Document of The World Bank FOR OFFICIAL USE ONLY Report No: IMPLEMENTATION COMPLETION AND RESULTS REPORT TF AO2673, TF AO6166 ON A SMALL GRANT IN THE AMOUNT OF USD (0.79) MILLION TO THE Ministry of Economy and Finance FOR Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) 03/29/2021 Energy & Extractives Global Practice Africa Region Regional Vice President: Ousmane Diagana Country Director: Nathan Belete Regional Director: Demetrius Papathanasiou Practice Manager: Christopher Gilbert Sheldon Task Team Leader(s): Nina Inamahoro ICR Main Contributor: Nina Inamahoro ABBREVIATIONS AND ACRONYMS AF Additional Financing CN-ITIE Comité national ITIE (SENEGAL EITI Multi-stakeholder Group) DPO Development Policy Operation EITI Extractive Industries Transparency Initiative EGPS Extractive Global Programmatic Support GoSN Government of Senegal IS International Secretariat (EITI secretariat based in Oslo) ISR Implementation Status Report MSG Multi-stakeholder group PP Project Paper PDO Project Development Objective PIM Project Implementation Manual SOE State-owned enterprises TF Trust Fund WB World Bank TABLE OF CONTENTS DATA SHEET ....................................................................... ERROR! BOOKMARK NOT DEFINED. I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 4 II. OUTCOME ...................................................................................................................... 9 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 14 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 15 V. LESSONS LEARNED AND RECOMMENDATIONS .............................................................. 15 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 17 ANNEX 2. PROJECT COST BY COMPONENT ........................................................................... 25 ANNEX 3. RECIPIENT, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ...... 26 ANNEX 4. SUPPORTING DOCUMENTS (IF ANY) ..................................................................... 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name Senegal Support to Extractive Industries Transparency P160022 Initiative Compliance Process Country Financing Instrument Senegal Investment Project Financing Original EA Category Revised EA Category Organizations Borrower Implementing Agency Ministry of Economy and Finance Senegal EITI Permanent Secretariat Project Development Objective (PDO) Original PDO The project development objective (PDO) is to assist Senegal in implementing its EITI agenda. Page 1 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) FINANCING FINANCE_TBL Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) Donor Financing TF-A2673 300,000 281,888 281,888 TF-A6166 490,000 450,819 450,819 Total 790,000 732,707 732,707 Total Project Cost 790,000 732,707 732,707 KEY DATES Approval Effectiveness Original Closing Actual Closing 19-May-2016 20-Jun-2016 31-Dec-2018 30-Jun-2020 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 08-Nov-2017 0.25 Additional Financing Change in Results Framework Change in Components and Cost Change in Procurement Change in Implementation Schedule 06-Dec-2018 0.44 Additional Financing Change in Results Framework Change in Components and Cost Change in Loan Closing Date(s) Change in Implementation Schedule 20-Dec-2019 0.52 Change in Loan Closing Date(s) Change in Implementation Schedule KEY RATINGS Outcome Bank Performance M&E Quality Satisfactory Satisfactory Substantial Page 2 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 10-Nov-2016 Satisfactory Satisfactory 0.05 02 22-Jun-2017 Satisfactory Satisfactory 0.19 03 02-Feb-2018 Satisfactory Satisfactory 0.27 04 14-Sep-2018 Satisfactory Satisfactory 0.44 05 24-Jul-2019 Satisfactory Satisfactory 0.49 ADM STAFF Role At Approval At ICR Regional Vice President: Makhtar Diop Ousmane Diagana Country Director: Louise J. Cord Nathan M. Belete Director: Riccardo Puliti Demetrios Papathanasiou Practice Manager: Christopher Gilbert Sheldon Christopher Gilbert Sheldon Task Team Leader(s): Ilhem Salamon Nina Inamahoro ICR Contributing Author: Nina Inamahoro Page 3 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES Context EITI implementation 1. The Government of Senegal (GoSN) declared its interest to join the Extractive Industries Transparency Initiative (EITI) in July 2012 and submitted a candidature application in July 2013. The EITI National Steering Committee (CN-ITIE) was confirmed by Presidential Decree in June 2013. The decision to join the EITI in this context symbolized the ambition of Senegal to use EITI principles to strengthen the governance of the extractive sector during a period of national uproar regarding misgovernance scandals during the Wade regime and also to use the extractive sector an engine of economic growth. The first EITI report covering extractive sector payments and revenues the year 2013 was due in October 2015 with expected validation by October 17, 2016. As is common with early EITI reports, Senegal’s first report did not contain all the information required to become compliant with the EITI standard. However, it provided a particularly important assessment of the actions that should be undertaken to enable the country to improve access to extractive sector data in order to meet the EITI standard requirements by October 2016. Senegal has since expanded the scope of its EITI reporting by adding new revenue streams; additional agencies and institutions are participating to the process. 2. In the opinion of Senegalese stakeholders there was an evident contradiction, between the significant production figures of the mining sector and its weight in the economy. Senegal is among the top 20 phosphates producing countries in the World with an annual production of 2.4 million tons in 2019 and deposits of heavy metals with the potential to bring the country to the status of world leading producer of ilmenite and zircon. Senegal also has a significant deposit of iron in Faleme1 that was supposed to start production in 2009 but the developer (Arcelor Mittal) failed to start production and the Government rescinded its title. A new taker committed to investing 2 billion USD to develop the mine and the related infrastructure such as railway and a port. The 2003 mining code exempted companies in the exploration phase from taxes and from paying customs on equipment, supplies, and imported petroleum products used in exploration. The Government of Senegal sought to improve its investment climate and set a review of the institutional setting of the extractives sector. A review of the 2003 mining code was initiated in 2013 and finalized with the approval of the new mining code in 2016. Soon after, an exercise to revise the petroleum code started and finalized in January 2019. According to 2014 EITI report, Senegal’s extractives sector contributed about 117708 million CFA to the government in 2013 mainly from the mining sector with a small contribution from the oil and gas sector. In 2018, it contributed 122200 Million CFA. This is expected to change once oil and production start at SNE (projected in 2023) and Grand Tortue (projected in 2023). The 2016 mining code included a moderate increase in royalties, taxes on exported minerals, imports are exempted of duties during the period of investment and production start-up of a new operation or extension of capacity of production of an already existing operation, free Government participation in all mining companies up to 10% of the capital and negotiate the acquisition of an additional 25% of the capital that can be retroceded to the Senegalese private sector in order to promote and / or develop their access to the mining sector, the introduction of a 1 630 million tons including 372 million of hematite (oxidized ore) and 258 million of magnetite (ore magnetic). Page 4 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) “take it or lose it� clause requiring mining license-holders to extract minerals in an effort to curb speculation, and provisions aimed at promoting the use of local goods, services and staff. Moreover, transparency requirements to comply with EITI reporting rules were introduced in the 2016 mining code. 3. Having a platform such as EITI has eased the capacity to lead public debate on the governance of the extractive sector. The EITI framework facilitated dialogue between civil society, the private sector, and the government through the EITI Multi-Stakeholder Group (EITI-NC). The growth of the mining sector since 20092 in Senegal reinforced the importance of a policy towards transparency, management of social and environmental impacts, increase in geological knowledge of available resources throughout the territory, and mainly the need for better mobilization of revenues from the sector. A 2017-2023 sectoral development policy (Lettre politique sectorielle de developpement in French with the acronym LPSD) was issued in 2016; it insisted on the need to break with a model that prioritizes mining and the export of products not transformed in favor of more comprehensive approaches that link mining policy and country development policy. A gas to power strategy regarding the oil sector was also issued in November 2018 with the objective to develop domestic energy access from Senegal’s oil & gas resources. A local content strategy for the oil & gas sector was also adopted in 2019. The results of efforts to maintain a transparent and stable policy environment provided results in Senegal. The commencement of new mining operations such as the mineral sands project in Diogo, expansion of the Sabodala gold mine, cement project in Pout, Mako gold mine, and the discovery of an oil field off the coast of Senegal in 2014 signaled the need to boost reforms for good governance and transparency, and strengthen the Government’s capacity to manage the extractives sector. The hydrocarbons sector could transform the country's future in light of large gas reserves that were discovered offshore. Strong gas prospects were found, several scenarios for Senegal’s economic development became feasible. The mining sector on the other hand was touted to be instrumental for achieving Senegal’s goal of economic growth at seven percent over the next decade. 4.The World Bank supported the GoSN since the preparation of its EITI candidature through an initial grant of $645,000 which closed on December 31, 2015. The project supported the Senegal World Bank Group’s Country Partnership Strategy (CPS) (FY13-17) (Report No. 73478-SN). It aligned directly with the foundation of “Strengthening the governance framework and building resilience� and contributed to “Pillar 1: accelerating inclusive growth and creating employment�. The grant contributed to the improvement of the governance of the extractives sector by reinforcing the capacity of institutions and stakeholders in the extractive sector to comply with the requirements of the EITI standard. By helping Senegal implement its EITI agenda, the project was an important element of the Bank’s partnership with Senegal in the extractive sector. When the grant was prepared, Senegal was a new candidate country that wasn’t familiarize with extractive sector transparency principles; since Senegal has matured in its implementation mechanisms and has become a regional leader in just a few years. 5.The initial extractive sector data reported under the 2013 EITI report demonstrated the institutional weaknesses that needed to be addressed in order to reach higher policy objectives: significant discrepancy between the amount of payments declared by the companies and the revenues indicated by Government agencies, and a number of revenue streams were missing. For those reasons, the data was assessed as being incomplete and unreliable. The recommendations from the Independent Administrator (IA) stressed the need to educate reporting entities on the EITI process, to increase the reliability of data, simplify the data collection exercise and to add all material revenue flows into the EITI perimeter. Other recommendations of the report included: (i) the need for a petroleum sector database, (ii) the need for verification/audit of government data, and (iii) the urgent need for awareness and training of reporting 2 The mining sector experienced a turning point after the opening of the Sabodala gold mine Page 5 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) agencies. In addition, it was urgently recommended that the declaring public authorities develop the human resources and logistical capacity to track and manage the sector in a comprehensive manner. The quality of later reports was crucial as the first report was not adequate to enable the country to be declared compliant with the EITI Standard and that such compliance required that at least one report meets all the requirements of EITI be published by October 17, 2016. The project was prepared to ensure viability and sustainability of the EITI process in Senegal. The grant support salaries of technical staff, training, the production of EITI reports and their regional dissemination events. Significant efforts were also invested in communication such as the creation of the EITI Senegal website and outreach through social media. The project was restructured twice to address pressing needs in the extractive sector such as oil and gas sector development and the efforts to mainstream EITI implementation in national public sector management mechanisms. 6.Since the EGPS support, the Bank has extended additional support to the Government of Senegal: the first consisted in a technical assistance in the oil and gas sector (approved in May 2017) to support the capacity of the Government of Senegal to negotiation the development of its gas resources and to enhance the contribution of the gas sector on the economy through enhanced legal and regulatory framework; the second assistance by the World Bank took the shape of a series of DPO (first approved in December 2019) to strengthen the governance of the energy sector. Those complementary instruments are making it possible for the Government to achieve the necessary reforms to benefit from its gas resources. The gas sector has the potential to become a larger revenue generator than the mining sector once revenues start flowing. The two recent instruments are quite complementary to the EITI support because many recommendations from EITI reports require reforms that can only be implemented with the extension of significant resources and capacity building efforts. Project Development Objectives (PDOs) The project development objective (PDO) is to assist Senegal in implementing its EITI agenda. Key Expected Outcomes and Outcome Indicators 7.The implementation of EITI supported the GoSN’s efforts to improve governance and to enhance transparency in the mining and oil and gas sectors. Through its commitment to the implementation of EITI, the Government demonstrated its adherence to an internationally recognized standard and practices of good, open and responsible sector governance. Greater transparency in data production, contract publication, and payments and revenues declarations boosted the country’s credibility with the international public and investors. 8.All four PDO indicators reached their targets: (i) Senegal successfully completed its validation in 2017 and received a commendable rating of ‘satisfactory progress’, (ii) the amount of revenues reconciled in the EITI reports increased on a yearly basis except for the years (20163 and 20184) when exceptional payments were received during previous years and caused drops the next year; (iii) follow-up action plans to address recommendations from EITI reports were developed and agreed annually by the EITI-NC, moreover actions were taken to address a great number of those recommendations; 3 Arcelor Mittal settlement paid to the Government of Senegal in the amount of 49 million CFA 4 Bonus payment by Total and financial contribution to INPG (National Institute of Petroleum) Page 6 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) and (iv) by the end of the project more than five recommendations from the 2014 EITI report were implemented (see paragraph 22). 9. Seven out of nine intermediate indicators reached their targets: (i) number of Senegal EITI reports completed and published in a timely manner, all three reports funded by the project were produced in a timely fashion, (ii) the assessment of the legal and institutional framework as it relates to the licensing and awarding of contracts in the oil, gas and mining sectors was carried out and disseminated within the government institutions involved in the extractive sector, (iii) the target percentage of female representation on the MSG was exceed, (iv) a successful dissemination of the 2014 Senegal EITI Report was carried out, (v) almost half of the participants at EITI reports dissemination events were women, (vi) the EITI mainstreaming study was validated, the study provided the requirements and design for the electronic disclosure platform and (vii) the EITI automated data disclosure platform was completed and went live in June 2020. 10. One intermediate indicator came close to reaching its target: (i) the number of events held to raise awareness around oil & gas development issues to EITI stakeholders – four events were held instead of the five targeted, and another fell short of reaching its target ‘Number of participants to the dissemination of the 2015 & 2016 Senegal EITI Report’ because the organizers of the dissemination events did not provide records of the full list of attendee names to the events – only half of the targeted audience was recorded. 11. The project development objective remained the same throughout the project. Following the first restructuring, three additional indicators (at PDO level and at intermediate level) were added to monitor the impact of the planned activities: (i) ‘Number of recommendations from previous EITI report implemented’, (ii) the validation of the EIT I mainstreaming study, and (iii) ‘Completion of EITI data automated disclosure platform’. The target value for one indicator was changed: Number of Senegal EITI Report(s) completed and published in a timely manner. The remaining indicators remained unchanged. Components 12. The ‘Senegal Support to Extractive Industries Transparency Initiative Compliance Process’ project was approved in May 2016. The project was a follow-on grant to an EITI Multi-Donor Trust Fund (MDTF) grant (Senegal EITI Implementation Support Project, P131626) which financed the establishment of Senegal’s EITI Permanent Secretariat and the first EITI report’s preparation and dissemination (calendar year 2013). The project sought to push EITI implementation in Senegal forward and support critical efforts needed to help the country reach EITI compliance. An additional financing of 290K was provided in November 2017 to implement additional activities such as the production and dissemination of the 2015 and 2016 EITI reports, training on the oil and gas sector for EITI stakeholders, capacity building of the national secretariat staff; a top-up fund of $200,000 was provided to ensure the sustainability and the mainstreaming of EITI in Senegal in late 2018 to fund the acquisition of the automated disclosure platform. The project received two closing date extensions: first extension (from December 31, 2018 to December 31, 2019), and the second extension (from December 31, 2019 to June 30, 2020). Page 7 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) 13. Component A: EITI Implementation Support ($590,000). This component supported the activities essential to EITI implementation and meeting Senegal’s obligations as an EITI candidate country to reach compliance. These activities include: • Production of annual EITI reconciliation reports. Recruitment of an Independent Administrator (IA) in charge of the preparation of EITI reports covering all extractive industries for the calendar years 2014, 2015, and 2016. Building on lessons learnt from the preparation of the first report (2013), training to help operators and state agencies better understand the EITI requirements. The project supported advisory services for state agencies and companies operating in the extractive industries to comply with EITI reporting requirements. • Assessment of the legal and institutional framework as it relates to the licensing and awarding of contracts in the oil, gas and mining sector. Recruitment of a consultant to: (i) review the legal and institutional framework in Senegal as it relates to license allocations (EITI requirement 2.2), registration of licenses (EITI requirement 2.3), and disclosure of contracts (EITI requirement 2.4), (ii) assess whether the legal and regulatory environment aligns to international best practices, and (iii) make recommendations on policy reforms the Government can adopt in order to address the gaps and strengthen the sector. The recommendations were shared with the Independent Administrator for the 2014 report prior to publication to incorporate the findings of the assessment. Under a previous project, two studies were undertaken in 2014 pertaining to the mining sector: “Legal and Fiscal Diagnostic of the Mining Sector� and “Institutional Assessment of the Ministry of Mines�. With regards to the mining sector, therefore, the consultant’s scope of work focused on areas not covered under the two studies as well as a stock-taking of the progress with the implementation of recommendations from the two studies. • Support for the implementation of recommendations from the 2014 EITI report. Considering the weaknesses of the 2013 report, recommendations of the 2014 report were considered as a baseline to record all implementation shortcomings and sector governance weaknesses. • Support the Implementation of automatic disclosure systems. To comply with an EITI requirement on disclosure of contextual data, Senegal moved towards the introduction of an electronic system that would centralize reference data on the extractive sector and make the data accessible to the public. A study to support the design of such a system was carried out and validated in late 2019. The Project financed the implementation of the platform. Public sector revenue declaring entities were consulted with regards to their needs and requirements in order to participate to the roll-out of the platform. The platform was completed in June 2020 and allows more frequent automated disclosure than the typical yearly reporting. 14. Component B: Communication and Outreach (US$ 110,000). This component supported the communications and outreach plan of the EITI Permanent Secretariat for the first year of project implementation and included the following activities: • Dissemination of three EITI Reports. Support for the EITI Permanent Secretariat to: (i) publish and disseminate crucial information on EITI implementation through the production of a short video and brochures in order to inform the public on the extractive industry, EITI implementation and related events, and (ii) printing and dissemination of three EITI reports including in the mining regions and other key regions. The workshops included dissemination of information on the 2016 EITI Standard and preparation for the EITI validation process. Page 8 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) • Internet and social media activities. Supported for the management of a Senegal EITI website and social media accounts that contain information specifically related to EITI implementation in Senegal as well as wider information on activities related to transparency of the extractive sector in Senegal, as well as global news and trends on EITI implementation experiences from other countries. • Training on the oil and gas sector. The project mobilized expertise to develop training modules for members of the CN-ITIE. The training enabled the members to better play their role in the EITI process and to also contribute to the revision of the petroleum legal framework. The training included topics such as petroleum legislation and taxation, revenue management, economic impact, social and environmental issues, best practices in governance, introduction to accounting and reading the accounting tables of extractive companies. • EITI impact study. The study identified, documented and analyzed both the impacts and concrete changes brought about by the implementation of the EITI in the governance of the mining, oil and gas sector from 2013 until late 2019. This study analyzed the strengths, weaknesses, threats and opportunities of the EITI process in Senegal. The study provided a documentation of lessons learned, good practices arising from the implementation of the EITI Standard as well as recommendations that are both strategic, achievable and measurable. 15. Component C: Project Management (USD$ 90,000). This component supported the costs of three EITI Permanent Secretariat staff (Permanent Secretary, Administrative and Financial Officer, and Database Specialist) during the first two years of implementation. The GoSN took over the financing of all salaries, and covered the costs of office space and associated utility costs, operation costs associated including office supply, office maintenance, internet, phone, banking charges, vehicles and fuel, and travel costs related to the work of the Secretariat and of EITI-NC members as needed. During the third year of implementation, funding was provided for training for secretariat staff. This component also covered yearly project financial management audits. II. OUTCOME Assessment of Achievement of Each Objective/Outcome 16. The project development objective (PDO) is to assist Senegal in implementing its EITI agenda. The project’s PDO can be broken down under two outcomes: (1) Enhanced capacity of stakeholders with disclosure requirements, and (2) improvement in sector governance. Outcome 1. Enhanced capacity of stakeholders with disclosure requirements 17.Project’s activities supported the improvement of EITI Senegal data quality with the production of relevant and complete data. The activities included training of EITI stakeholders on the standard’s requirements, payment of the salaries for three technical staff to run the secretariat until the Government of Senegal took over the payment of salaries for all secretariat staff. Data quality improvement were noted in recent independent administrators’ feedback since the Page 9 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) 2014 EITI Senegal report when the issue was initially reported and the 2019 EITI Senegal report which affirms that the data is complete and reliable. Those achievements were made possible by increased commitment to data disclosure with subsequent reports noting a reduction of unexplained payments discrepancies, consistent reporting of production and export data by mining companies, the extension of the reporting scope to include new yearly material payments, total participation of all companies and government agencies in EITI reporting, the commitment to reporting by the ‘Agence de Gestion et de Cooperation between Senegal and Guinea Bissau’ (AGC). Moreover, the Senegal EITI stakeholders have maintained a fast track production of EITI reports since the 2016 report (which came out in 2017); currently reports are usually only one year behind contrary to many other implementing countries who are at least two years behind. 18.The acquisition of an online platform for automated disclosure since June 2020 will increase the frequency of the report production – it will be possible to report data on a quarterly basis. Now companies and public agencies can self- publish data throughout the year on the platform. The platform will also improve the traceability of extractive revenues in the country's public finance statistics. The system includes two interconnected systems, that are also connected with the existing government systems: (i) a platform called FUSION, for the periodic centralization of data on financial flows collected by public administrations; (ii) an electronic data submission module called GovIn for online declarations of extractive companies; and (iii) an information portal accessible to the general public. Figure 1. Extractive sector automated disclosure platform 19.Progress was made with regards to the work on beneficial ownership. In October 2018, Senegal hosted the EITI Board meeting followed by a conference on ‘Beneficial Ownership in the extractive Sector in Africa’. The beneficial ownership Page 10 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) database was finalized in 2018 and is awaiting a formal launch. All EITI implementing countries had a deadline to publish all beneficial owners in the sector by January 1, 2020. Disclosure of beneficial owners’ data in Senegal is governed by Decree No. 2020-791 of March 19, 2020 relating to the beneficial owners’ database. The decree that was supposed to become effective in October 2020, is still awaiting publication of the legal order presenting the model declaration of beneficial ownership to be effective. 20.The efforts invested by the Senegal EITI Stakeholders were fruitful when the country become the first African country to be validated against the 2016 EITI Standards with a rating of 'satisfactory progress' on May 8, 2018. The grant provided funding to hold pre-validation self-evaluation workshops ahead of the formal validation. This was considered a feat as it was Senegal's first EITI validation ever and against rules considered to be more stringent than the previous standard against which many other countries were declared compliant and since then only one other African country received satisfactory progress (Nigeria). 21.The GoSN together with the EITI stakeholders has taken a strong ownership of the EITI process and a number of domestic stakeholders are showing interest in advancing governance and accountability in the extractive sector. EITI-NC in Senegal are playing a regional leadership role and facilitator of the process of transparency both at the national and the regional levels. Back in September 2014, the EITI-NC hosted a meeting of African EITI National Coordinators to discuss the evolution of the Standard and the needs of their respective countries. Further, civil society and private sector stakeholders successfully established independent constituency groups led by the ‘Coalition for transparency in the extractive industries’, a coalition of some 40 CSOs together with the Senegalese Chamber of Mines. These constituency groupings are facilitators of the EITI dialogue even though they do not represent exclusive organizations monopolizing the EITI mandate, as it is for the members of CN-ITIE, they are drawn from a nationwide pool of stakeholders. 22.Senegal’s membership to EITI allowed a dynamic dialogue on the extractive sector’s role in the economy that did not exist before and would be difficult to hold in the absence of such a tool. EITI stakeholders played a key role in reforms such as the review of the 2003 mining code back in 2014 and when plans for the revision of the hydrocarbon legislation were discussed. Recognizing the efforts that remain to be undertaken, EITI-NC developed self-assessment exercise of progress and worked closely with an inter-ministerial committee on the achievement of progress expected to reach milestones. The efforts made so far were important and recognized by peers. In February 2016, the then Senegal EITI-NC Chair Ismaila Madior Fall became a substitute representative for the college of implementing countries of Francophone West Africa until December 2017, then his successor Mankeur Ndiaye took over from January 2018 to June 2019, and Awa Marie Coll SECK became full representative for the college of implementing countries of Francophone West Africa since June 2019. Outcome 2. Improvement in sector governance 23.EITI has been used as an instrument for informing institutional reforms: in February 2018, the Council of Ministers of Senegal approved to set up an inter-ministerial committee to address recommendations from EITI reports. One of the project's activities was to help Senegal implement the recommendations of the 2014 EITI report. Those recommendations were also complemented by the findings of the license award audit in the extractive sector. Implemented recommendations during the project’s lifetime include: (a) improvements in the publication of comprehensive, reliable and quality data as discussed earlier; (b) the implementation of the recommendations from the ‘Cour des Comptes’ regarding the formal itemization of extractive revenues streams in the Government's public accounts; (c) reforms to ensure transparent and effective management of the oil and gas sector have been adopted through a petroleum law in Page 11 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) 2019, a gas law in 2020, a draft revenue management bill, public access to data on oil & gas reserves and other oil & gas sector data will be possible once the petroleum cadaster currently in development is finally launched, a number of national workshops were held to discuss the planned use of the revenues from the development of the oil and gas resources, there has been a clarification of regulatory roles between the ‘Direction des Hydrocarbures’ and PETROSEN and the role of PETROSEN as a revenue collection agency for some taxes (bonus and land rights); (d) a comprehensive platform to share extractive sector data is now available since the launch of the automated disclosure platform in June 2020; (e ) thanks to the adoption of the automated disclosure platform there were improvements in customs revenue management at two levels: first with a review of the “Direction Générale de la Comptabilité Publique et du Trésor� (DGCPT) clearance process and secondly with the creation of interfaces between the electronic platforms of the three agencies CUSTOMS, DGCPT, and the National Revenue authority through the SIGIF platform; and (f) MIFERSO which is the mining sector state-own enterprise disclosed its financial statement for the 2019 EITI report. 24.The remaining 2014 EITI report and license award audit recommendations that have not yet been implemented by project closing date include: (1) finalization of the procedures manual for the management of mining titles and the adoption for systematic controls on transactions operated on mining titles, (2) Upgrade and reconfiguration of the mining cadastre system taking into account the shortcomings identified and in accordance with the requirements of the EITI Standard and the 2016 mining law, (4) publication of financial statements by Petrosen, (5) the introduction of mechanisms of accountability for earmarked extractive income sent to regions or programs– this also includes effective monitoring of information on payments by companies to local authorities: for instance details of the identity of the taxpayer; name of the tax collected, (6) the disbursement of the subnational mining revenue transfers approved in the mining law have not started since the adoption of the decree in November 2009 (fond de preréquations), (7) activation of the FONSIS (fund aiming to promote the role of the Government of Senegal, as an investor and partner with the private sector) through the allocation of a portion of revenues from the oil, gas and mining sectors, and (8) harmonization of budget classifications used with international standards in order to more effectively trace revenues from the extractive sector. The Senegal CN- ITIE will continue to advocate for the implementation of those recommendations. The Senegal EITI stakeholders were planning to hold an event during the early part of 2020 to advocate for remaining recommendations to be executed but due to the Covid pandemic the event could not be held. 25.Since 2014, a growing amount of interest was directed towards the oil & gas sector. However, the sector is still very new in Senegal and many local experts lack experience in the development of an oil or a gas project. In December 2018, the World Bank granted additional grant funding to support the project to respond to the capacity needs of EITI stakeholders to understand the governance challenges of an emerging oil & gas producing country. A five days training of EITI stakeholders took place (February 2019 and March 2019) and participants were provided with a training manual on both the mining and oil and gas sectors to use as reference manual. Page 12 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) Overall Outcome Rating 26. The overall rating is satisfactory. The project was a technical assistance meant to support GoSN’s efforts to comply with EITI requirements and thereby establish the principles for a sustainable resource management system and enhance transparency in the extractive industries. The socio-economic benefits in term of jobs and incomes have a better chance of becoming a reality if current efforts are maintained and extended to overall public sector governance. Based on its scope and scale, the project has contributed to the improvement in the investment climate in the extractive sector in Senegal and set the country on the map of extractive investment destinations. The introduction of EITI practices has enhanced the prospects for attracting renowned investors to invest in upstream oil and gas, and mining, and directly leverage funds towards this end. By supporting GoSN’s effort to reach EITI compliance, the project contributed towards the reduction of risks that extractive industries become a curse rather than a blessing as is the case in many resource rich countries. Other Outcomes and Impacts 27. Projects impacts have a strong chance for long-term sustainability due to the ownership by local stakeholders and the Government willingness to development its capacity to manage the extractive sector and to consider new policy efforts. The activities covered in the project were included in the work plan approved by the Senegal CN-ITIE. Not all activities under the workplan were implemented due to the lack of resources. Granted more resources, it is possible that higher impacts could have been reached. 28. In April 2020, the project funded an EITI impact study to assess stakeholders5’ perception of the implementation of the EITI Standard in Senegal that asserted the following impacts: • 75% or more of survey respondents believe that EITI implementation: - Improved governance at the legal and institutional levels. - Increased transparency in the governance of natural resources. - Increased access to information on the extractive sector for the public. • Around 70% of survey respondents: - believe that EITI implementation promoted public debate and participation in the governance of the extractive sector. - believe that EITI implementation had positive impacts on stakeholders such as: Compagnies were highly satisfied, stakeholders appreciated the quality of reports published so far, there was satisfaction with the type of recommendations contained in EITI reports and the scale of implementation of the recommendations, and the support to capacity building of stakeholders. - had a positive perception of the implementation of the EITI standard in Senegal. 5 69 members of the following constituencies were selected to take part in the survey (i) Public sector, (ii) local elected officials, (iii) state-owned companies, (iv) private extractive companies, (v) civil society organizations (vi) members of parliament, (vii) the media, (viii) donors , and (ix) universities. Page 13 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME 29. The project’s success was mostly due to the ownership and political will existing in Senegal to lead EITI implementation effectively. MSG members play a strong role in the report production and monitoring of results. GoSN has co-financed EITI implementation (approximately 170 million CFA annually) to cover the majority of the operational and staff costs. Stakeholders outside of the formal EITI framework have also been active in facilitating the dialogue and improving their capacity to understand sector governance issues. It is important to note that the Senegal EITI Secretariat managed the grant on their own. The EITI Secretariat also participated closely to the ICR preparation by providing their own completion report within a timely period. The Secretariat collaborated significantly by providing clarifying information for the completion of the WB ICR. The draft Bank ICR was shared with the Senegal National EITI Secretariat but the team had no feedback. 30. The mobilization of EGPS efforts was important to support the efforts of local stakeholders : the first grant was in the amount of US$ 300,000, it was first restructured in November 2017 to add $290,000, a second restructuring was carried out in December 2018 to add $200,000 and extend the closing date by a year from December 2018 to December 2019. In order to allow the smooth implementation of remaining activities, a 6 months closing date extension was provided until June 2020. The additional time was required due to events on the ground and a busy calendar of the secretariat with a relatively small team. The contribution from the two WB projects discussed earlier should be acknowledged as it provided assistance to the institutions that are responsible to implement the reforms and develop internal capacity to better govern the sector. The Gas sector TA funded a number of training activities and is currently funding the acquisition of the Petroleum cadaster which has been a long-standing recommendation from EITI reports. The Energy sector DPO played a role in the drafting of the gas to power strategy. 31. The EITI secretariat in Senegal has grown from three technical staff to about seven currently however it seems like more would be necessary to respond to the needs and the ambitious workplan. There was also a need to bring up skills necessary to manage the grants according to WB guidelines. Some members received external training and guidance from the Bank team on a needs-basis. Those factors could have also played a role with the implementation speed. 32. Collaboration with the International Secretariat (IS) EITI secretariat in Oslo was also important during project implementation. It was possible to hold one joint mission during the validation period although the Bank task- team leader did not participate to all validation meeting. Periodic virtual meetings took place between the task- team leader and the IS Country Manager. 33. Yearly supervision missions were carried out to monitor project implementation progress with statutory stakeholders and others. The missions played an important role to validate implementation issues such as the readiness of the automated disclosure platform. It was important to get the explicit conformation of the interest and readiness of the Ministry of Finance. Considering that EITI is an important platform for dialogue, it is important to assess whether all stakeholders are engaged adequately. Due to the Covid outbreak, the last supervision mission took place in May 2019. 34. Due to the Covid pandemic, one activity (workshop to monitor the implementation of the 2014 report) could not be carried out due to lockdown orders before the project closing in June 2020. At project closing, 95% of the grant was disbursed. Page 14 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME 35. The Bank performance was particularly notable in the participation to key EITI events to build the national credibility of the national efforts. Support from fiduciary teams was important considering that the project was executed by the recipient. All compliance issues raised in audit reports were addressed. For that reason and others discussed in earlier sections, there are no risk to development outcome except a shift in political will. V. LESSONS LEARNED AND RECOMMENDATIONS 36. The experience of the project allowed to draw some lessons with regards to the depth of capacity issues and the multi-faceted nature of the needs. Despite great efforts by the beneficiary it was clear that the team needed stronger staffing with regards to core EITI implementation work and outreach to key stakeholders to encourage the adoption of reforms. The area of communication also needs resources that could make EITI implementation even more of a strategic initiative for a better governance of the extractive sector. Communicating the sector’s data in a low capacity context is a challenge in many EITI implementing countries. Social media platforms could be used more effectively to increase knowledge, disseminate data and engage stakeholders. Moreover, there is value in creating local multi-stakeholder dialogue platforms in regions impacted by extractive activity. This has been a long-standing request by civil society organizations. Such platforms can also help with averting social unrest when resources-based disputes occur. Due to the potential growth of the gas sector in the economy, Senegalese stakeholders should consider pushing the transparency agenda further into the wider energy sector with regards to the performance of regulatory agencies and SOEs such as Petrosen and Senelec. 37. The main recommendations would involve staff increases at the national secretariat to include a full time data specialist, an experienced communication specialist, more experienced sector specialist and the mobilization of resources for periodic training of members of Parliament and civil society representatives at least on a biannual basis. Members of Parliaments are re-elected every two years which means that new members do not always have the requisite knowledge of the sector. There are two members of Parliament on the CN-ITIE and they also serve a two-year mandate. Similarly, civil society representatives also serve a two-year term on the CN- ITIE. Those two groups who represent the voice of the general population cannot be effective advocates without receiving periodic training. Currently the EITI secretariat counts five technical staff which is not enough to cover the growing mandate of the standard and more importantly to support the mainstreaming efforts using IT tools. It is important for the GoSN to mainstream transparency measures in its adoption eGovernment platforms and digital solutions. 38. The project focused its efforts on the compliance efforts with the EITI standard. However, in order to maintain the credibility of the initiative, it will be important for citizens to see some material impact from the exploitation of the natural resources. It is important for future support to focus on the demand side of the accountability for the sector with greater involvement with civil society and local elected leaders. There have been efforts to bring the multi-stakeholder dialogue at the local level and this is becoming more urgent as many companies’ corporate social responsibilities activities are localized and there is pending implementation by the Government of extractive revenues sub-regional transfers. Page 15 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) . Page 16 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: Enhanced capacity of stakeholders with disclosure requirements Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion EITI validation completed Yes/No N Y Y Y 01-May-2016 02-May-2016 31-Dec-2019 30-Jun-2020 Comments (achievements against targets): On May 8, 2018 Senegal became the first African country to be validated with a rating of 'satisfactory progress' based on the 2016 EITI Standards. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Increased total value of Yes/No N Y Y Y revenues reconciled compared to the previous year 02-May-2016 02-May-2016 31-Dec-2019 30-Jun-2020 Page 17 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) Comments (achievements against targets): The year to year revenue increase is due to various reasons: (i) initially it was due to improvement in the quality of reporting as more companies started reporting and public sector agencies also improved their capacity to track their revenues, (ii) Objective/Outcome: Improvement in sector governance Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Follow up action plans to Yes/No N Y Y Y address EITI report's recommendations are 01-May-2016 02-May-2016 31-Dec-2019 30-Jun-2020 developed and agreed by the EITI-NC annually Comments (achievements against targets): Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Number of recommendations Number 0.00 5.00 5.00 6.00 from the 2014 EITI report implemented 23-Oct-2018 23-Oct-2018 31-Dec-2019 30-Jun-2020 Comments (achievements against targets): Page 18 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) A.2 Intermediate Results Indicators Component: Component A. EITI Implementation Support Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Number of Senegal EITI Number 0.00 3.00 3.00 3.00 Report(s) completed and published in a timely manner 01-May-2016 02-May-2016 31-Dec-2019 30-Jun-2020 Comments (achievements against targets): Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Assessment of the legal and Yes/No N Y Y Y institutional framework as it relates to the licensing and 01-May-2016 03-Nov-2020 31-Dec-2019 30-Jun-2020 awarding of contracts in the oil, gas and mining sector Comments (achievements against targets): Component: Component B. Communication and Outreach Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Page 19 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) Successful dissemination of the Number 0.00 0.00 1.00 1.00 second Senegal EITI Report 01-May-2016 02-May-2016 31-Dec-2019 30-Jun-2020 Comments (achievements against targets): Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Number of participants to the Number 0.00 300.00 300.00 105.00 dissemination of the 2015 & 2016 Senegal EITI Report 28-Sep-2017 28-Sep-2017 31-Dec-2019 30-Jun-2020 Percentage of women to men Number 3.00 0.00 20.00 47.00 participants at the dissemination events 20-Oct-2017 20-Oct-2017 31-Dec-2019 11-Jul-2019 Comments (achievements against targets): Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Number of events held to raise Number 0.00 5.00 5.00 4.00 awareness around oil & gas development issues to EITI 28-Sep-2017 28-Sep-2017 31-Dec-2019 30-Jun-2020 stakeholders Comments (achievements against targets): Page 20 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) Component: Component C. Support the Implementation of automatic disclosure systems Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Validation of EITI Yes/No N Y Y Y mainstreaming study 23-Oct-2018 23-Oct-2018 31-Dec-2019 30-Jun-2020 Comments (achievements against targets): Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Completion of EITI data Yes/No N Y Y Y automated disclosure platform 23-Oct-2018 23-Oct-2018 31-Dec-2019 30-Jun-2020 Comments (achievements against targets): Component: Component D. Project Management Unlinked Indicators Indicator Name Unit of Baseline Original Target Formally Revised Actual Achieved at Page 21 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) Measure Target Completion Percentage of female Percentage 15.00 0.00 20.00 25.00 representation on the MSG (Percentage) 01-May-2016 02-May-2016 31-Dec-2019 30-Jun-2020 Comments (achievements against targets): Page 22 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) B. ORGANIZATION OF THE ASSESSMENT OF THE PDO Objective/Outcome 1 Enhanced capacity of stakeholders with disclosure requirements 1. EITI validation completed, Outcome Indicators 2. Increased total value of revenues reconciled compared to the previous year 1. Number of Senegal EITI Report(s) completed and published in a timely manner 2. Successful dissemination of the second Senegal EITI Report 3. Number of participants to the dissemination of the 2015 & 2016 Intermediate Results Indicators Senegal EITI Report 4. Percentage of women to men participants at the dissemination events 5. Completion of EITI data automated disclosure platform 1. Publication of three EITI reports Key Outputs by Component 2. Regional dissemination events of EITI reports (linked to the achievement of the Objective/Outcome 1) 3. Launch of automated disclosure platform Objective/Outcome 2 Improvement in sector governance 1. Follow up action plans to address EITI report's recommendations are developed and agreed by the EITI-NC annually, Outcome Indicators 2. Number of recommendations from the 2014 EITI report implemented 1. Assessment of the legal and institutional framework as it relates to Intermediate Results Indicators the licensing and awarding of contracts in the oil, gas and mining sector Page 23 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) 2. Percentage of female representation on the MSG 3. Number of events held to raise awareness around oil & gas development issues to EITI stakeholders 4. Validation of EITI mainstreaming study 1. Study report of Assessment of the legal and institutional framework as it relates to the licensing and awarding of contracts in the oil, gas and mining sector 2. Follow-up meetings with stakeholders for the implementation of EITI report recommendations and the study on the contract award Key Outputs by Component process. (linked to the achievement of the Objective/Outcome 2) 3. Colloquium event on oil & gas sector in Africa, oil & gas panel event at the EITI board meeting in Dakar, meeting with GES Petrogas and EITI MSG, national event on the use of Oil & Gas revenues. 4. Validation meeting with the consultant of the EITI mainstreaming study Page 24 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) . ANNEX 2. PROJECT COST BY COMPONENT Amount at Approval Actual at Project Percentage of Approval Components (US$M) Closing (US$M) (US$M) EITI Implementation Support 0 .39 0 Communication and 0 .11 0 Outreach Project Management 0 .09 0 Design of an automated electronic platform for 0 .20 0 extractive data Total 0.00 0.79 0.00 Page 25 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) ANNEX 3. RECIPIENT, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS The draft document was shared with the Senegal National EITI secretariat for comments and feedback, but no comments were received by the deadline. Page 26 of 27 The World Bank Senegal Support to Extractive Industries Transparency Initiative Compliance Process (P160022) ANNEX 4. SUPPORTING DOCUMENTS 1.PROJECT PAPER, PROPOSED GRANT IN THE AMOUNT OF (US$ 0.30 MILLION EQUIVALENT), ‘SENEGAL SUPPORT TO EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE COMPLIANCE PROCESS PROJECT’, 18 May 2016 2.Implementation Status & Results Report, FY 2016, Seq No: 1, ARCHIVED on 10-Nov-2016, ISR 25257 3.RESTRUCTURING PAPER, ‘SENEGAL SUPPORT TO EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE COMPLIANCE PROCESS’, APPROVED ON MAY 19, 2016 4.RESTRUCTURING PAPER, ‘SENEGAL SUPPORT TO EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE COMPLIANCE PROCESS’, 29 October 2018 5.Implementation Status & Results Report, Seq No: 3, ARCHIVED on 02-Feb-2018, ISR30986 6.Implementation Status & Results Report, Seq No: 4, ARCHIVED on 14-Sep-2018, ISR33646 7.Implementation Status & Results Report, Seq No: 5, ARCHIVED on 24-Jul-2019, ISR36169 8. Mission aide-memoires: November 23-25, 2015 & December 1-4, 2015; October 31 – November 4, 2016; September 11 – 15, 2017; March 19 -23, 2018; September 24-26, 2018; April 29– May 3 2019 9.Financial times, Senegal communities weigh impact of growth in gold mining, April 18, 2018 10.Rapport Achèvement DTF02673 et 6166 - BM - 02102020 (Beneficiary completion report) 11.Evaluation des Impacts de la mise en œuvre de l’Initiative pour la Transparence dans les Industries Extractives au Sénégal, rapport Final, Aout 2020 Page 27 of 27