Public Disclosure Copy The World Bank Implementation Status & Results Report Mozambique Mining and Gas Technical Assistance Project (P129847) Mozambique Mining and Gas Technical Assistance Project (P129847) AFRICA | Mozambique | Energy & Extractives Global Practice | IBRD/IDA | Technical Assistance Loan | FY 2013 | Seq No: 7 | ARCHIVED on 30-Sep-2016 | ISR25062 | Implementing Agencies: Ministry of MIneral Resources Key Dates Key Project Dates Bank Approval Date:28-Mar-2013 Effectiveness Date:22-Aug-2013 Planned Mid Term Review Date:20-Jun-2016 Actual Mid-Term Review Date:26-Aug-2016 Original Closing Date:31-May-2020 Revised Closing Date:31-May-2020 Project Development Objectives Project Development Objective (from Project Appraisal Document) The proposed project development objective is to strengthen the capacity and governance systems of key institutions to manage the mining and hydrocarbon sectors in Mozambique. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Component A: Mining Governance Capacity Building and Reform:(Cost $17.65 M) Component B: Natural Gas Capacity Building and Governance Reform:(Cost $11.05 M) Component C: Cross-cutting Mining/ Natural Gas Capacity Building and Reforms:(Cost $9.95 M) Component D: Cross-Sectoral Reforms:(Cost $0.80 M) Component E: Project Management and Coordination:(Cost $4.90 M) PPA Refinancing:(Cost $3.00 M) Contingencies:(Cost $2.65 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Satisfactory  Satisfactory 9/30/2016 Page 1 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mozambique Mining and Gas Technical Assistance Project (P129847) Overall Implementation Progress (IP)  Satisfactory  Satisfactory Overall Risk Rating  Moderate  Moderate Implementation Status and Key Decisions MAGTAP continues to be implemented according to (and under some components ahead of) the planned schedule, with procurement progressing in all major components. The project supported transaction advisory support for the LNG project, financial and marketing advisory services to ENH, and geological data infrastructure development. Geophysical surveying has been completed and mapping to commence soon. Preparation of a Strategic Environmental and Social Assessment for mining and gas was launched in February, 2015, and after delays is expected to complete by December with consultations ongoing. The project remains on track to achieve its overall Project Development Objective and is rated as Satisfactory, however due to overruns in Gas Governance Component and foreign exchange there is a need for additional financing. The Bank and the Government of Mozambique are jointly working to develop additional financing with a target date of early FY18 for Board presentation. The Project has achieved a number of its core intermediate results and is making steady progress on others. The mining and gas industry in Mozambique has experienced important developments and challenges over the last couple of years. The new Mining and Petroleum Laws and corresponding Fiscal Laws were passed in August 2014, regulations were promulgated in early 2016. The mining sector has experienced serious difficulties over recent years, particularly in the coal sector. With Vale commissioning of the Nacala rail and port facilities, there is some renewed hope for revitalization of Tete mining sector but process may still be complicated due to low coal prices combined with high cost of production and transportation. The continued low oil price environment and slow global LNG demand has resulted in declining gas prices, which puts at risk many global LNG projects at the planning stage. While Mozambique is well advanced in its preparation to become a major gas producer, final investment decisions by investors are delayed. It is noted that commodity ups and down are common, and that the Government of Mozambique continues to improve its frameworks and capacity in preparation to the next phase of activities in both mining and gas sectors - which is at the core of MAGTAP. Extractive Industries Transparency Initiative (EITI). Mozambique remains EITI compliant and MAGTAP provides support to the process. The latest report of December 2015 covers the accounts for two years: 2013 and 2014. Mozambique is expected to face its second validation for EITI compliance in 2016. The EITI multi-stakeholder group (MSG) decided to combine years 2015 and 2016 in a single report as well (to be issued before December 2017). In the meantime discussion of results and decision making will continue. Challenges for EITI include access to budget and ensuring follow up to recommendations. Discussion of various options on how to institutionalize EITI and better embed it within the government’s system are ongoing. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Substantial  Substantial Macroeconomic  --  Moderate  Moderate Sector Strategies and Policies  --  Moderate  Moderate Technical Design of Project or Program  --  Moderate  Moderate Institutional Capacity for Implementation and Sustainability  --  Substantial  Moderate Fiduciary  --  Moderate  Moderate Environment and Social  --  Moderate  Moderate Stakeholders  --  Moderate  Moderate Other  --  --  -- Overall  --  Moderate  Moderate Results 9/30/2016 Page 2 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mozambique Mining and Gas Technical Assistance Project (P129847) Project Development Objective Indicators PHINDPDOTBL  Mining Cadastral database and GIS system integrated with the land-use databases & accessible on-line for public level information (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value N Y Y Y Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments Cadastre was updated and made public in 2013. A new updated is being started to align with revised mining regulations issued January 2016. Integration with land use system is not yet started (ToRs under preparation) PHINDPDOTBL  Mines and gas construction projects subject to annual technical inspections in line with established standards. (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 7.00 10.00 25.00 Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments Mine inspection undertaken for major mines by IGREME with support of DIPREMEs. Some ASM operations are visited by DIPREMEs but not regularly and lack capacity. INP completed 5 annual audit and carries out semi-annual inspections. New targets for mining is about 5 per year and for gas 3 per year. PHINDPDOTBL  Mines construction projects subject to annual technical inspections in line with established standards (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 5.00 15.00 Date 01-May-2013 -- 26-Aug-2016 31-May-2020 PHINDPDOTBL  Gas construction projects subject to annual technical inspections in line with established standards (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target 9/30/2016 Page 3 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mozambique Mining and Gas Technical Assistance Project (P129847) Value 0.00 -- 5.00 10.00 Date 01-May-2013 -- 26-Aug-2016 31-May-2020 PHINDPDOTBL  Mines and gas operations subject to fiscal controls per year in line with established standards (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 7.00 25.00 Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments For mining projects, fiscal audits are done ad hoc by the MRA where there are issues suspected. Major mining projects by Vale, Kenmarre, ICVL, Jindal, Baobab Resources. Completed audits for Anadarko, Sasol (all years of operation), ENI – on going. New targets for mining is about 5 per year and for gas 3 per year. PHINDPDOTBL  Mines operations subject to fiscal controls per year in line with established standards (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 5.00 15.00 Date 01-May-2013 -- 26-Aug-2016 31-May-2020 PHINDPDOTBL  Gas operations subject to fiscal controls per year in line with established standards (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 2.00 10.00 Date 01-May-2013 -- 26-Aug-2016 31-May-2020 PHINDPDOTBL  New mining/gas/infrastructure related contracts negotiated, benefitting from the developed frameworks and procedures (Number, Custom) 9/30/2016 Page 4 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mozambique Mining and Gas Technical Assistance Project (P129847) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 2.00 3.00 5.00 Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments Completed review of Rio Tinto/ICVL license transfer, and finalized several agreements related to FID for Anadarko and ENI. New target is 5 since earlier target of 11 was too ambitious. PHINDPDOTBL  Direct project beneficiaries (Number, Core) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 450.00 989.00 2390.00 Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 PHINDPDOTBL  Female beneficiaries (Percentage, Core Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 46.00 46.00 35.00 Overall Comments Total number of people receiving training under MAGTAP. Records are kept based on approved annual training plans (completed for 2014 and 2015 and semi-annual result of 2016 training plan). Execution rate of the training plans was very good with 87% of the planned trainees completing their respective courses in 2015 (compared to 60% in 2014). Intermediate Results Indicators 9/30/2016 Page 5 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mozambique Mining and Gas Technical Assistance Project (P129847) PHINDIRITBL  Mining Cadastre procedures updated (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value N Y Y Y Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments New mining cadastre system and related regulations in place since 2013, but with the revision of the law in 2014, new regulations were passed in 2016 and cadastre system due for the next update – contract with provider approved in July 2016, target should be fully met by end 2016. PHINDIRITBL  Mineral Information System upgraded with new geodata for strategic areas (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value N N N Y Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments New geophysical data is collected, but system is not yet designed to provide public access. REOI has been completed in June 2016. PHINDIRITBL  Number of ASM associations/cooperatives (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 63.00 0.00 0.00 89.00 Date 05-Nov-2012 08-Jun-2016 26-Aug-2016 31-May-2020 Comments This sub-component not yet started – pending completion of the ASM strategy which is expected to be published in second half of 2016 9/30/2016 Page 6 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mozambique Mining and Gas Technical Assistance Project (P129847) PHINDIRITBL  Procedures of tendering and evaluation of mineral assets developed (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value N N N Y Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments Partially completed as part of new mining regulations and new mining cadastre which include tendering module. Evaluation of assets was part of Rio Tinto/ICVL deal in 2014, as part of the assignment, consultants designed a workflow to support review of the deal, but once completed it was not proposed for formal adoption. PHINDIRITBL  Number of ASMs who have received targeted training (of which female %) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 2000.00 Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments Not yet started (awaiting completion and adoption of the ASM strategy) PHINDIRITBL  Health and safety and environmental regulations, including standards and monitoring procedures updated (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value N N N Y Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments Not yet started. Following adoption of the new mining regulations in 2016, environmental regulations are to be updated; selection of consultant in final stages. 9/30/2016 Page 7 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mozambique Mining and Gas Technical Assistance Project (P129847) PHINDIRITBL  Local law enforcement and judicial personnel trained on mining law and regulations under the project (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 2.00 2.00 200.00 Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments Not yet started. This component will be implemented together with community development component in 2017. Training on mining inspection included some law enforcement personnel. PHINDIRITBL  Number of studies assessing economic and financial feasibility for development of gas infrastructure carried out (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1.00 1.00 5.00 Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments A study on potential gas pipeline from Rovuma is about to start (contract approved but work not yet started). PHINDIRITBL  Staff of gas sector management institutions trained through MAGTAP to manage, regulate and monitor gas sector (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 19.00 19.00 60.00 Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments Number of personnel from MIREME and INP benefiting from training to-date. It is noted that substantial training on gas is provided by NORAD project (MAGTAP coordinates and on several occasions co-funded training provided by NORAD). The end target was revised downwards at MTR from 140 to 60. 9/30/2016 Page 8 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mozambique Mining and Gas Technical Assistance Project (P129847) PHINDIRITBL  Tools and mechanisms to attract financing for the State participation are in place (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value N Y Y Y Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments Phase 1 of financial advisory services to ENH on its state share in Rovuma is completed. It assessed several options and recommended mechanism that will apply to at least Block IV which is expected to proceed to FID in later 2016. Financial advisory will continue with finalizing negotiations of financing agreements. PHINDIRITBL  Pemba Regional Office equipped and operational to undertake health and safety, and environmental inspections of gas field operations (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value N Y Y Y Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments Pemba office opened and IT equipment and furniture installed. Some limited training provided. More activities planned for next phases of the project. PHINDIRITBL  Computerized Environmental Management Information System developed (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value N N N Y Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments Not yet started. 9/30/2016 Page 9 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mozambique Mining and Gas Technical Assistance Project (P129847) PHINDIRITBL  Results of Strategic Environmental and Social Assessment publicly disclosed by GoM in papers and through workshops and public outreach (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value N N N Y Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-Dec-2016 Comments Not yet due. SESA to be completed in December 2016. (revised target date - formally amended) PHINDIRITBL  Annual disclosure of reports on extractive industries revenues and revenue allocation at national level (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 5.00 5.00 7.00 Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments EITI reports are published annually. The latest report covered years 2014 and 2015 making EITI reports more current. New higher target determined at MTR (7 instead of 5). PHINDIRITBL  Provincial Directorates of Mineral Resources equipped & capable to monitor and inspect mining & exploration operations in their jurisdictions (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.00 1.00 1.00 10.00 Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments Provincial DIPREMEs of Tete, Zambezia, Niassa, Cabo Delgado, Manica and Nampula received vehicles, laptops, printers, scanners and data shows. All of those (except Manica) received new staff – civil servants – which were engaged under MAGTAP. Capacity is still low, but progress is made and more training is upcoming. 9/30/2016 Page 10 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mozambique Mining and Gas Technical Assistance Project (P129847) PHINDIRITBL  Number of CSO/CBOs trained on transparency monitoring across the extractive sector value chain (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 50.00 Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments Contract with provider of training and capacity building for CSOs is signed and pending launch. PHINDIRITBL  Number of studies completed and recommendations adopted to stimulate linkages between mining and gas projects and Mozambican economy (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 2.00 Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments A study (led by IPEME) of SMEs and options for their engagement with the industry is ongoing. Results are not yet in place. Support on Domestic Gas – options and pricing will be done after MTR. This indicator was revised to be more specific from "Strategies and policies for strengthening linkages of mines and gas production with national economic developed" to “Number of studies completed and recommendations adopted to stimulate linkages between mining and gas projects and Mozambican economy”. This clarification required a change in the unit of measurement. PHINDIRITBL  Sector specific regulations and action plan for local content developed and adopted (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value N -- N Y Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments Consultants’ services for “Business plan for ENH Logistics” is to be started to put in place framework for local industry participation through ENH. But, it is unlikely that MAGTAP would be able to meaningfully undertake other activities. The indicator "Number of bankable business plans developed under the project related to local industry participation in provision of local goods and services to extractive industry" was replaced with “Sector specific regulations and action plan for local content developed and adopted” to be more specific. As a result, the unit of measurement had to be changed. 9/30/2016 Page 11 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mozambique Mining and Gas Technical Assistance Project (P129847) PHINDIRITBL  Standards & procedures for oil & gas contingency planning & emergency preparations developed (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value N N N Y Date 01-May-2013 08-Jun-2016 26-Aug-2016 31-May-2020 Comments Contract signed but not yet launched Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P129847 IDA-51990 Effective USD 50.00 50.00 0.00 27.40 18.84 55% P129847 TF-16113 Effective USD 6.94 6.94 0.00 4.99 2.49 72% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P129847 IDA-51990 Effective 28-Mar-2013 19-Apr-2013 22-Aug-2013 31-May-2020 31-May-2020 P129847 TF-16113 Effective 27-Jan-2014 27-Jan-2014 27-Jan-2014 30-Nov-2018 30-Nov-2018 Cumulative Disbursements 9/30/2016 Page 12 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mozambique Mining and Gas Technical Assistance Project (P129847) Restructuring History Level 2 Approved on 15-Sep-2016 Related Project(s) P161683-Mining and Gas Technical Assistance Additional Financing 9/30/2016 Page 13 of 13 Public Disclosure Copy