The World Bank Implementation Status & Results Report Supporting the implementation of SOE Reform in Morocco (P181522) Supporting the implementation of SOE Reform in Morocco (P181522) MIDDLE EAST AND NORTH AFRICA | Morocco | Finance, Competitiveness and Innovation Global Practice | Requesting Unit: MNC01 (392) | Responsible Unit: EMNF1 (9282) IBRD/IDA | Program-for-Results Financing | FY 2024 | Team Leader(s): Natalia Agapitova, Pedro Arizti, Samia Mouline Seq No: 2 | Archived on 15-Apr-2025 | ISR03424 | Created by: Natalia Agapitova on 24-Feb-2025 | Modified by: Natalia Agapitova on 08-Apr-2025 1. PROJECT DEVELOPMENT OBJECTIVE 1.1 Development Objective Original Development Objective (Approved as part of Approval package on 21-Jun-2024) The Program Development Objective is to improve the governance, restructuring, competitive neutrality and performance monitoring of States Owned Enterprises. 2. OVERALL RATINGS Name Previous Current Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Substantial Substantial 3. KEY ISSUES & STATUS 3.1 Implementation Status and Key Decisions This is the second Implementation Status and Results Report (ISR) for the Program-for-Results (PforR) loan to Morocco, which supports State-Owned Enterprise (SOE) reform and was declared effective on September 17, 2024. The Program Coordination Unit (PCU) and Steering Committee were established within the stipulated 30 days, and the Program Operations Manual (POM) was submitted by the January 15, 2025 deadline, with final revisions completed by January 30, 2025. The Program addresses fiduciary, environmental and social risks through mitigation measures and emphasizes strong stakeholder engagement and coordination. Actions to address these issues include close supervision, customized technical assistance, and the establishment of a disbursement schedule. Collaboration with the PCU and implementing agencies (DEPP and ANGSPE) continues, although information sharing could be improved. Enhanced technical collaboration and early sharing of draft laws are recommended. The team has prepared a list of technical assistance needs and is seeking continuous support from development partners. Apr 15, 2025 Page 1 of 15 The World Bank Implementation Status & Results Report Supporting the implementation of SOE Reform in Morocco (P181522) 4. DATA ON FINANCIAL PERFORMANCE 4.1 Disbursements (by loan) Loan/Credit/TF Status Original Revised Cancelled Disbursed Undisbursed % Disbursed IBRD-97000 Effective 350.00 350.00 0.00 86.28 261.62 24.80% 4.2 Key Dates (by loan) Loan/Credit/TF Status Approval Signing Effectiveness Orig. Closing Rev. Closing IBRD-97000 Effective 21-Jun-2024 04-Jul-2024 17-Sep-2024 29-Jun-2029 29-Jun-2029 4.3 Program Action Plan Adopt a Program Operation Manual (POM) including administrative and M&E procedures; Action Description E&S management, complaints and GRM; PAP; results and verification protocol; reports templates, fraud and corruption reporting; FM, procurement, Program area details. Source DLI# Responsibility Timing Timing Value Status 120 days after the Effective Date Technical NA MEF/SG Other Completed of the Loan Agreement Completion POM approved by MEF with Bank no objection is distributed to all entities involved in Measurement Program implementation and dissemination workshop conducted. The POM has been prepared and the conditional non-objection was provided by the WB on Comments January 15, 2025, 120 days after the Effective Date. The final version that included all the recommendations of the WB was received on Jan 30, 2025. Establish and subsequently maintain throughout the implementation of the Program, (i) a Action Description Steering Committee and (ii) a Program Coordination Unit (PCU) with a composition and terms of reference acceptable to the Bank and described in the POM. Apr 15, 2025 Page 2 of 15 The World Bank Implementation Status & Results Report Supporting the implementation of SOE Reform in Morocco (P181522) Source DLI# Responsibility Timing Timing Value Status 30 days after the Effective Date of Technical NA MEF/SG Other Completed the Loan Agreement Completion Letter by MEF confirming establishment of steering committee and Program coordination Measurement unit detailing composition of its members and frequency of meetings. The Program Coordination Unit (PCU) and Steering Committee were established within the Comments stipulated 30 days, as confirmed by the communication received on October 8, 2024. Action Description Appointment of social and environmental focal points at the levels of ANGSPE and DEPP. Source DLI# Responsibility Timing Timing Value Status No later than 90 days after the Effective Date of Environmental and the Loan NA ANGSPE and DEPP Other Completed Social Systems Agreement and before the start of new program activities. Completion Letters of appointment of the environmental and social focal point by ANGSPE and DEPP Measurement The environmental and social focal point by ANGSPE and DEPP have been appointed and the Comments WB holds regular meetings with the focal points. Human resources management plan which will serve as a framework for managing social Action Description impacts on employees who will be reassigned or dismissed as part of SOEs restructurings. Source DLI# Responsibility Timing Timing Value Status Before any restructuring activity and Environmental and NA DEPP/ANGSPE Other before the start of Not Yet Due Social Systems relevant activities supported by the Program. Apr 15, 2025 Page 3 of 15 The World Bank Implementation Status & Results Report Supporting the implementation of SOE Reform in Morocco (P181522) Description of the plan for reallocation of resources and post-dismissal management Completion (reintegration actions, compensation, etc. ) by the entity coordination the restructuring Measurement (ANGSPE or DEPP) Comments The activity has not started. Planning and Budgeting. Ensure adequate three-year budget allocations to achieve program Action Description results which will be clearly reflected in the program budget of of ANGSPE, DB/SCSF, DEPP/ONEE-Electricity Branch Source DLI# Responsibility Timing Timing Value Status ANGSPE, Fiduciary Systems NA DEPP/(FSCS)/ONEE- Recurrent Continuous In Progress Electricity Completion Allocation is done and shared with the Bank. Measurement The Task Team will discuss the three-year budget allocations during the upcoming supervision Comments mission. Budget execution. Implement a bi-annual reporting mechanism on the status of the Program Action Description expenditure And Financial management KPIs, included in the semi-annual Program activity report. Source DLI# Responsibility Timing Timing Value Status PCU in coordination Revised Fiduciary Systems NA Recurrent Semi-Annually with ANGSPE/DEPP Date Completion A reporting is done and shared with the Bank semi-annually using a template to be Measurement developed with Bank’s support in the POM. The WB agreed to combine the first six-monthly monitoring report with the one at the end of Comments June 2025. Consequently, the first monitoring report will cover more than one six-month period and will be due on 15 August 2025. Internal Control and Internal Audit. Set up the operational internal audit department in Action Description ANGSPE. Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems NA ANGSPE Due Date 31-Dec-2026 Not Yet Due Completion Internal audit unit adequately staffed; management tools of the function put in place. Measurement Apr 15, 2025 Page 4 of 15 The World Bank Implementation Status & Results Report Supporting the implementation of SOE Reform in Morocco (P181522) The task team will follow up with the client on the establishment of the operational internal Comments audit department in ANGSPE by the required timeframe. Internal Control and Internal Audit. (a) Internal audit charter prepared and validated by the Action Description ANGSPE and (SCSF) boards. (b) A Tailored Manual of procedures validated by ANGSPE and implemented. Source DLI# Responsibility Timing Timing Value Status 31 December Fiduciary Systems NA ANGSPE/FSCS Other Not Yet Due 2026 Completion Manuals prepared and validated. Measurement The audit charter and the manual of procedures will be prepared and validated by 31 Comments December 2026. Fraud & Corruption. Develop the procedures for collection, consolidation, reporting including Action Description frequency, on fraud and corruption in the POM and identify the responsible entity. Source DLI# Responsibility Timing Timing Value Status PCU in coordination 6 months after Fiduciary Systems NA with ANGSPE and Other In Progress effectiveness DEPP Completion Number of cases of fraud and corruption systematically reported in Program activity reports. Measurement The Fraud & Corruption Procedures have been included in the POM. Program activity reports Comments are not yet due for this measure to be completed. Procurement reporting. Preparing a semi-annual reporting to track the program's Action Description procurement performance supported by key performance indicators. Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems NA ANGSPE/DEPP/DB Recurrent Semi-Annually Not Yet Due Completion Procurement reporting section within semi-annual report. Measurement Comments The Program activities have not yet started. Apr 15, 2025 Page 5 of 15 The World Bank Implementation Status & Results Report Supporting the implementation of SOE Reform in Morocco (P181522) Procurement. Exclusion of suspended and debarred firms, Including in the bidding Action Description documents an eligibility check clause requiring procuring department to ensure that any person or entity debarred or suspended by the Bank is not awarded a contract. Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems NA ANGSPE Recurrent Continuous In Progress Completion Upon effectiveness, preparing an instruction requiring the IAs to ensure that any person or Measurement entity debarred or suspended by the Bank is not awarded a contract. The client with support from the task team will prepare an instruction requiring the IAs to Comments ensure that any person or entity debarred or suspended by the Bank is not awarded a contract. Procurement complaints. keeping a log of all procurement-related complaints and ensuring Action Description their timely resolution. Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems NA ANGSPE, DEPP, DB Recurrent Continuous In Progress Completion Complaints and resolutions. Measurement Comments The complain system will be established and monitored. 5. KEY DATES Key Events Planned Actual Approval 21-Jun-2024 21-Jun-2024 Effectiveness 17-Sep-2024 17-Sep-2024 Mid-Term Review No. 01 29-Jan-2027 Operation Closing/Cancellation 29-Jun-2029 6. SYSTEMATIC OPERATIONS RISK-RATING TOOL Rating at Approval Last Approved Rating Risk Category Approval Package - ISR Seq. 01 - 09 Oct Proposed Rating 21 Jun 2024 2024 Apr 15, 2025 Page 6 of 15 The World Bank Implementation Status & Results Report Supporting the implementation of SOE Reform in Morocco (P181522) Political and Governance Substantial Substantial Substantial Macroeconomic Moderate Moderate Moderate Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Substantial Substantial Substantial Institutional Capacity for Implementation and Substantial Substantial Substantial Sustainability Fiduciary Substantial Substantial Substantial Environment and Social Substantial Substantial Substantial Stakeholders Moderate Moderate Moderate Overall Substantial Substantial Substantial Apr 15, 2025 Page 7 of 15 The World Bank Implementation Status & Results Report Supporting the implementation of SOE Reform in Morocco (P181522) 7. RESULTS 7.1 PDO Indicators by PDO Outcomes Governance improvement Baseline Actual (Previous) Actual (Current) Closing Period Indicator Name Value Month/Year Value Date Value Date Value Month/Year SOEs corporate governance 0 Apr/2024 0 17-Sep-2024 0 31-Mar-2025 100 Jun/2029 practices improved (composite indicator) (Number) SOE Restructuring Baseline Actual (Previous) Actual (Current) Closing Period Indicator Name Value Month/Year Value Date Value Date Value Month/Year Number of SOEs restructured 0 Apr/2024 0 17-Sep-2024 0 31-Mar-2025 22 Jun/2029 (Number) Competitive Neutrality Baseline Actual (Previous) Actual (Current) Closing Period Indicator Name Value Month/Year Value Date Value Date Value Month/Year Number of SOEs with public 0 Apr/2024 0 17-Sep-2024 0 31-Mar-2025 3 Jun/2029 service obligations formalized (defined, costed, and transparently financed) (Number) Performance Monitoring Baseline Actual (Previous) Actual (Current) Closing Period Indicator Name Value Month/Year Value Date Value Date Value Month/Year Apr 15, 2025 Page 8 of 15 The World Bank Implementation Status & Results Report Supporting the implementation of SOE Reform in Morocco (P181522) Number of SOEs that follow 0 Apr/2024 0 17-Sep-2024 0 31-Mar-2025 32 Jun/2029 high standards of financial or climate reporting (Number) 7.2 Intermediate Results Indicators by Results Areas Strengthening state ownership policy and functions, frameworks for corporate governance, and financial discipline of SOEs Baseline Actual (Previous) Actual (Current) Closing Period Indicator Name Value Month/Year Value Date Value Date Value Month/Year IRI 1.1 Training of DEPP and No Apr/2024 No 17-Sep-2024 Yes Jun/2029 ANGSPE staff and a sample of SOEs on the methodology and practices for the preparation of contracts- programme and performance contracts. (Yes/No) IRI 1.2 Number of SOEs 0 Apr/2024 0 17-Sep-2024 0 31-Mar-2025 5 Jun/2029 publishing an ESG report, including a section on relationships and consultation with stakeholders (staff, customers, suppliers, regulators, public and local authorities). (Number) IRI1.3 The annual report on No Apr/2024 No 31-Mar-2025 Yes Jun/2029 SOEs submitted to Parliament includes a section Apr 15, 2025 Page 9 of 15 The World Bank Implementation Status & Results Report Supporting the implementation of SOE Reform in Morocco (P181522) on the measures taken by relevant SOEs to address climate risks and sustainable development. (Yes/No) IRI 1.4 Publication by MEF of No Apr/2024 No 17-Sep-2024 No 31-Mar-2025 Yes Jun/2029 documentation establishing instruments and mechanisms for the classification of SOEs by type of financial control. (Yes/No) Resizing of the state footprint and fiscal impact of SOEs and enhancing competition and competitive neutrality Baseline Actual (Previous) Actual (Current) Closing Period Indicator Name Value Month/Year Value Date Value Date Value Month/Year IRI 2.1 Adoption of guidelines No Apr/2024 No 17-Sep-2024 No 31-Mar-2025 Yes Jun/2029 for the liquidation of SOEs. (Yes/No) IRI 2.2 Percentage of SOE-led TBD Apr/2024 TBD 17-Sep-2024 TBD 31-Mar-2025 100% Jun/2029 transactions that are notifiable to the Competition Council for prior opinion per law, that are effectively notified and processed by the CC. (Percentage) IRI 2.3 Number of cases 0 Apr/2024 0 31-Mar-2025 10 Jun/2029 processed by the Competition Council concerning SOEs and opinions or studies concerning sectors with State participation. (Number) Apr 15, 2025 Page 10 of 15 The World Bank Implementation Status & Results Report Supporting the implementation of SOE Reform in Morocco (P181522) IRI 2.4 Number of SOEs with 0 Apr/2024 0 17-Sep-2024 0 31-Mar-2025 3 Jun/2029 competition law compliance programs in place (Number) IRI 2.5 Standard rules for the No Apr/2024 No 17-Sep-2024 No 31-Mar-2025 Yes Jun/2029 procurement of SOEs are developed, integrating good principles of competitive neutrality, competition, non- discrimination, and transparency. (Yes/No) Enhancing SOEs performance monitoring and climate reporting Baseline Actual (Previous) Actual (Current) Closing Period Indicator Name Value Month/Year Value Date Value Date Value Month/Year IRI 3.1 Percentage of SOE 25% Apr/2024 45% Jun/2029 providers' complaints related to payment delays responded within 1 month (Percentage) IRI 3.2 Training of ANGSPE No Apr/2024 No 17-Sep-2024 No 31-Mar-2025 Yes Jun/2029 representatives in SOEs boards on climate risks and climate disclosure. (Yes/No) 7.3 Disbursement Linked Indicators (DLI) PBC Name Baseline Actual (Previous) Actual (Current) Closing Period Apr 15, 2025 Page 11 of 15 The World Bank Implementation Status & Results Report Supporting the implementation of SOE Reform in Morocco (P181522) Value Date Value Date 1:DLI 1: Adoption No formal state No formal state No formal state and publication of Value ownership policy has ownership policy ownership policy has the state ownership been adopted. has been adopted been adopted policy and 17-Sep-2024 31-Mar-2025 strengthening of ANGSPE governance Allocated 0.00 0.00 (Text) Amount Not Due DLI allocation 43,000,000.00 No implementation 2:DLI 2: Improving No implementation No implementation of requirements for the operation and of requirements for of requirements for minimum portion accountability of minimum portion of minimum portion of of independent SOE boards, with Value independent board independent board board members or independent members or female 17-Sep-2024 members or female 31-Mar-2025 female members and representation in representation in representation in improved gender SOE boards. SOE boards SOE boards balance (Text) Not Due Allocated 0.00 0.00 Amount DLI allocation 25,000,000.00 3:DLI 3: State-SOE No contracts (either No contracts (either No contracts (either contractualization contracts of contracts of contracts of framework programs or programs or programs or upgraded and Value contracts of contracts of 17-Sep-2024 contracts of 31-Mar-2025 rolled-out with the performance) have performance) have performance) have integration of Public been signed with been signed with been signed with Service Obligations sustainable sustainable sustainable Apr 15, 2025 Page 12 of 15 The World Bank Implementation Status & Results Report Supporting the implementation of SOE Reform in Morocco (P181522) and sustainable development development development development objectives and do not objectives and do objectives and do not objectives (Text) always include PSO not always include always include PSO Not Due compensation PSO compensation compensation Allocated 0.00 0.00 Amount DLI allocation 25,000,000.00 4:DLI 4: Adoption Value N/A N/A N/A and implementation of law on performance- oriented and risk- Allocated 17-Sep-2024 31-Mar-2025 based financial 0.00 0.00 control and Amount governance (Number) Not Due DLI allocation 43,000,000.00 DLR 5.5 Number of restructuring operations 5:DLI 5: resulting in (a) a Restructuring of direct or indirect Value N/A N/A 17-Sep-2024 N/A 31-Mar-2025 decrease in the SOEs (Text) state's ownership Not Due stake in SOEs, or (b) an increase in synergies between SOEs, or Apr 15, 2025 Page 13 of 15 The World Bank Implementation Status & Results Report Supporting the implementation of SOE Reform in Morocco (P181522) (c) private sector participation, with the relevant human resources management plan(s) as defined in the Program Action Plan). (scalable) Baseline: 0 Target: 14 (10 ANGSPE & 4 DEPP) Allocated 0.00 28,000,000.00 Amount DLI allocation 70,125,000.00 6:DLI 6: A limited number od A limited number A limited number od Transformation of SOWs are od SOWs are SOWs are SOEs into corporatized, have corporatized, have corporatized, have Value corporations adopted IFRS and adopted IFRS and adopted IFRS and following high resort to market resort to market 17-Sep-2024 resort to market 31-Mar-2025 standards of financing. financing. financing. financial reporting (IFRS) (Number) Allocated 0.00 0.00 Not Due Amount DLI allocation 43,000,000.00 7:DLI 7: There are no There are no There are no Formalisation of Value guidelines for guidelines for 17-Sep-2024 guidelines for 31-Mar-2025 public service formalizing PSO and formalizing PSO and formalizing PSO and Apr 15, 2025 Page 14 of 15 The World Bank Implementation Status & Results Report Supporting the implementation of SOE Reform in Morocco (P181522) obligations (PSOs) most PSO are not most PSO are not most PSO are not of SOEs (Number) identified and identified and identified and Not Due formalized. formalized formalized Allocated 0.00 0.00 Amount DLI allocation 30,000,000.00 here are no There are no No Performance and guidelines for guidelines for 8:DLI 8: risk management formalizing PSO and formalizing PSO and Strengthening of Value monitoring systems most PSO are not most PSO are not SOE performance exists for ANGSPE identified and 17-Sep-2024 identified and 31-Mar-2025 monitoring (Text) formalized formalized Not Due Allocated 0.00 0.00 Amount DLI allocation 25,000,000.00 9:DLI 9: Most SOEs Most SOEs including Most SOEs including Strengthening of including high high emitters not high emitters not climate reporting by Value emitters not disclosing climate disclosing climate high emitting SOEs, disclosing climate information information following information 17-Sep-2024 31-Mar-2025 internationally accepted Allocated frameworks (Text) 0.00 0.00 Amount Not Due DLI allocation 45,000,000.00 Apr 15, 2025 Page 15 of 15