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Implementation Completion Report (ICR) Review - Agro-Export Development Project

1. Project Data:   
Project ID:
Project Name:
Agro-Export Development Project
Agro-Industry & Marketing, Agriculture
L/C Number:
Partners Involved:
Govt. of Netherlands, Govt. of the Swiss Federation
Prepared By:
Madhur Gautam, OEDST
Reviewed By:
Patrick Grasso
Group Manager:
Alain Barbu
Date Posted:

2. Project Objectives, Financing, Costs, and Components:

Objectives: (i) develop the newly established Bolivian Export Foundation (BEF) as a private, autonomous, self-financing organization, which would form financially sound, agro-based subsidiaries and joint ventures with small- and medium-scale entrepreneurs and investors; (ii) introduce improved production, processing, marketing and management technology to upgrade the capacity of Bolivian producers and exporters to compete in international markets; (iii) expand agricultural production in an environmentally sound manner; and (iv) generate employment and capital accumulation in order to improve the income and standard of living of poor farmers, women's groups, and urban and rural laborers.

Components: The project was to finance: (i) operations of BEF, including its enterprise investment program, initially expected to consist of five joint ventures and subsidiaries; (ii) the employment of an internationally recruited management firm of four experts to help the BEF form and manage its enterprises and concurrently train their Bolivian counterparts to take over the BEF at the end of the fifth year; and (iii) provision of technical assistance by BEF to its investment enterprises in marketing, financial management and export.
Financing and costs:Project costs at appraisal were US$34.6 million equivalent, of which IDA provided US$ 22.5 million, Government of Netherlands US$ 8.9 million and the Government of the Swiss Federation US$ 3.2 million. Final project costs were US$25.6 million. About US$6.1 million of the IDA credit was canceled at closing.

3. Achievement of Relevant Objectives:

The project only partially achieved its objectives. It helped in the institutional development of BEF as an autonomous organization with capacity to exploit export potentials and effectively deal with business partners. Its financial performance, however, has been poor. The project helped introduce new technologies and expand agricultural production, but the achievements thus far have been limited. A number of the investments have failed; the remaining enterprises are newly established and it is possible that their export potential has not been fully realized. The direct impact of the project on employment and income generation has been less than expected. The main goal of the project, the promotion of sound export-oriented subsidiaries has not been satisfactorily met, as the current value of the portfolio (estimated at between US$8-12 million) is well below the levels of total investment (US$21.8 million). Only 9 of the original 30 enterprises are still active, and of these, the majority are at varying levels of risk.

4. Significant Outcomes/Impacts:

1. The development of BEF as an autonomous organization with capacity to evaluate business opportunities with export potential and to deal with aggressive business partners.
2. The introduction of new technology in agro-export production activities, albeit limited.

5. Significant Shortcomings (include non-compliance with safeguard features):

The poor quality of BEF's investment portfolio, despite very high levels of management and operational costs, with no new investments in the pipeline. The project design was deficient in not including any performance monitoring indicators.

6. Ratings:ICROED ReviewReason for Disagreement/Comments
Institutional Dev.:
    Sustainability depends on the performance of current portfolio and the ability to mobilize funds in the future. The prospects for both are uncertain at this time.
Bank Performance:
Borrower Perf.:
Quality of ICR:

7. Lessons of Broad Applicablity:

The main lessons emerging from this project are the need to ensure that the project management has the relevant business, rather than government, experience and that it has the necessary entrepreneurial skills to deal with local operating environment and business relations. Particular attention should also be paid to the local legal framework in which a proposed new entity has to operate.

8. Audit Recommended?  No


9. Comments on Quality of ICR:

The ICR is satisfactory, although a bit terse. There is an inconsistency between the text and the annex tables on the amount of credit canceled at closing.

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