The World Bank First South West Indian Ocean Fisheries Governance and Shared Growth Project (P132123) REPORT NO.: RES42975 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF FIRST SOUTH WEST INDIAN OCEAN FISHERIES GOVERNANCE AND SHARED GROWTH PROJECT APPROVED ON FEBRUARY 27, 2015 TO THE UNION OF THE COMOROS, REPUBLIC OF MOZAMBIQUE, AND UNITED REPUBLIC OF TANZANIA ENVIRONMENT, NATURAL RESOURCES & THE BLUE ECONOMY AFRICA EASTERN AND SOUTHERN REGION Regional Vice President: Hafez M. H. Ghanem Country Director: Deborah L. Wetzel Regional Director: Mark Lundell Practice Manager/Manager: Africa Eshogba Olojoba Task Team Leader(s): Julien Marie Francois Million, Enos E. Esikuri, Franka Braun, Joao Moura Estevao MarquesdaFonseca, Maminiaina Solonirina Rasamoelina The World Bank First South West Indian Ocean Fisheries Governance and Shared Growth Project (P132123) ABBREVIATIONS AND ACRONYMS FFP Fisheries Development Fund GEF Global Environment Facility ISR Implementation Status Report MCS Monitoring, Control and Surveillance MIMAIP Ministry of Sea, Inland Waters and Fisheries PDO Project Development Objective PIU Project Implementation Unit POEMN Mozambique’s National Marine Spatial Plan ProAzul Mozambique Blue Economy Development Fund REPMAR Mozambique Marine Fisheries Regulations RF Results Framework ROSCAS Rotating Savings and Credit Associations SADC Southern African Development Community VMS Vessel Monitoring System SWIOFish1 South West Indian Ocean Fisheries Governance and Shared Growth Project 1 SWIOFish1-MZ SWIOFish1 in Mozambique The World Bank First South West Indian Ocean Fisheries Governance and Shared Growth Project (P132123) BASIC DATA Product Information Project ID Financing Instrument P132123 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 27-Feb-2015 30-Sep-2021 Organizations Borrower Responsible Agency DGRH,Ministry of Sea, Inland Waters and Fisheries,Ministry of Livestock and Fisheries, Indian Ocean Commission,Ministry of Economy and Mainland,Ministry of Agriculture, Natural Resources, Finance,MINISTRY OF FINANCE,Vice Presidency of Finance Livestock and Fisheries, Zanzibar,Deep Sea Fishing Authority Project Development Objective (PDO) Original PDO The Project Development Objective is to improve the management effectiveness of selected priority fisheries at regional, national and community level. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-55460 27-Feb-2015 21-Apr-2015 27-Oct-2015 30-Sep-2021 11.70 8.81 2.16 IDA-55890 27-Feb-2015 12-Mar-2015 22-Jun-2015 30-Sep-2021 31.00 20.87 9.02 IDA-D0110 27-Feb-2015 09-Apr-2015 28-Oct-2015 30-Sep-2021 9.50 8.02 .76 IDA-H9940 27-Feb-2015 21-Apr-2015 27-Oct-2015 30-Sep-2021 18.30 16.69 .09 The World Bank First South West Indian Ocean Fisheries Governance and Shared Growth Project (P132123) IDA-H9950 27-Feb-2015 08-May-2015 18-Dec-2015 30-Sep-2021 5.00 4.00 .61 TF-19021 27-Feb-2015 12-Mar-2015 22-Jun-2015 30-Sep-2021 5.00 3.35 1.65 TF-19022 27-Feb-2015 21-Apr-2015 27-Oct-2015 30-Sep-2021 7.00 5.59 1.41 TF-19023 27-Feb-2015 09-Apr-2015 28-Oct-2015 30-Sep-2021 3.50 2.16 1.34 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Status 1. The project was declared effective on 22 June 2015 and has been under implementation for about 62 months. The last Implementation Status and Results Report (ISR) (April 7, 2020), reflecting combined ratings for the three countries in SWIOFish1 (Comoros, Mozambique and Tanzania) and the regional component, rated progress towards achievement of the PDO and overall implementation progress as Moderately Satisfactory. Total project disbursements are at 80%. This restructuring pertains only to SWIOFish1 in Mozambique (SWIOFish1-MZ), as reflected in subsequent sections of this paper. 2. Following Project restructuring in February 2019, SWIOFish1-MZ has made remarkable improvements, going from a 16 percent execution rate in September 2018 to about 66% percent in June 2020. Total disbursements for SWIOFish1 in Mozambique [IDA-55460; IDA-H9940; TF-19022] are at 84 percent. Most component 2-related indicators are expected to be achieved, although there is space for improvements in key areas such as Monitoring, Control and Surveillance (MCS) and marine spatial planning. Component 3 is seeing good performance. Some indicators have seen overachievement, while others were on track to be achieved if not for current budgetary constraints (see section B below). Some key Project achievements are highlighted1 below: (a) Component 2: Improved governance of priority fisheries (US$ 22 million) (i) The preparation and review of several key policies and regulations for the sector, including approval of the Policy and Strategy of the Sea, completing the Mid-Term Review of Mozambique’s Fisheries Master Plan, Updating and approval of the New Fisheries Statistics Master-Plan, completing the National Strategy and Action Plan for Mangrove Management (2018-2023), revising the Law of the Sea (2019), new Marine Fisheries Regulations, new Fisheries Products Quality Control Regulation, and approving a new Aquaculture Development Strategy (2020- 2030) is expected to strengthen the legal and regulatory framework for fisheries in the country. (ii) The piloting of new routine catch data collection system based on the Food and Agriculture Organization’s OPEN ARTFISH, including updating the frame survey for Maputo province, under the New Fisheries Statistics Master-Plan. Frame surveys have been since carried out in Sofala, Zambezia and Nampula, providing a much more accurate picture of fisheries in key implementation areas. 1Component 1 – Enhanced regional collaboration – is implemented at regional level. As it is not part of this restructuring, it is not discussed in this paper. The World Bank South West Indian Ocean Fisheries Governance and Shared Growth Project (P132123) (iii) Substantial increase in land and coastal patrol effort, targeting mostly artisanal fisheries (e.g. 609 days of land and coastal patrols in 2018 vis-à-vis 749 days in 2019), and updating the country’s MCS strategies (waiting approval). (iv) Online publication for the first time since SWIOFish1-MZ became effective in 2015 of key licensing and quota information for semi-industrial and industrial fisheries. (v) Multiple trainings on, among other issues: fisheries data sampling; compliance certification for catches; community management of fisheries resources and conservation of marine ecosystems; language training of MCS personnel; Vessel Monitoring System (VMS) training; identification of priority areas for mangrove restoration; biosecurity zoning for aquaculture is contributing to increasing direly needed capacity in the sector (b) Component 3: Increased economic benefits from priority fisheries (US$ 12 million) (vi) Restructuring the Fisheries Development Fund (FFP) into Mozambique’s Blue Economy Development Fund (ProAzul), with major improvements in institutional performance. (vii) The window 1 of the Mais Peixe Sustentável Matching Grants Scheme has been very successful, reaching over 1,200 individual families, almost 3 times the number of beneficiaries expected during the scheme design. (viii) Support to Rotating Savings and Credit Associations (ROSCAs) in Sofala, Zambezia and Nampula have reached about 7 times the number of beneficiaries anticipated during Project preparation (about 25,000 beneficiaries in August 2020 vis-à-vis a target of 3,500 beneficiaries). (ix) One fish market and one extension agents housing constructed as a result of the project, with other 4 infrastructures underway (2 markets and 2 extension agents housing). (c) Component 4: Project management and coordination (US$ 3 million) (x) Substantial improvement in PIU performance after restructuring (xi) New digital systems for project management, financial management, contract management and grievance redress under implementation, enabling more timely and accurate information for decision-making. 3. With the substantial acceleration in implementation pace since the Mid-Term Review, the project now has a commitment rate of about 93 percent. As a result, it is now dealing with a financing challenge, and some targets cannot be met due to the lack of financial resources (see sections I B and section II). 4. COVID-19 is still on a worsening trend in Mozambique, with the number of detected cases and deaths at 4,444 and 27, respectively, as of 104 376 tested (September 6, 2020). As a result of global supply chain and market disruptions, the sector has seen reduction in fishing activity and trade in some fisheries, and access to quality feed for aquaculture has been reportedly a challenge. Other restrictions in social gathering, turn-based arrangements for Government staff, and other COVID-19 containment measurements have caused some processes to slow down, in particular the ones requiring extensive consultation such as National Marine Spatial Planning and the updates to the Marine Fisheries Regulations (REPMAR) and Priority Fishery Management Plans. 5. The World Bank received and reviewed the last audited Financial Statements, reflecting the year ended December 31, 2019. The auditors expressed an unqualified opinion on the Financial Statements. No significant issues were identified by the World Bank team, and SWIOFish1-Mozambique was encouraged to maintain the standard. B. Rationale for restructuring 6. Level two Project restructuring is needed to address the impacts of budget constraints. The main reasons for the budget constraint include (i) the negative impact of the XDR-USD exchange rate variation estimated at US$ 1.8 million (September 3, 2020); and (ii) activities whose real cost proved to be significantly higher than originally estimated. These included, among others, the development of the National Maritime Spatial Planning Plan (POEMN), with a contracted and estimated price differential of $ 1,017,248, and the assessment and technical design of landings sites, with a contracted and estimated price differential of $ 240,000. The insufficient regularity with which financial commitments were tracked, coupled with the use of excel spreadsheets, led to delays in recognizing the financial challenge. Since then, however, PROAZUL has invested in the implementation of more robust financial and contract management systems, which are allowing close tracking of commitments. The World Bank South West Indian Ocean Fisheries Governance and Shared Growth Project (P132123) 7. As detailed in Section II, the impact of budget constraints will be addressed through (a) budget reorganization, and (b) changes in the project results framework. Changes in the Results Framework reflect changes in IDA only, and not in GEF. This restructuring is expected to enable the Project to achieve its PDO, adequately monitor and measure relevant results, and ensure funding available is leveraged and applied to priority activities achievable during the remaining implementation period. II. DESCRIPTION OF PROPOSED CHANGES C. Description of Changes 8. Budget reorganization. The Project budget was strategically reviewed based on two fundamental criteria: (i) relevance to achievement of agreed results (as per results framework) and (ii) budgetary availability. Two indicators will be directly affected due to budgetary constraints (see paragraph below). Other important cuts that do not directly impact on the results framework include, among others: construction of the SADC MCS Center; acquisition and rental of vessels for fisheries surveillance2; establishment of co-management areas in Sofala province; and several technical consultant contracts. 9. Changes in the Project Results Framework. The Results Framework was updated, to align targets with the available budget. As detailed in Section IV, the following indicators were modified: (i) Infrastructures to support artisanal fisheries completed and operational (Number), with target reduced from 8 to 6; (ii) Commercial Businesses receiving support from ProAzul Matching Grants Scheme (Number), with target reduced from 16 to 53. 2 Although MCS activities have seen important budget cuts, the results framework target for the indicator “actual days of patrols in the target area” will not require modifications. Land patrols are not affected by budget cuts, while the planned vessel rental targeted marine areas beyond 60 nautical miles, which were not within the scope of the results framework indicator. While the acquisition of planned vessels negatively influences the ability to undertake coastal patrols in the targeted areas, 2019 results demonstrate that the Government can reach the target set by better using existing vessels. 3 These activities and related indicators were selected to be reduced in scope and help address the Project’s financing challenge as (i) there were no related commitments in the form of existing contracts within the Project and (ii) they were intensive in budget use. The pipeline for these indicators (infrastructures and commercial businesses originally planned/engaged) is expected to be supported through other operations. For instance, due to its success, Mais Peixe Sustentável is being used in the context of COVID-19 response through domestic budget funds, and is expected to be scaled-up through funds from IFAD, AfDB and other two World Bank operations under preparation (Sustainable Rural Economy Program and the Northern Rural Resilience and Livelihoods Project). The World Bank South West Indian Ocean Fisheries Governance and Shared Growth Project (P132123) III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ PBCs ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) . The World Bank South West Indian Ocean Fisheries Governance and Shared Growth Project (P132123) . Results framework COUNTRY: Eastern Africa AFCC2/RI-South West Indian Ocean Fisheries Governance and Shared Growth Project 1 Project Development Objectives(s) The Project Development Objective is to improve the management effectiveness of selected priority fisheries at regional, national and community level. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Improve the management effectiveness of selected fisheries at regional, national and community level (Regional Level) Number of new SWIOFC member country signatures to 0.00 6.00 bilateral and/or multilateral agreements on fisheries (Number) Fisheries Management Plans implemented 0.00 3.00 (Number) Tanzania: Management plans for tuna/tunalike fish, 0.00 6.00 octopus, reef fish, small pelagic, prawns, mariculture (Number) The World Bank South West Indian Ocean Fisheries Governance and Shared Growth Project (P132123) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Mozambique: Management plans for demersal line 0.00 0.00 0.00 0.00 1.00 2.00 3.00 3.00 fisheries, coastal shrimp, and deep-sea crustaceans (Number) Comoros: EAF demersal fisheries 0.00 0.00 0.00 0.00 1.00 1.00 1.00 1.00 management plan (Number) (Community level) Co- management units achieving at least 2 0.00 0.00 performance targets (2) (Number) Tanzania (Number) 0.00 7.00 Mozambique 0.00 0.00 0.00 0.00 10.00 20.00 30.00 30.00 (Number) Comoros (Number) 0.00 0.00 0.00 1.00 2.00 4.00 6.00 6.00 Direct project 0.00 105,050.00 beneficiaries (Number) Female beneficiaries 0.00 31.00 (Percentage) Comoros (Number) 0.00 0.00 1,500.00 3,000.00 5,500.00 8,000.00 10,000.00 10,000.00 Percentage of female 0.00 27.00 (Percentage) The World Bank South West Indian Ocean Fisheries Governance and Shared Growth Project (P132123) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Mozambique 0.00 0.00 6,000.00 15,000.00 20,000.00 25,000.00 30,000.00 30,000.00 (Number) Of which female 0.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 (Percentage) Tanzania (Number) 0.00 65,000.00 Of which female 0.00 50.00 (Percentage) Regional (Number) 0.00 50.00 Of which female 0.00 30.00 (Percentage) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Component 1. Enhanced regional collaboration Minimum Terms & Conditions (MTC) for access to tuna fishery No Yes agreed at technical regional level (Yes/No) SWIOFC sustainable regional financing No Yes mechanism agreed (Yes/No) The World Bank South West Indian Ocean Fisheries Governance and Shared Growth Project (P132123) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Component 2. Improved governance of priority fisheries Fisheries Information System (FIS) / NA NA Dashboards operational (Text) Tanzania: Fisheries Information System publishes data No Yes regularly with updated data (Yes/No) Mozambique: Dashboard in place and made public with No No No No Yes Yes Yes Yes regularly updated data (Yes/No) Comoros: Dashboard in place and made No No No No Yes Yes Yes Yes public with regularly updated data (Yes/No) At least one key policy or legal instrument for fishery management NA NA developed or updated for each country (Text) Tanzania: Fisheries Act revised, consulted and No Yes submitted to cabinet (Yes/No) The World Bank South West Indian Ocean Fisheries Governance and Shared Growth Project (P132123) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Mozambique: Aquaculture Strategy No No No No No Yes Yes Yes reviewed and updated (Yes/No) Mozambique: Mid- term review of the No No No Yes Yes Yes Yes Yes Fisheries Master Plan and update (Yes/No) Mozambique: The Sea and Policy Strategy No No No Yes Yes Yes Yes Yes (Yes/No) Comoros: Fisheries law application texts No No No No Yes Yes Yes Yes adopted (Yes/No) Control of fishing activity NA NA (Text) Tanzania: % of noncompliance incidences as per 80.00 50.00 patrol effort (Percentage) Comoros: Vessels inspected, as a percentage of the 2.00 2.00 2.00 4.00 6.00 8.00 10.00 10.00 motorized fleet (Percentage) Mozambique: Actual 200.00 500.00 540.00 600.00 600.00 days of patrols in the The World Bank South West Indian Ocean Fisheries Governance and Shared Growth Project (P132123) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 target area, disaggregated by (i) land patrols (ii) coastal patrols (Number) Mozambique: Actual days of land patrols in 200.00 300.00 320.00 360.00 360.00 the target area (Number) Mozambique: Actual days of coastal patrols 0.00 200.00 220.00 240.00 240.00 in the target area (Number) Mozambique: Situation Plan elaborated and submitted for approval to No No No Yes Yes the relevant authority (Yes/No) Component 3. Increased economic benefits from priority fisheries Number of target community individuals participating in value- NA NA chain enhancement through project initiatives (Text) Tanzania: Village Savings Loan Scheme 0.00 2,200.00 recipients (Number) The World Bank South West Indian Ocean Fisheries Governance and Shared Growth Project (P132123) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Mozambique: Participants in Rotating Saving and 0.00 0.00 0.00 1,000.00 2,000.00 2,500.00 3,000.00 3,000.00 Credit Scheme (PCR) cycles (Number) Comoros: Number of value-chain operators benefitting from 0.00 0.00 50.00 125.00 250.00 400.00 600.00 600.00 business and value- chain development training (Number) Operational fisheries NA NA infrastructure (Text) Tanzania: Operationalized business plans for 0.00 3.00 MACEMP built landing sites (Number) Comoros: Number of operational fisheries 0.00 2.00 2.00 2.00 4.00 4.00 8.00 8.00 infrastructure (Number) Mozambique: Infrastructures to support artisanal 0.00 3.00 6.00 6.00 6.00 fisheries completed and operational (Number) The World Bank South West Indian Ocean Fisheries Governance and Shared Growth Project (P132123) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Action: This indicator has been Revised At least one target fishery value chain NA NA enhanced per country (Text) Tanzania: At least one recommendation is implemented for each priority fish value 0.00 3.00 chain study for economic benefits (Number) Mozambique: Targeted value chain actors receiving support from the FFP Matching Grants Scheme, 0.00 129.00 285.00 405.00 405.00 disaggregated by (i) individual family applicants and (ii) commercial businesses (Number) Action: This indicator has been Revised Mozambique: 0.00 125.00 275.00 400.00 400.00 Individual family The World Bank South West Indian Ocean Fisheries Governance and Shared Growth Project (P132123) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 applicants receiving support from FFP's Matching Grants Scheme (Number) Mozambique: Commercial Businesses receiving 0.00 4.00 5.00 5.00 5.00 support from FFP's Matching Grants Scheme (Number) Action: This indicator has been Revised Comoros: Fish export from Comoros No No No No No Yes Yes Yes (Yes/No) IO Table SPACE . The World Bank AFCC2/RI-South West Indian Ocean Fisheries Governance and Shared Growth Project 1 (P132123)