The World Bank AGRICULTURE POLICY MONITORING AND EVALUATION CAPACITY BUILDING PROJECT (P158359) REPORT NO.: RES43349 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF AGRICULTURE POLICY MONITORING AND EVALUATION CAPACITY BUILDING PROJECT APPROVED ON JANUARY 6, 2017 TO REPUBLIC OF ARMENIA AGRICULTURE AND FOOD EUROPE AND CENTRAL ASIA Regional Vice President: Anna M. Bjerde Country Director: Sebastian-A Molineus Global Director: Martien Van Nieuwkoop Practice Manager/Manager: Frauke Jungbluth Task Team Leader(s): Arusyak Alaverdyan, Pierre Jean Gerber The World Bank AGRICULTURE POLICY MONITORING AND EVALUATION CAPACITY BUILDING PROJECT (P158359) ABBREVIATIONS AND ACRONYMS AEIM Agricultural Extension, Innovation and Monitoring APERUC Agricultural Programs Elaboration, Resource Use and Cooperatives APID Agricultural Projects Implementation Department APMECB Agriculture Policy Monitoring and Evaluation Capacity Building CNA Capacity Needs Assessment GIS Geographical Information System GOA Government of Armenia IT Information Technology MOA Ministry of Agriculture M&E Monitoring and Evaluation MOE Ministry of Economy MOF Ministry of Finance MTR Mid-Term Review PDO Project Development Objective PHRD Program for Human Recourse Development PIU Project Implementation Unit PRIME Performance and Results with Improved Monitoring and Evaluation RA Republic of Armenia The World Bank AGRICULTURE POLICY MONITORING AND EVALUATION CAPACITY BUILDING PROJECT (P158359) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID Financing Instrument P158359 Investment Project Financing Original EA Category Current EA Category Approval Date Current Closing Date 06-Jan-2017 31-May-2021 Organizations Borrower Responsible Agency Ministry of Economy,Agriculture Projects Implementing Republic of Armenia Department of the Ministry of Economy Financing (in USD Million) FIN_SUMM_PUB_TBL SUMMARY Total Project Cost 0 Total Financing 0 Financing Gap 0 DETAILS -NewFin3 The World Bank AGRICULTURE POLICY MONITORING AND EVALUATION CAPACITY BUILDING PROJECT (P158359) Project Development Objective (PDO) Original PDO The project's development objective is to strengthen M&E capacity and systems as elements of evidence-based agriculture policy analysis and formulation. This is in line with the broad objective of the PRIME window of the Japanese PHRD technical assistance grants program which is to enhance the use evidence-based decision making in government systems, by strengthening the M&E systems of recipient ministries in priority sectors. Agriculture has been selected as a priority area for grant support, along with health, nutrition, population and urban development. Armenia's Ministry of Agriculture (MoA) is viewed as a strong candidate for support due to itsdemonstrated commitment to policy reform, its awareness of the need to improve its capacity for policy analysis and policy formulation, and its recent efforts to strengthen its capacity for monitoring and evaluation. Strengthened government ownership of the policyprocess is viewed as an important further outcome of grant support. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-A4449 23-Mar-2017 23-Mar-2017 16-Oct-2017 31-May-2021 1.80 .31 1.49 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING The project remains critically important for Armenia’s agriculture sector. The need for strong public sector M&E capacity and for evidence-based policy making—the two principal objectives of this PHRD-funded Project—are fully aligned with the Agriculture Strategy of the Government of Armenia. The Strategy was approved at the end of 2019 and relies on evidence-based identification of sector development priorities. The availability of data and of analytical tools, such as the Datawarehouse and Geographical Information System (GIS), are also critical as the Ministry of Economy (MOE) prepares and implements a COVID-19 resilience and recovery national program. Despite implementation delays and unforeseen external events, several key activities of the project have been completed, or are well advanced. Component I: Capacity Building for Evidence Based Policy Making Analysis and Formulation The World Bank AGRICULTURE POLICY MONITORING AND EVALUATION CAPACITY BUILDING PROJECT (P158359) The component includes activities related to staff training program for capacity building; skills building for survey design and analysis; specific economic evaluations; information technology support and database management; technical assistance. Two critical studies have been completed to date: (i) a capacity needs assessment (CNA), including the review of the institutional base, M&E system in place and human resources, as well as the development of a complete training program, including identification of specific beneficiaries, content and timeline (completed in January 2021); and (ii) a review of the databases currently available at the Ministry and at other public organizations, and the formulation of recommendations for the establishment of a consolidated data warehouse within the MOE’s Agricultural Extension, Innovation and Monitoring (AEIM) (completed in May 2020). The MOE project team has started to act on these results and several activities were implemented in the past months. A team of eleven consultants and two firms were hired to: (i) conduct baseline surveys and analysis; (ii) initiate capacity building activities in the areas of GIS and database management; and (iii) develop an user-friendly data warehouse and analytical tools (GIS system, monitoring system), which will provide MOE’s policy making and monitoring departments (Agricultural Programs Elaboration, Resource Use and Cooperatives (APERUC) and AEIM) with up-to-date information for effective policy making. It will include: (i) results of the Agricultural Census; (ii) results of annual, quarterly, and monthly statistical surveys; (iii) trade data collected by the customs service; and (iv) regular summary data from relevant Ministry systems. Statistician and database consultants were recruited to this end. Finally, market studies are being conducted to investigate new export markets for Armenian fruits and vegetables. Component 2: Project Management Since May 2020 the MOE project team is fully staffed and receives direct and regular guidance from the Deputy Minister of MOE. Subsequently, project implementation accelerated and a number of consultancies had been initiated and some have already been completed. The financial management arrangements under the project remain satisfactory and acceptable to the Bank. There are no overdue audits or interim un-audited financial reports under the project. No formal Mid-Term Review (MTR) has been conducted given the low level of activity and disbursement in the past. Detailed technical discussions were however organized in December 2020, the modalities are being established by the team in collaboration with the implementing team to conduct an MTR for the project in April 2021, depending on the approval of project extension, to assess progress toward achieving project outcomes and the PDO. In close consultation with the Bank, the project team has developed a detailed plan of activities and expenditures that will allow the achievement of the Project’s original PDO as well as full disbursement of funds by the proposed new closure date of the Project. These activities build on the CNA and the needs identified therein. They respond to the needs that have emerged in the MOE after restructuring and are supporting the vision and objective of the Agriculture Strategy for Armenia. They also respond to the country’s need to face the COVID-19 pandemic. The implementation plan of the proposed activities is realistic given the current circumstances and responds to pressing needs at the MOE. Previous project restructurings. The first restructuring of the project was approved in July 2017 to reflect changes in the implementation agency introduced by the Government of Armenia at the time. The second restructuring was approved in June 2018 and included: (i) changes in treatment of taxes to be paid by the consultants hired under the Project (exclusive of taxes) to advance implementation; and (ii) an extension of the Closing Date by one year and five months from December 31, 2018 to May 31, 2020. The third restructuring was approved in July 2019 and reflected The World Bank AGRICULTURE POLICY MONITORING AND EVALUATION CAPACITY BUILDING PROJECT (P158359) changes of the implementing agency and implementation arrangements: The Ministry of Agriculture (MOA) was merged with the Ministry of Economy (MOE) and MOE became the agency responsible for the project implementation. After the merger of the ministries, the M&E department of MOA was replaced with the MOE’s Agricultural Extension, Innovation and Monitoring (AEIM) department where most of the capacity development support through the project takes place. This resulted in several structural changes in the project implementation arrangements1. The project team became fully operational only in October 2019. Finally, a fourth restructuring was approved in February 2020 and included extension of the Project Closing Date by 12 months from May 31, 2020 to May 31, 2021. In addition, the following events impacted project implementation. In the spring of 2020, the COVID-19 pandemic hit Armenia. A first lock down was announced on March 16, 2020. This prevented all international and local travels of consultants and staff and had a direct impact on the implementation of most activities, in particular data collection, technical assistance, trainings and consultations. The MOE teams and other partner organizations had to refocus their attention to the design and implementation of COVID-19 prevention and recovery measures. In September 2020, the war in Nagorno-Karabakh started. While the war ended in November 2020, it disrupted activities during that period as Ministry staff was mobilized to support Prime Minister office. A state of emergency and travel restrictions were put in place until January 11, 2021. Implementation ratings. Project implementation progress is rated moderately satisfactory. Table 1 below summarizes the likelihood of PDO targets achievement with and without the proposed closing date extension. Table 1. Status of PDO indicators as of February 2021 PDO Indicator Target Progress Achievement Achievement Status Status Likelihood Likelihood with 12 months May 31,2021 extension Number of additional datasets included in database 8 0 Low High and regularly updated Number of policy tools developed and regularly 4 10 Achieved Achieved applied, with staff trained in their use Number of independent policy evaluations and 20 7 Modest High surveys completed The project has overcome multiple and substantial external causes of delay that have affected implementation in the past. The commitment of MOE to the project and its ability to identify effective ways to cope and adapt to such external event is strong. The project team is fully staffed and clear implementation and reporting arrangements are in place. There has been marked acceleration of activities and disbursement since last Implementation Status Report of May 2020 (from zero 1 The new project management structure emerged following a series of institutional initiatives of the Government. The 2019 restructuring recognized the new institutional model for the management of externally funded investment projects that abandoned PIU-like structures and relied on line ministries being directly responsible for implementation, fiduciary functions and for compliance with all applicable safeguards. The World Bank AGRICULTURE POLICY MONITORING AND EVALUATION CAPACITY BUILDING PROJECT (P158359) to 17.2 percent, with about US$140,000 committed to be disbursed by the end of May 2021)2. Finally, a convincing and detailed implementation plan is available to complete the remaining activities by the proposed revised closure date. II. DESCRIPTION OF PROPOSED CHANGES The proposed project restructuring would be a no-cost 12-month extension of the closing date. This extension would result in a cumulative extension of 41 months. The proposed extension does not involve a change in the Project Development Objectives, scope, activities, and categories of expenditures. The proposed revised closing date is May 31, 2022, which would almost coincide with the closing date of the Second Community Agricultural Resources Management and Competitiveness lending project (CARMAC 2) – April 30, 2022 - to which the implementation of the project is closely related. The Project team of MOE has provided a detailed plan of activities and expenditures considering the proposed new closure date of the project of May 31, 2022 that has been reviewed by the Bank Task Team and found reasonable (see summary table below). It comprises the following items: a. Improvement of institutional capacity and human resource for evidence base policy making developments; b. Establishment of a consolidated database on the agriculture sector and related analytical tools; c. Development of a policy implementation monitoring system at AEIM; d. Implementation of selected targeted studies and surveys supporting the formulation of agriculture policies; e. Training and capacity building; and f. Development of tools to support policy formulation at AEIM. Component/Task/Sub-task 2019 2020 2021 2022 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 I Capacity building I-1 Initial reviews Capacity Need Assessment (CNA) X X X X X X Review available databases X X X X X Review independent policy analysis X X capacity Review consultation mechanisms X I-2 Creating the evidence base Establish data warehouse & analytical X X X X X tools Develop data-collection systems X X X X Develop policy monitoring system X X X X X Establish Ministry Ag. Information X X X X X unit 2The current project implementing team could initiate more activities but all of those would go beyond the current closing date of the project this is why they were put on hold until the decision on project extension is made. The World Bank AGRICULTURE POLICY MONITORING AND EVALUATION CAPACITY BUILDING PROJECT (P158359) Carryout policy studies & surveys (ag. X X X X X land, new market development, vineyards) Provide IT training & support X X X X X X X I-3 Building capacity Trainings in key approaches for X X X X X evidence-based policy making Develop policy tools X X X Train staff in survey design & analysis X X X X Embed policy cycle into the Ministry X X X X II Project management II-1 Establish project Establish office, recruit project staff, X procure equipment Recruit local consultants X X X X X Identify team of international experts X X X II-2 Reporting, supervision & evaluation Quarterly reporting X X X X X X X X Supervision missions X X X X X X Independent evaluation X X III. SUMMARY OF CHANGES Changed Not Changed Loan Closing Date(s) ✔ Disbursement Estimates ✔ Implementation Schedule ✔ Implementing Agency ✔ Project's Development Objectives ✔ Results Framework ✔ Components and Cost ✔ Cancellations Proposed ✔ Additional Financing Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ The World Bank AGRICULTURE POLICY MONITORING AND EVALUATION CAPACITY BUILDING PROJECT (P158359) Change in Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline TF Status Closing Closing(s) Closing for Withdrawal Applications 31-May-2020, 31- TF-A4449 Effective 31-Dec-2018 31-May-2022 30-Sep-2022 May-2021 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Expected Disbursements (In US$) Fiscal Year Annual Cumulative 2017 0.00 0.00 2018 0.00 0.00 2019 0.00 0.00 The World Bank AGRICULTURE POLICY MONITORING AND EVALUATION CAPACITY BUILDING PROJECT (P158359) 2020 0.00 0.00 2021 0.00 0.00 2022 0.00 0.00 2023 0.00 0.00 Note to Task Teams: End of system generated content, document is editable from here.