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December 22,1995

Moldova: Emergency Drought Recovery Project (Loan 3569- MD)

The Moldova Emergency Drought Recovery project (Loan 3569-MD for US$26 million) received the Bank's first loan to Moldova and was approved in FY93. The Implementation Completion Report (ICR) was prepared by the Europe and Central Asia Region and provides a good account of the implementation of the project. The Borrower provided inputs, but did not prepare a separate completion report.

The principal objective of the project was to provide fast disbursing funds for agricultural imports, notably agricultural chemicals, fertilizer, diesel engines, and spare parts for agricultural machinery, to assist recovery from the catastrophic 1992 drought. The project was expected to increase agricultural production for domestic markets and exports and indirectly to help reduce poverty.

Implementation of the project was highly successful. Moldova became independent in August 1991 under precarious economic and civil circumstances. In 1992 it was struck by the worst drought since 1946. The Bank reacted rapidly to this emergency and quickly prepared, appraised and approved the project. Through judicious use of the project preparation facility, focused technical assistance, early identification of essential requirements, and procurement through international shopping and limited international bidding, the bulk of the imported inputs arrived in time for the 1993 agricultural season.

The impact of project financed inputs, coupled with a more normal rainfall season in 1993, was impressive. For example, fruit production in 1993 more than doubled compared to 1992 (the drought year), and was 50 percent higher than in 1991. Spare parts imported under the project, by keeping equipment in working order, enabled the timely completion of important field operations, including spraying of pest-prone crops, including tree fruits and grapes, and planting of potatoes and sugar beet. Application of western precision seeding technology resulted in excellent sugar beet crops. Other innovations were also introduced and many are now standard practices in Moldovan agriculture.

Project outcome is rated as highly satisfactory by both the ICR and the Operations Evaluation Department (OED). The ICR does not rate the sustainability of this shortterm project, but OED rates it as likely in view of the project's technological impact. The institutional objectives of this project were limited, but it did have a substantial positive impact on the capacity of several agencies to deal with Bank procedures. Hence, institutional impact is rated as substantial by both the ICR and OED. Bank performance is rated as highly satisfactory in the ICR and by OED.

Among the lessons to be derived from this project are: (i) emergency projects work well if they have clearly defined and simple objectives; (ii) successful preparation of emergency projects requires competent professionals on both the Bank team and in the government implementing agencies; and (iii) inexperienced and new borrowers require higher than average implementation support, both from the Bank and through well-focused technical assistance. No audit is planned.

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