The World Bank Implementation Status & Results Report STATE OWNED ENTERPRISES RELATED FISCAL MANAGEMENT PROJECT (P160796) STATE OWNED ENTERPRISES RELATED FISCAL MANAGEMENT PROJECT (P160796) AFRICA | Cabo Verde | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2018 | Seq No: 4 | ARCHIVED on 16-Jun-2020 | ISR42123 | Implementing Agencies: Ministry of Finance, Republic of Cabo Verde Key Dates Key Project Dates Bank Approval Date: 04-Jun-2018 Effectiveness Date: 22-Oct-2018 Planned Mid Term Review Date: 01-Dec-2020 Actual Mid-Term Review Date: Original Closing Date: 31-Jul-2023 Revised Closing Date: 31-Jul-2023 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective is to strengthen SOE related fiscal management. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Component 1: Results-Based Financing:(Cost $16.00 M) Component 2: Technical Assistance:(Cost $3.50 M) Component 3: Project Management:(Cost $0.50 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions Implementation progress of the project remains satisfactory. In 2019, one PDO indicator has been achieved, one has exceeded the end year target and one is on track of achieving the end of project target. Transfers from the Government budget to SOE’s for their operations, including lending subsidies, capital injections and guarantees for target loans represented 7 percent of the GDP in 2019 which is the 2020 project target and down from 9.57 percent of GDP in 2018 and from the 10.90 percent of GDP project baseline (2017). The 2019 public revenues from SOE's in tax payments, dividends, concession payments and divestment proceeds increased from US$348,772 to US$22.5 million in 2019. Meanwhile, the operating margin of TACV has not yet improved. The operational costs represented 175 percent of operating revenues in 2017 as reported in the 2017 TACV audited annual financial statements. The operating margin was estimated to 219 percent in 2018 according to the 2018 unaudited financial statements, beyond the target of 100 percent. The COVID-19 pandemic’s adverse impact on the economy and SOE’s activities could have an adverse impact on the achievement of some of the Project development outcomes, namely on TACV operational margin due to travel ban, and on the volume of transfers to SOE’s, and profits and dividends generated by SOE’s. 6/16/2020 Page 1 of 7 The World Bank Implementation Status & Results Report STATE OWNED ENTERPRISES RELATED FISCAL MANAGEMENT PROJECT (P160796) 4 out of 6 intermediate results indicators related to the component 2 on technical assistance have been achieved. The Government has disclosed the pipeline of companies to be restructured and/or divested and reinforced the SOE oversight and monitoring. In addition, a comprehensive report on the SOE's portfolio including analysis of financial and operational performance was published on the Ministry of Finance’s website for 2017. The 2019 SOE's report covering the year of 2018 has also been shared with the World Bank Project team and disclosed on the Ministry of Finance website. The first year Disbursement Linked Indicators (DLIs 1 to 4) have been achieved leading to a sharp increase of the disbursement ratio from 0,2 percent to 56 percent and the second year DLIs are on track. The Recipient submitted on March 19, 2019, the evidence of the achievement of the DLIs 1, 2, 3 and 4. The evidence has been verified by the Independent Verification Agent. The World Bank, based on the information available and after getting a reasonable assurance on the achievement of the DLIs, reimbursed a total amount of $9,898,834 million in May 2019. In April 2020, $ 3,085,075 has been disbursed raising the overall disbursement ratio to 76.18% as of June 1, 2020. The SOE's policy is ongoing and should be completed along with remaining technical assistance activities under the component 2 of the Project. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance High Substantial Substantial Macroeconomic Substantial Substantial Substantial Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Substantial Substantial Substantial Sustainability Fiduciary Moderate Moderate Moderate Environment and Social Substantial Substantial Substantial Stakeholders Substantial Substantial Substantial Other Substantial -- -- Overall Substantial Substantial Substantial Results PDO Indicators by Objectives / Outcomes Strengthen SOE related fiscal management IN00852921 ►Reduced public financing to SOEs - including transfers from the budget and capitalization (% of GDP) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 10.90 7.00 7.00 6.00 Date 29-Dec-2017 30-Nov-2019 30-Nov-2019 31-Mar-2022 6/16/2020 Page 2 of 7 The World Bank Implementation Status & Results Report STATE OWNED ENTERPRISES RELATED FISCAL MANAGEMENT PROJECT (P160796) IN00852922 ►Improved operating margin of TACV (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 144.00 219.00 219.00 80.00 Date 29-Dec-2017 30-Nov-2019 30-Nov-2019 31-Mar-2022 IN00852923 ►Annual public revenues from SOEs (Millions USD - in tax payments, dividends, concession payments, divestment proceeds) (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 5.00 22.00 22.00 10.00 Date 31-Dec-2017 30-Nov-2019 30-Nov-2019 20-Jul-2022 Intermediate Results Indicators by Components Component 2: Technical Assistance IN00852924 ►IRI1: Comprehensive SOE policy adopted (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Current (2016) SOE The government framework law outlines adopts a policy on general rules for SOEs including clear Value No policy adopted No policy adopted corporate governance of performance targets SOEs and government and transparency oversight and reporting obligations of SOEs Date 29-Dec-2017 31-Dec-2018 31-Dec-2018 31-Mar-2022 Not achieved Comments: IN00852925 ►IRI2: Implementation and utilization of the SOE financial database (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Database with UASE operates general complete financial and excel sheet with basic Database up and operational Value Database up and running aggregated information running performance on six (6) largest SOEs information on the entire SOE portfolio Date 29-Dec-2017 29-Mar-2019 29-Mar-2019 31-Mar-2022 Achieved Comments: IN00852926 ►IRI3: Strengthened legal framework for debt management with a greater emphasis on contingent liabilities (Text, Custom) 6/16/2020 Page 3 of 7 The World Bank Implementation Status & Results Report STATE OWNED ENTERPRISES RELATED FISCAL MANAGEMENT PROJECT (P160796) Baseline Actual (Previous) Actual (Current) End Target new law for debt new law for debt maangement including maangement including A clear legal Fragmented debt contingent liabilities contingent liabilities framework that is Value management legislative approved by the approved by the respected by SOEs framework Parliament in December Parliament in and Government 2018 December 2018 Date 29-Dec-2017 29-Mar-2019 29-Mar-2019 31-Mar-2022 Achieved Comments: IN00852927 ►IRI4: Review of SOE Portfolio and structuring oversight/holding of SOEs (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Some individual The government has The government has Greater clarity on performance reviews disclosed the pipeline of disclosed the pipeline SOEs that need to be Value carried out as part of 23 companies to be of 23 companies to be restructured, sold or performance agreement restructured and/or restructured and/or partially privatized preparations divested divested Date 29-Dec-2017 01-Nov-2018 01-Nov-2018 31-Mar-2022 Achieved Comments: IN00852928 ►IRI5: Fiscal risk monitoring reports on SOE portfolio published (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Comprehensive reports on all SOEs published on MoF’s web site including analysis of financial and operational Annual report on Yes - 2017 Fiscal Risk Yes - 2017 Fiscal Risk performance Value contingent liabilities from Report issued in June Report issued in June (including, 6 lar 2018 2018 benchmarking) and all financial transfers with the state (including all transfers, arrears, implicit subsidies, etc.) Date 31-Dec-2017 01-Nov-2018 01-Nov-2018 31-Dec-2022 Achieved Comments: IN00852929 ►IRI6: Citizen Feedback on SOE Reform Process (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Information available on citizens' opinion on Surveys to be carried out Surveys to be carried how well government No information on citizen Value two years into the out two years into the has planned for, opinion reforms reforms communicated and implemented SOE sector reforms. 6/16/2020 Page 4 of 7 The World Bank Implementation Status & Results Report STATE OWNED ENTERPRISES RELATED FISCAL MANAGEMENT PROJECT (P160796) Date 31-Dec-2017 01-Nov-2018 01-Nov-2018 15-Sep-2023 Not achieved Comments: Performance-Based Conditions IN00852930 ►PBC 1 TACV has adopted and announced a Retrenchment Plan acceptable to the Bank (Yes/No, Output, 3,000,000.00, 100.00%) Baseline Actual (Previous) Actual (Current) Fiscal Year 2022 Value No Yes Yes -- Date -- 18-Apr-2018 18-Apr-2018 -- IN00852931 ►PBC 2 TACV has established Grievance mechanism acceptable to the Bank (Yes/No, Process, 3,000,000.00, 100.00%) Baseline Actual (Previous) Actual (Current) Fiscal Year 2022 Value No Yes Yes -- Date -- 28-Jun-2018 28-Jun-2018 -- IN00852932 ►PBC 3 Staff targeted by the Retrenchment Plan has been retrenched (Number, Intermediate Outcome, 8,000,000.00, 48.73%) Baseline Actual (Previous) Actual (Current) Fiscal Year 2022 Value 0.00 123.00 123.00 -- Date -- 29-Mar-2019 29-Mar-2019 -- Comments: 38 staff received packages and a further 74 received early retirement packages. IN00852933 ►PBC 4 Detailed annual SOE reports prepared by UASE (Number, Output, 2,000,000.00, 20.00%) Baseline Actual (Previous) Actual (Current) Fiscal Year 2022 6/16/2020 Page 5 of 7 The World Bank Implementation Status & Results Report STATE OWNED ENTERPRISES RELATED FISCAL MANAGEMENT PROJECT (P160796) Value 0.00 1.00 1.00 5.00 Date -- 31-Dec-2018 31-Dec-2018 -- Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P160796 IDA-62510 Effective USD 20.00 20.00 0.00 14.43 4.51 76% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P160796 IDA-62510 Effective 04-Jun-2018 22-Jun-2018 22-Oct-2018 31-Jul-2023 31-Jul-2023 Cumulative Disbursements PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC 6/16/2020 Page 6 of 7 The World Bank Implementation Status & Results Report STATE OWNED ENTERPRISES RELATED FISCAL MANAGEMENT PROJECT (P160796) Restructuring History There has been no restructuring to date. Related Project(s) P172528-State-Owned Enterprises related Fiscal Management Project - Additional Financing 6/16/2020 Page 7 of 7