The World Bank Implementation Status & Results Report Local and Regional Competitiveness Project (P154263) Local and Regional Competitiveness Project (P154263) EUROPE AND CENTRAL ASIA | North Macedonia | Finance, Competitiveness and Innovation Global Practice | Recipient Executed Activities | Investment Project Financing | FY 2016 | Seq No: 10 | ARCHIVED on 24-Jun-2021 | ISR46165 | Implementing Agencies: Cabinet of the Deputy Prime Minister for Economic Affairs, Delegation of the European Union, Government of the Republic of North Macedonia Key Dates Key Project Dates Bank Approval Date: 12-Jan-2016 Effectiveness Date: 28-Jul-2016 Planned Mid Term Review Date: 14-Nov-2018 Actual Mid-Term Review Date: 14-Nov-2018 Original Closing Date: 31-Dec-2019 Revised Closing Date: 30-Jun-2021 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective (PDO) is to enhance the contribution of tourism to local economic development and improve the capacity of the government and public entities to foster tourism growth and facilitate destination management. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Component 1: Technical assistance for tourism development (Bank executed):(Cost $1.42 M) Component 2: Strengthening destination management and enabling environment (Recipient executed):(Cost $1.35 M) Component 3: Investment in tourism-related infrastructure and linkages at destinations (Recipient executed):(Cost $21.81 M) Component 4: Strengthening project management (Recipient executed):(Cost $1.50 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Unsatisfactory Moderately Unsatisfactory Overall Implementation Progress (IP) Moderately Unsatisfactory Moderately Unsatisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions The implementation of the LRCP slowed down significantly since the first quarter of 2020, due to the outbreak of the COVID- 19 pandemic. 6/24/2021 Page 1 of 7 The World Bank Implementation Status & Results Report Local and Regional Competitiveness Project (P154263) The crisis affected the implementation of each Component differently. Under Component 1 (the World Bank executed component), the World Bank hired a firm to support project supervision on the ground and to introduce more certainty to the implementation of the municipal subprojects. During the last virtual supervision mission that took place in March 2021, the World Bank team, the PIU and the EU reviewed and discussed the tasks of the firm and the support expected by the PIU. Conversely, all activities under Component 2 were put on hold in the first quarter of 2020 due to the Covid-19 crisis as per agreement between the World Bank, the EU and the government. Finally, under Component 3, a total of 57 sub-projects are active and they can be broken down as it follows: 19 sub-grants were assigned to municipalities, 20 to associations, and 18 to micro and small enterprises. Of these 57 subprojects, 4 subprojects with municipalities have been completed, as well as 18 with associations and 15 with micro and small enterprises, for a total of 20 still ongoing. As a result of a request from the government and the European Union Delegation, the World Bank agreed to extend the project for an additional three months (until the end of September, 2021) to allow for the completion of the remaining subprojects under Component 3 and to allow the PIU to carry out project closing activities. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Substantial Moderate Moderate Macroeconomic Moderate Moderate Moderate Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Moderate Substantial Substantial Institutional Capacity for Implementation and Moderate Substantial Substantial Sustainability Fiduciary Substantial Substantial Substantial Environment and Social Moderate Moderate Moderate Stakeholders Substantial Substantial Substantial Other -- -- -- Overall Moderate Substantial Substantial Results PDO Indicators by Objectives / Outcomes Enhance the contribution of tourism to local economic development IN00975960 ►Additional private investment generated in tourism-related activities at beneficiary destinations (US$, cumulative) (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 3,350,000.00 4,924,339.00 10,000,000.00 6/24/2021 Page 2 of 7 The World Bank Implementation Status & Results Report Local and Regional Competitiveness Project (P154263) Date 15-Jan-2016 30-Sep-2020 31-Mar-2021 30-Jun-2021 As of March 2021, the additional private investment was estimated at US$ 4,360,056, which includes the co-financing of SMEs and Associations beneficiaries of the matching grants as well as additional private investments by some of them. This indicator has been severely affected by the COVID-19 crisis since several beneficiaries had planned additional private investments, but they could not implement them due to the consequences of the pandemic. It is also important to highlight that this indicator is expected to Comments: improve in the next months not only for the closing of all the Associations and SMEs subprojects but also because the PIU is estimating the additional private investments generated by the sub-contractors. This value will be finalized over the summer of 2021. * The investments were made in EURs and converted in dollars. IN00976067 ►Increase in tourism-related jobs in beneficiary destinations (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1.70 1.60 7.00 Date 31-Dec-2016 30-Sep-2020 31-Dec-2020 30-Jun-2021 This indicator was severely affected by the COVID-19 pandemic. The national market contracted of about 20% while project beneficiaries showed some resilience, allegedly thanks to the project and to the dynamic of the local market. The Bank team and the PIU are further looking into the attribution of Comments: beneficiaries' jobs to the project. Finally, the indicator is measured at December 31, 2020 because it uses data from the employment office which were not currently available at March 2021. Improve the capacity of the government and public entities to foster tourism growth IN00976066 ►Destination Management partnerships formed (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 3.00 Date 15-Jan-2016 30-Sep-2020 31-Mar-2021 30-Jun-2021 The activities connected to this indicator were stopped due to COVID-19 pandemic as per agreement between the World Bank, the EU and the client and reflected in the Aide Memoire of the mission that took Comments: place in February-March 2020. Intermediate Results Indicators by Components Component 2: Strengthening destination management and enabling environment (Recipient executed) IN00976068 ►Destination management capacity built, as measured by public and private stakeholders trained in destination management and development (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 196.00 206.00 200.00 Date 15-Jan-2016 30-Sep-2020 31-Mar-2021 30-Jun-2021 6/24/2021 Page 3 of 7 The World Bank Implementation Status & Results Report Local and Regional Competitiveness Project (P154263) No additional people have been trained since the last ISR, however all the activities and the beneficiaries were reviewed (cleaning and finalization of the files and of the reporting) and this value can be considered Comments: as the final one. IN00976070 ►Share of local residents that are satisfied with tourism development in the destinations that benefit from the activities in the project. (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 38.40 41.70 70.00 Date 15-Jan-2016 30-Sep-2020 31-Dec-2020 30-Jun-2021 This indicator was assessed through two surveys. The second survey was launched at the end of the year of 2020 and the final value of 41.7% is an average of the values of the two surveys that were conducted. Comments: The value of this indicator was severely affected by the stopping of the activities of component 2 to which it relates. IN00976072 ►Destination development plans agreed (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 3.00 Date 31-Oct-2019 30-Sep-2020 31-Mar-2021 30-Jun-2021 The activities connected to this indicator were stopped due to COVID-19 pandemic. They were financed Comments: by Component 2. Component 3: Investment in tourism-related infrastructure and linkages at destinations (Recipient executed) IN00976069 ►Grant beneficiaries who consider that supported activities are subject to consultation and reflect their views. (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 67.40 81.90 80.00 Date 15-Jan-2016 30-Sep-2020 31-Dec-2020 30-Jun-2021 This indicator was assessed through two surveys. The second survey was conducted in the fall of 2020 Comments: and the final value of 81.9% is an average between the values of the first and the second survey. IN00976071 ►Private enterprises that benefit from activities funded through the project’s grants, owned or managed by a woman (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 18.50 19.00 15.00 Date 15-Jan-2016 30-Sep-2020 31-Mar-2021 30-Jun-2021 The value of the percentage reflects the Associations and SMEs sub-projects that closed and the increase Comments: in the enterprises that benefitted from activities funded through the grants. 6/24/2021 Page 4 of 7 The World Bank Implementation Status & Results Report Local and Regional Competitiveness Project (P154263) IN00976073 ►Private enterprises that benefit from activities funded through the project’s grants. (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 48.00 415.00 100.00 Date 15-Jan-2016 30-Sep-2020 31-Mar-2021 30-Jun-2021 The value reflects the closing of most of the SMEs and Associations sub-projects. A further increase is Comments: expected with the closing of the remaining sub-projects. IN00976074 ►Private stakeholders that participate in project-supported capacity-building activities (e.g. training, supplier development, others) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 797.00 797.00 300.00 Date 15-Jan-2016 30-Sep-2020 31-Mar-2021 30-Jun-2021 No new activities captured by this indicator have taken place since last year. Comments: IN00976075 ►Increase in number of overnights by tourists in beneficiary destinations (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.10 12.00 Date 15-Jan-2016 30-Sep-2020 31-Dec-2020 30-Jun-2021 The value of this indicator has been severely affected by the COVID-19 crisis and it would have been higher in absence of the pandemic. However, while the national market contracted of about 29%, some beneficiaries reported pretty much stable values, or small increases in this indicator thanks to the local Comments: market that picked up in the second part of the last year, and to the project intervention that helped them to be resilient and continue activities whereas and as possible. The indicator is calculated at December 2020 because it uses also data from the Statistical Office that are not available at March 2021. IN00976076 ►Number of tour packages offered by tour operators (local and foreign) that include the project-supported destinations as a new offering (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 91.00 118.00 30.00 Date 15-Jan-2016 30-Sep-2020 31-Mar-2021 30-Jun-2021 Most of these tour packages were created by the Associations sub-projects that completed. These new experiences are very innovative for the country and they offer a wide range of products and services, such Comments: as hot air balloon flying, e-bikes, tandem jumping, stand up paddling boards (SUP), diving equipment, adventure trails, among the others. They are continuing in the midst of the pandemic mainly for locals. Performance-Based Conditions 6/24/2021 Page 5 of 7 The World Bank Implementation Status & Results Report Local and Regional Competitiveness Project (P154263) Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P154263 TF-A1779 Effective USD 19.11 19.11 0.00 11.84 6.74 62% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P154263 TF-A1779 Effective 14-Jan-2016 14-Jan-2016 28-Jul-2016 31-Dec-2019 30-Jun-2021 Cumulative Disbursements PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC 6/24/2021 Page 6 of 7 The World Bank Implementation Status & Results Report Local and Regional Competitiveness Project (P154263) Restructuring History Level 2 Approved on 16-Feb-2017 ,Level 2 Approved on 31-Oct-2019 ,Level 2 Approved on 23-Dec-2020 Related Project(s) There are no related projects. 6/24/2021 Page 7 of 7