Public Disclosure Copy The World Bank Implementation Status & Results Report MD Second Competitiveness Enhancement Project (P144103) MD Second Competitiveness Enhancement Project (P144103) EUROPE AND CENTRAL ASIA | Moldova | Trade & Competitiveness Global Practice | IBRD/IDA | Investment Project Financing | FY 2015 | Seq No: 7 | ARCHIVED on 29-Dec-2017 | ISR30659 | Implementing Agencies: Ministry of Finance, PIU under Ministry of Economy, Credit Line Directorate under Ministry of Finance, Government of Moldova/Ministry of Economy, ODIMM Key Dates Key Project Dates Bank Approval Date:11-Jul-2014 Effectiveness Date:02-Oct-2014 Planned Mid Term Review Date:17-Oct-2016 Actual Mid-Term Review Date:17-Oct-2016 Original Closing Date:31-Jan-2020 Revised Closing Date:31-Jan-2020 Project Development Objectives Project Development Objective (from Project Appraisal Document) The project's development objective is to increase the export competitiveness of Moldovan enterprises and decrease the regulatory burden they face. This PDO will be achieved through a set of measures that aim to: (i) improve the business environment through regulatory reforms that reduce the cost of doing business; (ii) help SMEs and exporters to get access to business development services;and (iii) improve access to medium and long term finance for export oriented enterprises. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Regulatory Reform:(Cost $6.24 M) SME Development:(Cost $8.04 M) Access to Finance:(Cost $30.00 M) Project Management:(Cost $0.72 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Moderately Satisfactory  Moderately Satisfactory Overall Implementation Progress (IP)  Moderately Satisfactory  Satisfactory 12/29/2017 Page 1 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MD Second Competitiveness Enhancement Project (P144103) Overall Risk Rating  Substantial  Substantial Implementation Status and Key Decisions Regulatory reform: There is progress with One-Stop-Shop (OSS) for online issuance of permits and licenses, but major deliverables need to take place in December 2017 to meet ambitious timeline. This is a critical reform for the Government to undertake, with many government agencies involved, and Prime minister’s involvement is needed to ensure sustainability, delivery of pilot phase and roll-out of the system to all the remaining permits and licenses. The ministry of Economy needs to take more proactive role and ownership over Performance indicators for government authorities with a business regulatory function as this is also part of DLIs. Some improvement under this activity did take place since the last ISR, where ministry undertook activities to include more agencies into the performance indicators measurement, and to collect and publish results of the first year of monitoring of performance of the baseline institutions. Delays in adopting agreed changes to RIA methodology, and poor RIA compliance. Changes to the Decree no 755 of June 20, 2016 have only partially followed recommendations provided by the WBG team, and did not bring much needed improvements in RIA process. Government is preparing new changes to regulations to enable better RIA compliance and this should be prepared by end December 2017 and to start public consultations on the new methodology in January 2018. RIA Secretariat moved to to State Chancellery (SC) since the last ISR. This is notable improvement compared to previous ISR. A comprehensive program for RIA and SCM capacity building within ministries will need to be set up. Some progress with the technical assistance to the Competition council. Since the last ISR, we have two market assessments on going, as well as capacity building initiative and equipping of CC. This is improvement compared to previous ISR. SME development: The component is progressing well. ODIMM is going forward in implementing its institutional development strategy. The Project is assisting ODIMM set up its export promotion department as well as the M&E and Internal Audit Department. MIEPO starts to play a more visible role in external country promotion activities of the Government. The Project is assisting the institution in the development of its economic diplomacy program. The Government is in the process of preparation of the new Regulations on Moldova Investment Agency, to be approved soon, thereby MIEPO will change status and functions. MGF facility is progressing well and the first impact evaluation is in the process of being performed in December 2017. The results will be reflected in the next ISR. Access to Finance: Credit line is disbursing as planned. This is improvement compared to previous ISR. The team has reviewed the current disbursement rates under the project versus the volumes originally planned at project approval stage. With the current four PFIs, disbursements are slower than originally projected: in 3 years after project effectiveness, CLD has disbursed 55.6% of the credit line (USD 16.3 mln out of USD 29.4 mln). Disbursement has been slightly better than projected by the team, due to a more intense activity of PFIs during the period (seasonal high demand plus attractive interest rate for local currency loans). ODIMM is testing in practice the functionality of the software developed for the Credit Guarantee Facility. The software has been installed in the PFIs working with the CGF and the development company together with ODIMM will collect feedback in order to fix any potential bugs. Overall: Although the overall progress of the project is good, the ongoing comprehensive public administration reform has distracted the key Government stakeholders from the implementation of project activities. During last ISR, team agreed set of key actions to be undertaken by the government, and out 12/29/2017 Page 2 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MD Second Competitiveness Enhancement Project (P144103) of seven key activities, four completed, two partially completed and one delayed. Given all the above, overall progress is satisfactory. The Project team closely monitored progress under all components and disbursements and ensured that planned activities are progressing. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Substantial  Moderate Macroeconomic  --  Substantial  Moderate Sector Strategies and Policies  --  Substantial  Substantial Technical Design of Project or Program  --  Substantial  Substantial Institutional Capacity for Implementation and Sustainability  --  High  High Fiduciary  --  Moderate  Moderate Environment and Social  --  Low  Low Stakeholders  --  Moderate  Moderate Other  --  --  Low Overall  --  Substantial  Substantial Results Project Development Objective Indicators PHINDPDOTBL  Reduction in management time spent meeting regulatory requirements (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 10.70 7.90 7.90 8.50 Date 30-Jun-2013 30-Dec-2016 29-Dec-2017 31-Dec-2019 Comments This indicator is prepared on annual basis. Data for 2017 we will have in early 2018. 12/29/2017 Page 3 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MD Second Competitiveness Enhancement Project (P144103) PHINDPDOTBL  Percentage of matching grant recipients that are engaged in a new export-oriented activity (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 15.00 15.00 50.00 Date 02-Oct-2014 31-May-2017 29-Dec-2017 31-Dec-2019 Comments This indicator is prepared on annual basis. Data for 2017 we will have in early 2018. PHINDPDOTBL  Average annual percentage increase in lending to export oriented enterprises by participating financial institutions (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 13.90 13.90 5.00 Date 02-Oct-2014 30-Dec-2016 29-Dec-2017 31-Dec-2019 Comments This indicator is prepared on annual basis. Data for 2017 we will have in early 2018. PHINDPDOTBL  Cumulative amount of medium and long term lending by participating financial institutions under the line of credit (>24 months) (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 4.70 4.70 23.40 Date 30-Jun-2014 30-Dec-2016 29-Dec-2017 31-Dec-2019 Overall Comments This indicator is prepared on annual basis. Data for 2017 we will have in early 2018. Intermediate Results Indicators 12/29/2017 Page 4 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MD Second Competitiveness Enhancement Project (P144103) PHINDIRITBL  Establish and apply performance indicators for Government authorities with a business regulatory function (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Performance indicators established for all the Recipient’s authorities with a business regulatory function that are included in theaction plan agreed on with the World Bank; The performance indicators are Performance indicators Performance indicators monitored and monitored and publicly monitored and publicly publicly Value System does not exist reported. Targets reported. Targets reported in revised/ validated revised/ validated 2018 and 2019 per theaction plan agreed on with the World Bank; and The targets for each performance indicator are revised and validated for 2020 and thefollowing years, per the action plan agreed upon with the World Bank Date 01-Jun-2014 30-Dec-2016 29-Dec-2017 31-Dec-2019 Comments MoE completed the collection of primary data from public authorities and agencies and passed the information to the members of national evaluation group. The evaluation will be completed by mid of December and reported publicly by the ministry of economy and infrastructure in early 2018 12/29/2017 Page 5 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MD Second Competitiveness Enhancement Project (P144103) PHINDIRITBL  Cumulative number of reforms enacted according to the Action Plan to reduce regulatory barriers and remove anti-competitive elements of legislation and regulation (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 6 cumulative actions of the Action Plan implemented, including actions to Value 0.00 2.00 3.00 remove anti- competitive elements of legislation and reduce other regulatory barriers Date 01-Jun-2014 30-Dec-2016 29-Sep-2017 31-Dec-2019 Comments The amendments to the legislation for closing a business has been enacted and MoE submitted to the WBG documentary evidence. Two other reforms are on-going. PHINDIRITBL  Percentage of laws and sub-laws affecting businesses that are assessed by the RIA Secretariat and discussed at Working Group of theState Commission on Regulation before approval by Parliament (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 80.00 44.00 44.00 98.00 Date 30-Jun-2014 30-Dec-2016 29-Dec-2017 31-Dec-2019 Comments This is tracked annually and will be reported in early 2018 12/29/2017 Page 6 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MD Second Competitiveness Enhancement Project (P144103) PHINDIRITBL  Percentage of event participants reporting satisfied or very satisfied with workshops, training, seminars, conferences, study tours, etc. (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 90.00 85.00 80.00 Date 01-Jul-2014 31-May-2017 29-Sep-2017 31-Dec-2019 Comments The MGF is on track with this indicator. Data has been collected during the MGF targeted dissemination seminars, thematic conferences, SMEs business weeks, exporters forum, meetings with BA and Chamber of Commerce's (around 1600 participants). Since official launch in September 2015, the MGF team have performed an extensive dissemination campaign around the country about the opportunities for businesses. Over 20 media institutions have written about the Project activities, including opportunities offered by the MGF subcomponent in over 200 news and 16 promotion events organized by CEP. PHINDIRITBL  Adoption and implementation of a Strategy for ODIMM that promotes organizational effectiveness and reflects segmentation of delivery assistance mechanisms and enterprise needs (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target ODIMM strategy is implemented, budgeted, and monitored and ODIMM implemented evaluated 2016 strategy, and is effectively in implementing 2017, 2018 and 2019 and initiated focusing on medium companies, ODIMM establishing credit ODIMM strategy in strategy is Value No Strategy guarantee scheme, implementation updated and expanding reach to adopted by the rural areas and women appropriate enterpreneurs, government improving E-portal on authority; BDS providers, etc Government allocates adequate budget based on the updated strategy Date 02-Jun-2014 30-Dec-2016 29-Dec-2017 31-Dec-2019 Comments This is annual indicator and will be reported in early 2018 12/29/2017 Page 7 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MD Second Competitiveness Enhancement Project (P144103) PHINDIRITBL  Adoption and implementation of a Strategy for MIEPO that promotes organizational effectiveness and reflects market segmentation andimproved export promotion delivery assistance mechanisms (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target MIEPO strategy is implemented, budgeted, and monitored and evaluated effectively in MIEPO is focusing on 2018 and 2019 overall export Strategy is promotion on national MIEPO strategy in updated and Value No Strategy level and activities implementation adopted by the linked to that, which is appropriate in line with Strategy government authority; Government allocates adequate budget based on the strategy Date 02-Jun-2014 30-Dec-2016 29-Dec-2017 31-Dec-2019 Comments This is annual indicator and will be reported in early 2018 PHINDIRITBL  Increased outreach of ODIMM (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.00 15.00 15.00 2.30 Date 31-Dec-2015 30-Dec-2016 29-Dec-2017 31-Dec-2019 Comments 12/29/2017 Page 8 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MD Second Competitiveness Enhancement Project (P144103) This indicator is presented on annual basis. Survey is being conducted as we speak and results available in January 2018 PHINDIRITBL  Increased effectiveness of ODIMM (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 73.00 81.00 81.00 94.80 Date 31-Dec-2015 30-Dec-2016 29-Dec-2017 31-Dec-2019 Comments This indicator is presented on annual basis. Survey is being conducted as we speak and results available in January 2018. PHINDIRITBL  Increased outreach of MIEPO (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.10 28.00 28.00 0.15 Date 31-Dec-2015 30-Dec-2016 29-Dec-2017 31-Dec-2019 Comments This indicator is presented on annual basis. Survey is being conducted as we speak and results available in January 2018 12/29/2017 Page 9 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MD Second Competitiveness Enhancement Project (P144103) PHINDIRITBL  Increased effectiveness of MIEPO (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 35.00 55.00 55.00 52.50 Date 31-Dec-2015 30-Dec-2016 29-Dec-2017 31-Dec-2019 Comments This indicator is presented on annual basis. Survey is being conducted as we speak and results available in January 2018 PHINDIRITBL  Cumulative number of SMEs receiving Matching Grants (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 84.00 118.00 250.00 Date 30-Jun-2014 31-May-2017 29-Sep-2017 31-Dec-2019 Comments The MGF is on track with this indicator. As of end September there were 131 grant applications registered, of which 118 approved, 10 rejected and 19 in the pipeline. The target established for this year is 120 SMEs. PHINDIRITBL  Cumulative number of business development services provided to SMEs (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 189.00 266.00 500.00 Date 30-Jun-2014 31-May-2017 29-Sep-2017 31-Dec-2019 Comments The MGF is on track with this indicator. The cumulative number of business development services under the approved BIPs, as of 30.09.2017 was 962, of which 266 BDSs has been delivered to MGF beneficiaries. 12/29/2017 Page 10 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MD Second Competitiveness Enhancement Project (P144103) PHINDIRITBL  Number of MGF beneficiaries creating or improving products (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 68.00 102.00 150.00 Date 28-Feb-2014 31-May-2017 29-Sep-2017 31-Dec-2019 Comments The MGF is on track with 102 beneficiaries with need of BDSs to create and/or improve products/services. PHINDIRITBL  Number of MGF beneficiaries improving production processes (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 44.00 58.00 150.00 Date 28-Feb-2014 31-May-2017 29-Sep-2017 31-Dec-2019 Comments On track with the overall target with 58 beneficiaries with need of BDSs to improve production processes. However, for periodic target, this is 5% below periodic target, but the team is confident in meeting this indicator PHINDIRITBL  Number of MGF beneficiaries improving business management (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 65.00 90.00 150.00 Date 28-Feb-2014 31-May-2017 29-Sep-2017 31-Dec-2019 Comments On track with 90 beneficiaries with need of BDSs to improve business management. 12/29/2017 Page 11 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MD Second Competitiveness Enhancement Project (P144103) PHINDIRITBL  Percent of MGF beneficiaries that are woman-owned or have a female CEO (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 36.00 42.00 0.00 Date 28-Feb-2014 31-May-2017 29-Sep-2017 31-Dec-2019 PHINDIRITBL  Number of sub-loans disbursed from the Line of Credit (cumulative) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 53.00 88.00 83.00 Date 30-Jun-2014 30-Dec-2016 29-Sep-2017 31-Dec-2019 Comments In terms of cumulative number of sub-loans disbursed the results of the Y.1 +Y.2 are significantly above the targets (34 targeted vs. 53 de facto). As of September 31, 2017 in total of 88 direct and indirect exporters received loans PHINDIRITBL  Volume of PFI funding for exporters through the Line of Credit (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 9.70 14.30 29.40 Date 30-Jun-2014 30-Dec-2016 29-Sep-2017 31-Dec-2019 PHINDIRITBL  Portfolio at risk (NPLs) under the Line of Credit (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 8.50 7.80 5.00 Date 30-Jun-2014 30-Dec-2016 30-Jun-2017 31-Dec-2019 12/29/2017 Page 12 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MD Second Competitiveness Enhancement Project (P144103) Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P144103 IBRD-84000 Effective USD 30.00 30.00 0.00 16.17 13.83 54% P144103 IDA-55090 Effective USD 15.00 15.00 0.00 4.92 8.76 33% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P144103 IBRD-84000 Effective 11-Jul-2014 15-Jul-2014 02-Oct-2014 31-Jan-2020 31-Jan-2020 P144103 IDA-55090 Effective 11-Jul-2014 15-Jul-2014 02-Oct-2014 31-Jan-2020 31-Jan-2020 Cumulative Disbursements 12/29/2017 Page 13 of 14 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MD Second Competitiveness Enhancement Project (P144103) Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 12/29/2017 Page 14 of 14 Public Disclosure Copy