Document of The World Bank FOR OFFICIAL USE ONLY Report No. 8764 PROJECT COMPLETION REPORT COMOROS DEVELOPMENT BANK OF THE COMOROS (DBC) (CREDIT 1378-COM) OCTOBER 22, 1990 Industry and Energy Operation Division South Central and Indian Ocean Department Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit - Comorian Franc (CF) The Comoros belongs to the "franc zone" and the Comorian franc is pegged to the French franc at F I = C2 50. Exchange Rate (Annual Average): Year CF 1 =US$ US$1 - CF 1982 0.00304 329 1983 0.00262 382 1984 0.00?29 437 1985 0.00223 448 1986 0.00289 346 1987 0.00333 301 1988 0.00339 295 ABBREVIATIONS ADB - African Development Bank BIAO - Banque Internationale pour l'Afrique Occidentale BIC - Banque Internationale des Comores BNP - Banque Nationale de Paris CADER - Centre d'Appui au D6veloppement Rural CBC - Central Bank of Comoros CCCE - Caisse Centrale de Coop6ration Economique CEFADER - Centre Fd6ral d'Appui au D6veloppement Rural CREDICOM - Soci6t6 de Cr6dit pour le D6veloppement des Comores DBC - Development Bank of Comoros DFC - Development Finance Company EDF - European Development Fund EIB - European Investment Bank IEC - Institut d'Emission des Comores SSE - Small Scale Enterprise UNDP - United Nations Development Programme WEIGHTS AND MEASURES Metric System 1 kilometer = 0.62 mile I square kilometer = 0.3861 square mile 1 hectare = 2.47 acres 1 kilogram 2.2046 pounds 1,000 kilograms 1 ton FISCAL YEAR January 1 to December 31 FOR OFFICIAL USE ONLY THE WORLO BANK Washington. D.C 20433 U.S.A. 01ce o Owectw.nerat Qperaotns Intuatena October 22, 1990 MHORANDUN TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Comoros Development Bank of the Comoros (DBC) (Credit 1378-CON) Attached, for information, is a copy of a report entitled "Project Completion Report on Comoros - Development Bank of the Comoros (DBC) (Credit 1378-COM)" prepared by the Africa Regional Office. No audit of this project has been made by the Operations Evaluation Department at this time. Attachment This document bas restricted disribution and may be used by recipiwts only in the peformance Of their ofical dutWieIts contents my no otwise be disclosed witbot Wod Dank attiastion. FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT COMOROS DEVELOPMENT BANK OF COMOROS (DBC) (CREDIT 1378-COM) TABLE OF CONTENTS Paxe No. PREFACE SU.MA.Y......................... BASIC DATA SHEET ............................................. iii BVALUATION SUNMARY ................................................. v I. INTRODUCTION T................................. 1 A. Background ................ ...2. . 1 Terms and Conditions .................................. 1 B. Project Objectives and IDA's Role ..................0. 2 II. MACROECONOMIC AND SECTORAL SETTING ......................... 2 A. Background ............................................. 2 B. Recent Economic Developments .............. ... ..... ...... 2 C. The Productive Sectors .................................. 3 Manufacturing and Artisanal Activities s........... 3 Construction ...................................3.... 3 Tourism ....... . ..o .................................. 3 D. The Financial Sector............................... 4 Commercial Bank o ................ ....... ............ 4 Inflation ............................................. 4 Interest Rates ining ........................o .... 5 Maroeconomic Framework .................... ....... 5 III. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT ................... 6 A. The Institution ......................................... 6 Ownership and Board ............ ...................... 6 Management .... ...... ....... ........ ..... .......... 6 Organization ...................... .... . . ...... ........ 7 Staffing and Training .......... ................ 7 Policies and Procedures ...................... 7 Technical Assistance ........................... 7 Project Promotion and Appraisal ............ 7 Supervision ...................... .. ................... 8 Reporting and Audit ................ ........... 8 B. Main Institutional Issues ............................... 8 Interest Rates ..................... 8 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. TABLE OF CONTENTS (cont'd.) Page No. IV. OPERATIONAL AND FINANCIAL PERFORMANCE ...................... 9 A. Operations ..*........................... 9 B. Financial Performance .................................. 10 Quality of Portfolio ............................... 10 Financial Position and Performance ................... 10 V. ALLOCATION OF CREDIT ................... .... 11 VI. CONCLUSIONS AND LESSONS LEARNED ............................ 12 Sustainability .......*.. ...................... 13 ANNEXES 1. Compliance with Conditions of Credit and Project Agreement ... 15 2. Estimated and Actual Disbursement ..........* *............... 17 3. Actual and Proj4cted Operations, 1983-88 ..................... 18 4. Sectoral Distribution of Loans, 1983-88 ...................... 19 5. Loan Portfolio Evolution, 1983-89 ............................ 20 6. Actual and Projected Balance Sheets, 1982-88 ................. 21 7. Actual and Projected Income Statements, 1982-88 .............. 23 8. Financial Performance Indicators, 1982-88...........**........ 25 9. List of Subprojects and Other Project Components Financed Under Credit 1378-COM ............................. 27 10. Economic Characteristics of Subprojects Financed Under Credit 1378-COM .............................................. 30 11. Financial Characteristics of Subprojects Financed Under Credit 1378-COM ... ....... ..................... 31 12. Economic Characteristics of Subprojects Not Financed Under Credit 1378-COM ........................................ 32 13. Financial Characteristics of Subprojects Not Financed Under Credit 1378-COM ..... ...................... .. 33 ATTACHMENT Comments Received from DBC ....... .... ........................ 35 PROJECT COMPLETION REPORT COMOROS DEVELOPMENT BANK OF COMOROS (DBC) (CREDIT 1378-COM) PREFACE This report presents an evaluation of Credit 1378-COM to the Islamic Republic of the Comoros, with DBC as the direct beneficiary. This first IDA line of credit to DBC was approved and signed in June 1983, and was declared effective in December 1983. Disbursements were completed in July 1987. The project was completed and officially closed more than one year ahead of schedule. The Association's Africa Regional Office has prepared this report on the basis of information contained in the Bank files and written information received from the Borrower in the form of tables and subproject descriptions. The report reviews DBC's use of the Credit proceeds and its institutional development over the past years. This PCR was read by the Operations Evaluation Department. The draft PCR was sent to the Borrower and DBC for their comments. The comments received from DBC were incorporated in the final PCR and are reproduced as an attachment to the Report. PROJECT COM1PLETION REPORT COMOROS DEVELOPMENT BANK OF COMOROS (DBC) (CREDIT 1378-COM) BASIC DATA SHEET CREDIT POSITION (Amounts in SDR million) As of Dec. 31, 1989 Original Disbursed Cancelled Read Outgtanding Credit 1378-COM 2.2 2.2 -- -- 2.2 CUMULATIVE ESTIMATED AND ACTUAL DISBURSEMENTS FY84 FY85 UY86 FY87 FY88 (i) Estimated 0.13 0.60 1.29 1.86 2.20 (ii) Actual 0.30 1.00 2.10 2.15 2.20 (iii) (ii) as Z of (i) 230 170 160 116 100 PROJECT DATES Oriiinal Dates ActualLRevised First mention in files -- 01/19/79 Negotiatione 05/82 05/04/83 Board Approval 08/82 05/31/83 Credit Agreement Signed -- 06/17/83 Credit Effectiveness -- 12/27/83 Final Comitment 12/31/86 12/31186 Closing Date 06/30/89 03/28/88 MISSION DATA Month/ No. of No. of Staff Date of Year Weeks Staff Weeks Revort Identification 09/80 2 3 6 11/80 Pre-appraisal 10/81 1 1 1 12/81 Appraisal 11/82 2 3 6 05/83 Supervision 07/86 1 1 1 08/86 Supervision 03/87 1 1 1 04/87 -v - PROJECT COMPLETION REPORT COMOROS DEVELOPMENT BANK OF COMOROS (DBC) (CREDIT 1378-COM) EVALUATION SUMMARY 1. The main objectives of the project included financial and technical assistance to promote and develop productive investments in Comoros through a newly established development finance intermediary. Institution building was, therefore, an important objective supported by provision of direct tech- nical assistance to DBC (paras. 3.03, 3.08, 3.09), and imposition of external auditing requirements (para. 3.12) as well as prudent interest rate policies (paras. 3.13 and 3.14), sound lending practices, and financial structure and performance policies (paras. 3.07, 4.06, 4.07 and Annex 8). 2. The project was implemented faster than anticipated and the credit closed more than one year ahead of appraisal estimates (para. 1.02 and Annex 2). Supervision was limited to only two staff weeks in the field and, as IDA did not follow through with a repeater operation (para. 1.05), the last mission to visit DBC dates back to March 1987. However, DBC's reporting and auditing vere timely and satisfactory (para. 3.12) through the commitment period, allowing IDA to continue monitoring institutional developments, albeit with some delays subsequently. 3. Institution building objectives have generally been attained although unfavorable economic progress and persistent political instability may have adversely affected DBC's borrowers as well as its financial position and performance during 1988 and 1989 (paras. 4.05, 4.06 and 6.02). On the investment side, the economic and financial characteristics of subprojects financed, their ex-ante internal rates of return and estimated number of jobs generated indicate that IDA's objectives have probably been reached (paras. 5.01-5.04). Unfortunately, the paucity of available ex-Post data on a representative sample of subprojects financed and operating, does aot provide an opportunity to undertake a significant evaluation of their real economic and financial impact and viability, to support that conclusion. 4. On mac.roeconomic policy issues, relatively focused objectives set out under the project (see Annex 1) met with some tangible, though limited, results (para. 2.14). On specific financial sector issues the interest rate policy objectives, as applicable to DBC, were generally achieved but fell short as regard the commercial bank's rates (paras. 2.12 and 2.13). A broader sectoral approach encompassing monetary policies and instruments of CBC, a provision to allow DBC to recycle IDA funds (paras. 1.03, 4.06), at least one annual short field supervision of DBC after closing of the credit, might have contributed to a better design and implementation of this project. Subsequent adverse political and economic developments in Comoros (para. 2.03) throw some shadow on DBC's financial viability and ability to sustain the long-term objectives set out under the project (para. 6.05). PROJECT COMPLETION REPORT COMOROS DEVELOPMENT BANK OF COMOROS (DBC) (CREDIT 1378-COM) 1. INTRODUCTION A. Background 1.01 The Development Bank of the Comoros (DBC) was created in August 1981, to promote the country's economic development through provision of equity capital and financing for investments in a wide range of productive sectors, including manufacturing, agriculture, tourism, transport and services. The objective was to replace CREDICOM (Soci6t6 de Cr6dit pour le D6veloppement des Comores) the former development bank which was in the process of liquidation following serious financial difficulties. A study to assess the viability of a new development bank had just been carried out by the Government with the assistance of the European Investment Bank (EIB). The World Bank endorsed the positive results of that study and decided to go ahead with preparing DBC's first IDA line of credit. 1.02 The project proposal was prepared by the Government and DBC with assistance from IDA's appraisal mission of November 1982 (Appraisal Report No. 4332-COM). The IDA Credit of SDR 2.2 million (including SDR 278,000 for technical assistance [SSE promotion, staff training and consultant services]) was approved on May 31, 1983; it was signed on June 17, 1983 and became effective on December 27, 1983. Commitments and disbursements under this first IDA line of credit were faster than anticipated at appraisal. Principal factors for the swift implementation included DBC's dynamic manage- ment, timely and well performing hands-on oriented technical assistance and pent-up demand conservatively underestimated at the time of appraisal. As a result, final commitment and disbursement targets were achieved one year ahead of schedule. The final disbursement vas made on March 28, 1988 which became the de facto closing date of the Credit. 1.03 Terms and Conditions. The total SDR 1.9 million credit component was onlent by the Government to DBC at interest rates of 5 and 6%, respec- tively, and a 6% interest margin. This relatively comfortable margin was required to cover DBC's high fixed operating cost that could not be recouped over a large volume of business. The Government also supported IDA's commit- ment fee of 0.51. Repayment from DBC to Government was based on a fixed amortization schedule of 10 years (including 4 years grace) in view of the small size of IDA financed subloans. There was no provision for DBC to recycle IDA funds at the end of the grace period and prior to Government reimbursement to IDA. The technical assistance component was passed on as a grant from Government to DBC, and the Government also assumed the foreign exchange risk without a fee. Other features of the Credit included an indi- vidual free limit of US$75,000 and an aggregate free limit of US$1 million. - 2- B. Project Obiectives and IDA's Role 1.04 Main objectives of this first IDA line of credit included assistance for developing productive activities ir. the Comoros by providing financial resources and technical assistance to help establish and strengthen the then newly created development bank. As a result, institution building was a key element of the project. 1.05 Following repeated requests from DBC for an IDA follow-up project at the final stages of the commitment period, and particularly in view of the faster than anticipated disbursements, initial preparation of a multifaceted second line of credit took place. However, DBC secured a US$2 million loan (2% - 15 years) from EIB, one of its shareholders, thus foreclosing justifi- cation for the proposed operation. Latest available financial statements indicate a tight liquidity problem, and a worsening arrears situation deriving principally from deteriorating economic conditions of Comoros, and somewhat tempered by a relatively solid equity base for DBC. II. MACROECONOMIC AND SECTORAL SETTING A. Background 2.01 The Federal Islamic Republic of Comoros, an isolated Indian Ocean archipelago that became independent from France in 1975, harbors a pouv.lation of 442,000 and its GNP per capita was estimated at US$440 in 1988. Ylith an 80% rural population and a rudimentary agricultural sector, accounting for about 35% of GDP, Comoros is highly dependent on external trade (over 2:% of GDP), and external financial assistance. The staple crops are bananas, coconuts, manioc and rice, but food production does not cover local require- ments, resulting in the importation of increasing quantities of meat and rice. Severe environmental problems, including declining soil fertility due to soil erosion and population pressure on land, limit agricultural expan- sion. A 3.3% population growth rate, outstripping an estimated real GDP growth of 0.9% in 1988, shows an alarming trend. B. Recent Economic Devlopments 2.02 Despite a relatively rapid economic growth in the early 1980s (over 4% a year), achieved mainly through a high level of externally-financed investrent, the economy has experienced structural and financial problems that have worsened in the last few years. Real GDP growth slowed down to an average of 3% a year during 1983-87. In 1988, real GDP is estimated to have increased by only 0.9%, leading to further deterioration in per capita income. Agricultural and industrial growth in particular, have been unable to offset the slowdown in the construction sector, following the completion of major investments in infrastructure under the Interim Development Plan (1933-86). Export earning levels fluctuate following world market prices for Comoros' main cash crops (e.g., vanilla, cloves and ylang ylang), a situation exacerbated at times, by an overvalued currency, the Comorian franc, which is pegged to the French franc (F 1 - CF 50.0). The softening of export prices, combined with continued strong demand for imported foodstuffs, petroleum -3- products and consumer goods, hAs led to large external current account deficits which rea':hed about 27Z of GDP in 1988 (or 72 of GDP if grants are included). 2.03 Cent-al Government finances are in structural difficulty because of the weakness of the revenue base, the prevailing under-collection of taxes, the instability of exports, and the steady increase in expenditure. Although the overall budgetary deficit (excluding grants) declined from 38% of GDP in 1984 to 231 in 1988, this mainly ref leted a sharp cutback in capital expenditures in response to a fall in foreign borrowings. The treasury remains illiquid: there are frequent delays in meeting civil servants' pay- roll, and domestic and external arrears are accumulating. The situation of the public enterprises has also become a cause for concern due to lack of sound financial accounts and weak management. Government pricing policies and the public management of the import monopolies, including the use of their surpluses, have led to inefficient resource mobilization in the public sector. C. The Productive Sectors 2.04 Manufacturing and artisanal activities remain limited, accounting for less than 5% of GDP, and consist primarily of export crops processing and some import substituting factories supplying the domestic market. With the exception of two to three relatively large enterprises (by Comorian standards), processing industries consist mainly of small-scale units, dependent on wood as their primary source of energy and raw materials, thus further contributing to deforestation and soil erosion. 2.05 The promotional and financing activities of DBC, combined with the revised 1984 Investment Code, helped in the creation and expansion of many small production units (i.e., bakeries, confectioneries, ice-cream makers, coffee roasters, garages and smal. machine shops, etc.). However, the limited size and dispersion of the market over three islands remains an insurmountable obstacle necessitating a reorientation towards labor inten- sive, export-oriented industries, for which a potential exists. 2.06 The construction industry, which experienced substantial growth of 7 to 9% in the late seventies and early eighties, has slowed down with the completion of major public works, financed by foreign aid, that spurred its development. The most serious obstacle to construction industry activities resides in the paucity and limited range of locally available or produced building materials, and the high cost of imports. 2.07 Tourism activities remain modest in spite of potential for develop- ment and increase in capacity. Hotel capacity has increased from less than 100 rooms to over 300 rooms in 1989 with the opening of a new hotel complex in Galawa. However, tourist arrivals and length of stay (on average four nights) remain fluctuating leading to average room occupancy rates of around 30%. The main constraint to further tourism development stems from the remoteness of the archipelago, which limits airline links and Comoros' ability to offer competitive tour operator prices. Tourism remains therefore a low priority sector for investment. -4- D. The Financial Sector 2.08 The Banking System in the Comoros consists of the Banque Centrale des Comores (Central Bank of Comoros - CBC) which, in 1981, replaced the Institut d'Emission des Comoree (IEC), created in December 1974 to take over the currency management functions previously performed by the Banque do Madagascar et des Comores; a commercial bank, the Banque Internationale des Comores (BIC); a Development Bank, the Banque de D6veloppement des Comores (DBC), which was created ia 1981 and started operatioas in the first part of 1982, replacing the former Soci4ti de Cr6dit pour le D6veloppement des Comores (CREDICOM) liquidated the same year. 2.09 On November 23, L979, the Government signed a monetary cooperation agreement with France, whereby the Comoros became part of the Franc Zone, the Comorian franc having a fixed parity of CF 50 to the French franc. This association ensures free and unlimited convertibility of local currency, in F, and access, on a limited basis, to other hard currencies, thus facili- tating foreign trade. An Operetions Account is kept with the Public Treasury of France, through which all foreign transactions are made. Upou its creation, the CBC was vested with the power to regulate interest rates, and to determine the country's monetary and credit policies. According to the statutes of CBC and in line with the monetary cooperation agreement with France, the Deputy Director of the Bank must be a French official, Vespon- sible for monetary management. The Board has a membership of eight equally divided latween France and Comoros. 2.10 Commercial Bank. The Banque Internationale des Comores (BIC) was established in February 19-32 with a share capital of CF 300 million con- trolled by: Banque Internationale pour l'Afrique Occidentale (BIAO): 51%; Comorian State: 34%; local private shareholders: 15%.1 As of September 30, 1988, BIC had extended short-term loans totalling about CF 5.5 billions com- pared to CF 3.1 billion in 1982, while deposits increased to CF 6.1 billion. BIC remains profitable and highly liquid, thanks to conservative lending policies, focusing exclusively on short-term activities, emphasis on resource mobilization and generally good management by its majority foreign share- holder, BIAO.2 2.11 Inflation in the Comoros, as measured by the cost of living index, was well above 101 in the early 1980s. However, with the Government policies to regulate prices of certain essential goods, in particular basic food items and petroleum products imported by state enterprises, recorded inflation has become more moderate, averaging around 4% in 1985-88. 1/ Each private shareholder may not have more than 1%. B/ BIAO was liquidated amiably by Banque Nationale de Paris (BNP), its majority shareholder, on June 13, 1990, following substantial losses incurred in the last three years. Its assets, including in particular shares in BIC, are expected to be taken over by Banque Nationale de arie. BIC's operations will therefore not be affected by BIAO's liquidation as BNP will take over management responsibility. BNP is France's number one commercial bank, and a leading one world wide. -5- 2.12 Interest Rates. The Central Bank controls all interest rates by setting ceilings and preferential rates to priority sectors. UBC presently charges a preferential rediscount rate of 6% for medium-term funds and 6.5% for short-term funds, while maintaining a normal rediscount rate for other activities fixed at 8.5%. BIC, the commercial bank, is allowed to charge, on its short-term loans, rates which range from 13% for short-term financing of export crops, to 16-19% for its normal domestic trade financing and over- drafts. These high lending rates, relative to inflation, were authorized earlier by the Central Bank to grant the new commercial bank a substantial spread in its formative years. In addition such rates finance only short- term, highly profitable commercial transactions. Nevertheless these EIC rates, by discriminating between end-users and various economic activities, were distortionary and left the door open for abuses by, and hidden Subsidies to, a privileged segment of the population. These rates were not lowered subsequently as expected due to CBC's inability to utilize rediscount ceilings as a monetary policy instrument to bring about changes in rates. BIC having achieved a comfortable excess liquidity position from 1985, did not need any CBC refinancing, thus reinforcing its monopolistic position. CBC could have utilized reserve requirements to siphon off BIC excess liquidities but elected instead to let the commercial bank park its funds in remunerated deposit at the Central Bank. As the project was not designed to address monetary policy issues from an overall financial sector perspective, IDA's leverage, already nstrained by Comoros' membership in the franc zone, was even more limited to 'nfluence BIC's short-term rates. DBC's rates range from 9 to 12% for medium and long-term loans, depending on risk and the sector. 2.13 Term deposit rates vary from 6 to 6.5% p.a. and appear positive in real terms at the inflation rate that prevailed through 1988. One additional factor likely to influence deposit rates is the level of interest rates in France and other franc zone countries. Deposit rates must be set competi- tively with respect to those areas in order to encourage domestic savings mobilization and avoid their placement in French banks. It was therefore agreed that such deposit rates would also take account of that competitive- ness factor; this agreement was implemented in 1986, but not in 1988, when most franc zone rates were adjusted upward twice, while rates in Comoros remained unchanged, principally in view of the lower inflation rate. As the IDA Credit was by then closed, and prospects for a second IDA-financed opera- tion nil, leverage on Government and DBC, to influence interest rate policies, was significantly reduced. 2.14 Macroeconomic Framework. In addition to institutional interest rate issues to be reviewed later in chapter III (paras. 3.13 to 3.15), the Govern- ment's pricing policies and industrial strategy and policies were addressed in the course of this project (Sections 3.05 (a) and (b), and 3.07 of Credit Agreement). In order to correct somewhat arbitrary price control practices detrimental to investor ccnfidence, the Government agreed and implemented a new pricing policy in respect of locally manufactured goods. Thus a rela- tively liberal pricing policy is now applied, with flexible regulations governing the prices of certain products; the objective aims at avoiding excessive price increases stemming from shortages caused by chronic shipping delays. On industrial strategy, the 1980 Code, which favored largo-scale, -6- capital and import-intensive ventures, was revised in 1984 to reorient incen- tives in favor of SSE, for example, as agreed under the IDA Credit. The revised code fell short expectations, however, as it was not underpinned by coherently formulatzZ -velopment strategy and policies. Th particular, the 1984 Code did not . ss the Government's stated objective to emphasize labor-intensive, expor.-,ciented ventures; as IDA was not provided, as agreed, the opportunity to review the draft code prior to promulgation, these issues could not be addressed properly. The Bank Group's expected assistance in this respect and continued macroeconomic dialogue, already frustrated by persistent institutional weaknesses and public finance constraints, were virtually stopped by chronic political unrest and instability. It is expected to renew this assistance and dialogue following the latest favorable institutional and political developments. III. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT A. The Institution 3.01 Ownership and Board. DBC's initial share capital of CF 300 million (fully subscribed and paid-in) has remained unchanged since inception. This capital base was adequate to keep DBC well within its contractual 4:1 debt/equity ratio for the duration of the project. The debt to equity, which stood at 3.2:1, at the time of closing, had improved to a solid 1:1 ratio at end 1988. 3.02 The Board composition underwent only minor changes. The two foreign shareholders, Caisse Centrale de Coop6ration Economique (CCCE) and European Investment Bank (EIB), which control 33% of the capital, did not take an active role in formulating policies or reviewing projects; the RTB does not delegate its vote but reserves the right to attend (or be represented) at the Board meetings, and the CCCE representative from its resident office usually took a neutral stance on politically sensitive issues, including those related to project approvals. This posture led to a de facto Government- controlled and operated board, even following changes in Board memberships in 1985 and 1986. However, EIB, CCCE and IDA's agreements provided generally for final approval of loans to be refinanced by them, thus counterbalancing eventual Board biases in lending. 3.03 Management. The expatriate General Manager, seconded by CCCE to launch the institution, was replaced in July 1983, as planned, by his Comorian deputy. An adviser to the new General Manager, also seconded by CCCE, arrived in Moroni in April 1984, to replace a previous one who resigned for health reasons after four months. The new Comorian General Manager lacked experience in managing a development institution, but compensated largely by his willingness to learn and rely on his senior staff. In October 1984, it was agreed that the General Manager's contract be financed through IDA, for a one-year extension; satisfactory performar-e led IDA to extend its financing through 1987. As a result, DBC's management benefitted substan- tially from the provision of technical assistance and gained considerable experience over the past several years, gradually assuming increased duties. At the time of closing, management was strong and well performing both at the General Manager's level as well as below. -7- 3.04 Organization. DBC's organization has experienced some changes during project implementation. In 1983, the Industrial Promotion Unit, staffed by an expatriate and a Comorian, was established to identify and prepare bankable projects for the DBC. In 1985, DBC's organizational struc- ture, which was unnecessarily complicated and partitioned, was simplified and consolidated into two main departments in lieu of four. The new department chiefs are experienced nationals whose performance has been satisfactory. 3.05 During 1985, DBC opened a branch in Anjouan, the second largest island of Comoros, which accounts for almost 30% of DBC's operations. The same year, DBC introduced the use of micro computers for its lending and accounting operations, with satisfactory results, including, inter alia, problem-free financial accounts, up-to-date operational data, arrears and loan recovery situation, etc. 3.06 Staffing and Training. DBC at the time of appraisal had a total staff of ten persons; at the time of closing it had a staff of 15, of whom four were professionals. Including expatriate advisers, DBC also depended heavily on its dedicated and capable General Manager and its Chief Accountant. These two managers benefited from overseas training as well from an extension of the advisers' contracts until the end of 1986. As a result, the staffing situation was improved and consolidated; the only staff increases stemmed from the aforementioned new Anjouan branch. 3.07 Policies and Procedures. DBC's investment and financial policies, developed with IDA's assistance and reflected in its policy statement, are adequate and remained without substantial changes over the past years. Financing of projects was limited to 80% of total project cost; the maximum debt to equity ratio remains fixed at 4:1, while explicit project selection criteria govern decision making. A detailed operational manual has finally been conceived and constitutes a valuable working reference for staff and management. 3.08 Technical Assistance. DBC has benefitted from valuable advice provided by two high quality experts over the past years. The adviser to the General Manager stayed on until June 1988 under EIB/CCCE funding but the promotion expert left in late 1986 due to lack of funding. A young French volunteer also assisted in the computer activities until November 1988. 3.09 Proiect Promotion and Appraisal. The Small Scale Enterprise (SSE) Technical Assistance and Promotion Unit of DBC played a pivotal role in 1984 and 1985 with the UNDP and IDA financed expert providing the lead in project identification, promotion and appraisal. Perceived weaknesses in economic and financial knowledge of this expert were counterbalanced by the other expatriate adviser's cautious approach and know-how in those fields. An apparent conflict between these advisors, exacerbated by perceived political pressures, led to the promotion of some dubious projects. Close knit com- munity ties and concentration of wealth in the hands of four leadtng family groups, made it difficult for the promotion expert to perform satisfactorily and free of pressure. With the end of UNDP and IDA funding, this expert's contract was not renewed and the Promotion Unit remained virtually unstaffed. A young French volunteer with engineering background has been providing some interim assistance, with limited results. - 8 - 3.10 DBC's management formulated detailed project appraisal guidelines, including economic rate of return calculations. By 1986, appraisal work was being successfully carried out in the credit department by a well trained staff. In order to further improve the appraisal process, as well as quality decision-making, DBC established a Loan Committee in 1986, to review all financing proposals before their submission to the Board. 3.11 Supervision. During the period of disbursement, DBC closely super- vised project implementation to ensure adequate procurement and effective use of goods purchased and installed. For this service, DBC charged fees of CF 10,000 to CF 40,000 depending on the size of the subloan. However, DBC's supervision of operational projects remains very limited due to cost and staff constraints. DBC's management, sensitized to the importance of adequate supervision and follow-up, planned to, partially, remedy this short- coming by subcontracting this activity to a State financed agricultural extension service (CADER/CEFADER). The latter would follow-up a substantial number of DBC's agricultural loans (150 out of 200, mortgaged loans excluded) for a fee. The remaining loan portfolio would be subjected to special super- vision at least once a year, with detailed supervision reports to be included in a project file. This procedure has now been institutionalized, but remains to be improved judging from the limited number and poor quality of the sample of supervision reports received by IDA. Procurement and disburse- ment procedures had been adequate, thanks largely to the expatriate advisers, whose advice on equipment selection was instrumental in substantial cost savings by entrepreneurs. 3.12 Reporting and Audit. The first audit of DBC's accounts for the period ending December 31, 1982 was conducted by the Chazal du Nee and Co., a Mauritian firm that does audits for other bank projects. The reports followed the long form normally required by IDA for Development Finance Company (DFC) projects only in 1984 and 1987, but have never been qualified. Generally, auditing practices have been timely since 1985 although the 1988 audit has not been received. Since 1984, DBC's reporting to IDA has been regular and punctual, and improved substantially following computerization. In general, DBC's records are kept meticulously. Since computerization of the financial information system, DBC's internal and external reporting has remained reliable. B. Main Institutional Issues 3.13 Interest Rates. As agreed with IDA (Project Agreement, Section 2.11 (a)), DBC's interest rate charged under the Credit to subborrowers (11% at appraisal) was to be reviewed annually. It was proposed to increase that rate by two percentage points to 13%, and to raise the housing mortgage rate to at least 15% starting October 1, 1985. IDA argued that the majority of mortgage financing which cost only 11% p.a. chiefly benefited an affluent clientele of merchants and high level Government officials, who should not be thus subsidized. With current inflation rates estimated at that time to be 10-12% p.a., the proposed increases entailed positive rates, thus limiting the erosion of DBC's equity in real terms, and eliminating indirect subsidies to private investors. DBC also needed to boost its earnings in order to better cover its administrative costs, improve its margin of profit and strengthen its equity base. -9- 3.14 DBC and the Government finally agreed, in 1986, to a rate increase from 11% to 12%, for all loans except housing mortgaged loans, i.e., below the 13% minimum rate suggested by the Bank. This increase to 12% was accepted as the IMF and the Central Bank's estimates, at that time, for the annual inflation was scaled down to less than 10%, thus making DBC's rates marginally positive in real terms; DBC's rate for mortgage housing loans would range from 11% for low cost social housing, to 12-15% for various cate- gories of residential housing. By 1987, rates for housing loans increased slightly to 15% depending on the loan amounts, while the inflation ra.e further declined to an annual rate of 8%, thus making all interest rates positive in real terms. As stated earlier (para. 2.11), the actual average inflation rate was around 4% in 1985-88, and the effective real interest rates were largely positive. 3.15 Another interest rate issue arose in the context of a CCCE line of credit to DBC, targeted to agriculture and housing, and amounting to F 5 mil- lion. DBC's refinancing and lending rates were fixed, respectively, at 5% and 8% p.a. Such rates meant a 3% margin that would be insufficient to cover administrative expenses and allow for adequate provisions against risks of loss on riskier small agricultural loans. Higher interest margins generated from IDA and DBC's own resources would therefore cross-subsidize CCCE- financed operations. The Government and DBC were unsuccessfully asked to reconsider this matter. The CCCE loan was not fully utilized at the time of closing, except for one sizable project financed at 11% p.a. -- an adequate rate. No information is available on subsequent CCCE financing of sub- projects. IV. OPERATIONAL AND FINANCIAL PERFORMANCE A. ODerations 4.01 During the commitment and disbursement period of the Credit, (1982-87), DBC's approvals (detailed in Annex 3) were all for loans except for one equity participation to the Gazcom project in 1984, of CF 7.4 million. Annual lending operations were slightly below appraisal estimates, although on target cumulatively during 1983-86. Total approvals in the productive sector amounted to CF 1.48 billion for 420 operations. IDA approved SDR 2,003,819 (or at SDR 1 - CF 400, CF 816,515,600) for 102 subprojects, i.e., approximately 55% of DBC's operations. 4.02 DBC's operations reflect its multisectoral charactir and remained concentrated in industry, agriculture and houuing (Annex 4). For the first full year of operation, only seven medium and long-term approvals out of 31 had been in industry and agro-industry. They included two wood workshops, a liquified oxygen and acetylene plant, and a dry-cleaning plant. Housing finance, a major activity of DBC, is limited by DBC's statutes to not more than 30% of its total loan approvals in any given year, and is not eligible for IDA financing. DBC also finances small agricultural projects (i.e., vanilla beans, vegetables, chickens, small fishing boats). Sixty-three percent of total loans granted by DBC in 1982-1983 were for amounts not exceeding CF I million (US$3,300 at current rates). Due to their high administrative costs, it was agreed that DBC would decrease approvals of - 10 - small loans; the latter started decreasing gradually from 1984 onwards, leading to a better balanced portfolio in terms of size and sector distribution. 4.03 Reflecting DBC's increasing economic impact, 1985 lending operations in industry and transport, though still fewer in number, accounted for a larger share of portfolio outstanding (58%) followed by housing finance (27%). In 1986, approvals for the industry/transport sector declined slightly but continued to provide the largest share of operational volume (46%), followed by housing finance (24%). 4.04 In agriculture, (i.e., vanilla and spices), artisans and fisheries account for a large number of relatively small and thus administratively costly loan operations. Most of these credits fall below CF 2 million cor- responding to the approval limit of the general manager, who as a result, approves about 60% of them. Computerization of accounts contributed in lowering the administrative cost of small agricultural loans. B. Financial Performance 4.05 Quality of Portfolio. Annex 5 details the evolution of DBC's port- folio. On the basis of the most recent audit report available on 1987 accounts, total portfolio affected by arrears jumped in absolute terms from CF 148.2 million in 1984 to CF 330.7 million in 1987, correlatively with loan portfolio growth; in relative terms, there was a decline as portfolio affected by arrears decreased from 30.6% in 1984 to 25% in 1987. The port- folio affected by arrears of over three months was smaller but rose faster during the same period, from CF 35.7 million to CF 138.9, i.e., 7.4% and 10.6% of total portfolio outstanding respectively. This arrears situation stems largely from substantial, and increasingly frequent, delays in Govern- ment salary payments to civil servants. The latter account for a large number of DBC's borrowers, and their declining purchasing power also affects commercial borrowers. Provisions against risks of losses have been increased from CF 24.3 million in 1984 to CF 63.1 million in 1987, covering 68% anA 45.4% respectively of portfolio affected by arrears of over three months. The level of arrears has worsened in 1988 and 1989, and although provisions have been doubled to CF 127 million in September 1989, the quality of port- folio appears to have substantially eroded, based on 1988 unaudited and 1989 provisional financial statements. This deterioration stems largely from worsening economic and public finance conditions in Comoros exacerbated by chronic political instability. This being said, and as analyzed below, the financial structure of DBC apparently remains solid and its equity should allow it to face up to increased provisioning requirements. 4.06 Financial Position and Performance. DBC's projected and actual balance sheets and income statements are detailed in Annexes 6 and 2 respec- tively. Over the period of project implementation, estimates have generally been on target, if not above. DBC's long-term debt to equity remained at a conservative 1:1 ratio at end 1988 agai,ist an agreed 4:1 limit. As of September 30, 1989, the ratio stood at 1.9M1. Liquidity which has generally been adequate, is now tight, DBC having drawn down most of its available foreign lines of credit at September 1989, making it highly dependant on limited Central Bank facilities. Under terms of the IDA Credit and Project . - 11 - Agreements, DBC has nonetheless met all of its financial obligations to Government, meeting interest and principal payments in a timely fashion, the June 1990 principal payment included. DBC has been relatively successful in loan collection and in mobilizing additional foreign exchange funds from CCCE (F 250 million) and EIB (ECU 2 million), and has steadily reinforced its equity base (+31% in 1983-88) with a plough back of all profits, while main- taining a conservative provisions policy. The institution has reached a turning point, however, and probably now requires additional term resources both in loans and equity. The arrears situation, in view of the difficult economic situation in Comoros, may have substantially worsened to the point of requiring significant write-offs, to be offset by capital increases to maintain an adequate equity base. 4.07 The profitability picture looks favorable compared to appraisal estimates, and based on performance indicators detailed in Annex 8, DBC enjoyed a comfortable spread on its lending operations, ranging from a high of 12% in 1984, when it became fully operational, to 7.2% in 1988 following a substantial growth of its portfolio, which almost quadrupled during that period. The decreasing spread was offset by tightening administrative expenses which decreased from a very high 8% in 1984 to 3.7% of average assets at end 1988, thus allowing returns of over 1% on average assets and 4.8% of equity by end 1988. The Central Bank imposed ceiling on interest rates charged by DBC has not provided sufficient leverage for DBC to generate higher returns on investments, while maintaining a conservative provisions policy averaging 5% of loan portfolio in the period under review. V. ALLOCATION OF CREDIT 5.01 The IDA Credit financed a total of 102 subprojects (detailed in Annex 9). Economic and financial characteristics of these subprojects are summarized in Annexes 10 and 11 respectively. Si of the eight subprojects financed over the free limit are located in Grande-Comore, and two are in Anjouan; they are all new projects. The six subprojects in Grande-Comore consist of the following operations; (i) establishment of a small chemistry factory near Moroni to produce liquified oxygen for medical use, and acetylene for industrial purposes; the projected FRR is the lowest of all 8 subprojects at 11.46%; (ii) construction of an auto-mechanic garage for repairs, maintenance, and painting of automobiles; this subproject is esti- mated to yield a FRR of 42%; (iii) acquisition of a new Piper Saratoga air- plane in order to improve the operating efficiency and profitability of Comoraviation, an air taxi service; this investment is expected to increase operating profits by 33% and to generate an estimated FRR of 37%; (iv) estab- lishment of a floor tile production unit located on a site atop its required raw material; the estimated FRR is 21%; (v) setting up four import substitu- tion activities which will nhare joint production facilities to reduce over- head cost; the four projects include production of various types of candy, liquid bleach, kitchen chairs, and cardboard boxes; after an estimated small lose the first year, the expected financial rates of return are: 19.5%, 27%, 611, and 24% respectively; (vi) the last subproject consists of a plant with an annual production capacity of 200 tons of soap for the domestic market, 200 tons of natural copra, and 200 tons of copra oil for export to Europe; the estimated FRR of this project is 25%. - 1q - 5.02 The other two projects are localized in Anjouan, and consist of: (i) production of foam mattresses and cushions for furniture with an esti- mated FRR is 26%; and (ii) the manufacturing of school supplies, mostly note- books, in a printing plant, with an expected FRR of 352. 5.03 Total IDA financing of the eight larger projects amounted to SDR 939,670, ranging from SDR 93,000 for the Comoraviation air taxi service, to SDR 191,000 for the Gazcom chemical factory which has the lowest FRR of the eight subprojects. The average subloan for the operations over the free limit ("A") is SDR 117,478.75. These eight large subprojects are estimated to have created some 148 jobs. 5.04 Total IDA financing of 94 subprojects below the free limit is SDR 1,044,749. The average subloan is SDR 11,114.35. Data on the number of jobs generated through subprojects below the free limit ("B") were inade- quate. On the basis of data available on a sample of 22 subproje:ts, it is estimated that 208 jobs were created. VI. CONCLUSIONS AND LESSONS LEARNED 6.01 At the time of preparation and appraisal, Comoros' banking system was undergoing a crisis with the imminent liquidation of the then unique development bank, while the sole commercial bank that operated theretofore had just been closed and replaced by a new, privately-controlled bank. A feasibility study, financed by EIB, having positively concluded to the necessity and viability of a new development bank in the face of existing investment demand, led the Association to the DBC project proposal. In addition to providing needed technical and financial assistance for developing productive activities, the project also aimed at a major capacity building endeavor to ensure independent and proper economic and financial screening of investment proposals, as well as better management, so as to avoid the fate of the previous development institution. Comoros' small size and the probability that most, if not all, investment proposals would be screened and financed through DBC, did not justify a sectoral approaczh, par- ticularly in view of the fact that the only other financial intermediary was fully controlled and managed by an experienced, private international banking group. 6.02 The objective of creating an efficient and viable financial inter- mediary that operated along strictly established bank lending policies and criteria, was by and large achieved. The absence of private domesti. share- holders, the relatively tolerant attitude of EIB and CCCE, the sole foreign shareholders, and the ensuing dominant role of Government board members, may have, at times, biased investment dec, ion making, though for EIB, CCCE and IDA-financed operations, no cases of interference or biased lending have been documented, these institutions having ensured good appraisal and lending procedures for their financing. Furthermore, the board composition was largely compensated by the positive impact of foreign technical advisors, the judicious selection of good quality local counterpart managers and staff who have performed remarkably well and maintained a degree of independence from the board of directors. IDA's supervision, though limited in the field, has - 13 - also had a positive impact on Government and DBC. The subsequent success of DBC in securing additional financing from EIB and CCCE attests to the satis- factory operating policies maintained by its management, and to its credit- worthiness. 6.03 As regard funding of financially and economically viable projects, on the basis of ex ante rates of return estimates, it can be said that IDA's objectives were achieved. DBC financing was instrumental in the creation of a whole new set of private small-scale enterprises, providing heretofore lacking and needed economic goods and services to consumers. Whether such goods and services are price competitive, and the enterprises providing them financially viable, cannot be ascertained due to lack of reliable and up-to- date ex post operating and financial data on subprojects financed. However, a significant number of new jobs are estimated to have been generated. In fact, the speed with which the Credit was committed and disbursed relative to appraisal estimates, attests to the success of subproject implementation. Today, in terms of capacity building in the context of Comoros, DBC repre- sents a crucial link that should be preserved and strengthened. In this regard, DBC, which is short on resources, might have benefitted from a clause allowing it to recycle IDA funds since the first instalment to Government was due by December 1988. 6.04 On macroeconomic policy aspects, the Association's impact, though somewhat limited in scope due to unfavorable prevailing political climates, was nonetheless real. IDA contributed to a dampening of pervasive price control practices and to a revision, albeit short of stated objectives, of incentives in favor of more economically desirable ventures under the investment code. On financial sector policies, the membership of Comoros in the franc zone and the high liquidity of the commercial bank, BIC, substan- tially limited IDA's leverage, especially as regards the fixation of foreign exchange and short-term rates. A broader sectoral approach might have addressed high real short-term rates stemming from the monopolistic position of the sole commercial bank. Nevertheless, IDA was successful in contributing to more acceptable interest policies throughout the commitment period of the Credit, thus ensuring positive real rates on deposits, even beyond 1988. 6.05 Sustainability. The absence of a repeater multifaceted IDA opera- tion may have significantly limited and slowed down IDA's potential impact. Moreover, IDA's field supervision was limited to only two man-weeks, with the last mission to visit DBC dating back to March 1987, i.e., three years ago. Since closing of the Credit in December 1988, no mission has visited DBC. Although DBC's periodic reporting remained adequate through September 1989, needed ex post data and information on subproject performance have been lacking. Furthermore, DBC was expected to run out of resources by end 1989. As there is no additional information on development in the resource situa- tion, it is difficult to ascertain whether the institution is in a position to maintain financing of operations. That being said, it should be noted that DBC has met all of its payment obligations to Government under the IDA Credit and Project Agreements, an indication that the liquidity problem may not be as severe as it appears. The worsening economic situation that preceded, and which has been exacerbated by the recent tragic political events, may have further contributed to the deterioration of the financial - 14 - position and performance of subprojects financed under the IDA credit, as well as those financed from other sources of fund. The worsening situation of these borrowers may affect negatively DBC's financial situation and declining quality of portfolio. Under these circumstances, sustainability is questionable at this stage. The opportunity provided the borrower to comment may shed some light on DBC's financial status and prospects. -15 - COMOROS A 1 Page 1 of 2 DEVELOPWgNT BANK OF COMOROS (DBC)I PROJECT COMPLETION REPORT CREDIT 1378 - COM Compliance with Conditions of Credit and Prolect Agareemnt I. CREDIT AGREEMENT Sections Government shall complete, 3.05 (a) no later than December 31, 1983, a review of the incentives it offers to investment enterprises and afford IDA the opportunity to comment on the IDA was not provided the recommendations resulting opportunity to comment on from such review. recommendations. However, a new investment code, which Government should take is now promulgated, was 3.05 (b) action, by May 31, 1984, as reviewed by IDA and found shall be necessary to generally adequate compared introduce additional to the previous code. investment incentives and modify existing investment incentives in light of the review referred to above in para. (a). 3.07 Government shall ro later In compliance. than May 31, 1984, formulate, in consultation with IDA, a pricing policy in respect of locally produced goods and implement this policy promptly. The objective is to have manufacturing enterprises free to set their prices. 2.04 (b) Production of information, Partial compliances ex post data, and other relevant data on operating subpro- statistics on subprojects jects are insufficient and and DBC performance under cover a very lnited sample. the project, in support of a project completion report to be prepared by DBC within six months of closing date. -16 - ANNEX 1 Page 2 of 2 2.07 (a) Compulsory periodic In full compliance. and (b) reporting. 2.11 (a) Interest rate of 11 percent In full compliance. to be charged on IDA financed subloans. 2.11 (b) Consultation on interest Generally in compliance. rates with IDA. 2.12 Maintenance of a technical In full compliance. and 2.13 assistance and promotion unit for SSE, using qualified consultants hired according to World Bank criteria and guidelines. 3.02 Auditing requiremeats. Generally in compliance as regard financial stat-ments, although only two long form audits were undertaken in 1984 and 1987, the other years being on a short form basis. Audit reports do not mention anywhere the situa- tion of statements of exUenditures (SO which may not have been utilized in support of disbursement). 3.03 Debtlequity limit of 4:1. In full compliance. - 17 - ANNEX 2 PROJECT COMPLETION REPORT CO0M08 DEVEPNT BAK CREDIT 1378 - CCH ESTIMATED AND ACTUAL DISBURSEMENT (CUMULATIVE SDR 1000) ESTIPATED ACTUAL FY 84 June 30 135.0 FT 85 December 31 320.0 550.0 June 30 600.0 600.0 FY86 December 31 970.0 1,700.0 June 30 1,290.0 2,100.0 FT 87 December 31 1,610.0 2,200.0 FY88 2,000.0 2,200.0 FY89 2,200.0 2,200.0 J目b i- ：侮一汗羹蠶 《劇勻奮C》 個開紅甲鱸亂總伯且）實O編必O作不調魷州 馴口〕一口遞C,11個發0 坤向口斗口織口蒲劉口口馴劉口口j 且網織細響司！Ln邊旬〕1讓實Ob口 i- ；〕購〕可一鄙馴啡 細啊口開鴉留騙頗勵電刃才 9綢口廈司州闢留開寫袖邊協，O頂肉口」讓為 馴口〕，個遞戲11個總口 婦劇口幼口織口啊興鉤劊劉口口） 1緘闖刁開申顱！U馴闢pt讓實。騙d P~CT CO~Tim REPORT Cg~ DEVBA~ mm CRWIT 1879 - CON Lom POR^10 ~tom (A~ - CF MILLIGG) -- - --------- - ------------- - ------------------------------ ~ ------ IM 11964 JIM JIM 11«7 JIMstil~*21 --- - ------------ - -------- --------------------------------- J J Total ø~ Lo» pørtfølle J Gulm~ log 229.4 l 496.0 M.o 1,049.9 1 w».Ø 1,421.6 1,6n.o ~ 199) (04.4) (173.*) (296.9) (267.6) i=.7)1 (813.0) a.&. Total AM«% *f Prøvleimm s* 20.1 24.8 0.0 61.3 83.1 80.0 127.0 M~ r øf ~ In Portføllø 184 816 401 460 474 J sø 0~ 199) (61) (121) (166) (in) (2") Me) J Tøtel A~ t fi.ø. 10.2 21.2 20.4 69.7 64.6 122.0 4.9 84.: » 2.1 2.6 2.0 1. 8.2 9.0 Portfolig Affo~ by J J A~re " S øf T~l J out~ lag Pør«*I l* n.*. U3m ".D. Prowlslon as % øf portf*44 Aff«fmd by Lo» col ~~ J » 6 AM~ 0" 91.00% 94.Om 97.0091 97.005 96.0051 J ------------ - --- - ------- --------- U~tted vi *2: Prøv#--1«øl 1«$f& < DØC ø» Iffimrø~ for lo~ la» ~ CF I mi I l 1« 一審 J馴口邊C,C口曦甩肥下，口闖鬨日閑啊才 C自個悶論劍瀾他個陶怔網軍細騙戲 《閑沁It自•神一《口馴 禹C實U他州閱）口馴O廳CtC。細魄向膩e馴唱汪15 •－--．一爭－--..-．一華中－－一■一。•一•，一畸一•－-－一件騰－-－一騙一申一禎•一•。－一•。．一細－一總一辱目•一•．-－一個•申－---．一。一中－.-－一。－一。。•一。。．---－一•．禎．，一”一‘-－一唱－-.------－一‘－一神－一”■，－一‘•－--－一‘一““中一‘．一‘•－．一牌－．一網一”-.&------－一。。一‘一。－-－一。■戶 自調一調粽鵠霹＿〕＿劇 •t勵個系．•d亂令•d 哺I》 州甚 廈個卜 Ol Hhl 卜彥遺 1N ■騙 ■O 必I 擊· 戶，彎戶哺頃《t. &．載＿＿壯＿目噩庫瞋圖 州 N當U口為獸寫閑魚口•．，『個細口向，綱魷開 •劇口）一馴：,al個口0 ’開口幼口騙口啊州開個劉口口， 豪開N.I口馴關略幼甲個細 月騙』闔譚《細諍U口11細開日團網萬 &C口口開喝劇〕日j向口矚魚歸網 口騙勵啊騙馴陽。C口開 州訪U魄結0啊勵」膩tI勵。膩細視魷網劍開瀾屆鳥 勵 蒙龜雊韋一一到仔 ·”訪 ！入 l騙 lO 卜｀l 援N 閣醒煙 馴r 、匡＿＿〕＿＿蘊＿_!＿萬叩一！可叮頭引 個當盧健馴刁tv媽發中j仰口口L寫間個細0仰頂州幻階 馴口）一朧，,11唱口口 鰓綢個月開劉劇口口勵閱奮劉口口j ，州M寫U閱llU鳥參也〕t讓實0瞌自 PRØJW COWLMOK REj V Cm^ 0~w~ mm cnælv 1378 - cm F»~IAL P~~ INDKATOM ESTY^VED AND ACTUAL --------------------------------------------------------------------------------------------------------------------------------------------- l l~ l tg" l 1%4 l Ms l MG 1 1981 1 tom_41 ---------------------------------- - ----------------- ---------------------------------------------------------------------------------- --- i AmIAL JE"Imræl A~ lairtømlæl AcnmL JESTIMTæl ACTUAL JESYDMIEDI ACTUAL l ACTUAL l ACTUK ------------------------------ --------------------------------------------------------------------------------- cw~ L~/ AV*raff Toto# A~ta 16.40 10.00 6.30 11.10 7.æ 10.20 9.00 10.10 9.40 9.30 6.10 mæ F~ial £op~/ i ~row Total &4. to 9.60 4.00 6.00 4.70 8.80 4.30 4.60 4.30 3.60 3.70 Flo~lol "p*~/ Avoraw low moet* 0.09 0.06 0.80 2.00 1.9D 2.70 2.20 2.30 2.30 Avore" Total A~ta .1.40 1.30 1.30 3.70 1.40 2.30 1.20 1.00 1.10 Net I~i Avor~ awi t, *.M 1.60 9.60 2.80 4.80 4.w 4.20 4.10 4.00 usørøes oad cmæjegion/ Ave~ L~ r~#*tio *.W at.70 82.00 11.30 12.80 10.90 12.90 11.10 12.00 11.40 10.80 ch*rom 9.00 &.og 9.00 5.00 4.80 5.00 5.20 5.00 6.10 Tør* Døbt,/ wet# 0.40 9.40 0.90 1.00 1.30 1.50 1.1» 1.00 prowieiamø/ L~ Porkfolig 10.00 2.50 9.00 2.20 s." 2.10 4.80 2.10 4.90 4.00 5.63 ------------------------------- ............ ------------------------------------------------------------------------------------------------- QQ tb CMI 0 ---------------------------------------------------------------------------------------------------------------- 5 ' 040 U3.~ 501 OUt 81 Uit ~ P!l4IpOd U et :t e~ &' °i Bal# O6 lE P~eeas 441-AeY 9't ~ ~ §a Wal Wat ~°i dm ' t o%* Me aav s p 5 OSUUUV ,îv, evsî eteeed= isteeu ! d ------------------------------ --------- --------- -------- I*0 SP t 'iPO t 'EPO6* 1 'El t'EPt o$ßades 0a -------------------------------------- ----------------------------- (sdrin2 - 1WIM) 04lvaiG l M Del «L sm w 6-tit s'st e-ott Sa t •st i·71 seemet assi 9• ~as es i set aula eot SWJ~ (So~NU1^ &-1U3W) uI U Ini l ...... .....I .. .. . i ~~~ ~e MIIUNHUNHURU : :c~1D ____ ____ ____ ____ ___ ____ ____ _-- ko .... g. .b ... ...... ' ―트 꺽 til i ti, e t -liv ................ ............ . -------------- MIDJECT Ca~loET ivTEPOT I1 1379 - cmt ;OIIC tRCTERISTICS OF S~tETS FIN~W C00 RWII 137 - COm --- - .------ .- --- -------------- ---------------- ----------------------------------------- ------------ -- - --------/--P ---F---- --- -- -- -- -- -- --- -- -- -- -- -- --- -- -- -- -- -- -- -- 1 ~tes/ ~ lywgs/ -- - S-- -. C-ca-~tc må -a c~ toact . im l LOCA FIMIA ~v EClNI:C C CIF ROJECT MOJECi COSI S l SEEMI l LmAftem PARTICPATIm O5 ATED 5 tIOlT COSI TOfAL -----o----------- -------------------------------------------------------------------------------------- At OOMCAL M C E 0 al NIt NtIt 9 10 1300 «S -45 .INIC AMD A2 MEMICAL 1 00 13 NIL. NI 34 kl 37 52 55 479 mimI AD T WMPM 2 mIa. NIL 35.24 3 76 305 60 tMICM 4 R11n AitJI I00 18 NI~. MIL 26.11 29 72 1595 13 AS P * 100 2 NtIL M&L 22.Ml 42 35 418 301 m maAU CEfic AN Co1TIGsf G~ A C OD 1 10 KIL 21.00 21 så 165 45 a a c r Ay 2 32 NIL 10 2.1e 300 9 225 135 &mim~IS Ag • 100 a1 48 b 2r.64 255 101 AL M1 at#IN o SOMICE Ca~ COMNE 100 L IBt Mt 20.86 MIL 3^ "D~ amna CAFE a2 MDTUSS MUn 100 10 *D NIL 0.00 NIB 0L U ~ OrAMMAf 11 OMNICAL CpI~S CS 100 a IB. NI. 18.13 NI 3 30 O47 etgE CSUle 100 6 NIL it. 21.6? NIt 35 225 9~ BNO FOGD nm~n 100 NIL NIkt 24.16 WtlL 41 175 k^ lo^ wo FN DJ CfhtE 100 a MIL NIL. 24.81 NI 95 9Bl W.APLt~; wahU c010E 40 12 MIt uS 26.8 NL 2001 ISs anIE 4 = NIB UNIE C 1UN 50, 10 NIL NIB. 16.4 NL am f g c Cm A W P Cm 3log0 25 M IAP 20 8.O 3IL5 04 9 0* &I 94 W~UN Ca00 1 20 NIB. 31.70 NIB an5 au5 e~ aA I Kol m FOGD Anm~ 100 25 MIL. Nt. 14.10 KIe 11X1 104 T 47 CoffiETl lm G11~ C1 100 10 20 WIL. 12.00 NIL. t1 15 962 fleo f= cM~i CNE 10 8 Iot NIKt 37.3 NIB. att at MNMUR nu8 Nd aM CIBU0~ 100 10 0 #it 7430 Nit 12M t0m ~ ar0 O1 D 0~ CaE 50 8 70 5 48.29 NIL du 45 av~ öl Am asuNs 500 12 MIL NIL 31.79 Nit 34 24 h14~ ~Lq 9= FOGD a04,m0MN 100' 4 NIL NIL 483 MIL 495 21M 9 04 EL.l~geCs CK~sm C~I t00o, 6 Mt Wtl W .m MIt 24 9 Ne w~ ar5 Tamd~0 0~ Co~UE 1001 I NIL. MIL 14.105 MIL 4 DD e ID0 1 MIL 0i 18.301 MIL 24t 14% f AFFA~E bt AWICLTIMI MIAMM 100 t WLt MIL 32.50 MIL 3 2m8 --------------------- ------------------------------------------------------------------- --------- ------ ..... 0 -31- ANNEX 11 Ia set - 9 •î •! a telte seasas asåggggggggao*gg$ - lø§ 蓄馴口』蓄寶C口闖門產才叩閱閱日權網， C口他開喝個顯匡劍嗡日C由觔劍 口開勵瀾，自馴陰一《口閱 馴潤口閑C口心闕自訪細開論奮肱0．細口們叩』日〕‘網O盲FI論州口叩戲加自 ：崗曇轟匯 &-.．•．.&.-．■－--.－一‘--.---------------－一。中－----.----－一。－-----－一。－－一。。，---－一。－-- l-1.,-l～。：二―一＿．一，t&,g 呈一一•二I‘二訌亡一仕一：，一I州胞戶‘，閑j個，o’飽一’I 二們闖口頃才露系低fl胎觔膩I儿也戲自目馴化日。i會必j細面i昌－必舟二“,I ―刻訓‘詞翁―廈’―妒 •一。－.－一，-－一侮，一華－--－一。。－.．一。一。一‘,-．一‘•．斗一。－-－一。－-－一。－一。－----．一。。，一h－一。． } PMJECT CØ~10N REPORT Cg~ ^W~ 8" CREDIT 1378 - cm F~l& CNNWTMISTICS ØF SUOPROJW% NDT F»WØ» W~ CREDIT 1376 - COM ------------------------------------------------------------------------------------------------------- SUOPROJECM op ---- C« DISBURSM l "e. 1FIM DØ l ow F. i. AM~ l l l --------------------- -- ------ ------- ----- - ------------ co"Dm 6576 C.C.C.E 29/12/M 28/06187 31.000.000 0 51.000,000 E.O.T. 9 E.l. 30m- /ff 29/10/67 M, 000 0 125 ow.oW I~ m NOK~ ALLAWI 9:6. 1. 30/06/" 27/11/8 12 009:000 0 12:000.000 ØGULA~ IE SMIM ~Um a~ øfl 90/ff/el 27/11/67 12:000,000 0 12 000 000 AMLIM ~ ~ ALI 6~ O:E 1: 30/M/67 25/10/87 il omlom 0 11:000:000 AODEF4E~ A~ 67% 0.£. l. 09/11/87 21m/a to:No.ooo 1 0 to R~ 000 --- - -------- - ----------------------- ---- --------- TørÅL i i l 2211molom 0 221,5W,000 ------------------------ ------------- ~Wat by %rGion Fift~91 PROMJECT COLETION REPMT alEDIT 1478 - CON FNCIAL ORACTISTIC OF SPROiECTS NOT FINMC T C IT 1378 - C l DiSDEN U CUST PROFIT N.PROFIT/ I m.COST N« ANoPRD ~ECTfø. ----. --------- - i------ - -----.---.--- -- IESTNAT ~L ACI i ESTATæ i AUAL ESTDATED I ACUAL CaOT. 6576 73.587.50 73.587.50 (204.500.00) N.A. -271.901 N.A. E.O.T. Ø48 208738.00 208,73=.00 144,400.00 N.A. 69.10 A. IMAIN Åkm 48 42,706.00 42,786.00 G.0.00 NA. 18.481 N.A. OMAA~EE SMDWW~ 664 17,.267.00 17.247.00 u.00 N.A. S.O2M N.A. AT IM AL 644 15.1907.00 18.907.00 1.642.00 N.A. 10.32 .A. Ame AID 6709 18,260.00 18.250.00 4,076.00 NA. 26.73 NA. --------------------------- ~ ~~ ~ ~ ~ ~ ~ ~ ~ -- - - - - - - - - - -- - - - - - - - - - -- - - - - - - - - - - - 35 - Attachment , Page 1 of 2 COMMENTS RECEIVED FROM DBC (Translation of Original Incoming Letter) Moroni, August 31, 1990 Development Bank of the Comoros P.O. Box 298 Moroni, Comoros Office of the General Manager Mr. Joseph B. Buky No. 90-5631BDC Acting Chief, Policy SAIFM Based Leading, Industry, Public Utilities and Urban Sector, Division Operations Evaluation Department, World Bank Washington, DC Subject: Project Completion Report of Credit 1378-COM Refs Your Report dated August 2, 1990 Dear Sir, In reference to the project completion report dated August 2, 1990, we would like to inform you that we do not have any particular observation of substance, except for a precision to be made in the chapter on the Conclusions and Lessons Learned. It is mentioned in paragraph 6.05 of that concluding chapter that DBC was late in its payments to Government of installments due from the IDA credit, following the end of the grace period. In regard to the above, I have the honor to inform you that, during the grace period, BDC has paid to Comorian Government, the following ircerest installments for the periods: August 6, 1984 to December 12, 1986 CF 50,112,033 January 1, 1987 to June 30, 1987 CF 19,639,022 July 1, 1987 to lecember 31, 1987 CF 20,986,155 January 1, 1988 to June 30, 1988 CF 20,318,879 July 1, 1988 to December 31, 1988 CF 17,213,617 January 1, 1989 to June 30, 1989 CF 17,167,692 July 7, 1989 to December 31, 1990 CF 13,658,274 January 1, 1990 to June 30, 1990 CY 13,658,275 TOTAL CP 172,753,947 - 36 - Attachment Page 2 of 2 As regard principal payments, three installments, totalling CF 409,748,235 have been paid as followas June 29, 1988 CF 136,582,745 June 6, 1989 CF 136,582,745 June 4, 1990 CF 136,582,745 Consequently, you can rest assured that payments have been regularly honored by DBC. However, there may have been delays in Government payments to IDA. I would like to take this opportunity to convey our thankfulness and appreciation for the kind attention you continue to manifest ror our institution, and remain at your disposal for any further queries you may have. Sincerely, Caabi Elyachroutu, General Manager