The Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR175279 IMPLEMENTATION COMPLETION AND RESULTS REPORT Grant No. TF0A1553 and TF0B1605 ON A GRANT IN THE AMOUNT OF US$6.746 MILLION TO THE THE ARAB REPUBLIC OF EGYPT FOR THE EQUAL ACCESS AND SIMPLIFIED ENVIRONMENT FOR INVESTMENT PROJECT September 26, 2022 Finance, Competitiveness And Innovation Global Practice Middle East And North Africa Region Official Use CURRENCY EQUIVALENTS (Exchange Rate Effective June 30, 2022) Currency Unit = Egyptian Pound EGP 1 = US$ 0.05 US$ 1 = EGP 18.80 FISCAL YEAR July 1 - June 30 Regional Vice President: Ferid Belhaj Country Director: Marina Wes Regional Director: Nadir Mohammed Practice Manager: Djibrilla Adamou Issa Task Team Leader(s): Aminur Rahman ICR Main Contributor: Rina Oberai, Dina M.E. Elkhishin Official Use ABBREVIATIONS AND ACRONYMS AF Additional Finance CPF Country Partnership Framework DPF Development Policy Framework EASE Equal Access and Simplified Investment ERRADA Egyptian Regulatory Reform and Development Activity FM Financial Management FY Fiscal Year FDI Foreign Direct Investment GAFI General Authority for Investment and Free Zones GOE Government of Egypt GDP Gross Domestic Product HQ Head Quarter IDA Industrial Development Authority ILAS Industrial Licensing Administrative System ICT Information and Communication Technology IT Information Technology IMF International Monetary Fund IPR Investment Policy Review ISC Investment Service Center KPI Key Performance Indicator MTR Mid Term Review MENA Middle East and North Africa MITSI Minister of Industry, Trade & Small Industries MPED Ministry of Planning and Economic Development M&E Monitoring and Evaluation NUCA New Urban Communities Authority OSS One Stop Shop OM Operational Manual OECD Organization for Economic Co-operation and Development PAD Project Appraisal Document PDO Project Development Objective PIU Project Implementation Unit SCD Strategic Country Diagnostic SDS Sustainable Development Strategy UELDP Upper Egypt Local Development Program WB World Bank WBG World Bank Group Official Use TABLE OF CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 5 A. CONTEXT AT APPRAISAL .........................................................................................................5 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) .....................................10 II. OUTCOME .................................................................................................................... 13 A. RELEVANCE OF PDOs ............................................................................................................13 B. ACHIEVEMENT OF PDOs (EFFICACY) ......................................................................................14 C. EFFICIENCY ...........................................................................................................................20 D. JUSTIFICATION OF OVERALL OUTCOME RATING ....................................................................22 E. OTHER OUTCOMES AND IMPACTS (IF ANY)............................................................................22 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 24 A. KEY FACTORS DURING PREPARATION ...................................................................................24 B. KEY FACTORS DURING IMPLEMENTATION .............................................................................24 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 25 A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................25 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE .....................................................27 C. BANK PERFORMANCE ...........................................................................................................28 D. RISK TO DEVELOPMENT OUTCOME .......................................................................................29 V. LESSONS AND RECOMMENDATIONS ............................................................................. 30 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 32 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 43 ANNEX 3. PROJECT COSTS BY COMPONENT ......................................................................... 45 ANNEX 4. EFFICIENCY ANALYSIS – COMPLIANCE COST SAVINGS FOR BUSINESS LICENSE ....... 46 ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS .. 50 ANNEX 6. SUPPORTING DOCUMENTS (IF ANY) ..................................................................... 51 ANNEX 7. ADDITIONAL FINANCING (AF) PROJECT OUTCOMES .............................................. 52 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name Equal Access and Simplified Environment for Investment P153487 (EASE) in Egypt Country Financing Instrument Egypt, Arab Republic of Investment Project Financing Original EA Category Revised EA Category Not Required (C) Not Required (C) Organizations Borrower Implementing Agency Egyptian Regulatory Reform and Development Activity (ERRADA), General Authority for Foreign Investments and The Arab Republic of Egypt Free Zones (GAFI), Industrial Development Authority (IDA) Project Development Objective (PDO) Original PDO

To improve the regulatory environment for investors through simplified licensing and transparent industrial land allocation processes.

Page 1 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 5,000,000 4,956,052 4,956,052 TF-A1553 1,746,000 1,720,622 1,720,622 TF-B1605 Total 6,746,000 6,676,674 6,676,674 Non-World Bank Financing 0 0 0 Borrower/Recipient 0 0 0 Total 0 0 0 Total Project Cost 6,746,000 6,676,675 6,676,675 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 02-Oct-2015 20-Apr-2016 25-Sep-2017 31-Oct-2021 11-Dec-2021 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 19-Mar-2018 2.69 Change in Results Framework Change in Loan Closing Date(s) Change in Implementation Schedule 27-Jun-2019 4.74 Change in Loan Closing Date(s) 30-Sep-2019 4.85 Change in Loan Closing Date(s) 25-Oct-2021 5.83 Change in Loan Closing Date(s) KEY RATINGS Outcome Bank Performance M&E Quality Satisfactory Moderately Satisfactory Substantial Page 2 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 14-Feb-2016 Moderately Satisfactory Moderately Satisfactory 0 02 10-Oct-2016 Moderately Satisfactory Moderately Satisfactory .50 03 18-Apr-2017 Moderately Satisfactory Moderately Satisfactory 1.42 04 28-Nov-2017 Moderately Satisfactory Moderately Satisfactory 1.95 05 20-Jun-2018 Satisfactory Satisfactory 3.30 06 11-Jan-2019 Satisfactory Satisfactory 3.85 07 05-Apr-2019 Moderately Satisfactory Moderately Satisfactory 3.91 08 09-Mar-2020 Moderately Satisfactory Moderately Satisfactory 4.96 09 15-Oct-2020 Moderately Satisfactory Moderately Satisfactory 4.96 10 19-Apr-2021 Moderately Satisfactory Moderately Satisfactory 5.31 11 12-Oct-2021 Satisfactory Moderately Satisfactory 5.59 SECTORS AND THEMES Sectors Major Sector/Sector (%) Industry, Trade and Services 100 Public Administration - Industry, Trade and Services 100 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Page 3 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Private Sector Development 0 Business Enabling Environment 30 Regulation and Competition Policy 30 Jobs 100 Enterprise Development 30 MSME Development 30 Finance 0 Financial Infrastructure and Access 10 MSME Finance 10 Public Sector Management 0 Public Administration 30 Municipal Institution Building 30 ADM STAFF Role At Approval At ICR Regional Vice President: Hafez M. H. Ghanem Ferid Belhaj Country Director: Poonam Gupta Marina Wes Director: Poonam Gupta Nadir Mohammed Practice Manager: Najy Benhassine Djibrilla Adamou Issa Task Team Leader(s): Sherif Bahig Hamdy, Nabila Assaf Aminur Rahman ICR Contributing Author: Harpinder Oberai Hooda Page 4 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Context 1. At the time of appraisal, a business environment characterized by complexity, uncertainty, and unequal treatment had suppressed private sector dynamism in Egypt for years. High administrative compliance burden was a serious obstacle to doing business in Egypt, and significantly affected smaller businesses. Egypt ranked 118 of 148 countries in the World Economic Forum (WEF) 2014 Competitiveness Index. Private sector investment as a share of GDP constituted only 11.4 percent over the period 2000-2016, which is approximately 7 percent lower than in other emerging countries. The constraints to private sector growth led investments to be skewed towards large, capital- intensive businesses that created few jobs. 1 The unemployment rate reached 13.4 percent in 2014, 2 of which 70 percent were between 15-29 years old, making youth unemployment a key challenge for economic inclusion and stability. The loss of formal employment was the main reason for households falling into poverty. About 26 percent of the population was below the national poverty line in FY13, with poverty rates reaching 50 percent in rural Upper Egypt. 2. During appraisal, the binding constraints to the business environment included industrial licensing, land allocation and regulatory governance. The complexity and uncertainty in acquiring an industrial license exemplified the problems faced by investors. 3 Egypt carried a legacy of past policies that remained a burden for investors and a source of discretion such as screening and licensing of industrial projects as part of its industrial policy, a “two-tier” licensing process involving a provisional license and a permanent operating license, and a strong culture of control that generated unpredictable delays in permits issuance which could take years. One of the often-cited deficiencies of the old investment law prior to 2015 was that the authority to grant licenses and land was split between several entities, which in turn led to slow, inefficient, and burdensome processes for investors. Previously, to get a license, businesses had to get approvals from 11 agencies, which could take up to 640 days. 3. The Government of Egypt (GOE) was cognizant that an enabling business environment was critical for a private sector led economic rebound. Under Egypt’s Vision 2030 launched in 2016, a key strategic pillar of the economic dimension was to improve Egypt’s regulatory environment for private sector development. To support its strategic priorities, and in line with the Development Policy Framework (DPF) objectives agreed with the Bank, the GOE undertook significant legislative reforms to improve the business climate by the time of appraisal and preparation of additional financing. Reforms included the passage of the new Investment Law, new Licensing Law, and amendments of the Company Law (see para 6). These were expected to stimulate inclusive growth, job creation, increase exports, and promote private sector development. 4. The EASE project was developed to establish an enabling environment for investment in Egypt aligned with the Egyptian governments’ priorities and the World Bank Country Partnership Framework (CPF) for 2015-19 (Report 1“More Jobs, Better Jobs: A Priority for Egypt”, June 2014, World Bank. 2IMF data. 3 2015 Ease of Doing Business (note: the Doing Business Reports have been discontinued). Page 5 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) No. 94554) and the Systematic Country Diagnostic (SCD) (Report no. 99722). The CPF identified the improvement in the business environment as one of the priority areas in the context of creating opportunities for sustained income generation by promoting private sector policies to level the playing field. The SCD for Egypt further highlighted that it was necessary to significantly reduce the complexity, discretion, and uncertainty that businesses face in complying with regulations and accessing services and factors of production. The Additional Financing in 2019 remained fully aligned with the CPF and the SCD’s overarching goals of promoting a private sector-led job creation agenda and inclusive growth. The project was informed by analytical work and continuous reform dialogue based on previous and existing WBG operations supporting the business environment. This included The Competition and Competitiveness ASA (P154650) of 2015-21 to support the Egyptian government on industrial zones including land management and to establish guidelines to govern rights and responsibilities of the IDA as regulator; and The Upper Egypt Local Development Program (UELDP) ASA (P159579) of 2016-21 and the still active Local Competitiveness and Livability (P177334) ASA which also strongly supporting the competitiveness of the Egyptian business environment. Rationale for the Instrument Choice 5. The Equal Access and Simplified Environment for Investment (EASE) Project, financed by the MENA Transition Fund in the amount of US$5 million, was approved on October 2, 2015, and became effective on April 20, 2016. An additional financing of US$1.746 million, was approved on November 8, 2019, to scale up Component 1 “Facilitating Accessible and Transparent Investor Services” of the EASE, which aimed to deepen and strengthen the sustainability of the reforms initiated under the parent project. The project aimed to: (i) support reforms of the institutional set-up for the delivery of licensing through the General Authority for Investment (GAFI); (ii) support the land allocation processes through GAFI and the Industrial Development Authority (IDA) and (iii) improve the process of regulatory reform for more inclusivity and consultations through the Egyptian Regulatory Reform and Development Activity (ERRADA). The rationale for focusing on industrial licensing and land allocation was that they were identified as binding constraints in the investment climate assessments during project preparation and the 2015 Ease of Doing Business Report (now discontinued). 6. The project design was informed by the preparatory initiatives of the GOE to undertake important legislative changes to improve the business climate. The team envisaged the need for WBG support that would be needed to implement the laws and, in that context, the project design was forward looking. For instance, Egypt’s Cabinet approved significant amendments to Egypt’s investment law in March 2015 (while the EASE project was being prepared), while the promulgation of the executive regulations (supported by EASE) for the investment law was enacted in 2017. The Egyptian Regulatory Reform and Development Authority (ERRADA)(with the assistance from EASE) supported the drafting and review of the Industrial Licensing Law. ERRADA, IDA and the Federation of Egyptian Industries contributed to formulating the Executive Regulations of the laws (ERRADA’s stakeholder engagement process for legal reforms is another key aspect of EASE). Concretely, EASE supported the following legislative changes: • The Investment Law no. 72 of 2017 and its Executive Regulations (ER). 4 The new investment law empowered GAFI to become the One-Stop-Shop (OSS) for investors and to seek the necessary approvals from various agencies that investors need to obtain. Formerly, GAFI provided OSS services for business registration which 4The new Investment Law include pro-investor policies, administrative reforms, streamlined business procedures and services and reduced red tape, new investment zones, Corporate Social Responsibility (CSR) and Conflict Resolution Mechanisms (CRM) provisions to promote good governance. Page 6 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) covered only business entry procedures. The new law simplified the regulatory compliance process by minimizing the points of investor direct interaction with multiple regulators. The new law also introduced a new system for land allocation (see para 17). • The Industrial Licensing Law no. 15 of 2017 and its ER. In alignment with the DPF objective for reforming the industrial licensing regime in Egypt to boost economic activity and promote formal industrial investment across Egypt, the law stipulated that the IDA would be responsible for granting industrial licenses. The law also adopted a notification licensing system for low-risk industries which account for nearly 80 percent of Egyptian industries. According to the IDA data, 90 percent of the licenses issued in FY 2017/18 were low risk industrial establishments. Prior to the law, such establishments had to pass through the full licensing procedures which entailed numerous environmental and safety requirements that were mostly irrelevant for the type of business. 7. To ensure effective implementation of the amended laws and support the Ministry of Investment and the GAFI to implement their mandates under the new laws, and to support digitized G2B services in Egypt, the WBG prepared the EASE project. The three agencies i.e., GAFI, the IDA and the ERRADA, were all actively engaged on the reform agenda. 5 To support the three agencies, the GOE needed a vehicle to provide technical assistance with a focused and fully financed program to respond to the need to deliver results in a relatively short period. Theory of Change (Results Chain) 8. The theory of change for the project is derived from the original results framework and is outlined in Figure 1. The results chain culminates in the PDO which is “to improve the regulatory environment for investors through simplified licensing and transparent industrial land allocation processes.” The EASE Project assumed that streamlining licensing procedures and automation at GAFI and IDA would contribute to clarifying the role of both entities in regulating investments and business entry. Eliminating unjustified licenses and removing layers of bureaucracy would result in higher business flow and would facilitate investment decisions in Egypt. Additionally, the changes were intended to create a shift in the positioning of GAFI and IDA from authority holder to regulator and service provider. This was expected to result in expanding the reach of services at the subnational level which would increase SME investments and thereby boost job creation. The ERRADA was envisioned as the regulatory catalyst in this process through the public private consultation sessions and their regulatory reviews. 5 GAFI was the principal governmental authority concerned with facilitating investment through its network of OSSs and aimed at easing and decentralizing business entry, licensing, and operations. The Industrial Development Authority (IDA) was the principal authority mandated with regulating the industrial sector and allocating land for industrial projects. The Egyptian Regulatory Reform and Development Activity (ERRADA), which was revived with Prime Ministerial Decree No. 1038 of 2014 and was then supervised by the Minister of Industry, Trade & Small Industries (MITSI) was mandated to catalyze and support reform implementation. The Minister of MITSI assigned ERRADA to focus on industrial licensing, land allocation and construction permitting as priority focus areas for reform. Page 7 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Figure 1. Theory of Change Challenges Constraints Activity Output Outcome Impact Component 1: Facilitating accessible and transparent investor services (GAFI) Procuring, install and testing required software and GAFI - CRM Platform Operational in hardware OSS Branches Mapping the as-is and to-be processes Mapping/Simplification of Entry procedures completed Gathering the updated licensing requirements from external Sector licensing requirements entities consolidated/ published on GAFI Portal Increased private Lack of sector The online system up and running Number of Online Business transparency in investment, Registrations business Average duration of including for SMEs Selecting the training topics, relevant GAFI trainees and Capacity Building workshops for GAFI OSS Complex and licensing staff completed licensing process reduced and at the sub- undertaking capacity building workshops uncertain business processes Number of GAFI OSS staff trained in national level environment workshops Inefficient Component 2: Supporting industrial sector transformational reforms (IDA) industrial The to-be designed processes are up and running withing Implementation of reformed licensing Increased number Highly licensing the IDA services. processes completed of land allocation increased investor bureaucratic process Applying the licensing by notification system for high-risk Risk based approach for industrial requests gains by reduced business industries technical evaluation applied processed lead time to environment Presence of The new licensing system up and running in IDA branches Online Industrial Land Allocation through the investment unjustified system deployed reformed land licenses (two- The land allocation to-be processes deployed in the newly Industrial Developer Land Allocation allocation system Capital intensive tier licensing) designed automated system framework designed and deployed businesses that Enhanced job The licensing to-be processes deployed in the newly Implementation of reformed resulted in less Strong culture creation designed automated system licensing processes completed jobs of control New industrial developer processes designed and deployed Industrial Developer Land Allocation within the framework designed and deployed investor serving Mapping of the as-is licensing processes and designing then Mapping/Simplification of Licensing institutions to-be sub-processes completed Selecting the training topics, relevant IDA trainees and Number of IDA Staff trained in Poor undertaking capacity building workshops Workshops coordination Capacity building workshops for IDA between branch staff completed entities in the Component 3: Capacity building for managing regulatory reform (ERRADA) business Regulatory reviews for selected topics and regulations Regulatory Reforms Proposed environment Consultation preparation and implementation Private Sector consultation on regulatory reform mechanism applied Selecting the training topics, relevant IDA trainees and Capacity building workshops for undertaking capacity building workshops ERRADA staff completed Number of ERRADA staff trained in workshops Assumptions to achieve PDOs 1) Businesses use the portals and Investment Map. 2) There are no significant legislative changes that affect the governance and responsibilities of the entities. 3) Training given to GAFI and IDA employees to be rolled out and transmitted to employees at the non-central government branches, Page 8 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Project Development Objectives (PDOs) 9. The Project Development Objective is “To improve the regulatory environment for investors through simplified licensing and transparent industrial land allocation processes.” In alignment with the expectations of the new investment law the project was intended to provide technical assistance and systems to enable the GAFI to implement its mandate of becoming the single window for investment services; streamline IDA’s licensing and land allocation processes to become more predictable and transparent; and help establish ERRADA as a strong promotor and catalyst for reform. Key Outcome Indicators 10. The original project design included the following PDO indicators: 1) Average duration of licensing process 2) Number of land allocation requests processed through the reformed land allocation system Components 11. The project had three main components described below: Component 1: Facilitating accessible and transparent investor services (GAFI) (US$ 2.25 mn; AF US$ 1.76 mn) 12. This component aimed at supporting GAFI become the national platform for business entry, licensing, and access to investor information at the national and sub-national level through its Investor Support Centers (ISC) and GAFI Information Portal. This entailed: (1) addressing GAFI’s processes and interfaces with all the involved regulators, including primarily IDA, but also other line ministries and local authorities involved in licensing; (2) developing an IT system to deliver business entry, licensing services, and investor information; and (2) capacity building and technical assistance to enable and support GAFI in this enhanced client-facing role, particularly of its ISCs. This component also included project management activities to be undertaken by GAFI. 13. The AF enhanced the activities of this component and aimed to support the GAFI to fulfill its new mandate under the Prime Ministerial Decree no. 816 of 2019. GAFI is the online interface of all investment lands in Egypt including the industrial lands through its online “Investment Map” on its Investment Portal (the decree also clarified that IDA is responsible for industrial land allocation processes). Under the AF, the activities included the following: i. Subcomponent 1: Supporting the role of the investor service center within GAFI to license investment activities. The AF built on the work being implemented under the parent project and promoted the electronic coordination and synchronization among relevant line ministries, local authorities at different governorates, and public entities that are involved in granting business licensing and permits; and establish a quality control system to guarantee its efficiency and effectiveness. ii. Subcomponent 2: Expanding Digital Transformation in GAFI. The parent project assisted GAFI in establishing an online portal and in providing electronic services to investors through the ISC. The AF supports further activities to efficiently manage investment data, expand investors’ online services and connect affiliate entities to the digital network. Page 9 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) iii. Subcomponent 3: Enhancing human and organizational capacity. The AF supported the sustainability of reform outcomes through a comprehensive strategy targeting organizational and human competencies. Component 2: Supporting Industrial Sector Transformational Reforms (US$ 2.25 million) 14. This component under the original project aimed to support transformational reforms at the Industrial Development Authority (IDA) related to industrial licensing and industrial land allocation. Specifically, the project sought to support the IDA’s transformation into a more strategic role on industrial regulations and licensing and its approach to implement risk-based regulatory governance principles. The original IDA components included: (i) undertaking business process reengineering for all its service including industrial licenses, construction permits, industrial register, industrial developer and land allocation (during the original project appraisal, IDA was engaged in mapping its industrial licensing processes in collaboration with ERRADA and with World Bank Group support; the project was to build on this work by supporting a fundamental restructuring of the IDA’s role in administering industrial licenses); (ii) supporting industrial land allocation by reforming the industrial developer concession model of land development and deploying an online industrial land allocation system; and (iii) supporting IDA’s technical and administrative capacity including enhancing the ICT infrastructure and worked on automating the newly re- engineered processes in IDA HQ and branches. Component 3: Capacity building for managing regulatory reform (ERRADA) (US$ 0.5 million) 15. This component under the original project aimed to strengthen the capacity of ERRADA on cross-cutting reforms that target constraints related to promoting transparency and predictability of the regulatory environment affecting firms in all sectors of the economy. Some of the ERRADA’s priority reform areas included industrial licensing and land allocation, and thus the third component complemented the first two components. More specifically, the project provided support ERRADA to: (i) complete a comprehensive inventory of business related procedures; (ii) process mapping and re-engineering of the most relevant administrative procedures with the objective of streamlining and simplifying them; (iii) establishing an informational portal of business related administrative procedures that makes requirements of these procedures accessible to the general public in a simple and comprehensive manner; and (iv) putting in place a public consultation and review mechanism on business related legislative proposals. B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) Revised PDOs and Outcome Targets & PDO Indicators 16. The PDOs and outcome targets, and PDO indicators were not revised during the project. The project began implementation in 2015 under an investment law (Law 17 of 2015), this law was replaced by the new investment law and industrial licensing law that led to changes in the mandates of GAFI and IDA, particularly for land allocation. While the project continued to focus on the same components outlined in the Project Appraisal Document (PAD), implementation of some activities was adapted to fit the context of the new laws, namely re-focused efforts in IDA on industrial license and in GAFI on business entry, licensing, and access to investor information. Furthermore, while during the original phase IDA was in charge of handling the land allocation requests (and that is the reason the system was being developed in IDA), the Decree No. 816 in 2019 changed the authority to handle land allocation requests Page 10 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) from IDA to GAFI. During the initial phase after this Decree was passed there was still disagreement and confusion between different entities about their corresponding authorities. However, over time this issue was resolved, and through the support of the EASE AF as well as changes in management of IDA, collaboration, and coordination between GAFI and IDA has significantly improved. The GAFI Investment Map (supported by EASE), which is known as Egypt Digital’s Investment Map, is the key vehicle to process the land allocation requests. Hence, the second PDO, “Number of land allocation requests processed through the reformed land allocation system”, was not changed but was delivered by the GAFI instead of the IDA. Despite changes in the legislative framework affecting the mandates of the entities involved, the essence of the project in terms of overarching objectives and outcomes was not affected. 17. Minor changes were made to intermediate results indicators during the mid-term review (MTR). The project team undertook a Mid Term Review (MTR) in September 2017 for a comprehensive review of the results framework which led to some changes to intermediate results indicators. The review was held in cooperation with the M&E officers at the IDA and the GAFI, PIU heads, and representative officials from the three agencies. It discussed the project’s monitoring plan, relevance of indicators, adequacy of targets, and validity of results reported. Slight changes to the results framework were: • Under Component 1: o Added an indicator to measure the “number of online business registration” to reflect the remoteness of the system in reaching investors. o Added an indicator “number of GAFI employees trained in workshops” to reflect training received on the new deployed systems. o Revised the end-target of the indicator “Capacity building workshops for GAFI OSS” from 10 to 20 workshops. • Under Component 2: o Added two indicators: “Mapping/simplification of Licensing sub-processes” by IDA and “Number of IDA staff trained in workshops.” • Under Component 3: o Added an indicator measuring the “Number of ERRADA staff trained in workshops”. Page 11 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Revised Components under Additional Financing 18. The project components were revised under the AF to scale up Component 1 “Facilitating Accessible and Transparent Investor Services”. The AF activities supported the original scope of the project to facilitate accessible and transparent investor services, and to help the GAFI to become an effective OSS through improved investor services. The AF did result in expanding activities with the GAFI to work on areas such as to manage investment data, expand investors’ online services, interactive map, capacity building on investor servicing, investor servicing and responding to investor inquiries FDI strategies etc. However, the PDO was not changed since the project was financed through the MENA Transition Fund with a conditionality for the original PDO to be intact. In addition, these areas were considered to deepen the engagement under the first component for reasons given below: • The main focus of the AF was consistent with the original objectives and would increase coordination with the external entities to create an OSS for a simplified investment process. This required extensive capacity building and work on process management to allow for a simplified flow of the new service ideology at GAFI. • The Investment Map is the reformed land allocation process as per decree no.816 issued in 2019, since the GOE expected that a comprehensive portal would allow for more transparency and a unified land allocation process. • Other activities were relatively small, such as supporting the FDI unit which allowed for better evidence-based decision-making using existing data. Other Changes 19. The project underwent several restructurings during the original and additional financing stages. The original project (US$5 mn) was approved on October 2, 2015, became effective on April 20, 2016, and closed on December 15, 2019. An Additional Financing (US$ 1.746 mn) was approved on November 8, 2019, and became effective on July 13, 2020. The four key changes are explained below: • 19 March 2018 – Change in Results Framework, Change in Loan Closing Date, Change in Implementation Schedule: Changes to the results framework included minor changes to intermediate indicators following recommendations of the M&E specialists during the MTR review. The project closing date was extended from July 1, 2018 to June 30, 2019, since there were some delays in setting up the project implementation arrangements, and some tasks had to be refocused due to the changes in legislations including the issuance of the new investment and industrial licenses laws and their executive regulations. Changes in implementation schedule were because GAFI and IDA were obliged to pause the re-engineering process to incorporate the new procedures under the new laws. • 27 June 2019 – Change in Loan Closing Date to finalize IDA activities on automation and to check that system was up and running. • September 2019 – Change in Loan Closing Date to December 15, 2019 to finalize payments and test systems at IDA, and finalize training on systems. • 25 October 2021 – Change in Loan Closing Date for the AF was extended from October 31, 2020 to December 11, 2021, in order to complete the ongoing project activities that experienced some delays due to COVID-19 closures in particular, the licensing portal and digital investment map. Page 12 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Rationale for Changes and Their Implication on the Original Theory of Change 20. The changes in legislations and ensuing changes in mandates of the concerned entities was the reason for the delivery of the second PDO shifting from the IDA to the GAFI. However, this did not affect the definition of the PDO or its achievement and therefore did not have any major implication for the original TOC other than for the intermediate indicator linked to IDA which would not be achievable. As such, the end goal of land allocation requests being processed (PDO 2) was achieved although the means was different from what originally envisaged because of changes in government regulations in the land allocation process. 21. The rationale for the revised components under the AF was to build on the momentum of the reform undertaken under the EASE project by deepening and sustaining the reforms already implemented under the parent project. The impact of the AF on the TOC was to strengthen component 1, and to deliver on the second PDO through the Investment Map (i.e., the GAFI portal developed during the parent project). 22. The restructurings were designed to ensure the completion of the activities and reflect these in the intermediate targets. The minor changes in the intermediate indicators were based on the findings of the MTR and accordingly were reflected in the TOC, though these did not have any impact on the PDOs or outcomes. The project extension dates were driven by the need to ensure activity completion and the testing of systems and did not affect the TOC. II. OUTCOME A. RELEVANCE OF PDOs Assessment of Relevance of PDOs and Rating Rating: High 23. The EASE project PDO remains highly relevant to the priority areas under the 2021 Systematic Country Diagnostic (SCD) Update (Report No. 164656) and the Country Partnership Framework (CPF) for FY23-27, planned for completion in FY23. A policy direction that was defined by the SCD is ensuring fair competition in the Egyptian market through creating a “transparent, predictable, and streamlined regulatory environment that encourages competition through easy firm entry, operation, and exit”. 6 This is directly supported by the EASE PDOs which aim to improve the regulatory environment for businesses through simplifying licensing and enforcing transparency in the industrial and land allocation processes. Under the new Egypt CPF FY23-27, the Bank will continue to support improvements in regulatory and licensing policies and market reforms. 7 The CPF supports efforts to achieve three high-level outcomes, including more and better private sector jobs. This will require boosting private sector investment, firm growth, and productivity through a more dynamic environment for business activity, created by addressing unnecessary constraints and unpredictability imposed by the regulatory environment. The licensing reforms and land allocation remain amongst the top priorities of the current CPF. The first objective of the first high level outcome “More and 6 Egypt Systematic Country Diagnostic Update, Unlocking Egypt’s Potential for Poverty Reduction and Inclusive Growth, October 2021, World Bank. 7 Country Partnership Framework (CPF) for the Arab Republic of Egypt for FY2023-2027, Draft Report, March 2022, World Bank. Page 13 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Better Private Sector Jobs” assures the continuation of the support given to improving regulatory and licensing policies and market reforms. Additionally, part of the third objective of the first high level outcome is strengthening the transparency of state procurement activity, and facilitating private sector access to land. 24. The Project objective is closely aligned with the Government’s national priorities outlined under the first pillar on industrial development of the Ministry of Trade and Industry strategy 2017. This pillar includes specific planned projects directly targeting licensing and the OSS, land allocation and the implementation of the investment map such as forming automated, simplified, and transparent procedures for the allocation of industrial lands and acquiring the licenses. Also, the strategy projects plan to provide industrial lands through an investment map across Egyptian governorates to integrate with global supply chains with smart applications to increase the efficiency of managing industrial lands. The strategy also refers to the creation of the single window operating efficiently for issuing industrial licenses. This is also in coherence with the Egypt Vision 2030 strategy for digitalizing most government services, whereby the Egyptian government has undertaken several initiatives and projects to develop automated and online services. As such, re-designing and digitalizing the processes at IDA and GAFI has also contributed to the overall national plan of facilitating investment procedures and digitalizing most government services. B. ACHIEVEMENT OF PDOs (EFFICACY) Rating: Substantial Assessment of Achievement of Each Objective/Outcome PDO: To improve the regulatory environment for investors through simplified licensing and transparent industrial land allocation processes 25. Based on the PDO, efficacy will be assessed separately for each of the project's two objectives: (1) simplified licensing and (2) a transparent industrial land allocation system. The objectives were to be achieved through activities under Component 1 and Component 2, as well as supported by Component 3 (see Table 1). The project was designed through these components to support the three entities involved, namely GAFI, IDA and ERRADA. Table 1: Components 1 & 2 – Outputs to Achieve PDOs 1 & 2 Component 1: Facilitating accessible and transparent investor services (GAFI) Intermediate Results Target Actual Status GAFI - CRM Platform Operational in OSS Branches 5 12 Exceeded Mapping/Simplification of Entry procedures completed Yes Yes Achieved Sector licensing requirements consolidated/ published on GAFI 479 474 Almost fully Portal Achieved Number of Online Business Registrations 100 436 Exceeded Capacity Building workshops for GAFI OSS staff completed 20 35 Exceeded Number of GAFI OSS staff trained in workshops 80 200 Exceeded Component 2: Supporting industrial sector transformational reforms (IDA) Intermediate Results Target Actual Status Implementation of reformed licensing processes completed Yes Yes Achieved Page 14 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Risk based approach for industrial technical evaluation applied Yes Yes Achieved Online Industrial Land Allocation system deployed Yes No Not Achieved Industrial Developer Land Allocation framework designed and Yes Designed Partially Achieved deployed but not deployed Industrial Licensing System deployed in IDA branches 10 22 Exceeded Capacity building workshops for IDA branch staff completed 10 13 Achieved Mapping/Simplification of Licensing sub-processes completed 4 15 Exceeded Number of IDA Staff trained in Workshops 50 84 Exceeded (1) Simplified licensing 26. The project intended to lead to simplified licensing through a reduction in the duration of licensing processes. This outcome is directly captured by the first PDO indicator which is an average of the days taken by GAFI and IDA to issue business and industrial licenses respectively. This was to be achieved through Components 1 and 2 (business and industrial licenses, respectively) to result in a reduction of (i) Number of days to comply with the Business Licensing process (GAFI component) and (ii) Number of days to comply with the Industrial Licensing process (IDA component). PDO 1: Average Duration of Licensing Processes (Business License & Industrial License) (i) Number of days to comply with the Business Licensing process – Achieved 27. The project has contributed strongly to the decrease in the number of days to comply with the business licensing process, which decreased from eight days to one days. The intermediate results and activities that contributed to this indicator include: 8 1. The project supported the mapping and the re-engineering of GAFI business procedures and commenced implementation during the AF. Mapping and simplification of procedures were the base for the simplified process, and one of the sub-indicators for the project that was met early on in the project. The project supported the required upgrades to GAFI’s ICT infrastructure and supported the deployment and operation of the newly designed processes which improved licensing operations. GAFI worked on developing a comprehensive digital system in which the electronic coordination among line ministries and local authorities was enhanced. (Target achieved) 2. The project supported the configuration and the deployment of the Customer Relationship Management (CRM) system at GAFI HQ and its 12 OSSs. The project integrated the OSS network, including e-archiving and electronic connectivity between the OSS branches, to enhance their quality of service. This has directly influenced communications with investors and created a responsive environment within the GAFI services. (Target exceeded) 3. GAFI undertook a comprehensive training plan for employees on the new deployed systems, which supported the efficiency of the licensing process and eliminated unnecessary procedures through re-engineering and automation. (Targets of the two indicators on training were exceeded) 8 All results framework data is based on client M&E Reports and Progress Reports (GAFI, IDA and ERRADA). Page 15 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) 4. GAFI developed and enhanced the GAFI information portal to provide comprehensive investor information and published information on the procedures and requirements for 474 licenses and permits from 79 different agencies. (Target almost fully achieved) 28. Key outcomes achieved by the end of the implementation of the AF for Component 1 include (see Annex 7 for more details): • Delivery of a new licensing services digital delivery model that is flexible for growth and can be adopted as a model for effective digital services transformation. • Delivery of the FDI and private sector Economic Performance Data collection and Analysis Platform to enable enhanced policy design. • Deploying these systems in an integrated framework with existing GAFI solutions. • Securing the Licenses and Equipment to enable effective, secure, and seamless operations. • Success in making GAFI teams own these systems to guarantee the sustainability of project results. • Enabling and equipping the human capital to be able to manage, maintain, and develop the deployed systems (for example, the Licensing platform front end was developed by GAFI teams). 29. The project took important steps to support GAFI to become a single window for licensing in line with its mandate. The parent project enabled GAFI to set up a licensing portal as mandated by the new Investment Law, and helped to map licensing services and understand workflows (see Figure 1, Annex 7). The additional financing helped GAFI to further build on this progress to become an OSS and reduce delays in getting licenses issued from different entities, even after the speedy approval from GAFI in one day. Ten of the 66 entities are now fully connected to the system, which comprises 80 percent of the services provided by external entities. Licensing documents for all 66 entities are now published on the GAFI portal. 30. Overall, the PDO for the business licensing system was achieved. The five sub-indicators were appropriate and capture the mapping and the re-engineering of GAFI business procedures, configuration, and the deployment of the Customer Relationship Management (CRM) system at GAFI HQ and its four OSSs, development and enhancement of the GAFI information portal, publishing of information on the procedures and licensing requirements, and training on the new systems deployed. The relevance of this indicator is high, as it contributed to the significant decrease in the number of days of the business licensing process which was a key constraint in the business environment. The activities led to transformative changes in GAFI’s IT infrastructure. For example, the Customer Relation Management (CRM) system, online business registration, and physical upgrading were introduced to ensure the quality of investors’ services, improve governance, and promote accountability. They also enabled GAFI to become a single window for licensing and for service delivery of the Investor Service Center to be improved. (ii) Number of days to comply with the Industrial Licensing process (high risk licensing) -- Achieved 31. The second part of PDO 1 measures the simplification of the high-risk licensing process by IDA, which has sole responsibility for issuing industrial licenses as per the new licensing law. Before the reforms, it took as much as 640 days to process a high-risk industrial license; it now takes 55 days. The time taken at IDA is only 8 days, while the remaining time is taken in getting approvals from the relevant authorities outside the IDA), e.g., the Civil Defense Authority and the Environment Authority. All six relevant intermediate indicators from Component 2 were achieved: a. The risk-based approach for industrial technical evaluation was applied. Following the start of the project, the Page 16 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) passage of Law no. 15 of 2017 differentiated between high risk and low risk industries and allowed IDA to undertake licensing by notification for low-risk industries. The current duration of the process is highly compressed after the deployment of the risk-based system. (Achieved) b. Mapping/Simplification of licensing sub-processes was completed, and the reformed processes were implemented. IDA undertook business process re-engineering for all its services, including industrial licenses, construction permits, industrial register, industrial developer, and land allocation. Revamping 15 sub-processes (against the target of four) eliminated unnecessary procedures and smoothed operations, which resulted in a simplified industrial licensing process, saving the time of investors. (Achieved both indicators) c. The Industrial Licensing System was deployed in IDA branches. Industrial licensing is now automated in IDA and its 22 branches (against the target of 10), and was developed under the EASE original financing. However, the current process faces several issues. First, the process has changed due to the amendment of laws and the new regulations enacted since 2019. This has resulted in technical issues, which are being addressed by updating the system. Despite staff being not fully trained on the new system and on the new process, and a number of the staff trained under the EASE project having left the IDA since 2019, the system is now working at up to 70 percent capacity. (Achieved) d. The project supported improvements to IDA’s technical and administrative capacity. It enhanced the ICT infrastructure and worked on automating the newly re-engineered processes in IDA HQ and branches. The project also worked on developing the software system, equipment, and installation of a new industrial licensing administration system (ILAS). Capacity building workshops for IDA staff and IDA branch staff were completed as planned. (Exceeded the targets for both indicators on capacity building.) 32. Overall, the PDO connected to the industrial licensing system was achieved. The five sub-indicators reflecting the mapping of processes and sub processes and the implementation of reformed processes, implementation of the risk- based system, deployment of the systems locally and capacity building, were fully met. It is, however, too early to measure the effectiveness of the automated system that has been deployed. While the indicators do not fully reflect all the changes that EASE enabled, the project also benefitted from the changes brought about by the introduction of Law no. 15 of 2017 which, for example, enabled the notification system. This indicator is highly relevant to the project, as it captures an important improvement in the industrial licensing methodology through a risk-based approach which was enabled by the mapping and the reengineering of the IDA processes. Achievement of PDO 1: The current average duration of licensing processes 33. Achievement of PDO 1 was Substantial and is highly relevant to meeting the first objective. The PDO 1 indicator for the current average duration of licensing processes (based on a simple average of two sub-indicators of IDA and GAFI) is 28 days compared to the baseline of 320 days and the end-target of 60 days. 9 This indicator is of high relevance for meeting the objective of simplified licensing as it created a significant change in speed and transparency through the new systems deployed, thereby leading to investor gains, and reducing the lead time to investment. Autonomy offered to external entities under the AF has contributed to simpler licensing processes. In addition, even small interventions under the AF, such as the FDI component, have created a large impact on facilitating evidence-based policymaking and 9 PDO 1 calculation: 1) Average Number of days taken by GAFI to issue the licenses: 1 day 2) Average Number of days taken by IDA to issue the licenses: 55 days  Simple Average of number of days taken by IDA and GAFI to issue the licenses: 55+1/2= 28 days Page 17 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) will provide a better direction to decision-making in Egypt. The project has also resulted in a significant change in the methodology for industrial licensing by helping to implement the risk-based approach through mapping and reengineering. Implementation of the new processes has helped to remove unneeded licenses and processes, resulting in savings in time and effort of both investors and the IDA staff. (2) Transparent Land Allocation System PDO 2: Number of land allocation requests processed through the reformed land allocation system – Achieved 34. The transparent land allocation system developed through the project contributed to an increase in the number of land allocation requests processed. While the objective was to be originally achieved through Component 2 (IDA), it was finally achieved through Component 1 (GAFI) due to the legal changes in the mandates of the entities. The second PDO indicator for the “reformed land allocation process” was achieved through the GAFI portal (known as the Investment Map), which processed 2,080 land allocation requests against the end target of 2000. GAFI has taken the lead on advertising and tendering land available at IDA, the NUCA, and the Governorates, through the Investment Map developed under the project. It was developed as a national data center and OSS for investment information, and includes the interactive features of locating investment opportunities by sector and geographical location, the requirements and procedures necessary to obtain business licenses and permits from GAFI or external entities, and information on access to land available for investment projects. The AF supported the upgrade of the Investment Map to allow investors to connect to external entities, with GAFI providing a follow-up on the workflow. The AF also supported features that allow investors to reserve opportunities and to share ideas online, which have led to a more responsive and transparent tendering process. 35. The indicators relating to land allocations through IDA – “Online Industrial Land Allocation system deployed” and “Industrial Developer Land Allocation framework designed and deployed” – have not been met because of changes in the land allocation process. Although the land allocation system in IDA was created and is ready for installation, it was never up and running since the land advertising and tendering process has moved to the GAFI investment map through Prime Ministerial Decree 816 of 2019. IDA is still in the process of completing further steps to improve land allocation systems integrated with the Investment Map. 10 The reengineered business processes set up during EASE are being leveraged to create a database for land and for enhancing the land allocation process, using additional investment from IDA. Achievement of PDO 2: Number of land allocation requests processed through the reformed land allocation system 36. Achievement of PDO 2 was Substantial and it is of high relevance for meeting the objective of a transparent land allocation system. GAFI enhanced its digital investment map, i.e., the “reformed land allocation process”, which processed 2080 land allocation requests against the end target of 2000. Overall, the relevance of this PDO indicator is high, as it assesses the project’s contribution to simplifying one of the most complicated steps in starting a business in Egypt. The GAFI Investment Map has created an online national platform for showcasing investment opportunities, 10 It is worth noting that land allocation has been put on hold since the last 7 months in order to carry out a survey of all land in industrial zones. The results of the survey will be integrated in the investment map operated by GAFI as an inventory of industrial zones land. IDA is also conducting a gap analysis to highlight investment opportunities in all industrial zones aligned with national priorities and commitments (as reflected in the SDGs, COP 26 etc.). The gap analysis is expected to be completed by January 2022 and will be shared with GAFI in order to update the investment map. Page 18 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) enabling investors to interact, and allocate land online. However, as noted in the PAD, the project was a small intervention that was not expected to change the entire process of land allocation in Egypt. (3) Capacity building for managing regulatory reform 37. The third component implemented through ERRADA was the catalyst that helped in achieving the project objectives through the public private consultation sessions and regulatory reviews. This outputs of this component were achieved through the following intermediate targets (see Table 2): a. Regulatory Reforms Proposed (Target exceeded). The parent project assisted ERRADA in addressing the existing stock of regulations, weeding out redundant, inefficient, and inconsistent regulations, and eliminating overlapping regulations through the work of the Inventory Group. 11 The Process & Institutional Mapping Groups prepared and updated 72 services summary sheets and 72 process maps, where processes were analyzed, mapped and recommendations were issued for IDA. This information was used to prepare the manual for administrative simplification. This manual was piloted by the Ministry of Local Development for micro-credits to rural agriculture areas and resulted in cutting two-thirds of administrative procedures. Going forward, the IDA pilot in process mapping will be rolled out in other entities in the industrial sector, such as the General Organization for Export and Import Control (GOIC). b. Private Sector consultation on regulatory reform mechanism applied (Target exceeded). GAFI and IDA utilized ERRADA to undertake 23 public-private consultation sessions (against the target of 15) on the several laws on licensing procedures, including Law no 15 of 2017. The recommendations from the consultations were embedded in the new processes for both GAFI and IDA. Consultations were also held on topics such as the industrial developers, industrial land allocation, the Industrial Register, and the ERRADA Informational Portal. ERRADA is increasingly involved in the process of drafting legislation by attending discussions in Parliament and is being given the opportunity to voice its opinions on draft laws, e.g., franchise law, Fintech, PPPs. c. Capacity building (The targets of both indictors were exceeded). ERRADA organized 33 courses, amounting to 124 training days with 124 attendees from ERRADA and 310 attendees from IDA. ERRADA has continued to expand its mandate using the capacity built and tools developed during the original financing of EASE. The role of ERRADA has developed significantly since it began reporting to the MPED in 2019, and its activities and specifically consultations now have a broader scope. 12 Consultations are now held regularly on topics aligned with national economic priorities and the SDG 2030 Agenda. Under EASE, detailed discussions were held on best practices and methodologies for conducting effective stakeholder consultations. 38. EASE also funded the information portal of ERRADA, which has a full inventory of industrial sector legislation and licensing procedures of different entities. The Portal aims to provide information to investors on obtaining permits and licenses, and gives stakeholders an opportunity to provide feedback on how the services could be simplified. The ERRADA portal is different from the GAFI portal, as it also provides information on investor experience in complying with the licensing requirements, such as the time taken, and bottlenecks faced. This contributes to simplifying the licensing process indirectly, as the investor has access to the information needed. 11 The legislative tools relating to the industrial sector were classified as follows: Industrial licenses (83 legislative tools), Industrial Register (65 legislative tools), Land Allocation (202 Legislative Instruments), Customs Release (38 legislative tools), and Occupational Health and Safety (26 legislative tools). 12During appraisal, ERRADA reported directly to the Cabinet and its activities focused primarily on industrial aspects in collaboration with IDA. Page 19 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Table 2: Component 3 Outputs Component 3: Capacity building for managing regulatory reform (ERRADA) Intermediate Results Target Actual Status Regulatory Reforms Proposed 15 25 Exceeded Private Sector consultation on regulatory reform mechanism 15 23 Exceeded applied Capacity building workshops for ERRADA staff completed 10 33 Exceeded Number of ERRADA staff trained in workshops* 15 20 Exceeded Note: * The total number of ERRADA staff trained in workshops is 20, however, in the latest ISR it was reported 60 as each of the 20 staff were taken 3 or more training workshops. Justification of Overall Efficacy Rating 39. The efficacy of the project is rated as Substantial, as it achieved its objectives despite the changes in the legal mandates of the entities, and implementation delays due to the COVID-19 pandemic and internal processes (see Table 3). Both indicators were appropriate to measure the achievement of the expected objectives of simplified licensing and a transparent land allocation system. Of the 18 Intermediate results indicators, the targets of 15 were mostly met; two were partially met, while one was not met, see Table 3. Project impact is however high, as it has set the steppingstone for G2B services in Egypt. Table 3: PDO Indicators PDO Indicators and Sub-PDO Indicators Baseline Target Actual Status Average duration of Licensing Processes 320 60 28 Exceeded  Number of days to comply with the Industrial Licensing 640 55 55 Achieved process (High Risk) (Days, Custom Breakdown)  Number of days to comply with the Business Licensing 8 3 1 Exceeded process (Days, Custom Breakdown) Number of land allocation requests processed through the 0 2000 2080 Achieved reformed land allocation system C. EFFICIENCY Assessment of Efficiency and Rating Economic Efficiency 40. At appraisal, the economic analysis described that the streamlining of licensing and land allocation processes could be expected to have two positive effects. These included: (i) Increasing the rate of investment by alleviating obstacles to investment (access to land and licensing), however direct attribution would be difficult; and (ii) Increasing investor gains by reducing the lead time to investment, which could be estimated using the opportunity cost of capital as set at the prevailing interest rate, disregarding all other direct costs, and assuming that the time for compliance (obtaining Page 20 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) land and industrial license) is reduced by 50 percent, thus providing significant gains to potential investors, and which would likely to translate into more jobs. 41. Following the completion of the project, new economic analysis has been carried out to estimate as least some of the impacts of the project. The project was able to contribute to two types of economic returns: (i) impact on investors from cost compliance savings resulting from a simplified licensing process; and (ii) impact on investors from improvements in the reformed land allocation process. As baseline data was not collected to estimate economic returns at the start of the project, it is difficult to calculate compliance cost savings for both objectives. 1) The project achieved savings for investors from the digitization of the licensing processes and improved investor handling, leading to reduced investor response time for both business licenses and high-risk industrial licenses: i. Business License. The economic analysis in Annex 4 measures the impact of the project through Direct Compliance Cost Savings (CCS) from simplified licenses for the business license (GAFI), based on data available from official sources and investor interviews. This methodology is a one-sided view of the benefit of the reforms to the private sector, and it provides an indication of the resulting extra resources that private businesses may use, at least in part, to expand their businesses or make new investments. 13 The simplified processes for business licenses led to estimated aggregate cost savings for one year, discounted to the 2015 baseline year, of US$14.8 million for all businesses. The estimated aggregate cost savings for FOUR years (i.e., the four years between 2017 when the reforms were enacted to 2021) discounted to the baseline year is US$58 million (see Table 4). Table 4. Direct Compliance Cost Savings (CCS) from Simplified Business Licensing (GAFI) Aggregate cost savings for one year (US$ million, undiscounted) US$16.219 SUMMARY IMPACT Aggregate cost savings for one year - discounted to baseline year (US$ million) US$14.833 Aggregate cost savings for FOUR years - discounted to baseline year (US$ million) US$58.028 ii. Industrial License. The process of simplifying high-risk industrial licenses led to a shorter time per transaction, and resulted in investor gains. The CCS could not be estimated for high-risk industrial licenses, because baseline data for labor cost and official fees are not available for 2015. The process was then not undertaken at IDA but at NUCA and the Governorates, and the costs were not unified. However, based on GAFI results, that these savings would be substantial. For the processing of the high-risk industrial licenses by IDA staff, the average number of employee workdays required per transaction reduced by almost 70 percent from 16 days to 5 days between 2015 and 2021, leading to savings in labor costs and costs per transaction for the government (see Annex 4). 14 Similarly, savings from reduced time per transaction will have been experienced by investors. 13 Direct Compliance Costs per transaction is the sum of official fees, other financial costs, and labor costs each time a firm completes a procedure. 14 Source: IDA Page 21 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) 2) The project also led to potential savings for investors from a reformed land allocation process. The GAFI Investment Map facilitated a significant increase in the number and efficiency of land allocation requests processed, saving investors time to collect the necessary information to obtain land plots and to connect to external entities with GAFI follow-up. Given the complexity of the land allocation process, it is difficult to establish a baseline for compliance cost savings ex-post. While focus groups may provide some idea, the project would have benefited from establishing, at appraisal, a framework for determining economic gains. Design and Administrative Efficiency 42. The design of the project aimed to leverage the roles of the three entities and mitigate the risks of lack of coordination (through the design of shared PIUs with competent staff). The project was designed to be flexible in adapting to changes (e.g., flexible component descriptions, restructurings, and AF) and this proved necessary during the legislative changes that affected the mandates of the entities and to adapt to unexpected contingencies. The project encountered delays in implementation of activities which led to the extension of the end dates for both the original project and the AF, as well as a delay in declaring the effectiveness of the AF phase, changes within government counterparts that impacted PIU functionalities, the impact of the COVID-19 pandemic, and some procurement delays (see paras 10-15 for key factors during implementation). However, the proactive engagement of the Bank team with the PIU led to a successful closure of the project without any cost overrun, while achieving the PDO indicator targets. Some of the implementation delays were also caused by the time and effort spent in engaging the GAFI staff in project implementation to ensure sustainability of the project outcomes. 43. By closing date of 11 December 2021, all activities under the procurement plan were completed and the funds were fully disbursed. Justification of Overall Efficiency Rating 44. The rating of Efficiency is Substantial, as the costs involved in achieving the objectives were reasonable in comparison with both the benefits and as expected for business environment reforms (i.e., good value for money). D. JUSTIFICATION OF OVERALL OUTCOME RATING Rating: Satisfactory 45. The PDOs of EASE were relevant and the objectives were achieved efficiently. Project outcome is therefore rated Satisfactory. While sub-indicators related to land allocation for IDA were not achieved due to changes in government policy, and there were some delays in making the AF effective and some early implementation issues due to internal processes and COVID-19 effects, the overall project achieved its results. E. OTHER OUTCOMES AND IMPACTS (IF ANY) Page 22 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Poverty, Gender, Social Impacts 46. The project was aligned with the CPF for FY15-19 which focused on two key drivers to increase shared prosperity and extreme poverty: (i) supporting economic stability and improved governance; (ii) creating opportunities for sustained generation by promoting private sector policies to level the playing field. 47. The project was not expected to have any direct adverse impact on poverty and gender or negative social effects. Institutional Strengthening 48. The project had a positive impact on coordination between the main entities involved. At the start of the project, having three different components implemented by three different entities was a significant challenge, especially since two of the entities (IDA and GAFI) initially had overlapping responsibilities. 15 However, this challenge turned into a point of strength during project implementation. Coordination between IDA and GAFI was facilitated throughout the project duration, and for example, this led to higher quality results during the investment map initiatives. Regular collective meetings were held with both entities and mission recommendations always stressed the importance of continuous coordination. 49. The close collaboration between IDA and ERRADA, and having a shared PIU between them, led to the institutional strengthening of both entities. ERRADA piloted the process mapping exercise at IDA. Practicing this exercise with IDA strengthened the capacities of ERRADA since constraints such as the lack of correct information and communication problems were not present. IDA and ERRRADA worked as one team with the same objective under the umbrella of EASE project and this was revealed in the smooth back and forth communication on process mapping, commentary on specific legal documents and ERRADA consultation sessions. 50. The project also contributed to creating more responsive investor services particularly through GAFI operations. The GAFI environment changed significantly after the initiative on the OSS funded by EASE, and several GAFI services are now provided based on investor feedback and demand. This was witnessed during the tour at the OSS during the ICR mission in December 2021, and through the analysis of the M&E reports submitted over the project’s implementation period. The development of the customer service satisfaction system includes specific indicators to assess the need, cost, and quality of the provided services. The system also measures the duration of problem solving, timeliness of responding to investor’s inquiries, and employees’ cooperation and other aspects of the service evaluation to enhance the analysis process and service delivery across all levels. The investment map also has a feature for investors to share their ideas, and investor ideas are reviewed and taken into consideration by the GAFI team. 15Olga Kaganova, 2017. Improving Productivity and Employment Capacity of State Industrial (and Other) Land in Egypt: Impossible without Land Management Modernization. The World Bank Group Publications. Page 23 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Mobilizing Private Sector Financing 51. The context of the project did not involve the mobilization of private sector financing. Other Unintended Outcomes and Impacts 52. No other unintended outcomes or impacts were identified. III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION 53. An important factor that affected the project design was the need to integrate three different implementing agencies. Two separate PIUs were established: one at GAFI for the GAFI component and one at IDA for both IDA and ERRADA components. IDA PIU executed the procurement and the FM operation on behalf of ERRADA. In order to avoid any confusion in the process of work, the two PIUs created a joint operational manual for the project that they both agreed on. B. KEY FACTORS DURING IMPLEMENTATION 54. The management of both GAFI and IDA changed several times during project implementation which consequently led to changes in the management team of the PIUs. These management changes to some extent affected the project implementation and often resulted in poor transmission of institutional knowledge of the project from one team to another. For instance, in 2019, most of the IDA team was replaced and a new chairman was appointed also as the PIU director. Thereafter, a new chairman took over in 2020 (after the component operation ended). At that time, IDA asked the WB team for EASE project deliverables which indicates that there was poor transition with respect to deliverables, and project documents were not maintained by the staff. 55. Additionally, the changes in the policy direction for the industrial land allocation in Egypt also affected the implementation of the project. Law 83 of 2016 stipulated that IDA has sovereignty over industrial land to allocate and manage this type of land. Under EASE, IDA processes re-engineering was undertaken on the basis that IDA will tender, allocate and manage the land. However, the guidelines published by the cabinet in March 2019 stipulated that GAFI will be the interface for investors on land and that it will undertake the tender process. This resulted in some confusion in the implementation of the newly designed processes since the process itself has changed. Given that this change was towards the project end, there was no time to re-adapt the processes to the new changes and thus, the land allocation processes developed under EASE for IDA are not well utilized. 56. There were also initial delays in declaring the additional financing phase effective, initial implementation delays, and COVID-19 related disruptions. The AF was approved on November 8, 2019, the Grant Agreement was signed on November 23, 2019, but was declared effective only on July 13, 2020. The AF project faced various implementation delays associated with the GAFI’s administrative processes and COVID-19 impact on limited Page 24 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) government functionalities in 2020. As a result, the effective project implementation timeline was reduced from 24 to 16 months. Despite these delays, significant milestones were achieved in terms of processing land allocation requests through the Digital Investment Map, enhancement of the Investment Map, reducing the time to obtain a business license, improving transparency and access to information related to various licenses, and capacity development of the GAFI team on a digital system of licensing. 57. There were changes in PIU management during the AF. The GAFI leadership in charge of implementing the project was changed twice since the effectiveness of the project in July 2020. The GAFI team had an adequate institutional and operational knowledge due to their engagement in the original phase which helped in expediting project activities and mitigating the risk of delayed project implementation. At IDA, the new teams quickly became familiar with the project, however, several intensive trainings were held for the new teams on the procurement and FM guidelines. 58. The AF phase faced procurement delays. The prolonged internal legal procedures of GAFI and the administrative process of the GAFI management for authorization and clearance of every procurement contract have also added to implementation delays. During the AF, the project had to cancel a few activities because of the inaccurate estimated costs or the technical specifications that were not responding to the project’s needs. However, the PIU highlighted during a May 2021 mission that the longer than usual internal processes were also due to building capacity by involving a number of GAFI staffers in various processes related to project implementation to ensure sustainability of the project outcomes after the project closes. 59. Due to COVID-19 restrictions, the WB team was not able to have face-to-face consultations and implementation support missions to monitor the implementation progress of the AF. To overcome this gap, the World Bank has held several virtual missions, the latest between May 23- 31, 2021. In addition, the WB team utilized virtual platforms extensively for weekly consultations and monthly videoconferences with the client counterparts to discuss project implementation issues and assess progress. As such, the impact of COVID-19 was mitigated for project supervision. 16 A final face-to-face supervision mission was undertaken before project closing between November 29 – December 6, 2021. IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION (M&E) M&E Design 60. The project objectives were clearly specified and are seen in outcome indicators, while the intermediate indicators capture project outputs adequately. The M&E design and arrangements were well-embedded institutionally, with M&E reporting from GAFI, IDA and ERRADA on a semi-annual basis. The PIU at GAFI, which 16 In addition, the GAFI took significant steps to mitigate the COVID-19 risks by: (i) amending the licensing process system to decrease investors’ footprints at the GAFI branches. The new process entails that the investor submits all the required documents online to be reviewed by the GAFI team; (ii) strengthening the video-conference tools and facilities within GAFI to increase the efficiency of the GAFI internal meetings and external communications with investors and stakeholders; and (iii) creating a new digital platform to streamline licensing services and solidify GAFI’s role as a single window for licensing services. Page 25 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) included a M&E Specialist, had overall responsibility for project management including reporting and monitoring and evaluation. 61. However, there were a few shortcomings in the quality of the M&E design: • The results framework was not adjusted to reflect the change in the delivery mechanism of PDO 2 and the new activities under the AF. While PDO1 was delivered through the GAFI Investment Map during the AF rather than through IDA as initially envisaged, the PDO was not changed as the definition was not impacted (“reformed land allocation process”). The intermediate results were also not changed to reflect this adjustment. There was a lack of clarity during the original project as to how PDO 2 would be delivered after the legal changes were undertaken. Further, the expanded activities under the AF were not added to the results framework as they were primarily seen as an extension of the parent project and due to the funding conditionalities as discussed above (see para 19). • The methodology used to calculate one of the PDO indicators could have been specified more clearly. The PAD did not clarify the calculation to be used to derive the indictor: “average duration of licensing processes”. • A framework to monitor the ex-ante and ex-post economic impact of the project was not set up. The project did not develop baselines at appraisal for the calculation of (direct) compliance cost savings, though it aimed to reduce the time and cost of business compliance. M&E Implementation 62. The M&E data was collected and analyzed effectively. Some examples include: • Baseline Data. An M&E Officer in the PIUs ensured core baseline data were in place, as well as reporting tools to allow for adequate monitoring and tracking of the project outputs. • Coordination and Progress Reporting. There was regular communication between the GAFI, IDA and ERRADA, including bi-weekly meetings/calls to provide updates on progress and facilitate problem solving. • Accountability. The three M&E reports were received from the three entities on a semi-annual basis. GAFI appointed an external consultant to undertake the M&E analysis and prepare the report. • Review and fixing weaknesses in the M&E design. The September 2017 Mid Term Review (MTR) mission reviewed the project’s monitoring plan, the relevance of the indicators, the adequacy of the targets, and the validity of results reported. The MTR recommendations led to some changes to the intermediate results indicators. • Reporting. Indicators in the results framework were reported regularly and transparently in the ISRs. M&E Utilization 63. The M&E data collected was used for project supervision and decision making. The M&E was also used to inform the design and implementation of the AF, in particular the qualitative reporting which indicated the need for extra activities to maintain the project results. For example, the GAFI reports highlighted the important need for linking the new processes to the external entities in order to reach the complete concept of the OSS. 64. The MTR flagged issues such as the land allocation system implementation delays, which led to the better identification of the expected outcomes from IDA. Page 26 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) 65. Communication between the three project entities was strengthened based on the MTR, including general guidance to deepen the involvement of ERRADA in the GAFI and IDA reviews and the setting of periodic meetings for the three entities to discuss and resolve any obstructions, as well as ensure an effective flow of information between their project teams. Justification of Overall Rating of Quality of M&E Rating: Substantial 66. Based on the above discussion, the quality of M&E is rated as substantial.. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE Environmental & Social Safeguards 67. These safeguards were not relevant to the project as no major environmental and social impacts were envisioned. Environmental and Social risks were rated as low throughout the project. Financial Management (FM) 68. The project maintained adequate financial management arrangements, and the fiduciary risk level was reduced from Substantial during appraisal to Moderate during the implementation of the AF. During the appraisal, fiduciary risks were identified as deficiencies in internal control and lack of transparent external audit system. For example, regulations for public procurement were outdated and not in line with international good practice. Administrative procedures were overly complex and provided for significant discretion that negatively affects performance and fosters arbitrary decision making. 69. To mitigate these risks, a FM manual within the Operational Manual (OM) was developed, defining the controls and flow of information, including required audit arrangements. The project depended primarily on the Direct Disbursements method in addition to the use of US Dollar Designated Account (DA), which was opened and operated by GAFI. An independent external auditor was hired by the project in accordance with the Terms of reference (TOR) acceptable to the Bank. The FM project management design was based on the original assessment of GAFI which was conducted in March 2015 and found to be satisfactory to the Bank. During the AF, the financial management (FM) and disbursement functions were managed by the GAFI, including providing implementation and monitoring oversight of sub-projects. The project submitted Interim Financial Reports (IFRs) on time. Fiduciary compliance is rated ‘Moderately Satisfactory’. Procurement 70. The overall procurement risk for the AF was considered to be moderate when the operation began A pre-appraisal Bank assessment identified key issues concerning procurement including :(i) lengthy process of small value contracts due to centralized decision making; (ii) lack of proper Standard Bidding Documents for goods and consulting services; (iii) rejection of all bids without prober due diligence; (v) lack of experience in international procurement practice; and (iv) cost overrun due to unnecessary layers of approvals to be obtained for each step in the Page 27 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) procurement process. The risks were mitigated through (i) the preparation of a Procurement Guide as part of the OM, which defines roles and responsibilities, sequence and timeframe for decisions and payments; and (ii) procurement training for the GAFI, in addition to other mitigating and quality assurance measures. Based on the World Bank Procurement Regulations, the GAFI developed a draft Project Procurement Strategy for Development (PPSD) that was uploaded by GAFI to the Systematic Tracking of Exchanges in Procurement (STEP). The PIUs at the GAFI and IDA included a Procurement Specialist. 71. Procurement performance remained moderately satisfactory during implementation, and was characterized by delays. The AF faced challenges in implementing activities under a tightened timeline due to procurement delays incurred by the GAFI. As mentioned earlier, during the AF, prolonged internal legal procedures of the GAFI and the administrative process of the GAFI management for authorization and clearance of every procurement contract added to implementation delays. The project also had to cancel few activities because of the inaccurate estimated costs or the technical specifications that were not responding to the project’s needs. Procurement performance is rated Moderately Satisfactory. C. BANK PERFORMANCE Quality at Entry 72. The project was prepared and appraised to enable it to achieve its stated development outcomes. The design of the project was based on a strong understanding of the Government’s reform priorities and was closely aligned with the CPF and the SCD. The project was also complemented by activities undertaken by development partners such as OECD under the MENA Transition Fund. 17 73. The Bank mitigated risks by bringing the project to high implementation-readiness before it was approved by the Board. The overall risk of the operation was rated substantial, with the lack of coordination and collaboration issues between the various agencies involved in the project being envisaged as the main risks. GAFI and the IDA had related and complementary responsibilities at appraisal, which could lead to coordination and overlapping mandate issues. Human capacity issues in relation to the new mandates were also highlighted. The project design sought to mitigate these risks through close coordination and capacity building. 74. The GAFI and IDA PIUs received intensive training on the Client Connection, the STEP systems, and FM reporting. The capacities of the procurement and FM specialists were developed, especially at IDA, as they were not acquainted with the Bank systems. The WB team conducted several trainings that averaged one training every 2-3 months. An Operations Manual was developed to cover the procurement and the FM procedures for the project. 75. As indicated earlier, there some deficiencies in the design of the M&E framework. However, the M&E design was 17Finally, the AF was also designed to strengthen governance and investment management practices, including investment promotion, international investment statistics, and institutional as well as corporate governance through the Organization for Economic Co-operation and Development (OECD) component of the project. Under the framework of the EASE project, the OECD component was implemented under a separate grant from the MENA Transition Fund and responded to a request for technical assistance from the Minister of Investment in relation to the activities carried out by the Ministry to enhance the investment framework. This corresponded with the Transition Fund Cross Pillar 5 Development Objective and Outcome Indicator 5.1 “Improved enabling environment and government capacity.” Page 28 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) pragmatic and proved to be adaptable. Quality of Supervision 76. The WB team provided on-going support to the PIUs, in particular to ensure coordination between GAFI, IDA and ERRADA during project implementation. Several supervision missions were undertaken every year, including virtually during the COVID-19 pandemic. Regular communications, including bi-weekly meetings/calls, were put in place to discuss progress and resolve issues. The MTR was utilized for a detailed review of the results framework, which led to some changes to intermediate results indicators. The Bank also widened the scope of the operation through the additional financing and ensured the completion of activities through project extension. The team provided candid and detailed assessments through the ISRs and during the MTR. 77. The World Bank FM and procurement teams provided effective supervision of fiduciary aspects. The teams provided several trainings and were responsive to client questions and needs. Procurement post-reviews were undertaken regularly and the FM team ensured timely FM reporting. All of the project related reports, Interim Financial Reports (IFRs) and Audit reports were received, reviewed, and found acceptable. 78. The Bank team adapted to the legislative changes that affected the governance structures to preserve the focus on the development objective. The new investment and industrial licensing laws introduced in 2017 led to changes in the mandates of GAFI and IDA, in particular for land allocation, and the Bank worked with Government to adjust activities within the original components. The Bank worked with the Government to provide additional financing for the project to help GAFI fulfill its mandate to be an effective OSS and to be the national portal for land allocation requests. Justification of Bank Performance Rating: Moderately Satisfactory 79. The overall rating of Bank performance is assessed as Moderately Satisfactory given that there were moderate shortcomings in quality at entry and in the quality of supervision. The Bank maintained implementation momentum towards achieving the PDOs, despite the challenges presented by the changes in the legal mandates of the entities as well as the COVID pandemic and delays faced to declare the AF effective which was remarkably completed in 16 months (instead of 24). The key shortcomings were in the design of the results framework and the lack of baselines to measure economic impact, however the M&E framework also proved to be flexible and adaptable to the changing situations. D. RISK TO DEVELOPMENT OUTCOME 80. Overall, there is a low risk that the development outcomes achieved through the project will not be sustained. The project complemented the broader reform efforts of the Egyptian Government undertaken over the past few years such as successfully devaluing its currency, introducing the VAT, and legislative reforms, such as a new industrial licensing law, investment law, bankruptcy law, amendments to the companies’ law, and establishing a movable collateral registry. The project also acted in coherence with various other reform activities that were Page 29 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) ongoing in the entities, such as in the GAFI, where these were mostly funded and implemented by the GAFI team. This national-level, as well as entity-level, momentum for reform was a significant factor behind the success of the parent project and of the additional grant. 81. To ensure sustainability beyond project closure, the PIU has helped establish the ownership of the project within GAFI. The PIU played a supportive role within the GAFI, and during the AF ensured that the GAFI built capacity and was in charge of managing processes. Government resources have been well leveraged and GAFI will be able to sustain the activities initiated during the project. As such, the likelihood of sustainability of the project beyond the closure is high. For example: • During the AF phase, the PIU within GAFI has continued to put GAFI in charge of managing processes such as the procurement plan, coordination of acceptance of bidding operation, approval of goods procured and supervision of implementation, etc. As such, the PIU has undertaken a facilitative role in supporting GAFI to put in place innovative, simplified, and transparent business processes through EASE. • The project has mobilized resources and skills and also led to spillover effects whereby EASE supported systems are used for multiple functions in GAFI. • Another factor that resulted in sustainable project implementation at GAFI was that there was strong political will to implement the new investment law. Additionally, high attention was given to the OSS, and GAFI has undertaken several reforms for the OSS that were not funded by EASE. V. LESSONS AND RECOMMENDATIONS 82. Key lessons learned from project implementation are as follows: • Relatively small projects can have a substantial impact in becoming steppingstones for the digitalization G2B services. The project delivered a new licensing services digital delivery model that is flexible for growth and can be adopted as a model for effective digital services transformation. Through the digital investment map, the project contributed to simplifying one of the most complicated steps in starting up a business in Egypt. Success was achieved in making GAFI teams own these systems to guarantee the sustainability of project results. Even very small interventions which were included as part of digitalization such as the FDI component have created a large impact toward facilitating evidence-based policymaking and will give better direction to decision-making within Egypt. • Reform of land allocation requires a comprehensive intervention. Working on a sensitive reform such as the land allocation process in a country such as Egypt is challenging since there is a strong political debate around the sovereignty and the ownership of land. For example, to date some industrial lands are still under the authority of New Urban Communities Authority (NUCA) while others are under the authority of the governorates. At the time of the project, coordination between IDA and these entities was unclear and unstable, and IDA lacked essential inputs that were regularly required from them. In order to undertake land allocation reform effectively, close cooperation with other relevant entities in necessary. Entities such as IDA also have to ensure the availability of adequate funds and capacities at national and local levels to effectively govern land management. In addition, a system for land information and classification is a necessary pre-requisite for process re-engineering of land allocation. • To support project implementation and sustainability, the bureaucratic culture and low capacity within entities need to be addressed. Ensuring sustainability requires creating the newly automated systems in a flexible manner that allows IT staff and the end users to amend the systems in line with future changes. Additionally, focusing on building Page 30 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) capacities within the project entities is critical for smooth reform implementation and future sustainability. Capacity building should not be limited to the training on the newly automated systems, but also extend to technical and project management skills. • Strong client relationship, flexibility and good digital infrastructure can mitigate issues due to disruptions such as COVID-19. During the AF, the key lessons from the impact of the pandemic included: (i) having a solid client relationship (as was the case for this project) is key for successful virtual consultations when face-to-face consultations are not possible, (ii) a well-functioning digital infrastructure and connectivity are much needed in Egypt to have good quality virtual consultations, and (iii) allowing more time for implementation to address weakness in government capacity and administrative complexities, the effects of which tends to be compounded during external shocks such as the COVID pandemic. • Donor collaboration through mechanisms such as the Transition Fund can help to create the momentum for reform. For example, the WB and the OECD were implementing partners under the Transition Fund for the umbrella operation with the combined PDO: “To improve the regulatory environment for investors through simplified industrial licensing and transparent land allocation processes and to support the Government of Egypt in designing a new investment policy and legal framework, and in strengthening its international investment regime”. The OECD published the Investment Policy Review (IPR) of Egypt in July 2020 and delivered online capacity-building courses such as on FDI Statistics to the GAFI Intelligence Unit. Such coherence between donors provides impetus to reform commitment. . Page 31 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: Improve regulatory environment for investors through simplified licensing and land allocation Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Average duration of Licensing Days 320.00 60.00 28.00 Processes 01-Jul-2015 31-Oct-2021 11-Dec-2021 Number of days to comply Days 640.00 55.00 55.00 with the Industrial Licesning process (High Risk) 01-Jul-2015 31-Oct-2021 11-Dec-2021 Number of days to comply Days 8.00 3.00 1.00 with the Business Licensing process 01-Jul-2015 31-Oct-2021 11-Dec-2021 Comments (achievements against targets): The current average duration of licensing processes (based on the two sub-indicators of IDA and GAFI) was fully achieved at 28 days (against the baseline value of 320 days and the end-target of 60 days) based on the following calculation: · Number of licenses issued by IDA in last 12 months: 186 Page 32 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) · Number of licenses issued by GAFI in last 12 months: 3112 · Average Number of days taken by GAFI to issue the licenses: 1 day · Average Number of days taken by IDA to issue the licenses: 55 days · Simple Average of number of days taken by IDA and GAFI to issue the licenses: 55+1/2= 28 day Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of land allocation Number 0.00 2,000.00 2,080.00 requests processed through the reformed land allocation 01-Jul-2015 31-Oct-2021 11-Dec-2021 system Comments (achievements against targets): As mentioned, the Government of Egypt in 2019 issued a Prime Ministerial Decree (# 816 of 2019) stipulating that the GAFI is the online interface of all investment land allocation process through Egypt’s Investment Map (which is developed and supported by this project), including the industrial lands of IDA. Accordingly, the GAFI has taken the lead on advertising and tendering land -as stipulated by the decree through the investment map developed under the project. Currently, industrial land available at the IDA, the New Urban Communities Authority (NUCA), and the Governorates are being advertised and tendered through the GAFI investment map. Investors submit their documents online at the GAFI portal, and the GAFI does the evaluation commentary. These processed land allocation requests then go to respective agencies (e.g., IDA) for actual allocations. Page 33 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) As such, 2080 land allocation requests have been processed through this new system, i.e., through Investment Map, which exceeded the target. These total number of allocations were processed in three different batches: 522 requests during October 2019, 720 requests during February 2020, and 838 requests during June 2020. A.2 Intermediate Results Indicators Component: Facilitating accessible and transparent investor services (GAFI) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion GAFI - CRM Platform Number 0.00 5.00 12.00 Operational in OSS Branches 01-Jul-2015 31-Oct-2021 11-Dec-2021 Comments (achievements against targets): Number of CRM platforms operating in GAFI branches was achieved beyond the target. GAFI renovated most of its branches and opened several branches in different governorates, mainly in: Cairo, Alexandria, Assiut, Ismailia, 6th of October, Gamassa, 10th of Ramadan, and Sohag. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion GAFI - Yes/No No Yes Yes Mapping/Simplification of Entry procedures completed 01-Jul-2015 31-Oct-2021 11-Dec-2021 Page 34 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Comments (achievements against targets): The re-engineering was achieved and undertaken by Reakitve Consultancy and was reviewed by GAFI and EERADA team as need. This was done to 80% of procedures. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion GAFI - Sector licensing Number 0.00 479.00 474.00 requirements consolidated/ published on GAFI Portal 01-Jul-2015 31-Oct-2021 11-Dec-2021 Comments (achievements against targets): The target was almost achieved, and a manual is published now with all sector licensing requirements which saves the investor at least 1 visit as he/she can access the exact required documents. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion GAFI - Number of Online Number 0.00 100.00 436.00 Business Registrations 01-Jul-2015 31-Oct-2021 11-Dec-2021 Comments (achievements against targets): Page 35 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Online business registration exceeded the targeted, despite being stopped during 2021 due to some renovations on the system. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion GAFI - Capacity Building Number 0.00 20.00 35.00 workshops for GAFI OSS staff completed 01-Jul-2015 31-Oct-2021 11-Dec-2021 Comments (achievements against targets): Training sessions were undertaken beyond targets and covered technical aspects as well as skills development. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of GAFI OSS staff Number 0.00 80.00 200.00 trained in workshops 01-Jul-2015 31-Oct-2021 11-Dec-2021 Comments (achievements against targets): Trainees numbered beyond targets and were chosen from different units and trained employees were responsible for transferring the knowledge acquired during trainings to their colleagues. Page 36 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Component: Supporting Industrial Sector Transformational Reforms Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion IDA - Implementataion of Yes/No No Yes Yes reformed licensing processes completed 01-Jul-2015 15-Dec-2019 31-Jan-2019 Comments (achievements against targets): The re-engineering was completed and covered the 4 main services (licensing, land allocation, construction permits and industrial developer). The re- engineering was done by Megacom Consultancy - an Egyptian consultancy who was also hired to preapre the guidelines for land allocation issued by the PM in March 2018. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion IDA - Risk based approach for Yes/No No Yes Yes industrial technical evaluation applied 01-Jul-2015 15-Dec-2019 31-Jan-2019 Comments (achievements against targets): The licensing by notification was made effective after the issuance of the new industrial licensing law and the project supported its implementation. Indicator Name Unit of Measure Baseline Original Target Formally Revised Actual Achieved at Page 37 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Target Completion IDA - Industrial Licensing Number 0.00 10.00 22.00 System deployed in IDA branches 01-Jul-2015 15-Dec-2019 31-Jan-2019 Comments (achievements against targets): The newly designed licensing system was implemented in all IDA branches. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion IDA - Online Industrial Land Yes/No No Yes No Allocation system deployed 01-Jul-2015 15-Dec-2019 15-Dec-2019 Comments (achievements against targets): The land allocation guidelines issued in March 2018 which announced GAFI as the land allocation interface with investors slightly changed the newly designed processes for land allocation at IDA and accordingly the new processes were not deployed. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion IDA - Industrial Developer Yes/No No Yes No Land Allocation framework 01-Jul-2015 15-Dec-2019 15-Dec-2019 Page 38 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) designed and deployed Comments (achievements against targets): The industrial developer system is designed but not applied as IDA are now trying to do more fundamental steps (such as a land inventory system) to be able to manage zones more effectively and accordingly allow for a system for developers. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion IDA - Capacity building Number 0.00 10.00 13.00 workshops for IDA branch staff completed 01-Jul-2015 15-Dec-2019 31-Jan-2019 Comments (achievements against targets): Technical capacity building workshops were fully undertaken. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Mapping/Simplification of Number 0.00 4.00 15.00 Licensing sub-processes completed 01-Jun-2015 15-Dec-2019 08-Sep-2021 Comments (achievements against targets): Page 39 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Mapping was done for the 4 main processes with all their sub-processes. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of IDA Staff trained Number 0.00 50.00 84.00 in Workshops 01-Jun-2015 15-Dec-2019 08-Sep-2021 Comments (achievements against targets): This result also exceeded targets, and staff were chosen based on their relevance to the service. Component: Capacity building for managing regulatory reform (ERRADA) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Regulatory Reforms Number 0.00 15.00 25.00 Proposed 01-Jul-2015 15-Dec-2019 11-Dec-2021 Comments (achievements against targets): ERRADA did several consultations on different laws and executive regulations and also undertook out a review all re-engineered processes carried out by IDA and GAFI. Page 40 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion ERRADA - Private Sector Number 0.00 15.00 23.00 consultation on regulatory reform mechanism applied 01-Jul-2015 15-Dec-2019 08-Sep-2021 Comments (achievements against targets): Consultations were held related to investment and industrial laws, and their executive regulations as well as topics related to industrial registry, industrial developer, land allocation etc. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion ERRADA - Capacity building Number 0.00 10.00 33.00 workshops for ERRADA staff completed 01-Jul-2015 15-Dec-2019 08-Sep-2021 Comments (achievements against targets): Most workshops were on legislative drafting. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Page 41 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Number of ERRADA staff Number 0.00 15.00 20.00 trained in workshops 30-Jun-2015 15-Dec-2019 08-Sep-2021 Comments (achievements against targets): The total number of ERRADA staff trained in workshops is 20, however, in the latest ISR it was reported 60 as each of the 20 staff were taken 3 or more training workshops. Page 42 of 54 Official Use The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS Name Role Preparation Sherif Bahig Hamdy, Nabila Assaf Task Team Leader(s) Badr Kamel Procurement Specialist(s) Wael Ahmed Elshabrawy Financial Management Specialist Dina Mohamed Eldemerdash Elkhishin Team Member Stefanie Lynn Ridenour Team Member Amal Nabil Faltas Bastorous Social Specialist Amal Nabil Faltas Bastorous Team Member Fatma Ahmad Al Ibrahim Team Member Hazem Mohamed Mokhtar El Wassimy Team Member Suzanne Parris Team Member Nermeen Abdel Latif Team Member Salma Ezzat El Sharawy Team Member Maha Abdelhamid Mohamid Tawfik Hussein Team Member Jamal Abdulla Abdulaziz Team Member Andreja Marusic Team Member John Raymond Wille Team Member Banu Setlur Social Specialist Supervision/ICR Aminur Rahman Task Team Leader(s) Page 43 of 54 The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Ashraf Ahmed Hasan Al-Wazzan Procurement Specialist(s) Wael Ahmed Elshabrawy Financial Management Specialist Hosam Diaaeldin Abdelnaser Hassan Financial Management Specialist Steve W. Wan Yan Lun Team Member Georges Tony Abou Rjaily Team Member Amal Nabil Faltas Bastorous Social Specialist Mohammad Farouk Ibrahim Kandeel Environmental Specialist Dina Mohamed Eldemerdash Elkhishin 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 FY15 34.735 129,579.82 FY16 8.345 30,810.04 Total 43.08 160,389.86 Supervision/ICR FY15 0 492.00 FY16 22.204 167,599.65 FY17 18.087 152,832.79 FY18 15.800 101,321.11 FY19 12.500 104,828.19 FY20 14.369 76,516.80 FY21 8.650 97,388.61 FY22 23.088 198,097.93 Total 114.70 899,077.08 Page 44 of 54 The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Annex 3. Project Costs by Component Percentage of Amount at Approval Actual at Project Project Components Approval (US$M) Closing (US$M) (US$M) 1. Facilitating 2.25 2.212 98.3% accessible and transparent investor service (GAFI) 1.746 1.720 98.5% Additional finance (GAFI) 2. Supporting 2.250 2.244 99.7% industrial sector transformational reforms (IDA) 3. Capacity building for 0.500 0.500 100% managing regulatory reform (ERRADA) Original Project 5.000 4.956 99.1% Additional Finance 1.746 1.720 98.5% Total 6.746 6.676 98.96% Page 45 of 54 The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) ANNEX 4. EFFICIENCY ANALYSIS – COMPLIANCE COST SAVINGS FOR BUSINESS LICENSE The Economic analysis below will focus on measuring the impact of the project through (Direct Compliance Cost Savings (CCS) from simplified licenses for the business license (GAFI), as the data is available from official sources and investor interviews. The CCS could not be estimated for the high-risk industrial license because a baseline is not available for 2015 as the process was not done at IDA but at NUCA and the Governorates, and the costs were not unified. (i) Direct CCS from simplification of Business License process (GAFI) Methodology. The CCS methodology is used to calculate the impact indicator for the average duration of licensing processes. 18 The Direct CCS indicator measures the impact of reforms aimed at improving administrative and institutional procedures to reduce the time and costs associated with the procedures required of private businesses. 19 Direct CCS are the savings that resulted from the difference in the pre- and post-reform annual costs (adjusted for taxes and discounted to the baseline year). This methodology is not a comprehensive cost-benefit analysis. It is a one-sided view of the reforms’ benefits to the private sector, and it provides an indication of the resulting extra resources that private businesses may use, at least in part, to expand their businesses or make new investments. See Figure 1 for the methodology to calculate Direct CCS developed by the IFC. 20 This methodology was applied to the business license process managed by the GAFI. Calculating Direct Compliance Cost Savings 18 The CCS template which was designed in 2012 to provide inputs to the IFC Approval document, Supervision Reports, Project Completion Reports, and Ex-post Project Evaluation Reports. 19 Indirect costs (e.g., the opportunity cost of capital idled by bureaucratic delays) can be even larger than the direct costs, but may be more difficult to value. 20 IFC, “Guidelines for Compliance Cost Savings” (Jackie Coolidge, Investment Climate Unit), November 2012. Page 46 of 54 The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Assumptions. The following assumptions for calculating direct CCS from Business License reforms were used: 2015 2021 Number of Transactions 11550 29832 Employee cost total per 10-12K 15k transaction (lawyer level in (use 10K for model) LLC) Total staff time (days)(lawyer 15 4 (1 filling forms + 2-3 to level in LLC) prepare doc) Official Fees EGP 3530 EGP 2030 Unofficial Fees From EGP 5000 to 10000 Investors can do this now (use 5K for model) through the GAFI portal (no need any more to employ someone to do the process). Source: GAFI 1. The number of procedures, days, and official fees were calculated, for the limited liability company in accordance with the provisions of the law. 159 of 1981, its capital is EGP50000 at the main Investor Services Center (ISC) in Cairo. 2. Before 2015 and the spread of ISC across governorates, the number of procedures and the number of days to establish the same type of company in the different governorates was much higher especially the governorates of Upper Egypt, the investor had to pay high travel and transportation costs. 3. The official fees include all the fees of the authorities concerned with finalizing the application for incorporation (investment authority fees - real estate registration fees -Commercial registration fees - Chamber of Commerce fees) which are currently paid once in aggregate by one of the electronic payment methods 4. Unofficial fees include, for example, (the agent fees), which are usually agreed upon between investors and the agent which may range on average between (EGP 5000-10,000) depending on the reputation and experience of the agent. 5. In addition to the official fees, the fee for issuing a power of attorney from the founders to the agent, which may cost up to EGP 100 as per power of attorney. Results. The simplified processes for business license led to aggregate cost savings for one year, discounted to the 2015 baseline year, of USD 14.8 million. The aggregate cost savings for FOUR years (e.g., the four years between 2017 when reforms were enacted to 2021) discounted to baseline year can be estimated at USD 58 million. See summary and full tables below for results. Aggregate cost savings for one year SUMMARY IMPACT (undiscounted) $ 16,218,563 Aggregate cost savings for one year - discounted to baseline year $ 14,832,560 Aggregate cost savings for FOUR years - discounted to baseline year $ 58,027,948 Page 47 of 54 The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) The Investment Law no. 72 of 2017; Industrial Licensing Egypt EASE license reform - Business GAFI Law no. 15 of 2017 To improve the regulatory environment for investors through simplified licensing and transparent industrial Reduction in average duration of business license process (GAFI) land allocation processes. BASELINE YEAR EX-POST NOTES ON DATA Indicate the data from the most recent Indicate the verified impact based on actual experience REPORTED: survey (or other data collection method) VARIABLE after the legislation is enacted and implemented Include any additional PRIOR to the passage of the legislation information on Data Source & assumptions, etc. Baseline, 2015 Data Source & Year Ex-Post Change Year Number of transactions for the procedure per year (Enter this number if 11,550 GAFI, 2021 - you have a reliable data source, otherwise leave blank and use the three rows below) Number of active firms in baseline year Held constant (2021: (if using "Number of transactions" leave this 11,550.00 29832 business row blank) registration transactions) Share of firms affected by the procedure in the baseline year, % 100.00% 100.00% 0.00% (if using "Number of transactions" leave this row blank) Average number of transactions per firm per year (if using "Number of 1.00 1.00 0.00 transactions" leave this row blank) Data to be entered by Project Average daily employee salary in baseline year in local currency (if Salary of lawyer level 666.67 Investor interview 666.67 0.00 multiple wage rates, pls use wage rate employee in LLC. 3750 supplementary table below) in 2021 Average number of employee work days required per transaction (if multiple wage 15.00 Investor interview 4.00 11.00 rates, pls use wage rate supplementary table below) Total official fees per transaction in local currency (if multiple fees, pls use fees 3,530.00 GAFI, 2015 2,030.00 GAFI, 2021 1,500.00 and costs supplementary table below) Other direct monetary costs per transaction in local currency (if multiple GAFI, 2015 (between 5- 5000 fee for agent + 5,100.00 0.00 GAFI, 2021 5,100.00 costs, pls use fees and costs supplementary 10K) 100 for power of table below) attorney Tax rate, % (use corporate income tax or 22.5% KPMG profit tax for affected companies) Real annual interest rate, % (nominal 1.5% WB Databank rate - inflation rate) Avg exchange rate for the year (local 7.69 WB Databank currency per 1USD) Years since baseline 6 Avg daily wage in USD 86.69 REALITY CHECK Avg financial cost per transaction in 1,122.24 USD (baseline) Number of transactions for procedure 11,550.00 11,550.00 0.00 per year Financial cost PER transaction (USD) 1,122.24 263.98 858.26 Admin cost Annual average financial costs for given 1,122.24 263.98 858.26 procedure for one firm Total annual financial costs for all 12,961,833.55 3,048,959.69 9,912,873.86 transactions Direct Cost Labor cost PER transaction (USD) 1,300.39 346.77 953.62 Labour cost Annual labour costs for given procedure 1,300.39 346.77 953.62 for one firm (USD) Total annual labour costs for given 15,019,505.85 4,005,201.56 11,014,304.29 procedure for all transactions (USD) Total annual direct cost for given procedure(s) for all affected firms 27,981,339.40 7,054,161.25 20,927,178.15 (gross) Total direct costs (net of tax) 21,685,538.04 5,466,974.97 16,218,563.07 Aggregate cost savings for one SUMMARY IMPACT year (undiscounted) $ 16,218,563 Aggregate cost savings for one year - discounted to baseline year $ 14,832,560 Aggregate cost savings for FOUR years - discounted to baseline year $ 58,027,948 Page 48 of 54 The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) (ii) Economic efficiency from simplification of High-Risk Industrial License process (IDA) The process of simplifying high-risk industrial licenses led to a shorter time per transaction for IDA. According to IDA, the average number of IDA employee workdays required per transaction dropped by 69% from 16 to 5 days, leading to savings in labor costs and costs per transaction for the government. 2015 2021 No. of high-risk licenses 90 (2017) 269 Average daily employee salary EGP 150 230 Average number of employee work 16 5 days required per transaction Source: IDA Page 49 of 54 The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS The Recipient did not provide comments on the Bank’s ICR. GAFI and ERRADA, the implementing agencies, have provided their completion reports independently. Page 50 of 54 The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) ANNEX 6. Supporting Documents (if any) 1. Supporting documents available in the project files are: • Project Appraisal Document (P153487/Grant No. TF0A1553) • Legal Agreement • Additional Financing Project Paper (Report No: PAD3399) • Restructuring Papers • Project Aide Mémoires and Management Letters • Project Implementation Status and Results reports • Safeguard Documents 2. Other World Bank Group documents: • World Bank Country Partnership Framework (CPF) for 2015-19 (Report No. 94554) • World Bank Systematic Country Diagnostic (SCD) (Report no. 99722).F • World Bank Country Partnership Framework (CPF) for FY23-27 (draft) • World Bank Systematic Country Diagnostic (SCD) Update (Report No. 164656) 3. Government of Egypt’s documents: • Client’s Implementation Completion and Results Report (GAFI, ERRADA) • The Investment Law no. 72 of 2017 • The Industrial Licensing Law no. 15 of 2017 • Ministry of Trade and Industry Strategy 2017 Page 51 of 54 The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) ANNEX 7. Additional Financing (AF) Project Outcomes Key outcomes during implementation of the AF include: • Delivery of a new licensing services digital delivery model that is flexible for growth and can be adopted as a model for effective digital services transformation (see Figure 1). • Delivery of FDI and private sector Economic Performance Data collection and Analysis Platform to enable enhanced policy design. • Deploying these systems in an integrated framework with existing GAFI solutions. • Securing the Licenses and Equipment to enable effective secure and seamless operations. • Success in making GAFI teams own these systems to guarantee the sustainability of project results. • Enabling and equipping the human capital to be able to manage, maintain and develop the deployed systems (for example, the Licensing platform front end was developed by GAFI teams). The processes and infrastructure for the Investor Service Center (ISC) were enhanced under EASE. The original financing funded the licensing infrastructure and the networks for the system used for the incorporation. During the project extension, the ISC service delivery has been further improved through the enhanced Queening System, which allows online appointment reservation, service selection, service rating, and it is fully integrated with GAFI CRM. The old system was a basic walk-in ticketing system. This system serves licensing, incorporation, and all ISC services in the main branch and GAFI branches across Egypt (see Figure 2). Over the project period, GAFI has expanded its branches to cover almost all Egyptian governorates and has undertaken significant reforms to the facilities of the new OSSs. An online business registration system was created under the original financing of the project, but was stopped due to security issues. Following a significant hacking incident, EASE AF supported GAFI in building an effective cybersecurity infrastructure to prevent future security breaches. The enhanced system will request investors to interact with GAFI twice: (1) to submit the original documents and (2) to provide signatures. Certificates and licenses that are issued cannot be obtained digitally as yet. The new FDI system financed under the EASE project digitized a previously manual operation and created base for future interventions; streamlined communication with investors and GAFI through interactive features, and enabled notifications for investor. Digitalizing the submission of the financial statements of investors improves transparency and contributes to informed policymaking when the reports are sent to the Cabinet. This is also strongly contributing to the objectives of the project as it simplifies previously complicated and manual processes and gives better and quicker access to information to both the regulator and the investor. The GAFI Investment Map was enhanced during the AF for the delivery of a new integrated infrastructure for the Investment Map to enable coordinated government policy on land allocation and investment opportunity promotion. During Phase 1 developed under the original project, investors could view and compare land opportunities, and ask for availability, while follow up with entities was conducted every 30 days. Phase 2 developed under the AF provided a window to connect to external entities in charge of land opportunities to allow them to directly change and upgrade the online opportunities, with GAFI providing a follow-up on the workflow. This gave GAFI a more supervisory role and increased transparency for investors. Page 52 of 54 The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) The AF further enabled investors to reserve opportunities share ideas so that opportunities are more demand- based, and allowed for bids which have all led to a more responsive and transparent tendering process. The development of the Investment Map is seen by GAFI as a continuous learning process in which it is highly responsive to changing dynamics. Figure 1. Licensing Process Streamlining 21 21 GAFI PIU, December 2021. Page 53 of 54 The World Bank Equal Access and Simplified Environment for Investment (EASE) in Egypt (P153487) Figure 2. ISC Service Delivery Enhancements 22 22 GAFI PIU, December 2021. Page 54 of 54