PAPUA NEW GUINEA Agriculture and Commercialization and Diversification Project (PACD – P166222) IDA Credit No. 6466-PG Seventh Implementation Support Mission 11 – 25 November 2024 Aide Memoire Table 1. Key project data and ratings Project Data USD (millions) Original Project Amount 40 m Total Disbursement 9.05 m Disbursement Rate 24.15% Approval Date April 20, 2020 Closing Date December 31, 2025 Project Ratings Previous Proposed Project Development Objective MS MS Implementation Progress MS MS Project Management, Monitoring and Evaluation MS MS Procurement MS MS Financial Management MS MS Safeguard MS MS A. INTRODUCTION 1. A World Bank team1 carried out the eighth implementation support mission for the Papua New Guinea (PNG) Agriculture Commercialization and Diversification Project (PACD) during 11 – 25, 2024. The objectives of the mission were as follows: (i) conduct a comprehensive review of project implementation over the past six months, with a focus on results and progress; (ii) closely monitor the advancement of road contracts, productive partnerships, and matching grant agreements currently under implementation; (iii) perform an in-depth assessment of project disbursement, establish a definitive timeline to achieve the disbursement targets for 2024; and (iv) finalize the restructuring as requested by Treasurer in his letter of September 23, 2024. 2. The mission thanks the PNG government, particularly the Department of National Planning and Monitoring (DNPM), Department of Treasury (DOT) and Department of Agriculture and Livestock (DAL) for their excellent support and collaboration. This aide memoire provides a summary of the mission's main findings and recommendations. They were discussed at a wrap-up meeting chaired by DAL Secretary, Dr Sergie Bang, on 25 November 2024 and are endorsed by World Bank Management. B. SUMMARY OF IMPLEMENTATION PROGRESS 3. Project development impact and achievement of development objectives. The project development objective (PDO) is to facilitate the development of competitive and diversified agriculture value chains for selected commodities in targeted provinces. The PDO remains moderately satisfactory, and despite the remaining limited time of 12 months the project is expected to achieve the PDO by December 31, 2025. 4. Overall status of implementation. The PACD has made notable progress in project implementation. Specifically, Component 3 – Productive Partnerships has achieved significant milestones, with 75 partnership agreements signed, surpassing the initial target of 35 due to high demand. This accomplishment represents 1 The mission comprised: Allan Oliver (Senior Agriculture Specialist and Task Team Leader), Son Thanh Vo (Senior Agriculture Specialist and Co-Task Team Leader), Anuja Kar (Senior Agriculture Economist, Co-Task Team Leader), Eric Blackburn (Senior Procurement Specialist), Joyce Morlin (Procurement Specialist), Moses Wasike (Senior Governance Specialist, Financial Management), Bunlong Leng (Environment Specialist), Tom Callander (Social Development/Social Risk Management Specialist), Agnès Deshormes (Consultant, Partnership and Value Chain Specialist), Ravi Corea (Consultant, MIS Specialist), Miks Muižarajs (Consultant, M&E and Impact Evaluation Specialist), John Lowsby (Consultant, Transport Specialist), Gwen Maru (Social Development Specialist), Darian Naidoo (Economist), Rosemary Doonar (Team Assistant), and Annie Phan (Team Assistant). 1 PGK45.94 million (USD 11 million) benefiting 20,406 farmers. The Coffee PMU has completed the disbursement of the second tranche of payments to coffee partnerships for nurseries and seedling production and has initiated the disbursement of the third tranche for post-harvest facilities. Additionally, under Component 1, the formulation of the National Spice Policy and the review of the Spice Industry Board Act are progressing well with co-financing from the European Union-funded Programme for Support to Rural Entrepreneurship, Investment and Trade in Papua New Guinea (EU-STREIT PNG) Project. Under Component 2, the construction contract for Tehobuin/Sipotavai feeder road (AROB) was awarded on October 16, launched on November 13, 2024, and commence work on December 15, 2024. The disbursement rate is currently low at twenty-four percent, an increase of only seven percent since the last ISM. However, with the anticipated acceleration in implementation, the project is expected to disburse eighty percent by June 30, 2025. The overall implementation progress therefore remains moderately satisfactory. 5. Key Findings and Recommendation 6. Component 1: Sub-component 1.1 will finance institutional support to the Autonomous Government of Bougainville/Bougainville Agriculture Commodities Regulatory Authority (BACRA) to develop necessary policy instruments and standards for the cocoa industry. 7. Component 2: Of the three planned cocoa roads, one is ready to start with construction scheduled to begin by 15 December 2024, following the contractor’s ESMP completion. 8. Component 3: Since the 7th ISM, 33 new partnerships have been approved by the Coffee PMU, totaling 75 partnerships (214% of the target). The target for benefiting farmers is fully achieved. Twenty matching grant agreements were signed, meeting 100% of the project target, including three for women-led entrepreneurs. Detailed tables are in Annex 4. 9. Delayed Disbursement: Disbursement is hindered by low ceilings in PMUs Designated Accounts (DAs), lengthy bank account opening processes, and operational challenges such as staff hiring, farmer profiling, and logistical issues in remote areas. These issues, along with COVID-19 disruptions, earlier project setup delays, and slow procurement processes, have slowed implementation across components. 10. Accelerate Disbursement: Under component 3, PMUs will disburse funds for three months’ costs based on withdrawal applications with budget estimates and cash flow projections. Partnerships must submit monthly bank statements and cashbooks detailing expenditures against the previous payment, verified against MIS data. Monthly acquittals will be the basis for additional funding to cover projected costs for an additional month, maintaining a three-month cost coverage buffer. PMUs will prepare monthly cashflow projections to determine the sufficiency of increased DA ceilings. Amended guidelines and a standard amendment for all partnership agreements was cleared by the World Bank on December 2, 2024, and will be presented to the Industry Coordination Committees (ICCs) for approval. Under component 2, PMUs are authorized to reimburse contractors for materials upon invoice submission, without requiring prior installation or usage. With the lifting of the disbursement ceiling and rapid advancement of Components 2 and 3, the project aims to achieve 35% disbursement by December 2024, 50% by March 2025, and 80% by June 2025. Detailed disbursement projections are in Annex 5. 11. STATUS OF COMPONENTS AND ACTIVTIES Component 1. Institutional capacity building 12. Institutional Support: Under sub-component 1.1 (DAL), the formulation of national policies for the spice and livestock sectors is progressing well and will include action plans. 13. Sub-component 1.2 – Commodity Boards: previously canceled activities supporting the Cocoa Board’s operations were reinstated and will be implemented upon receipt of a work plan and budget. This sub- component will also finance institutional support to Bougainville Agricultural Commodity Regulatory Act (BACRA) for developing policy instruments and standards for the cocoa industry. CIC has opted to develop a new structure for the Aiyura Coffee Processing Factory in place of the planned refurbishment. Preliminary design and geotechnical investigations are completed, and procurement of a structural design 2 engineer is underway. For the Tavilo Cocoa Labs, design drawings for the Cocoa Pod Borer quarantine lab refurbishment and SIT lab extension/refurbishment are under review before being submitted to the WB for technical clearance. Timelines were shared during the mission (Annexes 7.1 and 7.3), and cost estimates have been incorporated in the cocoa budget shared with DAL and the WB on November 22, 2024. 14. GESI family training and nutrition. The GESI program will provide family training in gender-sensitive empowerment and financial literacy to 50% of households in partnerships, and a nutrition program in collaboration with Provincial Health Authorities. Community Nutrition Volunteers will deliver household-based training, with all sessions to be completed by October 2025. Follow-up support and detailed activity plans until December 2025 will be prepared to help households apply their learnings. Component 2. Agriculture Feeder Roads 15. Construction. One construction contract was awarded for a cocoa feeder road in the Autonomous Region of Bougainville (AROB), while the remaining contracts (two for cocoa and three for coffee) are in the final stages of procurement, with works expected to start by February 2025 at the latest. According to construction schedules, all works will be completed by December 2025, although some contractors are expected to finish earlier. Detailed timelines are in Annex 6. For construction supervision, the Cocoa PMU Senior Engineer (SE) plans to personally supervise the two East New Britain Province (ENBP) roads, and the Cocoa PMU is in the process of single sourcing the engineer who supervised AROB roads under PPAP for the AROB road. For coffee roads, the PMU will recruit a supervising engineer for the three roads, and the SE will provide the oversight. 16. Road Maintenance Training Specialist (RMTS). The RMTS started work on December 3, 2024. The detailed program of RMTS activities will be agreed jointly with CB and CIC Senior Engineers. Since the cocoa roads program is ahead of the coffee roads program, the RMTS will start trainings in ENBP and AROB before moving to the provinces of Eastern Highlands, Southern Highlands and Simbu, along a detailed program to be shared with DAL and WB by December 31, 2024. 17. Ensuring delivery. To ensure compliance with the tight implementation timeframe, it is essential that DAL, CB, and CIC provide high-level, active monitoring of progress on National Procurement Committee approval, contract awards, mobilization, construction, and supervision activities. It was agreed that CB and CIC will submit monthly progress reports to DAL and WB, covering current status and updated timelines for completion. The first report is due by December 31, 2024. Component 3: Productive Partnerships 18. Sub-component 3.1 – On-Farm and Post-Harvest Productivity, and Formation of Producer Organizations. Since the 7th ISM, the Cocoa PMU completed the first tranche of payments for partnership staff hiring and office establishment, despite delays in opening partnership bank accounts. Farmers profiling is finished, with data being verified and uploaded into the MIS. The second tranche is underway, with measures to expedite disbursements, including outsourcing farmers’ profiling, revising activity plans through 2025, and hiring additional staff. The Coffee PMU disbursed the second tranche for nurseries and seedlings and started the third tranche for post-harvest facilities. Thirty-three new partnerships for diversification commodities were approved in October 2024. Farmers’ profiling will start in December 2024, conducted by PACD-financed cadets assigned to DAL regional offices. 19. The mission commends the strong integration of the Coffee PMU within the CIC and the strategic use of PACD investments to transition farmers from individually selling parchment to collectively marketing quality green beans. This shift is supported by improvements to the enabling environment initiated under PPAP, such as export contract registration for price transparency, simplified quality grades, CIC quality labs issuing certificates, and CIC grader training. Additionally, farmer-level interventions are delivered primarily through cooperative lead partners, including collective post-harvest facilities and group development support. 20. EUDR. The European Union Deforestation Regulation (EUDR), effective January 2026, requires importers to prove their supply chains are deforestation-free and meet strict traceability standards for EU market 3 access. The PACD MIS, which profiles farmers with geographic coordinates, supports traceability and will be shared with interested Lead Partners. The GoPNG has partnered with a global coffee company and a certification firm to certify that PNG coffee production areas exclude land deforested or degraded after 2020, using cost- effective remote sensing and satellite-based analysis, which is expected to extend to cocoa. 21. Sub-component 3.2 – Aggregation, Value-Addition, and Marketing. Given the initially low response, the Cocoa PMU conducted an information campaign before launching a second call for proposals, resulting in 35 eligible proposals now being screened for final approval in January 2025. The Micro, Small and Medium Enterprises (MSME) Development Officer has yet to be recruited. Of the 18 MSMEs set to receive coffee matching grants, two have completed procurement, four are implementing it, and 12 are awaiting overseas procurement. Business development services required by MSMEs will be identified jointly and delivered no later than upon procurement completion. Component 4. Project Management and M&E 22. Staffing: The Coffee PMU is fully staffed except for the Western Zone Administration Officer. The Cocoa PMU is hiring additional staff for Component 3 due to large areas and inaccessible regions. The Financial Management Specialist position at the PCU is being filled after previous staff were dismissed. All new recruitments are expected by December 2024. 23. Procurement: In the past 12 months, 25 contracts were procured by DAL, CB, and CIC, all behind schedule. The current procurement plan includes 24 activities yet to be procured, estimated at USD 8.9M. Priority activities include feeder road rehabilitations and road contracts. The project is scheduled for restructuring to reallocate undisbursed funds and reduce procurable items to USD 30.8 million. The procurement performance rating remains moderately satisfactory. 24. Financial Management (FM): FM performance is moderately satisfactory with some shortcomings. Adequate actions are being implemented to address bottlenecks. The project has no overdue audited financial statements for 2023. The overdue 2022 statements for GoPNG funding under the closed PPAP project has also been submitted on December 5, 2024. Interim financial reports for CIC are current, while those for CB and DAL are overdue. FM arrangements are in place to support increased disbursements. 25. Monitoring and Evaluation (M&E): The M&E team has expanded its use of new data collection tools. To address delays in the Cocoa PMU, an M&E workshop is recommended by January 30, 2025. All monitoring tools must be finalized by January 15, 2025, and staff trained by February 15, 2025. An immediate review of all source data for Result Framework indicators is recommended. The PCU will prepare Terms of Reference for a consultant firm to conduct the PACD endline study by January 31, 2025. The initial mission for the PACD Implementation Completion Report will take place in September 2025. 26. Management Information System (MIS): Significant progress has been made on the open-source MIS, now extending to all project components. It supports field data collection and grant acquittal. Discussions on sustainability highlighted the potential for Lead Partners to use specific modules independently and for implementing agencies to adopt the MIS as part of a future sector-wide system. 27. Environmental and Social (E&S) Safeguards: The project's safeguards performance is moderately satisfactory. No health and safety incidents were reported in the last six months. E&S screening reports and management plans are required for certain subprojects. Contractors must obtain PMU approval and WB no objection for Contractor ESMPs before site possession. The Coffee PMU aims to have all farmers sign household declarations on the E&S Code of Practice by January 2025. The PCU Safeguards Specialist will support similar efforts in the Cocoa PMU. 4 25. Next steps. To support the momentum gained and ensuring the project’s steady progress, the Bank will conduct an interim technical mission in February 2025 (exact date to be determined) followed by the 9 th ISM which is planned for May 2025 and the exact dates are to be discussed and agreed with DAL and DNPM. C. AGREED ACTIONS: D. BY WHEN ACTIONS (Best case RESPONSIBLE scenario) Component 1 1 Include action plans in National Spice Industry and January 15, PCU National Livestock policies and amend terms of reference 2025 accordingly 2 Launch procurement for livestock consultant January 15, PCU 2025 3 Implement activities that support CB’s operational activities January 15, CB/Cocoa PMU as soon as work plan and budget received from CB 2025 4 Provide institutional support to ARB/BACRA in January 31, ARB/BACRA and accordance with ARB/BACRA request 2024 Cocoa PMU 5 Cost estimate for design, procurement and construction of January 15, CIC Aiyura Coffee Factory will be shared with DAL and WB 2025 6 Cost estimate for design, procurement and construction of January 15, CB Tavilo cocoa labs will be shared with DAL and WB 2025 7 Prepare a detailed plan to organize the sequence of January 31, Gender Specialist/ GESI/nutrition activities across the project area until end of 2025 Nutrition Specialist 2025. 8 Develop/detail a follow-up approach to help households January 31, Gender Specialist/ apply their new GESI/nutrition learnings leveraging local 2025 Nutrition Specialist resources Component 2 9 Submit first monthly report to DAL and WB on progress of December CIC, CB three feeder roads, including current status and updated 31, 2024 timeline for completion 10 Detailed program of RMTS activities shared with DAL and December CB WB 31, 2024 Component 3 11 Amend guidelines, prepare a standard amendment January 31, Cocoa and Coffee applicable to all partnership agreements, submit to the 2025 PM World Bank for clearance, and present to the ICCs for approval 12 Request the World Bank to directly pay the supplier for January 15, Coffee PM bulk procurement of farmers’ tools 2025 13 Identify required business development services jointly October 31, Cocoa and Coffee with MSMEs and deliver latest upon completion of 2025 PMUs matching grant procurement Monitoring and Evaluation 14 In consultation with the Bank, prepare TOR for the January 31, Senior M&E Consultant Survey firm for the Endline survey 2025 Specialist, M&E Advisor 15 Procure services of the Endline survey firm March 31, Procurement 2025 Specialist, Senior M&E Specialist 16 Implement an M&E Planning and Implementation January 31, Senior M&E Workshop in Cocoa PMU 2025 Specialist, M&E Advisor 17 Finalize all PACD Monitoring tools January 15, Senior M&E 2025 Specialist, M&E Advisor 5 D. BY WHEN ACTIONS (Best case RESPONSIBLE scenario) 18 Review, clean and validate source data for all RF indicators, Immediate Senior M&E clean and submit an updated status update Specialist, M&E Advisor 19 In consultation with the Bank, prepare a TOR for the January 31, Senior M&E Consultant Survey firm for the Endline survey 2025 Specialist, M&E Advisor 20 Procure services of the Endline survey firm March 31, Procurement 2025 Specialist, Senior M&E Specialist 21 Arrange for transferring the MIS to interested lead partners. June 30, PCU MIS Specialist 2025 Environment and Social Safeguards 22 PCU’s Safeguards Coordinator will provide implementation support to Cocoa PMU through implementation of agreed December PCU and PMU workplan with a focus on E&S training for the partnerships; 31, 2024 and E&S induction of road contractors. 23 PMU should confirm with CEPA or the provincial Department of Environment whether the AIYURA January 15, PCU and PMU FACTORY and wet mill construction and operations 2025 require environmental permits. 24 11 matching grantees to complete their ESMPs for their December PCU and PMU infrastructure investments aligning with the 3.2 guidelines. 31, 2024 25 PCU’s Safeguards Coordinator will support Cocoa/Coffee After signing PCU and PMU ES officer to deliver ES induction to the local contractors. the access Safeguards Staff road contract 26 CESMPs for all market access roads to be submitted to the December World Bank and no-objection obtained before site PCU and PMU 31, 2024 possession is granted by the PMU. 27 Prepare estimated monthly cashflow projections that will be January 15, DAL, CIC, and CB used to determine the sufficiency of the increased 2025 PMUs designated accounts ceilings 28 Amended guidelines and a standard amendment applicable January 15, DAL, CIC, and CB to all partnership agreements will be prepared and 2025 PMUs submitted to the World Bank for clearance before being presented to the ICCs for approval 29 Submit overdue Interim Financial Reports for CB and DAL. January 15, CB and DAL PMUs 2025 6 ANNEXES Annex 1: Status of 7th ISM Agreed Actions Annex 2: List of persons met Annex 3: Partnerships and matching grants details Annex 4: PACD disbursement forecast Annex 5: Overview of staffing status Annex 6: Components 1 and 2 infrastructure timelines / cost estimates Annex 7: Management Information System 7 8 Annex 1: Status of 7th ISM Agreed Actions BY WHEN (Best case NO ACTIONS RESPONSIBLE Status scenario agreed during mission) Restructure 1 Request letter for restructure to the Bank Immediate DAL and PCU Completed Component 1 2 Actively engaged in the implementation of governance studies and other Immediate DAL, CB, CIC, Some activities under implementation. initiatives. LDC 3 Share details of the scope of the proposed factory extension at Aiyura, and the June 28, 2024, Coffee PMU SE Done for Aiyura Factory proposed coffee quality lab alterations at Panga, with the Bank Coffee Quality lab for Panga will be shared in first quarter 2025 4 Share details of the scope of the proposed labs alterations at Tavilo with the June 28, 2024, Cocoa PMU SE In progress. Drawings not yet certified by Bank local Building and Physical Planning Boards. 5 Conduct the cocoa conversion study September 2024 Cocoa PM In progress Component 2 6 Ongoing PMU SEs Ongoing The SEs will share brief weekly status update reports, including timeline updates, with the Bank. 7 SEs will identify potential RMTS candidates, agree a shortlist of three suitably June 28, 2024, PMU SEs First Candidate selected and in contract qualified and experienced individuals prior to interviewing the candidates. negotiations now. 8 SEs will prepare and share ToR for the two Construction Supervisor positions, June 28, 2024, PMU SEs for review by the Bank Component 3 9 Review cocoa partnerships including processing facilities, assess the July 2024 Cocoa PMU Completed possibility of moving them to Sub-component 3.2 under Call 2 and report to the World Bank Task Team. 10 Launch a second call for matching grants under SC 3.2 July 2024 Cocoa PMU Completed 11 Modify SC 3.2 guidelines to include the submission of bank statement June 2024 Cocoa PMU Completed showing availability of co-financing as an eligibility criterion. 9 Financial Management 12 Submit a request to increase the designated account ceiling June 30, 2024, PCU Delayed at Treasury. Continuous follow up. 13 Finalize and submit the audit of the December 31, 2022, financial statements June 30, 2024, PCU Field audit completed. AGO to issue opinion for PPAP 14 Finalize and submit the audit of the December 31, 2023, financial statements June 30, 2024, PCU Completed of PACD 15 Finalize the recruitment of the DAL FM Specialist June 30, 2024, PCU Delays in identifying CVs. CV evaluate and Specialist to be contracted in November 2024. Monitoring and Evaluation 16 MIS to generate monthly dashboards on activity and budget implementation June 2024 MIS consultant Good progress with Coffee PMU. More work flagging delays for early remedial actions by project management. to be done by Cocoa PMU Environment and Social Safeguards Component 1 17 Submit to the World Bank team the E&S screening reports Throughout the Cocoa/Coffee implementation PMUs Safeguards On going Officers Component 2 18 Ensure required amendments to coffee road bid documents not previously During contract Coffee PMU’s included in pre-bid meeting minutes/amendment are confirmed during negotiation Engineer Completed. contract negotiation 19 Encourage preferred bidders to progress the preparation of the full C-ESMP Upon selection Coffee and Cocoa while final government approvals are obtained for contract signing to ensure and notification Engineers and To be completed by December 2024 One Cocoa Road awarded, two for award in timely preparation and approval of the C-ESMP during the mobilization of preferred ESSOs January 2024. period bidders 20 Educate contractors on E&S requirements at the pre-bidding, during Throughout Cocoa PMU’s negotiation and before the start of civil work. Support the contractors in implementation Safeguards Officer Coffee PMU’s On going preparing their construction-ESMP (CESMP) as required in the bidding documentation. Safeguards Officer Component 3 10 21 Continue to identify any partnerships that intend to use Partnership funds to prior to signing PCU’s safeguards Under implementation with Cocoa purchase pesticides and then ensure they are aware of the requirements around partnership officer until the Partnerships. Coffee Partnerships completed the types of pesticides that are banned and the safe storage, use and disposal as agreements. Cocoa PMU hired a except for the diversified value chains. outlined in the ESMP of each partnership proposal. PCU will re-circulate or new safeguards post on the project website the updated IPM (2023), including the banned specialist chemicals. 22 Conduct internal PSU/PMU Component 3 E&S workshop to review progress 30 June 2024 PCU Coordinator Ongoing with Coffee PMU. Cocoa yet to start and outline actions to ensure requirements are met. and PCU Safeguards Specialist (with relevant PMU staff) 23 Conduct E&S workshop for the lead partners to support them to meet E&S prior to signing PCU Safeguards Completed for the Coffee Partnerships except requirements – with a particular emphasis on Environmental and Social partnership Specialist and PMU for the diversified value chains and 3.2 Management Plans (ESMPs), agreements. C3 coordinator and matching grants. Cocoa Partnerships. Yet to Integrated Pest Management Plans (IPMPs), HH declarations / ESSOs start Codes of Practice, Customary Land Use Agreements (CLUAs), training resources and E&S monitoring 24 Engage and support matching grant recipients on E&S screening and Prior to signing PCU Safeguards Coffee done instrument preparation matching grants Specialist and PMU recipients C3 coordinator and ESSOs 11 Annex 2: List of persons met DEPARTMENT OF NATIONAL PLANNING AND MONITORING Juanita Sundie, Aid Coordinator, Multilateral Branch DEPARTMENT OF TREASURY Maureen Su’walele, Debt Servicing Officer DEPARTMENT OF AGRICULTURE AND LIVESTOCK Dr Sergie Bang Secretary Robyn Ekstrom, DFAT Advisor DAL David Thomson, Technical Advisor DAL Steven Hoko, Deputy Secretary Technical Services, DAL Francis Daink, Deputy Secretary Policy Division Jethro Apinas, Project Coordinator, Consultant, PACD PCU Benita Beim, Finance and Procurement Consultant Clement Victor, Senior M&E Officer, Consultant PACD PCU Peter Katapa, Environment Safeguards Officer, PACD PCU Kerry Pagau, Gender Specialist, PACD PCU Christine Terim, Nutrition Specialist, PACD PCU COCOA BOARD OF PAPUA NEW GUNIEA Jesse Anjen Chief Executive Officer Roland Kerina, Project Manager Martin Powell, Partnership Manager Raymond Paulias, Senior Engineer Raphael Tapin, M&E Officer Kevin Vavana, Procurement Officer Robert ToKauba, Senior Finance Officer Dino Naing, Monitoring Information Systems Officer COFFEE INDUSTRY CORPORATION LIMITED Steven Tumae, Chief Operating Officer Potaisa Hombunaka, Project Manager Edric Famundi, Senior Finance & Procurement Officer Sebastian Sigl, Finance & Procurement Officer Belinda Temon, Finance & Admin Officer Alphy Semy, Productive Partnership Coordinator Raymond Dalla, Senior Partnership Officer, Eastern Zone Janet Lali, Partnership Officer, Eastern Zone Benjamin Kasito, Partnership Officer, Eastern Zone Jonah Tai, MSME Development Officer Eric Aba, Senior Engineer Anita Uvovo, Environment Social Safeguards Officer (ESSO) Nemica Pohonu, ESSO-Eastern ZoneBlein Mailil, Monitoring, Evaluation & Survey Officer Matheson Iyape, Management Information Systems Officer Simon Gesip, Senior Partnership Officer, Western Zone Petrus Tai, Partnership Officer, Western Zone Japhet Bep, Partnership Officer, Western Zone Scotty Norombu, ESSO-Western Zone 12 Annex 3: Partnerships and matching grants details Table 1 – Partnerships financed by PACD Number of Total amount Number of partnerships (PGK million) farmers Cocoa PMU - Cocoa, in combination 18 19.59 8,763 with coconut, livestock, spices Coffee PMU – Coffee 24 20.10 8,943 Coffee PMU – Honey, spices, 33 6.25 2,7001 livestock Total 75 45.94 20,406 Result Framework targets 35 20,000 1 Subject to verification through partnership baseline. Table 2 – Matching grants financed by PACD Number of matching Total contract Total matching grants amount grant amount (PGK million) (PGK million) Cocoa PMU 2 Yet to be finalized 8.1 Coffee PMU 18 7.57 5.9 Total 20 Result Framework target 20 13 Annex 4: PACD disbursement forecast BUDGET VS. EXPENDITURE - OCTOBER 2024 DISBURSEMENT FORECAST 2024 2025 Q4 Q1 Q2 Q3 Q4 Component 1 - Institutional capacity building 1 383 000 3 670 000 6 779 415 1 600 000 1 089 636 Component 2 - Agriculture feeder roads 2 500 000 11 163 000 12 163 000 4 593 644 1 609 164 Component 3.1 - Productive Partnerships 11 369 376 8 951 185 11 197 914 7 885 906 3 143 141 Component 3.2 - Matching grants 1 700 000 6 000 000 3 647 942 3 097 436 1 000 000 Component 4 - Project management 1 881 720 2 784 528 2 924 896 2 774 895 2 796 083 TOTAL 18 834 096 32 568 713 36 713 167 19 951 881 9 638 025 CUMULATIVE DISBURSEMENT 51 896 229 84 464 942 121 178 109 141 129 989 150 768 014 34% 56% 80% 94% 100% 5.1 Key Milestone against Projected Disbursements: Cocoa COMPONENTS KEY DELIVERABLES 2024 2025 Q4 Q1 Q2 Q3 Q4 Component 1 - Institutional - - - - capacity building - Component 2 - Agriculture feeder roads 0 km 1.5km (cum = 1.5km) 5km (cum=6.5km) 5km (cum=11.5km) 2.1km(cum=13.6km) 30 % of partnership 40 % of 17% of partnership 3 % of partnership WP 10 % of WP completed (cum = partnership WP WP completed (cum completed (cum = 100%) Component 3.1 (a) - Productive partnership WP 40%) completed (cum = = 97%) Partnerships All Value Chains completed 80%) Component 3.2 - Matching grants 0 MGs (cum = 0) 6 MGs (cum = 6) 6 MGs (cum = 12) 6 MGs (cum = 18) 18 MG completed Component 4 - Project - - - - management - Note: MG (Matching Grant); WP (Work Plan) *3.2 Cocoa MG – Activities commence in Q1 2025. We expect all 3.2 MGs to be completed by end of Q3 2025. 14 5.2 Key Milestone Project Disbursement: Coffee COMPONENTS KEY DELIVERABLES 2024 2025 Q4 Q1 Q2 Q3 Q4 Component 1 - Institutional - - - - capacity building - Component 2 - Agriculture feeder roads 0 km 1.5km (cum = 1.5km) 5km (cum=6.5km) 5km (cum=11.5km) 2.1km(cum=13.6km) 22 % of partnership 22 % of 13% of partnership 3 % of partnership 40 % of WP completed (cum = partnership WP WP completed WP completed (cum Component 3.1 (a) - Productive partnership WP 62%) completed (cum = (cum = 97%) = 100%) Partnerships Coffee completed 84%) Component 3.1 (b) - Productive 0 % of 15 % of partnership 40 % of 40 % of 5 % of partnership Partnerships Spices & small partnership WP WP completed (cum = partnership WP partnership WP WP completed (cum livestock completed 15%) completed (cum completed (cum = = 100%) =55%) 95%) Component 3.2 - Matching grants* 4 MGs (cum = 6) 6 MGs (cum = 12) 6 MGs (cum = 18) xxx MG completed xxx MG completed Component 4 - Project - - - - management - Note: MG (Matching Grant); WP (Work Plan) *3.2 MG – 2 Completed in Q3. We expect all 3.2 MGs to be completed by end of Q2 2025. 15 ANNEX 5. Overview of staffing status Project Coordination Unit (PCU) at DAL Cocoa Project Management Unit (CB PMU) Coffee Project Management Unit (CIC PMU) Position Status Position Status Position Status Project Coordinator (PC) On board Project Manager On board Project Manager On board Vacant – expected Financial Management Senior Financial & Proc on board in Productive Partnership Coordinator On board On board Specialist Officer December 2024 Senior Monitoring & On board Senior Finance Officer On board Administration Officer, WZ To be recruited if required Evaluation Specialist Environmental and Social Environmental and Social On board Senior Procurement Officer On board On board Safeguards Specialist Safeguard Officer Senior Partnership Officer Procurement Specialist On board M&E and Survey Officer On board On board (Eastern Zone) Monitoring and Evaluation Senior Partnership Officer On board Senior Engineer On board On board Advisor (Western Zone) Gender Equity and Social Expected to be on board by Finance Administration On board Road Maintenance Training Specialist On board Inclusion (GESI) early December 2024 Officer Nutrition Specialist On board Finance Assistant On board Senior Civil Engineer On board Environmental and Social Safeguard Office Manager On board On board Partnership Coordinator On board Officer Finance and Procurement On board since Communication and Information On board M&E Survey Officer On board Officer June 2024 Officer Finance & Procurement Driver/Admin Officer On Board Partnership Finance Officer On board On board Officer Partnership Officer (East New On board IT MIS Officer On board Britain, New Ireland and AROB) Partnership Officer (West New On board MSME Development Officer On board Britain, Madang and Morobe) Business MSME Development Expected to be on board by Two E&S Officers for On board Officer early December 2024 Western and Eastern Zones Four Partnership Officers IT and MIS Officer On board On board (Western and Eastern Zones) Administration On board Assistant/Driver/Logistics Officer Expected to be on board by Supervision Engineer- ARoB early December 2024 Expected to be on board by Partnership Payroll Assistant early December 2024 M&E Assistant- MOMASE 16 M&E Assistant- ARoB Expected to be on board by M&E Assistant- ENB late December 2024 M&E Assistant- WNB Productive Partnership Assistant On board AROB Productive Partnership Assistant On board WNBP Productive Partnership Procurement On board Assistant Partnership Procurement Implementation Support Short-Term Expected to start in Dec-2024 Consultant Productive Partnership QB Support Expected to be on board in Officer (on-site) late November-2024 17 Annex 6: Component 1 & 2 Infrastructure timelines / Cost estimates 7.1 Cocoa Laboratories Timeline Activity Output 2024 Action Status Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec By Done CPB Quarantine Refurbishment & Lab extension Physical Planning Approval 15.11.24 27.11.24 Building Board Approval 30.11.24 BOQ Cost Estimates 07.12.24 Safeguards LESIA 14.12.24 Review of RFB 07.01.25 NOL to Bid 07.01.25 Invitation for Quotes by CB 07.02.25 Evaluation of Quotes & TEC 28.02.25 NOL 14.03.25 Contract Award 21.03.25 Contract Signing 31.03.25 Mobilisation 30.04.25 Commencement of Works 31.08.25 SIT LABORATORY Physical Planning Approval 15.11.24 27.11.24 Building Board Approval 30.11.24 BOQ Cost Estimates 07.12.24 Safeguards LESIA 14.12.24 Review of RFB 07.01.25 NOL to Bid 07.01.25 Invitation for Quotes by CB 07.02.25 Evaluation of Quotes & TEC 28.02.25 NOL 14.03.25 Contract Award 21.03.25 Contract Signing 31.03.25 Mobilisation 30.04.25 Commencement of Works 31.08.25 18 7.2 Cocoa Roads Timeline Activity Output 2024 2025 Action AROB Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec By t 5.8 km Tehobuin-Sipotavai Road Contract Signing 16.10.24 Mobilization 22.11.24 Works implementation 10.06.25 East New Britain 4.0 km Kulungure Road Contract Signing 30.11.24 Mobilization 03.12.24 Works 29.10.25 implementation 3.18 km Vunapalading – Burit Road Contract Signing 09.12.24 Mobilization 10.12.24 Works 31.10.25 implementation 19 7.3 Aiyura Coffee Factory Timeline 7.4 Coffee Road Timeline 2024 2025 ACTIVITIES Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Receiving of NOL Legal Clearance Award of Contract ESMP Awareness Mobilisation Construction of roads 20 Annex 7: Management Information System 1. Data flow Legend MESO Monitoring, Evaluation and Survey Officer PPC Productive Partnership Coordinator PPO Productive Partnership Officer 21 2. Cocoa partnerships 22 3. Farmers profiling 4. Registered farmers 23 5. Farm-level key performance indicators 6. Partnership farmers (Morobe Province) 24 7. Kulungure Feeder Road (East New Britain Province) 25