The World Bank Report No: ISR3011
Implementation Status & Results
Indonesia
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Aceh Economic Development Financing Facility (P109024)
Operation Name: Aceh Economic Development Financing Facility (P109024) Project Stage: Implementation Seq.No: 3 Status: ARCHIVED Last Modified Date: 30-Mar-2011
Country: Indonesia Approval FY: 2009
Product Line: Recipient Executed Activities Region: EAST ASIA AND PACIFIC Lending Instrument: Emergency Recovery Loan
Implementing Agency(ies): Ministry for The Development of Disadvantaged Areas (KPDT), Bappeda
Key Dates
Board Approval Date 16-Dec-2008 Original Closing Date 30-Jun-2012 Planned Mid Term Review Date Last Archived ISR Date 17-Sep-2010
Effectiveness Date 30-Mar-2009 Revised Closing Date 30-Jun-2012 Actual Mid Term Review Date 15-Mar-2011
Project Development Objectives
Project Development Objective (from Project Appraisal Document)
The objective of the Economic Development Financing Facility is to assist the province of Aceh and the local and provincial governments to improve
opportunities for private business and private sector jobs and to continue fostering sustainable equitable long term economic development in Aceh.
Has the Project Development Objective been changed since Board Approval of the Project?
Yes No
Component(s)
Component Name Component Cost
Sub-Project Grants 44.50
Consultant Services 5.25
Incremental Operating Costs 0.24
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Overall Ratings
Previous Rating Current Rating
Progress towards achievement of PDO Moderately Unsatisfactory Moderately Unsatisfactory
Overall Implementation Progress (IP) Moderately Unsatisfactory Moderately Unsatisfactory
Overall Risk Rating
Implementation Status Overview
After initial delays and a lengthy preparation period for sub-project proposals, the EDFF project has now gained momentum, although it continues to face important implementation
challenges. This was confirmed during the Mid-term Review of the project which was held from February 27, 2011 to March 14, 2011. This review was prepared and conducted
jointly with representatives of the World Bank, the project implementing and executing agencies of the central Government, including BAPPENAS and Ministry for Development of
Disadvantaged Areas (KPDT) and the Government of Aceh (including the Governor's Office and BAPPEDA Aceh). Representatives of the Multi-Donor Fund for Aceh and Nias
(MDF), as well as MDF donors also participated.
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The World Bank Report No: ISR3011
The mission found that the project has made significant implementation progress overall since June 2010. The Government's main achievement has been to select and sign sub-
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grant agreements with eight international and local non-governmental organizations (sub-project implementing entities, or SIEs) for a total value of USD 42,649,602 . The sub-
projects focus broadly in the areas of fisheries, livestock, cocoa, coffee, rice, emping, patchouli and marketing and cooperative development--and are fully in line with the demands of
the local economy in Aceh and local government priorities. All eight SIEs have signed MOUs with the district governments to carry out the related activities and started activities in the
field. Estimated direct sub-project beneficiaries include approximately 25,000 primary producers, 813 farmer/fisherman/producer groups, 46 cooperatives, and 147 small and medium
sized enterprises. The project also has support from local governments, which participate in monitoring the sub-projects, provide office space for some sub-projects and land for
project activities and staff to be trained to ensure sustainability. According to Client Connection as of March 21, 2011, 56.2 percent ($28.1 million) of project funds has been disbursed
with 12 months left in implementation of sub-projects and 15 months for the project overall.
Despite this progress, however, the project requires significant additional support and intensive effort to ensure that the sub-projects reach their overall goals on a sustainable basis.
The main findings of the mission were as follows:
� All SIEs have made significant implementation progress in the last six months, mobilizing communities, hiring key project staff, initiating training of beneficiaries, and
preparing for construction of physical works. While progress varies substantially across sub-projects, it remains possible, but challenging, for the most to largely deliver on their key
project output targets by sub-project closing in March 2012. This will require intensive support from all partners and stakeholders, and sustainability of the gains is highly doubtful
given the time constraints.
� Short implementation timeframe. The funding source for the project (the Multi-Donor Fund for Aceh and Nias) definitively closes in December 2012 and therefore EDFF must
close by June 2012, without the possibility of extension. This short implementation timeframe brings about three key issues that affect the potential for the EDFF to fully achieve its
anticipated outcomes. First, the short timeframe does not leave room for any unexpected implementation delays at the sub-project level. The ability of SIEs to carry out timely
procurement of goods and services is a particularly high risk factor. Second, the short timeframe has forced certain SIEs to accelerate their implementation. Third, it has substantially
reduced the potential for sustainability of outcomes, without coordinated additional follow up support provided to the beneficiaries, cooperatives, and provincial and district
governments. Hence, sustainable returns on the EDFF investment after March 2012 are unlikely without further support to the relevant beneficiary groups, cooperatives and/or district
governments.
� Procurement and financial management capacity. Procurement and financial management capacity continue to be a major implementation challenge. Given that the use of
World Bank and some Government policies and procedures are new to the SIEs as well as to PMU/PMC, the mission found that a lack of familiarity of the guidelines under the project
has created implementation delays.
� Sustainability. As mentioned above, the short remaining implementation timeframe until the closing of the EDFF project puts sustainability of the outcomes at risk for all of
the sub-projects. The mission team discussed sustainability options extensively with all partners to gather views and ideas. The mission found strong support from key partners--
including the central Government, Government of Aceh, district governments, communities, and SIEs on the need to coordinate follow-up so that sub-projects have the best chance
to achieve their full/longer term development objectives. To this end, the mission identified thr ee preliminary options for sustainability, after the sub-projects end in March 2012. All of
these options need further evaluation of feasibility, advantages and risks.
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Results
Project Development Objective Indicators
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The World Bank Report No: ISR3011
Indicator Baseline Current End Target
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Indicator Name Value Value Value
Employment generated 0.00 5818.00 25000.00
Date Date Date
31-Dec-2010 30-Jun-2012
Type Unit of Measure Comment Comment Comment
Custom Indicator Number This is the number of farmers, This is the target number of
fisherman, and community groups farmers, fisherman, and community
supported, as of Dec 31, 2010, as groups supported under the sub-
reported in EDFF Annual Report projects, based on project
(byPMC). proposals.
Intermediate Results Indicators
Indicator Baseline Current End Target
Indicator Name Value Value Value
Enterprises supported 0.00 0.00 350.00
Date Date Date
31-Dec-2010 30-Jun-2012
Type Unit of Measure Comment Comment Comment
Custom Indicator Number This information is based on the Enterprises are defined as small-
EDFF Annual Report (by PMC). and medium-sized enterprises.
Activities are expected to This is the target number of SMEs
accelerate in this area in 2011. expected under the sub-projects,
based on project proposals.
Data on Financial Performance (as of 25-Mar-2011)
Financial Agreement(s) Key Dates
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Project Loan No. Status Approval Date Signing Date Effectiveness Date Closing Date
P109024 TF-93358 Effective 30-Dec-2008 30-Dec-2008 30-Mar-2009 30-Jun-2012
Disbursements (in Millions)
Project Loan No. Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed
P109024 TF-93358 Effective USD 50.00 50.00 0.00 28.10 21.90 56.00
Disbursement Graph
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The World Bank Report No: ISR3011
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Key Decisions Regarding Implementation
None
Restructuring History
There has been no restructuring to date.
Related Projects
There are no related projects.
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