The World Bank Implementation Status & Results Report Land Bank Financial Intermediation Project (P150008) Land Bank Financial Intermediation Project (P150008) AFRICA EAST | South Africa | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2017 | Seq No: 7 | ARCHIVED on 21-Dec-2020 | ISR44345 | Implementing Agencies: Land and Agricultural Development Bank of South Africa, Land and Agriculture Development Bank of South Africa, National Treasury Key Dates Key Project Dates Bank Approval Date: 23-Jan-2017 Effectiveness Date: 29-Sep-2017 Planned Mid Term Review Date: 31-Oct-2019 Actual Mid-Term Review Date: 11-Dec-2019 Original Closing Date: 01-Apr-2022 Revised Closing Date: 01-Apr-2022 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The project's development objective is to sustainably scale up Land Bank's financing, specifically to benefit emerging farmers. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Line of Credit for Agricultural Financing:(Cost $93.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Unsatisfactory Unsatisfactory Overall Implementation Progress (IP) Moderately Unsatisfactory Unsatisfactory Overall Risk Rating Substantial High Implementation Status and Key Decisions The project became effective on September 29, 2017. The disbursements under the project are at 28.8 percent as of February, 2020. Due to significant delays in project implementation and disbursements, the Project Development Objective and Project Implementation ratings have been downgraded to “Moderately Unsatisfactory’ from ‘Moderately Satisfactory’ in September 2019. The project 's "mid-term review’ was completed in December 2019 and key actions were agreed with the Land Bank to help accelerate project implementation and utilization of project funds. However, the implementation of these actions had to be put on hold following a liquidity crisis the Land Bank started facing in the first quarter of 2020 and the Land Bank defaulting on some of its credit obligations to its commercial lenders in April. The Project Development Objective and Project Implementation ratings are being further downgraded to “Unsatisfactory’ since the default and related cross-defaults are still unresolved and the enhanced risk to the achievement of the project development objective. The World Bank is continuing to assess the situation and will decide on the way forward on the project based on a satisfactory resolution to the current situation and an assessment being made on whether there is a sustainable way forward. 12/21/2020 Page 1 of 6 The World Bank Implementation Status & Results Report Land Bank Financial Intermediation Project (P150008) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Moderate Substantial Substantial Macroeconomic Moderate High High Sector Strategies and Policies Moderate Moderate Substantial Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Moderate High High Sustainability Fiduciary Low Moderate Moderate Environment and Social Moderate Moderate Moderate Stakeholders Moderate Moderate Moderate Other -- -- -- Overall Moderate Substantial High Results PDO Indicators by Objectives / Outcomes PDO is to sustainably scale up Land Bank’s financing, specifically to benefit emerging farmers IN00919360 ►Volume of wholesale loans disbursed under the project (minimum) (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 65,100,000.00 Date 31-Oct-2016 31-Mar-2019 30-Sep-2020 01-Apr-2022 IN00919391 ►Volume of direct value chain loans disbursed under the project (minimum) (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 4.46 6,598,240.00 27,900,000.00 Date 31-Oct-2016 31-Mar-2019 30-Sep-2020 01-Apr-2022 IN00919392 12/21/2020 Page 2 of 6 The World Bank Implementation Status & Results Report Land Bank Financial Intermediation Project (P150008) ►Total NPL rate under the line of credit (maximum) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 10.00 Date 31-Oct-2016 28-Jan-2019 30-Sep-2020 01-Apr-2022 IN00919393 ►Direct project beneficiaries (minimum) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 7.00 7.00 1,100.00 Date 31-Oct-2016 31-Mar-2019 30-Sep-2020 01-Apr-2022 Intermediate Results Indicators by Components Line of Credit for Agricultural Financing IN00919394 ►Increase in outstanding loan portfolio of Land Bank (minimum) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 37,796,688,000.00 2.40 0.00 10.00 Date 31-Dec-2015 31-Mar-2019 31-Mar-2020 01-Apr-2022 The net outstanding loan portfolio is expected to reduce by 3% compared to the portfolio in March 2019. Comments: IN00919395 Increase in CB outstanding loan portfolio (minimum) (Percentage, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 31,607,333,000.00 4.70 0.00 10.00 Date 31-Dec-2015 31-Mar-2018 31-Mar-2020 01-Apr-2022 IN00919396 Increase in REM outstanding loan portfolio (minimum) (Percentage, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 489,051,000.00 1.00 0.00 20.00 Date 31-Dec-2015 31-Mar-2019 31-Mar-2020 01-Apr-2022 IN00919397 ►Land Bank liabilities that are long-term (over 1 year) (minimum) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target 12/21/2020 Page 3 of 6 The World Bank Implementation Status & Results Report Land Bank Financial Intermediation Project (P150008) Value 31.00 50.00 58.00 40.00 Date 31-Dec-2015 31-Mar-2019 31-Mar-2020 01-Apr-2022 IN00919398 ►Return on Average Equity (minimum) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 6.78 2.60 0.00 6.78 Date 31-Dec-2015 31-Mar-2019 31-Mar-2020 01-Apr-2022 The Return on Average Equity was negative due to the loss reported for the year. Comments: IN00919399 ►Return on Average Assets (minimum) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.12 0.29 0.00 1.12 Date 31-Dec-2015 31-Mar-2019 31-Mar-2020 01-Apr-2022 Land Bank is expected to report a loss for the year. Comments: IN00919400 ►Total NPL rate for Land Bank (maximum) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 3.72 11.30 11.40 10.00 Date 31-Dec-2015 31-Mar-2019 31-Mar-2020 01-Apr-2022 Overall Comments IR 1. Institutional results reported are from unaudited financial results shared with the WB; audited financial statements have not yet been released. 2. Loan portfolio segmentation by CB and REM is not being reported since LB does not currently segment its portfolio along these lines. The new segmentation will be used in reporting results following the proposed project restructuring, if a restructuring is agreed upon. Performance-Based Conditions Data on Financial Performance Disbursements (by loan) 12/21/2020 Page 4 of 6 The World Bank Implementation Status & Results Report Land Bank Financial Intermediation Project (P150008) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P150008 IBRD-86860 Effective USD 93.00 93.00 0.00 26.88 66.12 29% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P150008 IBRD-86860 Effective 23-Jan-2017 10-Apr-2017 29-Sep-2017 01-Apr-2022 01-Apr-2022 Cumulative Disbursements PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC Restructuring History There has been no restructuring to date. Related Project(s) 12/21/2020 Page 5 of 6 The World Bank Implementation Status & Results Report Land Bank Financial Intermediation Project (P150008) There are no related projects. 12/21/2020 Page 6 of 6