Public Disclosure Copy The World Bank Implementation Status & Results Report CG Rep. Support to Economic Diversification Project (P118561) CG Rep. Support to Economic Diversification Project (P118561) AFRICA | Congo, Republic of | Financial and Private Sector Development Global Practice | IBRD/IDA | Specific Investment Loan | FY 2011 | Seq No: 8 | ARCHIVED on 06-Jan-2015 | ISR17418 | Implementing Agencies: Key Dates Key Project Dates Board Approval date:16-Dec-2010 Effectiveness Date:13-Sep-2011 Planned Mid Term Review Date:16-Nov-2015 Actual Mid-Term Review Date:-- Original Closing Date:28-Feb-2016 Revised Closing Date:16-Feb-2017 Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of the Project is to promote private sector growth and investment in the non-oil sectors in the Republic of Congo. Itwill focus in particular on SMEs and the Pointe Noire-Brazzaville growth corridor, which is the most important and immediate sourceof economic growth and diversification. Has the Project Development Objective been changed since Board Approval of the Project Objective? Yes Board Approved Revised Project Development Objective (If project is formally restructured)PHRPDODEL The objective of the project is to promote private investment in select non-oil value chains and to support Small and Medium Enterprises (SME) development. Components Name Support to Public Private Dialogue (PPD) and Investment Climate Reforms: TA to improve PPD, improve the investment climate and stren gthen the instit framework to support enterprises and investments:(Cost $4.30 M) Support to Enterprise Development and Investment Promotion: aimed at supporting access to non financial and financial services.:(Cost $8.40 M) Support to the reform of the railway company: This component will assist the Government in implementing a strategy to improve the op erations and services of the railway company, CFCO:(Cost $2.70 M) Project Coordination and Implementation:(Cost $3.60 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Moderately Unsatisfactory  Moderately Satisfactory 1/6/2015 Page 1 of 6 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report CG Rep. Support to Economic Diversification Project (P118561) Overall Implementation Progress (IP)  Moderately Satisfactory  Moderately Satisfactory Overall Risk Rating  --  Substantial Implementation Status and Key Decisions The Project was approved by the Bank on December 16, 2010 and it became effective on September 13, 2011. The original closing date is February 28, 2016. The board approved a project restructuring in February 14, 2014 and the related Amended Financial Agreement was signed by the Country Director and sent to the Minister of Finance for signature in June 2014. Out of the original Credit of US$10 million, disbursement stands at US$3 million, which puts the disbursement rate at 30%. The Bank fiduciary team rated the project Procurement and FM ratings from MS. Issues that had been affecting the MG operations during the last mission have been addressed. Activities critical to the achieving the PDO results such as the Matching Grant and investment promotion activities are on track with results indicators. The PDO rating was changed from MU to MS for the following reasons: (i) Significant progress has been observed in the realization of activities related to the two PDO result indicators (ii) the project disbursement rate of 30% is tracking projection with an expected rise above 50% by June 2015 based on activities already engaged and contract signed. The Republic of Congo improved its Doing Business ranking by 7 places from 185 to 178 thanks to the support provided by the project. However, the pace of reform has slowed down significantly over the past 12 months and constraints remain with reform implementation activities due in large part to the delay in the recruitment of the Permanent Secretary of the Public Private Dialog Platform who is a critical piece in the process despite several reminder from the Bank to the Ministry of Industry, the execution agency for that activity. On the first PDO result indicator of the aggregate amount of private investment supported by the project targeted at USD50 million by project end, so far the project contributed to supporting in excess $78 million worth of private investment with the breakdown as follow: (i) TOTAL agreed to sign an MOU with the Matching Grant to support a minimum of USD10 million dollars’ worth of goods and services to local SMEs supported by the project as part of its commitment to dedicate 10% of its USD10billion investment on new offshore oil exploration platform to the development of 'local content' (ii) A Congolese business holding has invested 16 million dollars to be build a new plant in the northern part of the country and the project benefited from the Matching Grant support to provide training and expertise for the certifications and training required as part of the investment (iii) BAYO, a Brazzaville- based dairy plant has made a USD 2 million investment in the plat expansion to help it diversify into fruit juices and as part of the loan requirement, the company needed to install a new accounting system and train staff accordingly, develop a new marketing plan and retain experts to help develop the new product lines. Matching Grant is proving all of these capacity building programs supporting the new investment (iv) As a result of the US-Africa held in Washington DC held in Aug 2014 to promote trade between the US and Africa, a group of US investors supported by the PADE made a commitment to set up a USD25 million venture fund that will initially focus on investing in Congolese SME with high growth potential support by the project in the areas of Local Content development in the Oil value chains and in AGOA related product with sales potential in the US market. On the second PDO result indicator the percentage of SME supported by the project that have so far achieved agreed upon performance indicators: The project supports SME using the Matching Grant through 3 types of activities: (i) support to individual SMEs (ii) support to SMEs through a value chain (iii) support to SME in local content development. About 80% of the SME supported are through value chains. So far about 150 SMEs across 7 value chain are being supported. The collective performance for these SME were to: a) Attend value chain training in series a workshops over the past 15 months (b) collectively structure the VC (c) collectively develop a strategy and action plan to improve value chain competitiveness and set production targets (d) form a legal entity representing the value chain - Groupement d'Interet Economique (e) Identify customers for the VC production. With regards to the performance indicators described for the SMEs in the value chain, they have all been reached to this date and the Matching Grant provided the TA to facilitate the process and continue to provide funding and TA for the implementation of the strategies and action plans. 1/6/2015 Page 2 of 6 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report CG Rep. Support to Economic Diversification Project (P118561) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  --  High Macroeconomic  --  --  Moderate Sector Strategies and Policies  --  --  Substantial Technical Design of Project or Program  --  --  Moderate Institutional Capacity for Implementation and Sustainability  --  --  Substantial Fiduciary  --  --  Substantial Environment and Social  --  --  Substantial Stakeholders  --  --  Substantial Other  --  --  -- Overall  --  --  Substantial Results Project Development Objective Indicators PHINDPDOTBL  Percentage of SMEs, out of all SMEs supported by the project, that achieved agreed upon target performance indicators (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 45.00 75.00 Date 11-Oct-2013 31-Mar-2014 01-Dec-2014 16-Feb-2017 PHINDPDOTBL  Aggregate private investment amount supported by project activities in select non-oil value chain. (Amount(USD), Custom) 1/6/2015 Page 3 of 6 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report CG Rep. Support to Economic Diversification Project (P118561) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 78000000.00 50000000.00 Date 11-Oct-2013 31-Mar-2014 01-Dec-2014 16-Feb-2017 Overall Comments Intermediate Results Indicators PHINDIRITBL  Number of Doing Business indicators that have been reformed to improve the country’s business environment (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 3.00 5.00 7.00 Date 30-May-2013 31-Mar-2014 01-Dec-2014 16-Feb-2017 PHINDIRITBL  Number of overall procedures that have been reduced in the five Doing Business indicators where the country is ranked least. (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 10.00 10.00 80.00 Date 01-Jan-2013 31-Mar-2014 31-Mar-2014 16-Feb-2017 PHINDIRITBL  Aggregate incremental sales for SMEs supported by the project (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- 0.00 -- 6000000000.00 Date 01-Jan-2013 11-Oct-2013 01-Dec-2014 16-Feb-2017 1/6/2015 Page 4 of 6 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report CG Rep. Support to Economic Diversification Project (P118561) PHINDIRITBL  Number of SMEs benefiting from non financial services (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 280.00 350.00 Date 04-Dec-2013 31-Mar-2014 01-Dec-2014 16-Feb-2017 Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P118561 IDA-48460 Effective XDR 6.40 6.40 0.00 1.91 4.49 30% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P118561 IDA-48460 Effective 16-Dec-2010 03-Feb-2011 13-Sep-2011 28-Feb-2016 16-Feb-2017 Cumulative Disbursements 1/6/2015 Page 5 of 6 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report CG Rep. Support to Economic Diversification Project (P118561) Restructuring History Level 1 Approved on 24-Feb-2014 Related Project(s) There are no related projects. 1/6/2015 Page 6 of 6 Public Disclosure Copy