Green Agricultural and Rural Revitalization Program for Results – Phase I (P177590) Fist Implementation Support Mission – Guangxi and Guizhou October 14-18, 2024 Aide Memoire I. Introduction 1. The World Bank task team1 conducted the first implementation support mission (ISM) for the China Green Agricultural and Rural Revitalization Program for Results (GARR PforR) – Phase I for Guangxi Zhuang Autonomous Region and the Guizhou Province from October 14 - 18, 2024. The main objectives of the mission were to: (a) review progress with the signing the on-lending agreements between the Ministry of Finance (MOF) and the two Regional/Provincial governments; (b) review progress with the implementation of the Program Action Plans (PAP) and achievement of the Disbursement Linked Indicators (DLI); (c) agree on the timeline for submitting the withdrawal applications for the advance payment of the International Bank of Reconstruction and Development (IBRD) loan; (d) review progress with the recruitment of the third-party Verification Agencies (VA) and Monitoring and Evaluation (M&E) arrangements. 2. The mission meetings were attended by senior official and experts from the International Poverty Reduction Center in China (IPRCC), Regional/Provincial Development and Reform Commission (DRC), Regional/Provincial Departments for Finance (DOF), Rural Revitalization Bureau (RRB), Agriculture and Rural Affairs (DARA), and other relevant government agencies. In addition, all 27 GARR PforR Program counties participated in the meetings virtually. 3. The Bank team would like to thank all government officials from the IPRCC, Guangxi Autonomous Region and Guizhou Province, and the Program Counties for organizing the first GARR PforR Program ISM and for their active participation and substantive contributions during the meetings. This Aide Memoire (AM) summarizes the implementation progress of the PforR Program, agreed actions and next steps. II. Assessment of Program Implementation Progress a) Signing the on-lending agreements between the MOF and the two Regional/Provincial governments 4. The government of Guangxi confirmed that the On-lending Agreement (OA) between the MOF and the government of the Guangxi Zhuang Autonomous Region was signed on September 22, 2024. Similarly, Government of Guizhou confirmed that the agreement was signed on September 26, 2024. The mission urged the Guangxi and Guizhou Regional/Provincial Department of Finances to speed up the signing of the Implementation Agreements (IA) with the 27 Program Counties. It was agreed that all agreements will be signed by November 15, 2024. This would enable Program Counties to prepare their Annual Work Plans and Budgets (AWP&B) for year 2025 in a timely manner. 1 Comprising Messrs./Mmes. Ladisy Chengula (Task Team Leader), Mr. Wendao Cao (co-Task Team Leader), Jieli Bai (Program Associate), Dai Lei (Environmental Consultant), and Li Di (Interpreter). 1 b) Progress on implementing the Program Action Plan (PAP) and achievement of the Disbursement Linked Indicators (DLI) 5. Program Action Plan. The mission noted that no progress has been made in implementing the PAP. The Guangxi and Guizhou regional/provincial governments cited the delays in the signing of the OAs as the main reason for this. The mission urged Guangxi and Guizhou Regional/Provincial leadership to implement the following PAPs November 30, 2024: (a) issue an official notification to all Program Counties that no contract will be awarded to either a firm or an individual appearing on either the World Bank’s debarred list or under temporary suspension list; (b) issue to all Program Counties updated policies related to funds integration and budget performance evaluation measures that increase the discretion of the county governments to utilize funds in line with their development plans and priorities; and (c) require all Program Counties to prepare and implement detailed training and capacity building plans for: (i) green agriculture skills, (ii) operations and maintenance (O&M) of the rural solid waste and wastewater facilities, and (iii) capacity building to support the achievement of DLIs. 6. Disbursement Linked Indicators (DLIs). Guangxi and Guizhou reported that despite the delayed signing of the Loan Agreement (LA) and Program Agreements (PA) they continued to implement their government programs. As such, some DLIs have been partially achieved but verification is still awaiting the hiring of the third-part Verification Agencies (VA). The mission reiterated that only DLIs achieved from January 1, 2023, will be eligible for reimbursement, if they meet the quality or standards clearly specified in the PforR Program documents (especially LA and PAs), including their verification protocols. c) Agreed timeline for submitting withdrawal applications for the advance payment of the IBRD loan 7. Guangxi and Guizhou Regional/Provincial governments confirmed that they plan to submit withdrawal applications for the advance payment of the IBRD loan. The Bank team clarified that the withdrawal applications should specify against which DLIs the loan advance is being applied against. This is because during the PforR Program implementation the loan advance will be documented against the results achieved under those DLIs. The Bank team also reminded the Guangxi and Guizhou Regional/Provincial governments that the advance amount is limited to 25 percent of their respective IBRD loan amounts. Subsequently, Guangxi and Guizhou governments confirmed that they will withdraw an IBRD loan advance of US$29 million and EUR15 million respectively, preferably by November 15, 2024. d) Progress on recruiting the third-party Verification Agencies (VA) and establishment of Monitoring and Evaluation (M&E) arrangements 8. Guangxi and Guizhou governments reported that some progress has been made in the hiring of the VAs. The terms of references (ToR) were cleared with the Bank before the PforR Program launch in April 2024. The bidding documents are under final review. However, the call for expression of interest was contingent upon the Regional/Provincial DOFs allocating budgets for hiring the VAs. The Regional/Provincial DOFs promised to do the same before October 31, 2024. It was agreed that the VAs should be in place no later than January 31, 2025. Regarding the M&E arrangements, both Guangxi and Guizhou governments acknowledged little progress; the 2 ToRs have not yet been prepared and shared with the Bank team and no budgets have been allocated for this purpose. The mission recommended that Guangxi and Guizhou governments allocate the budgets for hiring the third-party M&E agencies and share the TORs with the Bank by October 31, 2024, and November 15, 2024, respectively. III. Assessment of Compliance Performance a) Legal Covenants 9. The mission reminded the Guangxi and Guizhou Regional/Provincial governments that the PforR Program has six legal covenants that need to be complied with. To date, only one legal covenant related to the preparation of the Program Implementation Plan (PIP) has been met. The status of the remaining covenants is summarized below. (i) Establishing and maintaining PforR Program institutions. While all regional/provincial and county levels PforR Program implementation institutions have been established, there have been staff turnover or changes. In addition, majority of the Program Counties do not have the designated Environmental and Social (E&S) specialists in their Program Management Offices (PMOs). The mission urged the Guangxi and Guizhou governments to fill the vacant positions as soon as possible. (ii) Implementing the Program Action Plan. As mentioned above, none of the PAPs of the PforR Program have been implemented. The mission reiterated the need to speed up implementation of the PAPs as they are meant to facilitate the achievement of the results under the DLIs. (iii) Hiring of the third-party Verification Agencies. This covenant required Guangxi and Guizhou governments to hire third-party VAs within three-month of PforR Program effectiveness. While the procurement process has started, the pace has been slow, and the Bank team urged the Guangxi and Guizhou governments to speed up the procurement process. Without VAs being in place, partial DLIs achieved to date cannot be verified, and consequently disbursed against by the Bank. (iv) Preparing Annual Work Plans and Budgets (AWP&Bs). Guangxi and Guizhou governments are required to submit the AWP&Bs for implementing the PforR activities by December 15 of each year. The mission reminded the Guangxi and Guizhou team to abide by this timeline, so that government budgets and IBRD loan withdrawal quotas for 2025 can be locked in. (v) Preparing a consolidated mid-term review (MTR) report. The LA requires the Guangxi and Guizhou governments to furnish the Bank with MTR reports no later August 31, 2025. While this covenant is not yet due the two governments requested that the MTR mission be postponed by at least one year. The mission agreed that the Bank team will assess the implementation progress during the next ISM and seek guidance from Bank management on this. b) Financial Management 3 10. Guangxi and Guizhou Regional/Provincial governments requested that the first audit reports for the PforR Program combine years 2024 and 2025. This is because not many activities were implemented under the PforR Program in year 2024. The mission reminded the two governments to use the financial management templates shared by the Bank to record their budgets and expenditures of the PforR Program. It was agreed that the audit reports will be submitted to the Bank for review and feedback by September 30, 2025. c) Environmental and Social Safeguards 11. The mission learned that not all county Program Management Offices (PMO) have designated Environmental and Social (E&S) safeguards staff. The Regional/Provincial PMOs are yet to hire the third-party E&S monitoring agencies. The mission urged Guangxi and Guizhou Regional/Provincial PMOs to speed up the hiring so that the first semi-annual E&S monitoring report is prepared by July 31, 2025. The implementation of safeguards PAP measures is still pending: (i) putting in place measures to improve rural solid waste transfer stations by enhancing leachate and odor management facilities and providing personal protection equipment (PPE), sanitation and resting facilities for workers; and (ii) undertaking measures to ensure availability of adequate operations and maintenance (O&M) funding for the wastewater treatment facilities. The mission recommended that the Guangxi and Guizhou governments should include implementation of these PAP actions in the AWP&B for year 2025. IV. Next Steps 12. It was agreed that the next ISM will be conducted in late March or early April 2025. The Bank team will communicate the exact dates before end of February 2025. Table on Agreed Action Plan for the next 3-6 months? Annex 1: List of People met during the mission A. Guangxi Zhuang Autonomous Region Name Department/Agency Liu Zhiyi, Party member Regional Agriculture and Rural Department Huang Dongying, Director Regional Foreign Capital Utilization Management Office of Department of Finance Wang Xun, Level I Principal Staff Member Regional Foreign Capital Utilization Management Office of Department of Finance Meng Bin, Director Foreign Exchange Cooperative Office, Regional Agriculture and Rural Department Wei Zhuangmin, Officer Planning and Financing of Regional Agriculture and Rural Dept. Wang Huiwu, Director Foreign Capital Project management Center of Regional Agriculture and Rural Department Tang Wenbo, Deputy Director Foreign Capital Project management center, Regional Rural Revitalization Department 4 Wang Chuang, Division Chief Foreign Capital Project management center, Regional Rural Revitalization Department Peng Jie, Deputy Division Chief Foreign Capital Project management center, Regional Rural Revitalization Department Tang Shuangjing, Officer Foreign Capital Project management Center of Regional Agriculture and Rural Department Li Ye, Clerk Foreign Capital Project management Center of Regional Agriculture and Rural Department Li Dong Consultant to draft project documents 5 B. Guizhou Province Name Department/Agency Li Hao Liu Yusong Project Management Office Xu Liyuan Provincial Department of Finance Dang Wei Provincial DRC Dai Xinghong Provincial Rural Revitalization Department Wang Cehngzhu Provincial Monitoring Department Shen Xiaoyun Provincial Monitoring Department Yang Yong Planning Department Wu Kangping Comprehensive Department 6