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Implementation Completion Report (ICR) Review - Albania Urban Works And Microenterprise Pilot Project

1. Project Data:   
ES Date Posted:
Project Name:
Albania Urban Works And Microenterprise Pilot Project
Project Costs(US $M)
 4.4  4.56
Loan/Credit (US $M)
 4.0  3.51
Sector, Major Sect.:
Small Scale Enterprise,
Private Sector Development
Cofinancing (US $M)
 0.0  0.93
L/C Number:
Board Approval (FY)
Partners involved
Swiss Agency for Development Cooperation 
Closing Date
06/30/1999 06/30/1999
Prepared by: Reviewed by: Group Manager: Group:  
Fareed M. A. Hassan
Ronald S. Parker Ruben Lamdany OEDCR

2. Project Objectives and Components:

a. Objectives
The project aimed to help the Government of Albania boost urban employment and small-scale economic activities by: (i) rehabilitating basic urban infrastructure; (ii) assisting in the development of microenterprises by providing microcredit and technical advice; (iii) enhancing the skills of local governments needed for promoting local development; and (iv) supporting project-related operating costs of the Albanian Development Fund (ADF)

b. Components
The project financed the following components: urban works (US$1.19 million), microenterprise support (US$1.69 million), training and study tours (US$0.03 million), and implementation framework (US$0.6 million).

c. Comments on Project Cost, Financing and Dates
Financing: IDA (US$3.51 million), Government (US$ 0.24) and cofinanciers (US$ 0.93). The credit was approved on August 1, 1995 and there were six months between negotiations and effectiveness. However, the project closed on June 30, 1999 as scheduled.

3. Achievement of Relevant Objectives:

There were significant delays in processing the project. However, the project achieved most of its major objectives with only a few shortcomings. The urban works component succeeded in improving basic infrastructure in 15 municipalities and promoting private sector development through the involvement of private contractors. The small-scale credit component was successful in developing an urban microcredit program that exceeded loan disbursement targets by 50 percent because of the use of reflow. In contrast, the studies and training component was only partly implemented and technical support to microentrepreneurs were not provided. The implementation support component financed project-related operating costs of ADF, but the project was hindered by ADF's weak management and administration. The microcredit program was successful, but subsidies were essential for this. Finally, maintenance of urban work sub-projects has been one of the project's main challenge.

4. Significant Outcomes/Impacts:

The project succeeded in rehabilitating local urban infrastructure--markets, roads, telecommunication, sewerage, and water supplies. These sub-projects stimulated urban employment and private sector activities: (i) directly through opening up opportunities for the implementation of sub-projects through private contracts and (ii) indirectly through the development impact of improved infrastructure.

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

The project achieved most of its major objectives with only a few shortcomings.Non-lending complementary activities, including technical and business advice for microentrepreneurs, transfer of know-how technology, and new methods of supply and marketing, were not provided. Furthermore, very modest funding was included for training of local government staff (i.e., only one procurement seminar was provided to municipal staff).
6. Ratings:ICROED ReviewReason for Disagreement/Comments
Institutional Dev.:
    The sustainability of the achievements generated by the project are subject to uncertainty: for example, subsidies were essential for the success of the microcredit program. Will Besa Foundation, which recently assumed the responsibility of the microcredit program, impose financial discipline and improve productivity to ensure sustainability? The ICR presents inadequate evidence for rating sustainability likely.
Bank Performance:
Highly SatisfactorySatisfactory
    The Bank overestimated ADF's implementation capacity. Strengthening ADF's finance and administration before project implementation was necessary .
Borrower Perf.:
Quality of ICR:

7. Lessons of Broad Applicablity:

OED agrees with the lessons cited in the ICR, for example, early attention should be given to financial management and transparent financial procedures to ensure future sustainability.

8. Audit Recommended?  No


9. Comments on Quality of ICR:

The ICR is satisfactory. It rates achievement of employment objectives as substantial, but presents no evidence of this. The Government and the cofinancier did not comment on the draft ICR.

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