tourism Zoning Plans. These interventions were expected to enable the PDO to effectively carry out the country’s tourism agenda and to help the GoCV to better attract, facilitate, retain, and grow investment in this sector. Pre-restructuring rating:Modest 32. While the PDO-level indicator focusing on increasing investment and diversification was of high relevance, achieving the targets by the original project close (May 2021) was deemed unlikely. This was due both to delays in launching the project, in part due to the election cycle and subsequent institutional changes on the government’s side, and an overambitious indicator selection at the design stage. The selection of PDO-level indicators and target assumption seemed to be unrealistic, in particular in terms of private physical investment having materialized by project end. The 4The term “investment generated” was changed to “investments catalyzed” during the restructuring carried out in June 2020. 5It should be noted that, of the several interventions that were implemented under the two PDOs, some of them have contributed both to catalyzing investments as well as facilitating the diversification of the tourism sector. The report has tried to group the interventions under the two PDOs, based on to which PDO the intervention added more value. Page 14 of 57 The World Bank Competitiveness for Tourism Development (P146666) original PDO 1 indicator on investment generated meant the actual investment made by the investor, that is, expenditure. In reality, the time between the moment the investment license is granted, or investment is committed, and the actual groundbreaking and completion of the activity, was deemed beyond the control of the project team or its counterparts (MTT); therefore, the indicator together with its definition was assessed as unrealistic. 33. After a new government took office in April 2016, a new institutional framework was developed, and the tourism regulatory and policy mandate was transferred to the Ministry of Economy and Employment (MEE) created in December of 2016. The excessive allocation of mandates within MEE nonetheless created difficulties regarding tourism policy making and regulatory enforcement. Therefore, it prompted the creation of a dedicated MTT in 2018 and the establishment of the ITCV shortly thereafter (with close project technical assistance support) through Decree-Law number 37/2019 approved by the Council of Ministers and published officially on the Official Bulletin on July 25, 2019. ITCV’s board was subsequently appointed, almost three years into project implementation. All the while, the investment promotion agency, restructured in July 2016 as Cabo Verde TradeInvest,6 received critical technical assistance in the form of a tourism investor outreach plan and a restructuring plan under the project. 34. The initial PDO indicator, “the value of investments generated,” was achieved one month prior to the midterm review and three years into project implementation. One contract had been signed for an amount of US$50 million, but the actual investment had not yet broken ground and thus the initial PDO indicator regarding investment generated had not yet been achieved.7 Of the intermediate indicators, the establishment of the ICTV, and the development of a national tourism strategy were completed at the midterm review, but the development and approval of a tourism code was still work in progress. As part of the outreach strategic plan, two investment forums were conducted, one in Sal (Cabo Verde) and one in Boston (USA). In addition, to address potential environmental and social risks, the project included the preparation of a Strategic Environmental and Social Assessment (SESA) in the first year of the project as well as the establishment of a Grievance Redress Mechanism (GRM) system. As a result, prior to the second restructuring and for the calculation of the split rating, the rating assigned to this PDO was “Modest.” Post-Restructuring rating: Substantial 35. Thanks to the governance tourism institutional structure which, as mentioned, was settled by late 2019 and the pressing sectoral needs arising from the pandemic, project implementation picked up post restructuring. Notwithstanding the slowdown and closure of borders due to the COVID-19 pandemic (March 2020), the remaining activities were implemented and expected results were achieved. The ITCV benefited from capacity building and technical assistance activities under the project, including an exchange field trip to Barcelona for senior and mid-level staff to enhance their operational knowledge on key areas of their respective mandates. Additional activities were implemented, such as the development of a strategic marketing plan, appointment of a senior and local advisers to ITCV, a consultancy to assess the residential tourism segment, and a respective action plan. It should also be noted that further technical assistance for ITCV is planned under the follow-up World Bank Project (Resilient Tourism and Blue Economy Development in Cabo Verde Project, P176981), which was approved by the board on May 31, 2022, and which will further enhance ITCV’s capacity for key areas of tourism governance, notably sector marketing and product development. 6 Cabo Verde TradeInvest is a dedicated cross-sector investment and export promotion agency which substituted for the previous CI-ATIC (created only shortly before in late 2015). CI-ATIC had been conceived intending to concentrate the tourism policy and regulatory mandate with investment and export promotion. 7 While the methodology for measuring investment generated was mentioned in the original project appraisal document (PAD), this is using downstream methodology, the methodology details in the PAD were not sufficient for determining how the value would be captured and assessed. Page 15 of 57 The World Bank Competitiveness for Tourism Development (P146666) 36. In order to strengthen the sustainability of ITCV, the resources allocated from the Tourism Fund (which collects the bed-night tax) were expanded in a February 2022 decree-law to a dedicated 5 percent, enabling an increased budget for marketing and destination marketing outreach. Based on the technical assistance provided to the optimization of the tourism and investment promotion institutional framework (helping to improve administrative and operational efficiency), the support provided to organize investment forums, the drafting of the national tourism strategy, and island masterplans and tourism zoning plans (informing and providing greater security for future investments), the project was able to facilitate increased investment catalyzed in the amount of US$228.7 million (based on contracts signed) against a target of US$35 million, far exceeding this PDO indicator. Similarly, and based on data collected by the World Bank team, the initial target of investment generated (work commenced and funds disbursed) was also exceeded in the amount of US$134 million against a target of US$35 million (details of the implementation of the investments catalyzed, status and achievement are shown in box II.1). However, it should be noted that while the PDO indicator was revised, the original target of US$35 million was not revised. A revision to the original target should have been considered at restructuring, given that the first contract signed (US$50 million) exceeded the end target (in September 2019), see boxes II.1 and II.2, in addition to Annex 7 for details of the catalyzed investments. The revised intermediate indicators were either fully met or exceeded the end targets. Box II.1: Survey of the firms that signed investment contracts during the project period A structured questionnaire was applied to the nine tourism investment projects reported by the UGPE as benefited from instruments financed by the project, namely through the zoning plans developed for Sal and S. Vicente, the tourism island master plans, and the investment forums that took place in Sal and Boston. The questionnaire was able to confirm the positive influence of the project to seven of the nine investments (one investment dropped; one did not respond), notably through support to Cabo Verde TradeInvest and its investment strategy. The main reasons to invest in Cabo Verde pointed out by the interviewed companies were perceived security and stability, the strategic location regarding main source markets, and its sunny climate—which makes Cabo Verde a year-round destination with great tourism development potential. When asked what the key factors were which influenced their decision to invest in Cabo Verde, the majority of the interviewees asserted that the critical factors were the clarity and quality of Cabo Verdes’ investment attraction policy, followed by support from investment promotion agency and/or other government bodies, availability of investment incentives, as well as domestic and regional market potential; all of which were supported by the project. The cumulative amount of investment projected at full potential expressed by the sampled projects—excluding the abandoned one—was US$269.55 million, of which 50 percent, that is US$ 134 million, had been disbursed as of April 2022. The sample is expected to generate approximately 1,070 direct jobs at full capacity. Box II. 1 – Robinson Cabo Verde investment The Robinson Cabo Verde project comprises a 307-bedroom resort in a beachfront plot just west of Santa Maria in Sal Island, within the respective publicly owned tourism development land bank area (dubbed ZDTI) of Santa Maria Oeste. The 49.5- million-euro investment revamped an existing closed resort (Creole Hotel) and brought about the first wholly TUI-owned brand to operation in Cabo Verde, particularly in a new segment of adult-only offering, catering to a different profile of visitors, which was previously untapped in Sal Island and nationwide. The negotiations between the promoter and Cabo Verde TradeInvest culminated in the signing of the respective investment contractual agreement during the project-funded Cabo Verde Investment Forum in July of 2019. The commitment toward the development of the Tourism Zoning Plan for the Santa Maria Oeste ZDTI, whose project-funded development started in 2018, including the legally mandated consultative process, was especially important as it brought about the necessary clear and legally enforced zoning delimitation and usage guidelines for all adjacent plots, as well as respective accessibility and utility infrastructure guidelines, enabling a framework for sustainable and harmonized investment in this high potential area. This investment contributed towards increasing job creation and diversification through the introduction of a new brand and tourist segment on the island. Page 16 of 57 The World Bank Competitiveness for Tourism Development (P146666) 37. Table II.1 presents results of key PDO1-related indicators pre- and post-restructuring. Table II.1: DPO1—Outcome of key indicators pre- and post-restructuring Pre-restructuring rating: Modest Post-restructuring rating:Substantial PDO indicator Achievement Indicator Achievement level Additions/deletions level Value of investment One contract Increased investment Increased investment Value of investment generated (US$35 million) signed for catalyzed (US$ 35 catalyzed (US$ 228.7 generated. Deleted US$50 million million) million) Increased investment catalyzed. Added Intermediate indicators Start-up of operations of Yes Start-up of operations of Yes the joint tourism and the tourism and investment promotion investment promotion agency (CI-ATIC) (Yes/No) agency (CI-ATIC) Development of a national Yes Development of a Yes tourism strategy (Yes/No) national tourism strategy (Yes/No) Tourism code enacted by (No) Tourism code enacted by Yes the government (Yes/No) the government (Yes/No) Number of investment 2 Number of investment 3 forums organized (3) forums organized (3) Number of tourism 7 Added master plans adopted (7) Number of Tourism 6 Added Zoning Plans (POTs) adopted (6) Source: Authors' elaboration 38. In order to achieve this PDO and intermediate indicators, the following activities were completed by the project, and these interventions were important in facilitating increased investments into the tourism sector: a. Drafting the legal and regulatory reform instruments for the tourism sector (Tourism Code White Paper— TCWP): The TCWP was an umbrella needs assessment and benchmarking provided to authorities to develop legal reforms for the sector, and was expected to sustain ongoing sectoral regulatory framework upgrades. Three subsequent pieces of legislation were approved and published by authorities in October 2022.8 Furthermore, the Ministry of Tourism and Transports is working with the Ministry of the Sea in a joint taskforce to identify improvements and developments to the nautical tourism regulations. b. Carrying out marketing and outreach campaigns to attract potential tourism investors: As part of the outreach strategic plan, three investment forums were conducted, which together with the Tourism Island master plans and Tourism Zoning Management Plans (POTs) were relevant contributors to the promotion of a more attractive environment for investment projects in tourism. 8 These decrees are (i) updated licensing requirements for tourism accommodation operators (decree-law No. 45/2022 dated October 7, 2022); (ii) a legal regime for tourism and hospitality establishments in rural areas (decree-law No. 43/2022 dated October 7, 2022); and (iii) updated rules and norms for tourism service providers (decree-law No. 44/2022 dated October 7, 2022). Page 17 of 57 The World Bank Competitiveness for Tourism Development (P146666) c. Preparing and applying an SESA for the tourism sector: the SESA was made available online in the Ministry of Finance web site pre-restructuring and was used consistently on tender processes. For specific contracts of consultancy service provision, the document was delivered to consultants to guide their assignments on the social environment principles and requirements to ensure that these requirements were appropriately embedded in their deliverables. d. Design of the first tourism vision and corresponding multi-year strategy/action plan for the period 2017– 2027: The national tourism vision was published in July 2019 (Official Gazette No.81—dubbed Macro Options for the Sustainable Development of Tourism—GOPEDS Turismo). Based on this broad vision of tourism diversification, the Ministry of Tourism developed and adopted seven project-funded tourism island master plans9 which conducted a detailed inventory of tourism assets and potential per island and identified a sequenced action plan with proposed projects/activities to develop these in convergence with the identified potential market niches. Based on these masterplans, the ministry developed a comprehensive national action plan covering the whole range of implementation stakeholders, particularly local authorities—Tourism Operational Program (POT 2021–2026), approved by the Council of Ministers on April Box II.3: Unlocking the seeds for sustainable greenfield tourism investment— the example of the Praia Grande POT 5, 2022, through Resolution 31/2022. The Tourism Operational Program commits The Praia Grande zone in the eastern part of São Vicente Island authorities to a series of public was designated as a public tourism development landbank in 1994 investments—spanning infrastructure, for its perceived beach tourism potential. The respective project- destination marketing, policy reforms, and funded Tourism Zoning Plan, the development of which included human capital capacity building—for an a broad consultative and technical review process led by INGT and unprecedented amount of about US$200 spanning more than two years, was approved and published in million (co-funded by a follow-up WB IPF early 2022 and contains guidelines for infrastructure development and the Tourism Fund) and specifically which are key to unlock private sector investment, notably accessibility and utility service guidelines and areas, land usage targeted at unlocking additional private criteria and construction density rules, and clear delimitation of investment in tourism.10 environmental buffers and plot development areas. e. Drafting selected Tourism Zoning Plans Map BII.3.1: Extract from the Praia Grande POT plot overview (POTs): Through the National Institute for Territorial Management, the project financed six Tourism Zoning Plans, three on the island of Sal (Morrinho Branco, Santa Maria, and Ponta Serena) and three on the island of São Vicente (Praia Grande, São Pedro, and Baía das Gatas). These plans are considered critical inputs to attracting foreign investment as they determine the sustainable zoning guidelines and infrastructure guidelines for public special tourism investment zones of Sal and São Source: Portaria nº 18/2022, official Bulletin dated May 3, 2022 Vicente (see box II.3 for an example), thus 9 The master plans were developed for the islands of São Vicente, Santo Antão, São Nicolau, Brava, Fogo, Santiago, and Sal (Boavista and Maio were assumed under the respective real estate development company which has mandate over these islands). 10 The allocations of the Tourism Fund proceeds from the bed-night tax, determined by the Council of Ministers decree in five-year programmatic allocations, were decided in close coordination with Tourism Operational Program guidelines and directives. Page 18 of 57 The World Bank Competitiveness for Tourism Development (P146666) enabling the diversification and leverage of other high-potential demand segments, consistent with the GoPEDS long-term tourism vision and under the umbrella of the Second National Strategic Plan for Sustainable Development (PEDS II, covering 2022–2026). f. The project also funded the drafting of a National Strategic Marketing Plan as a complementary output, particularly well received by all stakeholders who agreed that it was a key stepping-stone to building Cabo Verde’s marketing vision and strategy for the post-COVID-19 recovery period. This plan was adopted by authorities as a crucial guiding reference for strategic and promotional positioning of Cabo Verde in terms of tourism. Its impact is expected to be seen in the short–medium term, considering that it will only start being implemented in 2022 and the following years, with funds from the new project (P176981). g. The design of a tourism investor outreach strategic plan and restructuring plan for the investment promotion agency TradeInvest assisted in improving the performance in attracting and retaining investment restructuring consistent with the tourism strategy mentioned above. The work included the development of standard operating procedures for investor promotion, facilitation, and aftercare. h. Carrying out capacity building activities to design new or improve existing information packages to increase the tourist destination experience (Tourism Georeferencing App11). The project funded this important online platform to provide tourists with key information on tourism sights and venues as well as complementary relevant information. This promotion is expected to contribute to an increase in the number of visitors and their average daily spending, serving to leverage local businesses receipts, with positive repercussion on the entrepreneurial dynamics at the level of micro and family businesses. Objective 2: Diversification of the Tourism Sector PDO indicator 2: number of MSMEs certified with quality seal and/or ISO/HACCP, of which owned or managed by women 39. The objective of this PDO was to increase the competitiveness of micro’ small’ and medium enterprises (MSMEs) that would benefit from tourism growth and diversification. The component supported value chain interventions through a small accommodation quality label and private sector organizations, while also addressing general access to finance topics in the business environment. The support to private sector associations and organizations was aimed at raising the respective capacity to attend to the skills needs of member MSMEs and hence support them in entering the overall tourism value chain, especially in implementing tourism products identified in the former Ministry of Tourism, Investment, and Business Development (MTIBD) inventory of current and potential products. The revised PDO Indicator and seven of the eight revised intermediate indicators were met. The one exception was the establishment of a national certification company, which was not achieved. Pre-restructuring rating: Negligible 40. The initial PDO indicator of increased bed nights at beneficiary small accommodations (18 percent)12 was formulated because a small accommodation performance was seen as a good proxy for the success of tourism 11The link to the platform is http://dev2.widegeo.com/dash/pt#. 12 Anincrease of 18 percent over the course of more than four years was seen as adequate in light of several factors. First, a survey of small accommodations conducted by the World Bank team revealed a high degree of interest among such establishments in this type of program. Second, there was very strong institutional backing from the line ministry, as well as the Institute for Quality Management and Intellectual Property (IGQPI), which was to lead the effort. Part of that support was based on seeing a very successful quality label model (“Seychelles Secrets”) Page 19 of 57 The World Bank Competitiveness for Tourism Development (P146666) diversification efforts. The limited quality and quantity of accommodations other than the large resorts catering to the all-inclusive market were seen as the most significant supply-side constraint to attract independent tourists that would be vital to the country’s diversification efforts. Increased bed nights at such accommodations would have demonstrated that not only had the quality and quantity of such establishments increased, but that more independent tourists were being attracted to the country. While this initial PDO-level indicator was of high relevance, achieving their targets by the original project close (May 2021) was deemed unlikely since the first small and medium enterprises (SMEs) to get certified would only start in mid-2022, and parallel efforts on marketing would take time to implement. The new indicator “Number of SMES certified with quality seal and/or ISO/HACCP, of which owned or managed by women” was introduced to measure quality improvements of small establishments or tourism services while also measuring diversification in terms of accommodation offerings. 41. As mentioned above, implementation progress also slowed down under this component, due to the election cycle and institutional reshuffling of tourism and MSME support mandates. The support to both the Northern and Southern Chambers of Commerce and member MSMEs nonetheless materialized, specifically through a quality certification program with a subset of SMEs with the potential for new or expanded sourcing to the tourism value chain. The first edition of the program, later replicated in a second edition (dubbed CERTIFIC I & II), focused on eight selected tourism- related product suppliers or service providers which were deemed capable of pursuing international accreditations like ISO or HACCP which would help the respective entrance into the tourism value chain. The Chamber of Tourism also steered a certification support program in the area of food security to tourism-related restaurants, dubbed Cape Safety II. The support to the chambers of commerce also included the provision of video conferencing equipment to enable streamlined communication across islands and with/between member SME and chambers in addition to other chamber capacity building initiatives. 42. The implementation of the quality seal for small accommodations program, led by the IGQPI, faced several major setbacks even before the emergence of the COVID-19 pandemic. An individual consultant was contracted to design the program and initiated work in December 2017. Unfortunately, the quality of work delivered by the consultant in June 2018 was considered by the World Bank and IGQPI to be unsatisfactory. After some interim support provided by the World Bank team in mid-2018, a new consultant was contracted in April 2019. The new consultant provided sound guidance, but the unsuccessful initial consultancy resulted in nearly a full year of lost implementation time. Pilots of the revamped program were successfully conducted during the summer of 2019 and rollout of the program was being prepared for the first quarter of 2020 in selected islands. However, a new challenge emerged in the form of a leadership change at IGQPI, resulting in additional appropriation and a learning curve and subsequent slowdown in the pace of implementation. 43. On the investment climate subcomponent, there was encouraging progress as secondary insolvency regulations were approved, and the overall legal framework was starting to be effectively used by the judiciary. In this context, the project supported important outreach and training activities to insolvency practitioners and the public at large. On the movable collateral registry, the drafting of the secured transactions legal framework was initiated and underwent a series of iterative consultations prior to approval. On the critical operational front of developing the movable collateral online platform itself, the authorities were requested to seek a competitive tender to mobilize an experienced international information technology (IT) vendor. 44. As the initial PDO 2 indicator of increased bed nights at beneficiary small accommodations was changed at the midterm review, and this indicator was only expected to be collected at project closing, there is insufficient data to assess on the South-South Knowledge Exchange visit to the Seychelles organized by the World Bank for key public and private tourism sector stakeholders. Furthermore, it was designed during a period of strong tourism growth in Cabo Verde and globally. Page 20 of 57 The World Bank Competitiveness for Tourism Development (P146666) its progress at pre-restructuring. However, since the implementation of the quality seal was delayed, it can be presumed that this indicator was not fully on track on this occasion. Post-Restructuring rating: Substantial 45. Despite the onset of the COVID-19 crisis and subsequent restrictions, project implementation picked up for activities under Objective 2. The revised PDO 2 indicator related to the number of SMEs certified was exceeded, reaching 208 against a target of 40. Beyond the core small accommodation quality seal program activities with IGQPI and targeted certification programs with the chambers of commerce (CERTIFIC I & II), the range of activities was expanded to include COVID-19 response and support measures to the benefit of the tourism sector and local entrepreneurs (see box II.4). Box II.2: COVID-19 project supported response and recovery activities to sector MSMEs In the wake of the COVID-19 pandemic and subsequent restrictions, which hit the tourism sector particularly hard, the project went on to support a series of activities that sought to aid the recovery of related businesses and workers. These include( i) support to the nationwide Clean and Safe Certification program, including beyond the islands of Sal and Boa Vista which concentrate most of the tourism offering; (ii) training of local consultants to provide continuous support to the Safe & Clean Program; (iii) promotional video for the Clean and Safe Certification Program; (iv) training to idle hospitality workers including taxi drivers and tour guides; and (v) additional general capacity building courses to professionals in the hospitality industry through the hotel and tourism school. All activities were concluded successfully, and the satisfaction surveys and feedback were positive on all courses delivered. 46. On the investment climate subcomponent, the establishment of an online movable collateral registry was concluded with both the approval of the secured transactions legal framework and successful launch of the online movable collateral platform developed and delivered through a local contractor. The insolvency outreach and dissemination campaign also progressed with additional activities. Finally, the national certification company was not established, the reasons for which are explained in point (e) below in the detailed summary of activities. 47. The following activities were implemented and contributed to achieving this PDO: a. Across all different lines of activities, a total of 208 MSMEs were certified in different forms: i. 11 MSMEs with ISO/HACCP (Food Safety). Activity—Technical Qualification for Tourism (CERTIFIC I & II), delivered through the chambers of commerce. Data source: Final Report of the Consultant validated by the chambers of commerce; ii. 114 HORECA (Catering Industry) with Sanitary Seal. Activity—COVID-19 Sanitary Seal Program. Data source: Final Report of the Consultant Firm validated by the Ministry of Tourism and Transport; iii. 15 Small Quality Seal accommodations. Activity—Quality Seal Program. Data source: Quality audit reports and certifications issued by IGQPI;13 iv. 68 HACCP certified HORECA (Food Safety for the Catering Industry). Activity—Cape Safety II. Data source: Consultant Firm Final Report validated by the Tourism Institute. v. Of the 208 MSMEs above, 98 (47 percent) women managed/owned MSMEs were certified in the following certification activities/schemes: 1. 5 of 11 under CERTIFY I & II/ISO 9001 and HACCP; 2. 51 of 114 within the scope of the COVID-19 Sanitary Seal Program; 3. 7 of 15 under the Quality Seal Program; and 13A total of 58 accommodations benefited overall from technical assistance under the program, 15 of which had progressed through to full certification at the time of project closing. Page 21 of 57 The World Bank Competitiveness for Tourism Development (P146666) 4. 35 under Cape Safety II/HACCP. b. The project supported the acquisition of assets and technical assistance for the chambers of commerce (video conference facilities, information and communications technology (ITC) upgrade of internal processes, creation of a financial resource mobilization capacity), which contributed to improvement of the respective response capacity toward member MSMEs and generation of revenue. Other interventions were funded as well on behalf of the chambers’ associates, enabling them to obtain international quality certification for processes and product hygiene safety and services, thus raising the possibility to enter the hospitality industry market (CERTIFIC I & II programs). c. Support for private sector organizations and MSMEs: A total of 240 MSME individual representatives benefited from training activities in different forms throughout the project. These activities aimed to increase the respective competitiveness to benefit from tourism growth. Specifically, these activities were: i. Technical assistance (TA) was provided to 20 SMEs (through the Technical Qualification Program, also referred CERTIFIC I and II), which aimed at preparing these companies to obtain international quality certification for processes and product hygiene and safety and services; ii. 46 under Quality Seal (Source: Alexandre Garrido Reports, IGQPI Progress Reports and Presentations); iii. 114 under MTT´s Sanitary Seal Program (Source: Preverisk Group Final Report); iv. 14 trained by THR (Source: THR Destination Tourism Marketing Plan Final Report); and v. 46 under Cape Safety II (Source: MundiConsulting Final Report). The outcome of these TA activities enabled these companies to enhance quality and certifications which are required by hospitality industry goods and services operators. Additionally, the support to the sanitary seal enabled these enterprises to be better positioned to recover in the wake of the COVID-19 pandemic and ensure the necessary sanitary and health standards. The lessons of these certification programs transitioned to the newly approved “Resilient Tourism and Blue Economy Development Project (P176981),” where a dedicated MSME subcomponent will continue to support the strengthening of the respective value chain, including through certification of key product and service value chains. d. Of the 240 MSMEs representatives who participated, 36 percent or 87 MSMEs owned/managed by women benefited from training activities, as detailed below: i. 22 from the Quality Seal; ii. 51 from the Sanitary Seal; and iii. 14 by THR under the Marketing Plan developed. e. National Certification Company (NCC) established: The project supported the development of a business plan to guide the creation of a national private provider of certifications, aimed at reducing the costs of these auditing and certification services, which are normally contracted abroad. The signing of a memorandum of understanding between the local chambers of commerce and a Portuguese provider of international certification (EIC) was in advanced negotiations. However, with the outbreak of the Covid-19 pandemic, the two promoters suspended negotiations. The two sides also could not agree on the location/head office of the NCC and, as a result, it was not established by project closure. It should be noted that the Unit for Implementation of Special Projects (UGPE) only facilitated the negotiation process between the chamber and the Portuguese firm with the assistance of the consulting firm that developed the business plan. Page 22 of 57 The World Bank Competitiveness for Tourism Development (P146666) f. Technical and Feasibility Study of Mindelo´s Oceanarium: The Mindelo Oceanarium is a showcase aquarium, noted in the respective tourism island master plan, that authorities had earmarked to strengthen the attractiveness of São Vicente as a tourism destination, in particular for cruise ship tourism. The study was jointly approved by the Ministry of Tourism and the Ministry of the Sea. The oceanarium remains one of the several investment projects originally included in the Special Maritime Exclusive Economic Zone Program (ZEEEM-SV); g. Developing and launching an electronic centralized registry for movable collateral, including provision of software and equipment for said registry: As part of the investment climate subcomponent, the project supported the establishment of a digital collateral registry for the purpose of facilitating access to credit using movable assets as collateral, including the necessary legal and operational aspects. After approval of the project-supported secured transactions legal framework in 2020, a project-funded web platform was developed and tested successfully (https://rgm.gov.cv/), including outreach and training on the use of the platform. The Council of Ministers resolution assigning operational purview on the registry was approved in May 2022 and, as required, a few MSMEs movable assets were registered on the web prior to project closing. This intervention was intended to address access to finance constraints of MSMEs. The pending objective and challenge are guaranteeing full integration at the back-office level with the central registrars in the Ministry of Justice. The contractor is also providing follow-on training, post-implementation support. As firms have progressively easier access to banking/loan services, there will more likely be an increase in business activities, hence the diversification of tourist offerings. h. Support for review and update of the legal and regulatory framework on insolvency: Another activity supported by the project was the facilitation of the insolvency regime through additional bylaws and training/outreach activities. Continuous outreach and dissemination activities to the business community and financial institutions (exceeding the project implementation timeline), remain critically necessary as insolvency practice is still relatively stalled; the lack of insolvency administrators and the complexity of the legal framework are still key challenges as noted by the business and judiciary community. The team has recommended that this activity be carried out under the recently approved and currently being restructured World Bank Project (Cabo Verde Digital Project, P171099), with its longer implementation timeline, to support the above goal. i. Tourism Georeferencing App: The project also funded the establishment of a Tourism Georeferencing App, intended to enhance visitor experience by providing tourists with key information on tourism sights and venues as well as other complementary and relevant information. This intervention is also expected to track the number of visitors and their average daily spending patterns to assist local business in planning and providing the required services to entice more tourists to visit Cabo Verde. Table II.2: PDO 2—Outcome of key indicators pre- and post-restructuring Pre-restructuring rating: Negligible Post-restructuring rating: Substantial PDO indicator Achievement Indicator Achievement Additions/deletions level level Increased bed nights at (0) Number of MSMEs certified 208 Increased bed nights at beneficiary small (with Quality Seal or beneficiary small accommodations (18%) ISO/HACCP or Safe & Clean) accommodations. (Number 40) Deleted. Page 23 of 57 The World Bank Competitiveness for Tourism Development (P146666) Number of MSMEs certified (with Quality Seal or ISO/HACCP or Safe & Clean). Added Of which, owned or managed by (0) Of which, owned or managed 47% women (33%) by women (33%) Intermediate Iindicators Number of small 0 Number of small 58 accommodations that benefited accommodations that from TA under the project (50) benefited from TA under the project (50) Number of MSME 17 Number of MSME 240 representatives who benefited representatives who benefited from training activities supported from training activities by the project (100) supported by the project (100) Of which women (35%) 12% Of which women (35) 36% National Certification Company No Added established (Yes/No) Technical and feasibility study Yes Added of Mindelo´s Oceanarium approved (Yes/No) Legal Framework for Insolvency Yes Legal Framework for Insolvency Yes Added and Collateral Registry approved and Collateral Registry (Yes/No) approved (Yes/No) Establishment of a movable No Establishment of a movable Yes collateral registry IT system collateral registry IT system (Yes/No) (Yes/No) Number of investor leads 0 Deleted receiving improved investment promotion services in the tourism sector (18) Documentation of a formal No Deleted investor outreach program (Yes/No) Source: Authors' elaboration Justification of Overall Efficacy Rating Overall rating: Substantial 48. Based on the reason mentioned above, the pre-restructuring efficacy is rated as Modest and post-restructuring efficacy is rated as Substantial. The overall efficacy is rated as Substantial. C. EFFICIENCY Overall efficiency rating: Substantial Assessment of Efficiency and Rating 49. An economic and financial analysis was prepared at implementation completion and results report (ICR) to estimate the economic rate of return of the project, incorporating actual disbursement figures. Based on this analysis, the Page 24 of 57 The World Bank Competitiveness for Tourism Development (P146666) net present value (NPV) is estimated to be US$6.3 million at a 12 percent discount rate with an ERR of 33 percent over a fifteen-year period, including the six years of project implementation. This analysis is based on the impact of investment generated through reforms and programs implemented under the project (Component 1) and a small increase in accommodation revenues for MSMEs certified under the project (Component 2). This analysis uses highly conservative assumptions given the difficulty in estimating the exact timing of this impact (details provided in Annex 4). The original Project Appraisal Document did not calculate an expected rate of return (ERR), so a comparison is not possible here. Actual benefits are likely to be higher, especially given the access to finance investments such as the movable collateral registry, which will further improve the capacity of local tourism businesses, thus allowing them to expand their businesses, improve the quality of the services, service more tourists, and explore higher- priced demand segments. The implementation of better planning and support mechanisms within the tourism sector is also likely to result in extensive social benefits both within and outside the tourism sector as this growth spurs demand for other support services in finance, infrastructure, and so forth. These social benefits are likely to be magnified through the continued support of the current Resilient Tourism and Blue Economy Development in Cabo Verde Project (P176981) which will provide financing for direct investment in necessary infrastructure in selected destinations and address ongoing market failures and bottlenecks in the tourism sector. It is worth noting that the current project builds heavily on learnings and institutional strengthening under the Competitiveness for Tourism Development (CTD) Project. Administrative and Implementation Efficiency 50. Extensive technical assistance activities were provided to support the national tourism strategy and action plan at several levels (national operational plan, island-level master plans, tourism zoning plans, targeted marketing strategy and plans). The project also assisted with the overhaul and optimization of the tourism institutional framework—notably the establishment of the Tourism Institute and support to the investment promotion agency (CV TradeInvest)—helping to improve administrative efficiency within the tourism sector and the overall investment mobilization capacity. This type of institutional development serves as the foundation for future tourism marketing, development, planning, and investment mobilization. Without such a foundation, future investments would be far less effective and targeted. Additionally, international investors considering a wide range of potential global investments are more likely to follow through on initial discussions with support from local investment promotion agencies. The support provided to organize investment forums and improve the capacity of local MSMEs (through certification, capacity building and related training throughout the COVID-19 pandemic, and increased access to finance through the moveable collateral registry) also improves the attractiveness of Cabo Verde’s tourism sector for larger-scale investors as the local economy is better able to provide for labor and value chain requirements. As such, these foundational investments in overall better governance enable enhanced planning, budgeting, accountability, and service delivery for government actors working in the tourism sector. As a whole, institutional support and capacity building under the CTD project strengthened administrative and operational capacity for the tourism sector, including administrative efficiency. 51. The CTD also improved allocative efficiency since investments to be financed under future projects (e.g., rehabilitated roads, coastal investments, marketing strategy, etc.) are part of the national tourism strategy and associated master plans and zoning plans. These strategies and plans were developed based on investments under the CTD following local consultations and citizen engagement activities and will continue to inform future investments, such as those being implemented under the current Resilient Tourism and Blue Economy Development in Cabo Verde project. The CTD demonstrated high operational efficiency, facilitating a 97 percent disbursement rate with only a one-year delay of the initial planned closing date despite implementation delays associated with the COVID-19 pandemic. Page 25 of 57 The World Bank Competitiveness for Tourism Development (P146666) 52. Considering the factors described above, efficiency is rated as Substantial. As discussed above, the project demonstrated strong returns from the investments catalyzed through Component 1 and the expected increase in accommodation prices for MSMEs certified under Component 2. The CTD also demonstrated high administrative, allocative, and operational efficiency over the course of project implementation. D. JUSTIFICATION OF OVERALL OUTCOME RATING 53. The overall outcome rating of the project is Moderately Satisfactory. While the initial phases of implementation were hampered by changes to the institutional arrangements and a variety of project management issues, the project turnaround in mid-2019 was noticeable and the emerging development impact of the project has been significant, especially after the Second Restructuring in June 2020. The project implementation rating that was Moderately Satisfactory in June 2018/2019 was upgraded to Satisfactory by the end of 2019. At project closing, the rating for progress toward meeting the PDO remained Satisfactory. 54. The PDO was highly relevant before and after restructuring. The PDOs were achieved despite the slow implementation progress in the early years. Implementation picked up by the midterm review and the resulting project restructuring in June 2020, which led to the revision of the PDO indicators and the introduction of several other indicators. The trajectory of the indicators moved significantly upward after this restructuring. The overall outcome rating calculated as weighted average (by disbursement) for the entire project is 4.0, which is equivalent to Moderately Satisfactory (See Annex 6 for overall outcome rating based on a split rating). E. OTHER OUTCOMES AND IMPACTS (IF ANY) Gender 55. The project promoted female inclusion particularly under Component 2 by focusing on (i) improving the competitiveness of MSMEs through the small accommodations quality label and support to private sector organizations, which was expected to have a particular benefit for women, as female entrepreneurs were more likely to own and manage small establishments; and (ii) improving access to finance constraints to MSMEs which disproportionally affected women because they were more time-poor than men and such reforms should lead to more women entering the formal sector (and labor market). Specific indicators were included to track the female inclusion support. Through the technical assistance and capacity building activities provided, of the 208 MSMEs that participated under this program, 98 (47 percent) were women managed/owned MSMEs. In the IGQPI- related training provided to the private sector, of the 240 MSMEs that participated, 36 percent or 87 MSMEs owned/managed by women benefited from training activities (quality and sanitary seal and marketing plans). Mobilizing Private Sector Financing 56. Mobilizing Private Sector Financing was a core design priority, catalyzing investment in the tourism sector. In this context, the project was able to catalyze US$228.5 million worth of investment (see under the Efficacy section for details). Poverty Reduction and Shared Prosperity 57. Based on a World Bank report, the islands where tourism is concentrated experienced significant declines in poverty during 2000–2010, with poverty decreasing in Sal by 59 percent and in Boa Vista by 52 percent, showing that tourism growth—driven during that period by large foreign direct investment (FDI) projects—had the potential to lift people out of poverty. Furthermore, the tourism sector has become Cabo Verde’s most important economic sector, Page 26 of 57 The World Bank Competitiveness for Tourism Development (P146666) responsible for around 20 percent of gross domestic product (GDP) and 14 percent of employment, with the majority of these workers located in resorts. While these resorts have had significant contributions to growth and employment, they denote scant linkages with the local private sector, composed mainly of MSMEs. This is understood as a missed opportunity for Cabo Verde, which can potentially increase these linkages—if foreign direct investors access local inputs, it can provide local MSMEs with the opportunity to grow, create jobs, and lift more people out of poverty. It was anticipated that through this project, Cabo Verde’s tourism growth would be more inclusive if it is to fulfill its vision to alleviate poverty. Therefore, the country’s vision was to develop a competitive and sustainable tourism sector with high value added through this project, focusing on the medium/high end of the market, while linking with local enterprises and services that would expand the benefits of this growth to the lower levels of the economic pyramid, thus alleviating poverty. The contributions made by this project should assist in accomplishing this vision. Other Unintended Outcomes and Impacts 58. Complementing the tourism operational plan or GoPEDS, and recognizing the potential and preservation needs of its coastal and marine assets as critical to sustain economic diversification and resilience, Cabo Verde recently adopted a dedicated blue economy strategy and action plan. The umbrella blue economy14 concept seeks to promote economic growth and diversification by exploring and maximizing comparative advantages and linkages with the tourism sector, while ensuring environmental sustainability in the marine and coastal sectors. 59. As a result of the COVID-19 pandemic, the project included, throughout the second half of 2020 and 2021, a series of response activities, namely a “safe and clean” training and certification program for tourism operators; training courses for guides, taxi drivers, chefs, and bakers; and revamped outreach and marketing efforts to position the destination for recovery. These interventions were not anticipated at project appraisal. III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION 60. World Bank and the government worked to integrate into the project design lessons learned from the design and implementation of other private sector development projects. Moreover, the project design was also enriched by studies on tourism carried out by the Trade and Competitiveness Global Practice including Tourism Development in Cabo Verde. One such study was “Is It Time to Abandon the All-Inclusive Model?”, which showed the importance of tourism diversification while continuing to support the all-inclusive model, which had generated a highly significant amount of tax revenue and jobs to the economy. Other studies included: “Establishing a Tourism Ministry, Board, or Institute? Selecting an Institutional Arrangement to Promote Tourism Growth in Cabo Verde”; “The World Bank’s Value Proposition for an Integrated 10 Sustainable Tourism Solution”; and “Global Investment Promotion Best Practices 2012”. In addition, project preparation included a study tour focused on tourism institutions funded by the South- South Knowledge Exchange Facility, where a public-private delegation visited the Seychelles to understand how the ministry and the tourism board coordinate and implement the activities in the tourism sector. Some of the lessons learned that were incorporated were (i) integrated sustainable tourism solution; (ii) investment promotion; (iii) quality label program; and (iv) support to MSMEs. 14According to the Ambição 2030 National Strategic Vision, the blue economy sector includes maritime transport, ports and logistics, shipbuilding and repair, nautical and recreational tourism, nautical sports, entertainment and leisure, security and surveillance, the pharmaceutical industry, fisheries, aquaculture and fish industries, research and exploitation of biological resources, blue energy, marine ecosystems, wrecks for diving, and geothermal energy. Page 27 of 57 The World Bank Competitiveness for Tourism Development (P146666) B. KEY FACTORS DURING IMPLEMENTATION 61. As mentioned earlier, after effectiveness on November 15, 2016, several government reorganizations, including the changing of several ministers, affected the implementation arrangements for the project, which slowed down implementation of planned activities in its early stages: a) The main technical counterpart at board approval, the Ministry of Tourism, Investment and Business Development (MTIBD), was restructured as the Ministry of Economy and Employment (MEE) shortly after elections and vesting of the new government in April of 2016. Furthermore, a dedicated investment promotion agency (CV TradeInvest), as opposed to the originally intended joint tourism and investment promotion agency (CI-ATIC), was also created under the new government during 2016. b) After a new reorganization in January of 2018, MEE was then divided in two, and the tourism sector was included under a new Ministry of Tourism and Transport (MTT). c) In 2019, a Tourism Institute was established, inheriting the policy implementation mandate from the MTT (which retained policy making). d) Finally, the government initiated changes to the Unit for Implementation of Special Projects (UGPE), which was placed under the mandate of the Ministry of Finance (MF) through a Council of Ministers Decree. 62. During the midterm review it was noted that the PDO indicators were too ambitious and unrealistic. The increased investments generated and the increased bed nights at beneficiary small accommodations were deemed overly ambitious and unrealistic. Details are given under the project restructuring section. These two indicators should have been carefully considered at the project design stage by both the borrower and World Bank. However, during the midterm review, these indicators were revised as part of project restructuring. In addition, given the number of small activities and the number of beneficiaries involved, it would have been more effective if the beneficiaries were greatly involved in the project design stage and brought on board prior to project implementation for orientation purposes, as most of them were new to World Bank policies and procedures. The project implementation agency also could have been better trained or provided with technical capacity building for the activities they were responsible for during the early stages of implementation. (See under lessons learned). However, as the project implementation progressed, the implementing agency responded very effectively and efficiently to ensure that all project activities were completed, funds disbursed, and the project objectives were met. 63. With rapid expansion of the COVID-19 pandemic, since surging in the Chinese Wuhan region in December 2019, COVID-19 quickly spread around the world. The speed of the spread and the serious health consequences of the disease triggered governments across the world to impose lockdowns and social distancing measures. This, in turn, caused economic activity to significantly slow down, businesses to close, and rising unemployment. This was especially relevant to the tourism sector worldwide, as all countries closed their boarders for a considerable period of time and the tourism industry came to a virtual stop. Following the closure of Cabo Verde’s international borders in March 2020 and the partial reopening in October 2020, tourism arrivals collapsed by about 75 percent that year. Hospitality operations and restaurants were the hardest hit segments in the economy. The slowdown in arrivals continued into the first one-half of 2021 as first quarter figures show a decrease of 93.6 percent in guest movements with respect to the same period in 2020. In this context, the project throughout the second half of 2020 and 2021 included a series of response activities, namely a “safe and clean” training and certification program for tourism operators; training courses for guides, taxi drivers, chefs, and bakers; and revamped outreach and marketing efforts to position the destination for recovery. Despite the COVID-19 closedown, the project implementation progressed quite effectively during this period, and the UGPE should be commended for their performance. Page 28 of 57 The World Bank Competitiveness for Tourism Development (P146666) 64. Considering that the tourism halt extended well into 2021 beyond the original scenarios, authorities continued to prioritize response measures such as design and implementation of COVID-19–related measures to support affected MSMEs in the tourism sector as well as communication, health, and safety activities linked to the resumption of tourism. Inevitably, some of the project legislative and operational targets were delayed, and the government’s ability to push through some of the reforms and capacity building activities was constrained in this adverse context. IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION (M&E) M&E Design 65. As specified in the project appraisal document (PAD), the M&E system was based on the agreed results framework and monitoring arrangements. This framework focused on the PDO outcomes to be achieved and the related intermediate outcomes, as well as the environmental and social recommendations of the Strategic Environmental and Social Assessment (SESA). However, it should be noted that a “Theory of Change (ToC” was not required when this project was appraised but was subsequently prepared during the midterm review. The project manager was in charge with coordinating the M&E functions for the project and was to be supported by an M&E specialist. By project effectiveness, baseline data and target values for all the agreed indicators were verified and confirmed by the implementing agency (the Unit for Implementation of Special Projects [UGPE]), in collaboration with the designated technical staff in each beneficiary entity. The technical departments in the government and the chambers of commerce were responsible for the data collection, analysis, and reporting of the agreed project development outcome indicators. The primary monitoring mechanisms were to be semiannual reports and annual reports prepared by the UGPE. The reports were expected to assess achievements against the baseline values defined in the matrix for arrangements on results monitoring and overall project progress using the indicators defined in the results framework and submitted to World Bank. However, it should be noted that there were delays in the establishment of a proper M&E section within the UGPE, due to changes brought about by several government reorganizations that hampered M&E activities during the early part of project implementation. M&E Implementation 66. As mentioned above, there were delays in establishment of the project’s M&E system and the selection of an M&E specialist, which took place in late 2019, almost three years into project implementation. Prior to the establishment of an M&E system, data on the evolution of indicators were consolidated in an MS Excel template and attached to the Semi-Annual Project Report forwarded to the World Bank. In April 2021, a new M&E software was installed (TOMATE) and the M&E specialist was trained to utilize the software. From that date on, the entire cycle of management of the Competitiveness for Tourism Development (CTD) Project indicators were effectively monitored through this new information management system. During project implementation, it became apparent that, although project indicators were broadly reflective of the two PDOs, the PDO indicators and targets had several shortcomings: (i) the objective of PDO 1 was not clearly specified (investments generated) and the indicator was unrealistic (overestimated) and not achievable within the time frame of the project; and (ii) the objective of PDO 2, while clearly specified (increased bed nights at beneficiary small accommodation establishments) was deemed unrealistic, as the interventions to small accommodations to get certified with quality seal was likely to happen during the fourth year of the project, potentially even beyond that due to the COVID-19 crisis, leaving limited time before project closure for improvements to take place and translate into additional “bed nights.” Intermediate indicators Page 29 of 57 The World Bank Competitiveness for Tourism Development (P146666) where short in fully capturing several expected project outcomes. While investments related to the tourism sector were overachieved, most of the increase cannot be exclusively attributed to the project. While it has been shown that the project had a positive effect on these investments, the size of the effect and the relationship of the effect are not measurable. M&E Utilization 67. The data on the evolution of the indicators were used to determine whether the project results, both at the PDO and intermediate levels, were occurring as planned or whether corrective measures needed to be taken. As a consequence of using the monitoring data, the original project results framework was revised during the midterm review and several indicators were either revised or deleted, and new indicators introduced. The data presented by the UGPE during regular/virtual missions served to inform the achievements, outcomes, and outputs of the multiple interventions of the project and were used to decide on the midcourse correction during the midterm review and the restructuring that followed in 2020. A Theory of Change in diagram form, developed at the midterm review, helped by linking different activities with outputs and intermediate indicators leading to the PDOs. The results indicators were able to adequately measure the progress of activities and were adjusted through the restructuring to capture new elements of the revised project and Theory of Change. However, the diagram could have been made stronger if specific activities were directly linked to outputs and then outcomes, and if the underlying assumptions had been made more explicit, that is, if a discussion had determined why the activities would lead to specific outputs, intermediate outcomes, and overall project objectives. Justification of Overall Rating of Quality of M&E 68. Although there were initial delays in establishing a robust M&E system and shortcomings mentioned above, these were rectified during the midterm review. As a result of the midterm review and the introduction of a “Theory of Change,” project restructuring and the introduction of a new M&E software/system, enabled the project to align the performance indicators with the project activities to better meet the project objectives. However, given the shortcomings identified during design and implementation, the quality of M&E is rated as Modest. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE 69. The project activities did not entail physical interventions (soft interventions, such as capacity building, development of services, upgrading of instruments, and support for tourism policy development), and did not have direct impacts on the environment. Since implementation of the strategies, plans and proposals prepared under the project could have resulted in negative (or positive) environmental impacts. As a precaution the project was rated as Category B, and the following safeguards were triggered: OP/BP 4.01—Environmental Assessment; OP/BP 4.04— Natural Habitats; and OP/BP 4.11—Physical Cultural Resources. To address potential environmental and social risks, the project included the preparation of a Strategic Environmental and Social Assessment (SESA) under Component 1 in the first year of the project as well as the establishment of a Grievance Redress Mechanism (GRM) system. SESA was made available online in the Ministry of Finance website and was used consistently on tender processes. For specific contracts of consultancy service provision, the document was delivered to consultants to guide their assignments on the social-environment principles and requirements. 70. In regard to GRM, an action plan was approved in 2019 and an environmental-social specialist was hired by the UGPE in 2020 to coordinate its implementation with the involvement of project beneficiaries. The action plan for the project aimed mainly at rectifying the absence of information among the beneficiaries and introducing specific channels Page 30 of 57 The World Bank Competitiveness for Tourism Development (P146666) for communication through the project. Starting in 2020, the following actions were completed (i) training of project beneficiaries on GRM; (ii) training sessions on complaints management addressed to focal points appointed by the project beneficiaries; (iii) setting up of a project-specific Complaints Management Committee for transparent and multi-stakeholder resolutions of any complaints; and (iv) creation, dissemination, and operationalization of diversified and accessible face-to-face and virtual complaint admission channels at the municipality level. No complaints have been submitted by the close of the project. GRM progress reports have been presented semiannually and integrated into the project quarterly reports. 71. Financial Management: The fiduciary function was designed to be handled by the UGPE. There were no major issues regarding financial management during implementation. The financial management (FM) arrangements in place remained adequate, and the overall financial management performance of the project was Satisfactory, thanks to the record keeping and satisfactory justification of transactions. The internal control system was also adequate, the audit report and financial monitoring reports were submitted on time, and their quality was overall deemed satisfactory. The external auditor had issued an unqualified opinion on all financial statements throughout the project implementation, including from 2021. 72. Procurement: Procurement activities were relatively slow during the first year, 2017, but picked up during 2018 and 2019. The implementation agency could also have benefited from more capacity building, especially on how to manage the technical aspects of the project, with respect to developing technical terms of reference. In 2020, a slowdown was registered, due to the COVID-19 pandemic. The year 2021 was marked by a great effort on all fronts to intensify an execution level, resulting in high effectiveness with 26 activities launched and concluded. Procurement performance was rated as Satisfactory throughout the project, and no major issues were encountered. A total of 75 contracts were signed throughout the project´s life, each contract standing for one activity. With a few exceptions, contracts were executed in a timely manner. C. BANK PERFORMANCE Quality at Entry Rating: Moderately Satisfactory 73. There were strong reasons for the World Bank’s involvement and support for this operation. Moreover, the project design was based on studies on tourism carried out by the Trade and Competitiveness Global Practice, including Tourism Development in Cabo Verde. The World Bank’s analytical work indicated that tourism in Cabo Verde has the potential to lift people out of poverty through employment, remittances, and linkages with the primary sectors—implying the need to both increase investment and expand the participation by domestic companies in the tourism value chain. Preparation for the project was supported by the studies mentioned above, and the PDO was consistent with Cabo Verde’s priorities. The World Bank team was well rounded with the participation of tourism specialists. The project also benefited from the continuity of having at least two core persons from the original team remain with the project from its inception to Loan closing. However, while the PDO-level indicators focusing on increasing investment and diversification were of high relevance, achieving their targets by the original project closing date (May 2021) was deemed unlikely during the midterm review; as a result the indicators were revised (see under project restructuring). This was due both to delays in launching the project, in part due to institutional changes on the government’s side, and overambitious indicator selection at the design stage. In addition, more emphasis should have been placed on mitigating capacity constraints (technical and procurement) within the implementation agency as well as the beneficiaries (see under lessons learned). Quality of Supervision Ratings: Satisfactory Page 31 of 57 The World Bank Competitiveness for Tourism Development (P146666) 74. Supervision missions were foreseen in the PAD and planned accordingly. With the advent of the COVID-19 andemic and the travel restrictions that followed, supervision missions were carried out virtually. The World Bank remained agile during supervision, and it was able to adapt the project to address the challenges in a demanding emergency context. It was diligent in working with the borrower to prepare and approve the project’s restructuring in a timely manner. The World Bank team was proactive, made of the required technical and operational staff, and responsive to the government’s requests for change (through several restructurings) when required throughout project implementation, and itdemonstrated flexibility and understanding in the use of project resources. However, it should be also noted that when the second restructuring of the project took place and the first PDO indicator was revised, World Bank should have at the time also revised the original end target amount of US$35 million of investments catalyzed (see under the efficacy section). World Bank supported the project implementation unit consistently, which was highlighted during the implementation completion and results report (ICR) interviews with the borrower. As a result of the close collaboration between the borrower and World Bank, the project was implemented effectively, the PDO was met, and about 97 percent of the funds were disbursed. This support was crucial to the quality of implementation and greatly valued by the borrower. Justification of Overall Rating of Bank Performance Ratings: Satisfactory 75. The overall World Bank performance is rated as Satisfactory. As discussed above, there were some shortcomings during project design and supervision, at times beyond the control of the project, such as the COVID-19 andemic. However, as a result of the proactive and effective work of the World Bank team, these shortcomings were addressed through close virtual supervision and the several restructurings carried out between 2017–2022, and as a result, the project was able to meet its objectives. D. RISK TO DEVELOPMENT OUTCOME Rating: Modest 76. The government’s commitment and ability to continue with implementing their tourism reform program will sustain the achievements under this project. The project aimed at building and strengthening structures and processes at the institutional and sector levels, which will benefit the country moving forward as tourism picks up. Based on the success achieved under this project, the government is also embarking on a follow-up tourism project, Resilient Tourism and Blue Economy Development in Cabo Verde Project. V. LESSONS AND RECOMMENDATIONS 77. Keeping the project design simple and better calibrating the level of ambition: This was a relatively small project (US$5 million), but the level of ambition at the outset was very high (i.e., increase investment and diversification of the sector). In addition to the high level of ambition, the project was composed of many small activities and included several beneficiaries, which added complexity and transaction costs. During the early phase of project implementation, the implementing agency struggled with coordinating these diverse activities with the various beneficiaries who were new to World Bank procedures, including the subject matter. 78. Strengthening early engagement of project beneficiaries: Following up on the previous lessons learned, the engagement of project beneficiaries early in the project preparation phase is vital for them to adequately understand details of activities identified and familiarize themselves with World Bank procedures. Prioritization of selected activities to be implemented should be discussed and agreed with the project beneficiaries, and a proper Page 32 of 57 The World Bank Competitiveness for Tourism Development (P146666) implementation plan established, making sure the right sequence of interrelated task/assignments are agreed upon, which would have made implementation in the early years more effective and eliminated the delays associated with the beneficiaries in understanding their roles and responsibilities. 79. A stable and solid tourism governance framework was pivotal in accelerating project implementation. Thanks to the governance tourism institutional framework set up as well as a strong and continued senior and technical leadership of key implementing patterns as of late 2019, the project was able to pick up project implementation pace, delivered on planned activities and achieved expected results. The support provided by the project to the creation of this governance framework, even it took a little longer than expected, was a critical factor paving the way for improved implementation at post-restructuring. Paying more attention to the design and supervision of monitoring and evaluation (M&E): As mentioned in the M&E section, the project had several shortcomings regarding the design and supervision of the M&E framework. The quality of the project development objective (PDO) indicators and related targets, as well as the causal linkages between intermediate indicators, PDO indicators, and PDOs should have been more carefully thought through at the design stage. The selection of an M&E officer and the establishment of an M&E system almost three years into project implementation is detrimental to project monitoring and evaluation. These should be in place at the inception of implementation of project activities. In this respect, more attention should have been made to rectify this situation, early on during supervision. 80. Building capacity for procurement activities: The project experienced some delays in initiating procurement activities during the initial years, as the implementation agency and the relevant beneficiaries lacked the technical capacity to develop terms of reference (TORs) for complex procurement activities (e.g., Collateral Reforms Registry, Destination Marketing Plans, etc.). Project design should take into consideration providing technical assistance in developing TORs for the more complex assignments, so that these activities are well designed and adequate budgets are provided for an effective design and timely implementation. In addition, the lack of availability with respect to members of technical committees who are appointed for tender evaluation of complex activities often leads to delays in evaluation of bids, which could have detrimental effects on the goods or consultancy services selected. Care should also be taken that those members appointed to technical committees have the time to devote for technical evaluations, since most of them tend to be staff with full-time jobs. In addition, since most of the proposals were in English, the technical committee members should also be proficient in the English language or have adequate translation services provided. Capacity building of the implementation agency/beneficiaries is necessary, however, it is time consuming, especially for complex activities, where in-house capacity is weak or nonexistent. 81. Ensuring smooth communication and coordination among key beneficiaries and the Unit for Implementation of Special Projects (UGPE): Given the number of beneficiaries and the diverse set of activities, it would have benefited the project and eliminated delays in implementation, if there was a technical committee to coordinate the various activities. The project did have in place a steering committee, but a technical committee would have been better suited to coordinate the diverse activities between the UGPE and the beneficiaries. . Page 33 of 57 The World Bank Competitiveness for Tourism Development (P146666) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: Increased investment generated Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Value of Investment Amount(USD) 0.00 35.00 35.00 228.70 catalyzed (disaggregated by islands and type of investors) 25-Apr-2016 15-Nov-2016 11-May-2020 31-May-2022 Comments (achievements against targets): The volume of investments in the tourism sector, catalyzed through investment licenses granted by CV TRADE- INVEST, and by the Tourist Utility Statute granted by DGTT (as of September 2019), reached in December 2021 the amount of 223,572, 857 Euros, equivalent to US$ 228,129,272. This achievement represents US$ 193 million above the fixed stipulated target (US$ 35 million), disaggregated into the following tourism investment projects: 1. ROBINSON Club of Cabo Verde: Establishment Agreement between the Government of Cabo Verde and Club Hotel CV SA, to carry out the project, through Resolution No. 110/2019 (https://kiosk.incv.cv/V/2019/9/6/1.1.94.2908/p1518), in the amount of 49,500,000 Euros; 2. Royal Horizon Ponta do Sino: Establishment Agreement between the government of Cabo Verde and Decameron New Horizons Ponta Sino SA, through Resolution no. 110/2019, of July 27 (https://kiosk.incv.cv/V/2020/7/27/1.1.87.3360/), in the amount of 130,000,000 Euros; 3. ApartHotel Titino: Tourist Utility Installation Statute granted through Joint Order No. 70/2019, of December 20 (https://kiosk.incv.cv/V/2019/12/20/1.2.181.3045/), in the amount of 500,000 Euros; 4. Dynamic Ocean Roof Associates: Status of Tourist Utility Facility assigned through Joint Dispatch nº. 31/2020, of 7 September; (https://kiosk.incv.cv/V/2020/9/7/1.2.123.3401/), in the amount of 400,000 Euros; Page 34 of 57 The World Bank Competitiveness for Tourism Development (P146666) 5. Ocean Blue Ocean Suites: Statute of Tourist Utility of Installation granted through Joint Order No. 40/2020, of December 29 (https://kiosk.incv.cv/V/2020/12/29/1.2.178.3526/), in the amount of 108,829 Euros; 6. Viveiro Golf Resort: Statute of Tourist Utility of the Facilities granted through Joint Order no. 12/2021, 10 March (https://kiosk.incv.cv/V/2021/3/10/1.2.43.3665/), in the amount of 5,000,000 Euros; 7. The Box - CASUL FOOD AND BEVERAGE: Situation of Tourist Utility of the Installation attributed by the Joint Order no. 30/2021, of August 3 (https://kiosk.incv.cv/V/2021/8/3/1.2.124.3851/), in the amount of 64,028 Euros; 8. Flor de Sal - Hotelaria Sociedade Unipessoal Anónima: Minutes of the Establishment Agreement between the State of Cabo Verde and Flor de Sal - Hotelaria Sociedade Unipessoal Anonima, through Resolution no. 75/2021, of July 27 (https://kiosk.incv.cv/V/2021/7/27/1.1.74.3840/p2028), in the amount of 38,000,000 Euros. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of MSMES certified Number 0.00 0.00 40.00 208.00 (with Quality Seal or ISO/HACCP or Safe & Clean) 25-Apr-2016 15-Nov-2016 11-Jun-2020 31-May-2022 of which, owned or Percentage 0.00 0.00 33.00 47.00 managed by women (%) Comments (achievements against targets): 208 MSMEs certified under the following project activities: (a) 11 MSMEs with ISO/HACCP. Activity - Technical Qualification for Tourism (CERTIFIC I & II). Data source: Final Report of the Consultancy/Consultant Mundi validated by the Chambers of Commerce; (b) 114 HORECA with Sanitary Seal. Activity - COVID 19 Sanitary Seal Program. Data source: Final Report of the Preverisk Group/Consultant validated by the Ministry of Tourism; (c) 15 Small Quality Seal accommodations. Activity - Quality Seal Progr am. Data source: Quality audit reports and certifications issued by IGQPI; (d) 68 HACCP certified HORECA. Activity - Cable Safety II. Data source: MundiConsulting/Consultant Final Report validated by the Tourism Institute. Page 35 of 57 The World Bank Competitiveness for Tourism Development (P146666) A.2 Intermediate Results Indicators Component: Component 1: Enhancing governance framework of the tourism sector Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Start-up of operations of the Yes/No No Yes Yes Tourism Institute 10-May-2016 15-Nov-2016 31-May-2022 Comments (achievements against targets): Data source: DL 37/2019, July 25 - Creates the Cape Verde Tourism Institute (https://kiosk.incv.cv/V/2019/7/25/1.1.81.2863/p1377). Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Development of a national Yes/No No Yes Yes tourism strategy 10-May-2016 15-Nov-2016 31-May-2022 Comments (achievements against targets): Data source: Official Gazette No. 81 | I Series | 07-25-19 GOPEDS Turismo (https://kiosk.incv.cv/V/2019/1/9/1.1.2.2642/). Indicator Name Unit of Measure Baseline Original Target Formally Revised Actual Achieved at Page 36 of 57 The World Bank Competitiveness for Tourism Development (P146666) Target Completion Number of Tourism Master Number 0.00 7.00 7.00 Plans adopted 25-Apr-2016 15-Nov-2016 31-May-2022 Comments (achievements against targets): The Ministry of Tourism adopted the seven Tourism Master Plans and, based on them, the Ministry developed the Tourism Operational Program (POT 2021-2026), approved by the Council of Ministers on April 5, 2022, through Resolution 31/2022 (https:/ /kiosk.incv.cv/V/2022/4/5/2.1.35.4172/). Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of Tourism Zoning Number 0.00 0.00 6.00 6.00 Plans (POTs) adopted 25-Apr-2016 15-Nov-2022 11-Jun-2020 31-May-2022 Comments (achievements against targets): 6 POTs adopted by the GoCV, as detailed below: (a) POT Baia das Gatas/SV (https://kiosk.incv.cv/V/2020/10/30/1.1.123.3471/p 2820); (b) POT São Pedro/SV (https://kiosk.incv.cv/V/2020/10/30/1.1.123.3471/p2846); (c) Santa Maria Este/Sal POT (https://kiosk.incv.cv/V/2021/12/30/1.1.128.4046/); (d) POT Morrinho Branco/Sal (https://kiosk.incv.cv/V/2021/12/30/1.1.128.4 046/); (e) POT Praia Grande/SV: (https://kiosk.incv.cv/V/2022/5/3/1.1.43.4200/); (f) POT Santa Maria Oeste/Sal (https:// kiosk.incv.cv/V/2022/5/31/1.1.53.4250/). Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Tourism Code enacted by the Yes/No No No Yes Yes Page 37 of 57 The World Bank Competitiveness for Tourism Development (P146666) Government 25-Apr-2016 15-Nov-2016 11-Jun-2020 31-May-2022 Comments (achievements against targets): In 2019, local authorities (MTT) decided to produce a White Paper/TCWP of the Tourism Code, allowing the Government to better move forward with legal reforms in the sector. The legislative package produced followed a TCWP TOMO I and TOMO II, which have been already bound and delivered to the MTT. The digital format is available at MTT's website https://drive.google.com/file/d/1xyVHghIfAhq4orEN6HGvxxnbUGaXmjBC/view?fbclid=IwAR3jfAHN- lNmbYGwZv83nnvLNo-rGgQUYujKb0kCXvdGTqmy1a9QxK1CCuY Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of Investment Number 0.00 0.00 3.00 3.00 Forums Organized 25-Apr-2016 15-Nov-2016 11-Jun-2020 31-May-2022 Comments (achievements against targets): In total, 3 investment forums were organized: (a) Forum Sal 2019 ((Ministry of Finance Report (https://bit.ly/2Nb6Tha)); (b) Forum Boston 2019 (https://tinyurl.com/y2kndejk); (c) Forum Sal 2021-64th CAF/ 2nd Ed. of the UNWTO Global Tourism Inv estment Forum in Africa (https://tinyurl.com/4wyxnz3u). Component: Component 2: Diversify tourism sector and increase inclusiveness of tourism-led growth by strengthening the competitiveness of local MSMEs Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Page 38 of 57 The World Bank Competitiveness for Tourism Development (P146666) Number of small Number 0.00 50.00 58.00 accommodations that benefited from technical 10-May-2016 15-Nov-2016 31-May-2022 assistance under the project Comments (achievements against targets): Target achieved, despite the constraints caused by the Covid-19 Pandemic, translated into 58 accommodation units that received technical assistance in the context of the small accommodation quality seal program, as follows: (a) 16 in 2020 (Reports and Pre sentations of Progress of the IGQPI, based on consultations carried out); (b) 30 in 2021 (IGQPI Progress Reports and Presentat ions, based on consultancies performed); (c) 12 TA's to additional accommodation in 2022 ((IGQPI Progress Reports and Pres entations, based on consultancies performed). Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of MSME Number 0.00 100.00 240.00 representatives who benefited from training 10-May-2016 15-Nov-2016 26-Jul-2021 activities supported by the Project Of which women (%) Percentage 0.00 35.00 36.00 Comments (achievements against targets): A total of 240 MSME representatives benefited from training activities through the Project. Specifically, they are: (a) 12 under CERTIFIC I (Source: MundiConsulting Final Report); (b) 8 under CERTIFIC II (Source: MundiConsulting Final Report); (c) 46 under Quality Seal (Source: Alexandre Garrido Page 39 of 57 The World Bank Competitiveness for Tourism Development (P146666) Reports, IGQPI Progress Reports and Presentations); (d) 114 under MTT&ac ute;s Sanitary Seal Program (Source: Preverisk Group Final Report); (e) 14 trained by THR (Source: THR Destination Tourism Mar keting Plan Final Report); (f) 46 under Cape Safety II (Source: MundiConsulting Final Report). Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion National Certification Yes/No No No Yes No Company established 25-Apr-2016 15-Nov-2016 11-Jun-2020 31-May-2022 Comments (achievements against targets): Despite CTD´s support for a Business Plan to guide the creation of a national private supplier of certification (ENC) , aimed at reducing the costs of these services, normally contracted abroad, and the signing of a memorandum of understanding between the local Chambers of Commerce and a Portuguese supplier of international certification (EIC), with the outbreak of the Covid-19 Pandemic and its economic consequences, the two promoters suspended negotiations (in fact latest information received indicates the partners did not reach an agreement on the headquarters of the ENC. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Technical and Feasibility Yes/No No No Yes Yes Study of Mindelo´s Oceanarium approved 25-Apr-2016 15-Nov-2016 11-Jun-2020 31-May-2022 Comments (achievements against targets): Page 40 of 57 The World Bank Competitiveness for Tourism Development (P146666) The study was jointly approved by the Ministry of Tourism and the Ministry of the Sea. Data source: Oceanário is one of the several investment projects included in the Special Maritime Exclusive Economic Zone Program (ZEEEM-SV); Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Legal Framework for Yes/No No No Yes Yes Insolvency and Collateral Registry approved 25-Apr-2016 15-Nov-2016 11-Jun-2020 31-May-2022 Comments (achievements against targets): Target achieved with the approval of the following Decree-Laws, by the Government, to improve the business environment: (a) Insolvency: Decree-Law No. 13/2020, of march 02, which approves the statute of the judicial administrator (https://kiosk.incv.cv/V/2020/3/2/1.1.24.3139/p585) ; (b) Collateral Registry: Decree-Law 40/2020, of April 01 (https://kiosk.incv.cv/V/2 020/4/1/1.1.41.3193/), which establishes the special legal regime for pledges and Decree-Law 48/2020, of April 30 (https://kiosk.incv.cv/V/2020/4/30/1.1.54.3221/) , which establishes the general legal framework for the use of movable assets as a guarantee for the fulfilment of obligations and the Register of Securities Guarantees. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Establishment of a moveable Yes/No No Yes Yes collateral registry 10-May-2016 15-Nov-2016 31-May-2021 Comments (achievements against targets): Page 41 of 57 The World Bank Competitiveness for Tourism Development (P146666) Web Platform has been developed and tested successfully (https://rgm.gov.cv/), with the first Collateral Registry done in the Platform RMG on may 2022 (https://drive.google.com/file/d/1wbj4zNPOWCjgr_F2FJpfLbdW5zQJhHrA/view?usp=sharing). Page 42 of 57 The World Bank Competitiveness for Tourism Development (P146666) B. KEY OUTPUT PER COMPONET Increased Investment Generated 1. Value of Investment Outcome Indicators catalyzed 2. Number of MSMES certified Objective 1: Increase investment into tourism sector. 1. Start-up of operations of the Tourism Institute 2. Development of a national tourism strategy 3. Number of Tourism Master Plans adopted 4. Number of Tourism Zoning Plans (POTs) adopted 5. Tourism Code enacted by the Government 6. Number of Investment Forums Organized Intermediate Results Indicators Objective 2: Increase diversification into tourism offerings 1. Number of small accommodations that benefited from technical assistance under the project 2. Number of MSMEs representatives who benefited from training activities supported by the project, of which women (percentage) 3. National Certification Company established 4. Technical and Feasibility Study of Mindelo’s Oceanarium approved 5. Legal framework for Insolvency and Collateral Registry approved 6. Establishment of a movable collateral registry Objective 1: Increase investment into tourism sector. Key Outputs by Component 1. Support to the set up and organization of the Tourism Institute 2. Support to improve the institutional framework and capacity to the investment promotion agency Page 43 of 57 The World Bank Competitiveness for Tourism Development (P146666) 3. Support to legal reform of the tourism sector, including the drafting of the White Paper on regulation for the tourism sector 4. Development of 7 Island level Master plans 5. Drafting of Strategic Marketing plan 6. Development of six tourism zoning plans 7. Support organization of three investments forums Objective 2: Increase diversification into tourism offerings 1. Delivery of quality label program for small accommodations with 15 business certified, 50 business received TA, 13 quality auditors, 17 quality consultants trained, and a web-based platform developed 2. Development of Tourism Georeferencing App 3. Support to improve business environment through review of insolvency framework and establishment of online movable collateral registry 4. Support to private sector organizations 5. Delivery of COVID-19 training for tourism professionals and MSMEs. Page 44 of 57 The World Bank Competitiveness for Tourism Development (P146666) ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS Name Role Preparation Penelope Demetra Fidas, Kofi-Boateng Agyen, Penelope Task Team Leader(s) Demetra Fidas Cheick Traore Procurement Specialist(s) Fatou Fall Samba Financial Management Specialist Gerard Joseph Mataban Jumamil Counsel Luciano Campelo Bornholdt Social Specialist Antonio Manuel Baptista Team Member Bradley Lawrence Weiss Team Member Elsa Rodriguez Felipe Team Member Milaine Rossanaly Team Member Eneida Herrera Fernandes Team Member Nina Pavlova Mocheva Team Member Tojoarofenitra Ramanankirahina Team Member Laurent Olivier Corthay Team Member Armando Heilbron Team Member Monica Patricia Rivero Riveros Team Member Laurent Mehdi Brito Team Member Astou Diaw-Ba Team Member Aissatou Diallo Team Member Maman-Sani Issa Social Specialist Page 45 of 57 The World Bank Competitiveness for Tourism Development (P146666) Cheikh A. T. Sagna Social Specialist Luz Meza-Bartrina Counsel Supervision/ICR Cristina Navarrete Moreno Task Team Leader(s) Ndeye Fatou Mbacke, Laurent Mehdi Brito Procurement Specialist(s) Seynabou Sarr Financial Management Specialist Jandira Monteiro Dos Santos Team Member Mame Safietou Djamil Gueye Social Specialist Fabienne Anne Claire Prost Environmental Specialist Antonio Manuel Baptista Team Member Bradley Lawrence Weiss Team Member Matthieu Louis Bonvoisin Counsel Roselyne CH Massanvi Akibode Mabudu Team Member Irene Marguerite Nnomo Ayinda-Mah Team Member Laurent Gonnet Team Member Laurent Olivier Corthay Team Member Eric Yves Dacosta Team Member Astou Diaw-Ba Team Member Seynabou Thiaw Seye Team Member Ganna Musakova Team Member B. STAFF TIME AND COST Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY14 7.802 55,250.81 Page 46 of 57 The World Bank Competitiveness for Tourism Development (P146666) FY15 45.420 261,896.63 FY16 19.905 122,625.20 FY17 .062 13,736.50 FY20 11.837 110,291.27 FY21 12.338 169,020.80 FY22 5.665 42,774.44 Total 103.03 775,595.65 Supervision/ICR FY14 0 3,780.00 FY17 10.345 56,278.12 FY18 12.913 101,185.01 FY19 11.572 115,287.85 FY20 8.511 83,159.03 FY21 10.410 71,665.20 FY22 10.324 108,697.54 FY23 2.865 24,103.90 Total 66.94 564,156.65 Page 47 of 57 The World Bank Competitiveness for Tourism Development (P146666) ANNEX 3. PROJECT COST BY COMPONENT Amount at Approval Actual at Project Percentage of Approval Components (US$M) Closing (US$M) (US$M) Component 1: Enhancing governance framework of the 2.27 2.02 0 tourism sector Component 2: Diversify tourism sector and increase inclusiveness of tourism-led 2.24 2.24 0 growth by strengthening the competitiveness of local MSMEs Component 3: Project 0.49 0.64 0 implementation Total 5.00 4.90 0.00 Page 48 of 57 The World Bank Competitiveness for Tourism Development (P146666) ANNEX 4. EFFICIENCY ANALYSIS 1. This annex provides details on the economic and financial analysis for the CTD conducted as part of the ICR. The original PAD did not calculate an estimated ERR. To the extent possible, the ICR analysis is based on actual data gathered as part of the M&E effort of the program, including investments catalyzed by the project and the number of MSMEs certified. This calculation is likely to underestimate actual benefits of the project investments given the potential for new future large-scale investments and positive spillover effects on other businesses within and outside the tourism sector. 2. The NPV is estimated to be US$6.3 million at a 12 percent discount rate with an ERR of 33 percent over a fifteen-year period including the six years of project implementation.15 The following table provides additional valuation estimates generated by the analysis. NPV (5% discount rate) US$15.6 million NPV (12% discount rate) US$6.3 million NPV (15% discount rate) US$4.2 million ERR 33% 3. Assumptions used in this analysis are outlined below: a. Investments catalyzed. As noted in the Results Framework, the total investment catalyzed by the project is estimated at US$228.7 million. This is primarily through three major investment projects: Robinson Club Cabo Verde (49.5 million euros, announced in 2019), Royal Horizon Ponta do Sino (130 million euros, announced in 2019), and Salt Flower Hotel (38 million euros, announced in 2021). Based on these investments, the analysis estimates that 10 percent of the investment value announced will be implemented within a six-year period, and that each project will generate an average of 50 jobs, with an annual salary of US$3,000. The analysis does not account for wider spillovers into the local economy that are likely to result from these investments. b. Increased accommodation prices. Support provided by CTD allowed for certification of 208 MSMEs. The analysis assumes that this certification will allow these MSMEs to increase their nightly accommodation charges by 5 percent as a result of this certification (from an average nightly rate of US$70 to US$74). Additional assumptions are that each of these MSMEs can accommodate approximately 6 tourists per day, totaling at 45,000 tourists per year across all of the certified MSMEs. The average length of stay is estimated at six days. Given that this analysis is based on a low average nightly accommodation charge, the impact of this certification could be considerably larger. 4. Sensitivity analyses: 15The estimated NPV at a discount rate of 5 percent is US$15.6 million, which reflects the cost of capital to the Government of Cabo Verde. However, the NPV of US$6.3 million at 12 percent likely better reflects the risk associated with investments in Cabo Verde as a risk-adjusted discount rate, especially given the cyclical nature of tourism investments in developing economies. Page 49 of 57 The World Bank Competitiveness for Tourism Development (P146666) a. Assuming that 30 percent of investment announcements will be implemented (instead of the 10 percent assumption used in our baseline analysis) increases the CTD ERR to 47 percent. b. Assuming that 5 percent of investment announcements will be implemented (instead of the 10 percent assumption used in our baseline analysis) reduces the CTD ERR to 26 percent. c. Assuming that the delay from investment announcement to implementation is three years (instead of the assumed six years) increases the CTD ERR to 50 percent. d. Assuming that the delay from investment announcement to implementation is eight years (instead of the assumed six years) reduces the CTD ERR to 26 percent. e. Using a baseline nightly accommodation rate of US$100 instead of the assumed US$70 increases the CTDPPP ERR to 37 percent. f. Using a baseline nightly accommodation rate of US$60 instead of the assumed US$70 reduces the CTD ERR to 31 percent. g. Assuming that the MSME certification enables a 10 percent increase in the nightly accommodation charge (instead of the assumed 5 percent) increases the CTD ERR to 43 percent. h. Assuming that the MSME certification enables a 3 percent increase in the nightly accommodation charge (instead of the assumed 5 percent) reduces the CTD ERR to 29 percent. Page 50 of 57 The World Bank Competitiveness for Tourism Development (P146666) ANNEX 5. BORROWER, CO-FINANCIER, AND OTHER PARTNER/STAKEHOLDER COMMENTS The borrower has reviewed and validated this Implementation Completion and Results Report (ICR) with no comments. The following section thus summarizes the borrower’s ICR. 1. This Implementation Completion and Results Report (ICR) was prepared by the project manager, under the Competitiveness for Tourism Development (CTD) Project, which has been implemented from November 16, 2016, to May 31, 2022. The CTD Project was designed to support the strengthening of the governance framework of the tourism sector and strategic planning, in addition to creating structured programs for support to SMEs in the hospitality sector. 2. In view of the activities implemented and the results achieved vis-à-vis of the PDO and the intermediate targets established, as reported in the sections that follows, it is UGPE´s judgement that CTD has been completed satisfactorily. 3. Context and Objectives. Cabo Verde has emerged as a tourist destination for international travelers, with an 8 percent annual average growth rate from 2002 to 2017, induced mainly by FDI from European operators in large seashore resort accommodations on two islands—Sal and Boavista. Prior to the COVID-19 pandemic, the sector accounted for near 40 percent of overall economic activity, 25 percent of GDP, and 93,000 total jobs. Notwithstanding the remarkable past performance, the sector still reveals critical vulnerabilities that inhibit its competitiveness. Such vulnerabilities were recognized during CTD´s PAD preparation, notably: (i) low capacity to proactively promote investment; (ii) governance framework of the sector demanding legal and institutional adaptations; (iii) minimal linkage of domestic private sector in the tourism value chain; (iv) destination highly concentrated on ”sun and sea“ niche and relying on a few European source markets; and (v) business ecosystem needing further reforms to facilitate and foster access to competences and finance for MSMEs. 4. While CTD objectives remained unchanged during implementation, the project went through some adjustments and reallocation of funds. These did not affect the disbursement categories of the project, as per the financing agreement, but rather intended to better align specific activities to the GoCV´s increased focus on sector-governance and policy direction, and to respond to the COVID-19 pandemic crisis as well. The adjustments occurred in (i) May 2018, to increase the resources to certain critical activities 16 ; (ii) June 2020, a restructuring in line with the Mid-Term review’s recommendations to adjust the results framework and to include a series of private sector capacity building support activities in response to COVID-19 17 ; (iii) April 2021, to extend the project closing date to January 31, 2022, to permit important follow-on support to conclude core activities of the project as it suffered delays brought on by the COVID-19 18 ; and (iv) January 2022, establishing May 31, 2022, as the new closing date, to ensure full completion of key structural activities and accomplishment of identified intermediate results. 5. M&E. The M&E system was to be based on the agreed results framework and monitoring 16 Ref. Letter from the Ministry of Finance, Ref. No./ GMF/2018, of May 04, 2018. 17 Ref. WB Project Paper for disclosure, Report Nº.: RES41762, June 17, 2020. 18 Ref. WB Notice to Borrower, April 21, 2021. Page 51 of 57 The World Bank Competitiveness for Tourism Development (P146666) arrangements. This framework focused on the PDO outcomes to be achieved and the related intermediate outcomes. The data on the evolution of the indicators were used to determine whether the project results, both at the PDO and intermediate levels, were occurring as planned or whether corrective measures needed to be taken. Because of using the monitoring data, project activities had to be revised or added. The original project results framework also experienced changes during the midterm review as a result of the monitoring findings. The Results Chain below was approved for CTD: out of 14 targets established, 13 were met or exceeded, which represents a 94 percent achievement rate. 6. Technical implementation. 75+ contracts executed by the project, each contract standing for one activity. With rare exceptions, contracts were executed timely, with a technical execution rate near 100 percent. Unsurprisingly, activity implementation was relatively slow during the first year, 2017, but picked up during 2018 and 2019. In 2020, a slowdown was registered, due to known COVID-19 caused constraints. FY2021 is marked by great effort on all fronts to intensify execution level, resulting in high effectiveness, with 26 activities launched and concluded. As the project closing date was extended, in 2022 it was possible to implement 5 activities, of which 4 TA to 12 small accommodations were to assure completion of a 50 TA target. 7. Project management. Overall, the project management was conducted stably and efficiently, free of situations that couldn´t be handled and resolved. This observation is reflected on the open and pragmatic mode of interaction adopted with all project stakeholders, characterized by (i) adequate compliance with procedures, (ii) regular and coherent consultations with the team from World Bank, (iii) proactive yet discrete monitoring of activity implementation jointly with project beneficiaries, and (iv) a results-oriented approach to contracts execution. The above ingredients were crucial for the satisfactory implementation of the project, a conclusion that can be made from the results of the online qualitative survey conducted by the UGPE´s M&E specialist and supported by the project manager in late December 2021, with all of CTD´s beneficiaries and a representative sample of its service suppliers. Page 52 of 57 The World Bank Competitiveness for Tourism Development (P146666) ANNEX 6. THEORY OF CHANGE, CHANGES AND RESULTS TO KEY INDICATORS Figure A6.1: Theory of Change Source : Restructuring Paper of Competitiveness for Tourism Development Project. June 2020. Page 53 of 57 The World Bank Competitiveness for Tourism Development (P146666) Table A6.1: Revised indicators at the second Level 2 restructuring At project board approval Second restructuring (10-May-2016) (11-June-2020) Original PDO indicators Revised/new/deleted indicators Value of investment generated (disaggregated by islands and type Value of investment catalyzed (disaggregated by of investors) (Amount USD 35 million) islands and type of investors) (Amount USD 35 million) Increased investment generated (Amount USD 35 million) Deleted Increased bed nights at beneficiary small accommodations (18%) Number of MSMEs certified (with Quality Seal or ISO/HACCP or Safe & Clean) (Number 40) Of which, owned or managed by women (33%) Of which, owned or managed by women (35%) Increased bed nights at beneficiary small accommodation Deleted establishments (18%) Original intermediate result indicators Revised intermediate result indicators Number of tourism master plans adopted (7) Number of Tourism Zoning Plans (POTs) adopted (7) Tourism Code enacted by the government (Yes/No) Number of investment forums organized (3) Number of small accommodations that benefited from the quality Number of small accommodations that benefited label program under the project (50) from technical assistance under the project (50) Number of MSME representatives who benefited from training (by Number of MSME representatives who benefited the two chambers of commerce) activities supported by the project from training (from both public and private trainers) (100) activities supported by the project (100) Of which women (35%) Of which women (35%) National Certification Company established (Yes/No) Technical and Feasibility Study of Mindelo´s Oceanarium approved (Yes/No) Collateral registry approved (Yes/No) Number of investor leads receiving improved investment Deleted promotion services in the tourism sector (18) Implementation of a formal investor outreach program (Yes/No) Deleted Source: Authors' elaboration Page 54 of 57 The World Bank Competitiveness for Tourism Development (P146666) Table A6.2: Overall outcome rating based on a split rating Original PDO Revised PDO pre-restructuring post-restructuring Relevance of objectives High Efficacy (PDO) Modest Substantial Efficiency Substantial Outcome ratings Moderately Unsatisfactory Satisfactory Numerical value of the outcome ratings 3 5 IDA disbursement US$3.28 million US$1.57 million Share of disbursement 0.66 (66%) 0.34 (34%) Weighted value of the outcome rating 1.98 1.70 (numerical value of outcome rating × share of disbursement) Final outcome rating Moderately Satisfactory (weighted value original + weighted value revised) (3.68 rounded off to 4) Source: Authors' elaboration Page 55 of 57 The World Bank Competitiveness for Tourism Development (P146666) ANNEX 7. INVESTMENT CATALYZED AND SURVEY RESULTS 1. Based on the work carried out under the Component 1 and combined with the activities under Component 2, Cabo Verde was able to attract substantive investments to develop their tourist industry as evident by table A7.1. 2. Some institutions played a significant role in the process of attracting and maintaining investments in the tourism sector. The sample was asked to indicate which government agencies and other institutions they had been in touch with during the investment process and to rate their performance. Cabo Verde TradeInvest and the Ministry of Tourism and Transport were named as the main correspondents. In terms of quality of interaction and assistance, CV TradeInvest was unanimously named as the one that provided the most valuable assistance. The Municipality of Sal also received a positive note. The slow rate at which some approval processes moved forward was named as the main frustrating aspect to be improved. It was also mentioned that communication with central services was, at times, more efficient then with local representations. Some interviewees indicated the Customs and Immigration as one of the institutions with which they had extremely poor experience due to lack of clarity, support, and extreme bureaucracy. The majority of the interviewees did not participate in the Investment Forums, and those who did attend (the Sal one), found them to be somewhat useful. 3. Despite insistence, 22 percent of the survey sample did not participate. Notwithstanding, the interviewees shed some light on the key factors motivating investors to invest in Cabo Verde and the perception regarding the performance of institutions that deal with investment processes. The results also provided an update on the status of the sampled investment projects. 4. It is evident that the project positively influenced two of the critical factors without which investors claim they would not have invested in Cabo Verde: (i) support from investment promotion agency/ government bodies, and (ii) clarity of an investment attraction policy. The quality of legal and regulatory frameworks seemed to have improved the prospects, but was not critical to the decision to invest, and the quality and certainty of a planning framework (including territorial planning) was also named as a plus. 5. It was noticed that the value of the investments collected from the survey did not match the information provided by UGPE in the final results framework. This can be justified by the investor representatives not being strict with their answers, and/or Tradeinvest not having an efficient monitoring mechanism in place, which allows an updated implementation status of all projects with contractual benefits (“Convenção de Estabelecimento”) or tourism utility status (“Estatuto de Utilidade Turística”). 6. As can be noted in table A7.1, the investment decision dates of Viveiro Golf Resort and Royal Horizon Ponta do Sino were a few years before the CTD duration. However, due to internal and external factors, these projects only signed contractual agreements (“convenção de estabelecimentos”) and started construction in 2021 and 2020, respectively, and therefore should be included as part of investment projects under the influence or support of P146666. On the other hand, the Dive Inn—Club Nautica project was abandoned, hence should not be included in the catalyzed investments list. Page 56 of 57 The World Bank Competitiveness for Tourism Development (P146666) Table 6: Value of Investments Catalyzed Name Description Location Amount Reason for inclusion, date, and record EUR mil. number Robinson The Robinson Club Cabo Verde project, Santa 49.50 Included because of the following CTD Club Cabo belonging to the company Club Hotel CV, Maria– contributions: (i) technical assistance to Verde S.A., is located at ZDTI Oeste de Santa Sal Cabo Verde TradeInvest investment Maria–Ilha do Sal. The hotel opened in promotion outreach and restructuring December 2019, closed in March 2020, and plan; (ii) subsequent financing of the reopened in September 2021. It is currently Cabo Verde Investment Forum (CVIF) fully operational. The establishment 2019 (Island of Sal, July 1–3, 2019) where agreement between the Government of the investment convention was signed, Cabo Verde and Club Hotel CV, S.A. for the and (iii) concurrent funding of the construction of the Robinson Club Cabo development of Tourism Zone Plan (POT Verde, provided for the maintenance of 106 Santa Maria Oeste– Sal), represents the jobs in the former Creole hotel and the project's main contributions to increased creation of 144 new direct jobs. investment in the tourism sector. Royal The Royal Horizons Ponta do Sino Resort Santa 130.00 Included because CDTP´s (i) financing of Horizon project, belonging to the company Maria– the Cabo Verde Investment Forum (CVIF) Ponta do Decameron New Horizons Ponta Sino, S.A., Sal 2019 (Island of Sal, July 1–3, 2019), as Sino is located in the ZDTI of Santa Maria –Sal well as (ii) funding of the development of and is under construction. According to Tourism Zone Plan (POT Santa Maria– updated information, it is in negotiation Sal), represents the project's main with Afreximbank for additional financing. contributions to increased investment in the tourism sector. Dive Inn– Diving activities (4 jobs) Baia das 0.20 Approval of the zoning plan POT Baia das Club Gatas– Gatas/SV Nautico SV BO No. 143 II Series 10/8/2019 Apart Hotel establishment– ApartHotel (3 jobs) Santa 0.50 Approval of the zoning plan POT Santa Hotel Maria Maria East/West/Sal. BO No. 181 II Titino Series. 20/12/2019 Dynamic Hotel establishment–Hotel (4 jobs) Santa 0.40 Approval of the zoning plan POT Santa Ocean Maria Maria Este/Oeste/Sal. BO No. 123 II Roof Series. 9/7/2020. Associates Blue Accommodation and catering (20 jobs) Santa 0.10 Approval of the zoning plan POT Santa Ocean Maria Maria East/West/Sal. BO No. 178 II Ocean Series. 29/12/2020 Suites Viveiro Golf course and club house restaurant Santa 5.00 Approval of the zoning plan POT Santa Golf hospitality (70 jobs) maria Maria Este/Oeste/Sal. BO No. 43 II Series. Resort 3/10/2021 The Box Restaurant Hospitality (9 jobs) Santa 0.06 Approval of the zoning plan POT Santa Maria Maria East/West/Sal. BO No. 124 II Series. 8/3/2021 Salt Hotel establishment – hotel (500 jobs) Santa 38.00 Approval of the zoning plan POT Santa Flower Maria Maria Este/Oeste/Sal. 7/27/2021 Total in euro million 223.78 Total in US$ million 228.70 Source: Authors' elaboration with data from interviews conducted Page 57 of 57