Independent Evaluation - Home > Search

Implementation Completion Report (ICR) Review - Mining Sector Capacity Building Project


  
1. Project Data:   
ES Date Posted:
09/09/2005   
PROJ ID:
P057875
Appraisal
Actual
Project Name:
Mining Sector Capacity Building Project
Project Costs(US $M)
 15.5  20.43
Country:
Mauritania
Loan/Credit (US $M)
 15.0  20.09
Sector, Major Sect.:
Central government administration,
Law and justice and public administration
Cofinancing (US $M)
   4.76
L/C Number:
C3206      
   
Board Approval (FY)
  99
Partners involved
 
Closing Date
12/31/2004 12/31/2004
         
Prepared by: Reviewed by: Group Manager: Group:  
Ashwin Digambar Bhouraskar
Fernando Manibog Alain A. Barbu OEDSG

2. Project Objectives and Components:

a. Objectives
According to the Project Appraisal Document, the broad objectives were to strengthen the Government's capacity to act as a facilitator and regulator of mining activities and to catalyze private investment in Mauritania's mining sector. The specific objectives were to (a) complete sector reforms in order to establish an enabling environment to attract foreign direct investment in mining, which would ensure a real and sustainable contribution to economic growth; (b) build institutional capacity to effectively enforce laws and regulations, administer mining titles, and monitor sector developments; (c) strengthen the Government's capacity to make essential geological information available to potential investors, including a mining data bank and a geological map; and (d) establish capacity in the country, by means of pilot projects, to identify and address environmental as well as social impacts from mining.

b. Components
The project included 4 components:

(i) Capacity building of Ministry of Mines and Industry (MMI) agencies (US$2.55 million)
(ii) Developing a geological information infrastructure (US$10.45 million)
(iii) Creating an environmental management system (US$1.5 million)
(iv) Forming and financing a Project Implementation Unit (US$1.0 million)

c. Comments on Project Cost, Financing and Dates
Project Cost While there is some inconsistency among the different project cost and loan figures presented in the ICR (in Annex 2), the Region has verified that the actual project cost is US$20.43 million.
Financing A devaluation of the US$ relative to SDR resulted in an increase in the value of the loan amount of US$15 million to US$20.3 million. The additional resources were spent on Component II (Geological Infrastructure). Co-financing of US$4.76 million from the Islamic Development Bank (US$3.96 million) and the French Cooperation (US$0.8 million), which had not been clearly defined and is not mentioned in the Project Appraisal Document, was provided during implementation. At appraisal, the government contribution was determined at US$0.5 million.


3. Achievement of Relevant Objectives:

(a) Complete sector reforms in order to establish an enabling environment to attract foreign direct investment in mining This objective was partially achieved. Six legislative reforms relating to the regulatory environment in the mining sector were enacted during project implementation. The ICR, however, provides no information on the substance of the reforms and how they contributed to producing an enabling environment for FDI. Annual average FDI rose from US$10 million in 1997 to US$148 million at project closing, and thus surpassed the high-case scenario figure projected at appraisal (in "Annex 4: Cost Effectiveness Analysis Summary" in the PAD) of US$120 million. But the 3 other indicators for increased FDI did not meet either their targets or the levels projected for them, respectively, in the high-case scenario: (i) the number of private operators involved in the different stages of the mining cycle did not reach the 20-30 range (the target as given in the PAD, p. 4), and in fact declined from 14 in 2001 to 8 at project-end; (ii) average annual mineral exports did not meet the high- or low-case scenario figure for this indicator; and (iii) according to the ICR, fiscal revenues from mining did not meet expectations (but did surpass the low-case scenario figure). Explicit targets for average investments, mineral exports and fiscal revenues, as well as a LogFrame Matrix, were not present in the PAD. What remain unclear are the approximate portion of increased FDI for which the project was responsible and the investments that were projected in the absence of the project.
(b) Build institutional capacity to effectively enforce laws and regulations, administer mining titles, and monitor sector developments This objective was partially achieved. Through technology applications, the Mining Cadastre established as an autonomous unit under the Ministry of Mines and Industry, has been able to process mining titles with greater efficiency. There is no information available in the ICR to indicate that adequate measures were taken to build capacity for enforcing laws and regulations and for monitoring sector developments.
(c) Strengthen the Government's capacity to make essential geological information available to potential investors, including a mining data bank and a geological map This objective was achieved. Owing to savings derived from a change in the USD/SDR exchange rate and additional financing from other donors, the activities for this objective were expanded and nearly 30% more area was mapped than planned at appraisal. However, the mining data bank, the Geological and Mining Information System (SIGM), under the Directorate of Mining and Geology (DMG), which is to store and provide geological data to investors, experienced staff capacity problems that were not resolved till the close of the project.
(d) Establish capacity in the country, by means of pilot projects, to identify and address environmental as well as social impacts from mining This objective was achieved. Several pilot studies were conducted to (i) develop baseline environmental information that would serve for environmental impact analysis and defining the content of Environmental Impact Assessments, and (ii) assess the socio-economic impacts of mining to mitigate adverse effects from the sector. The project also helped create an environmental unit, the Environmental Affairs Service (SAE), within the DMG, along with an Environmental Management Information System (SIGE), developed links between the SAE and the Ministry responsible for environmental management, and assisted in the adoption of environmental regulations for the mining sector. But SIGE, like SIGM (see obj. (c) above), lacked skilled staff through much of the project period, bringing into question the effectiveness of the training activities planned for this objective and (c) above.

4. Significant Outcomes/Impacts:

The project established mine titling and geological information systems to provide mining companies with the services they require to plan investments.
  • Procedures for assessing and mitigating the adverse environmental and socio-economic impacts of mining were initiated.
  • The institutional framework of the MMI was modernized and developed to support a greater role for the private sector in the mining sector.

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

Despite staff training (according to the PAD), efforts to build capacity in 2 institutions,SIGE and SIGM, were not as successful as planned.
  • The monitoring and evaluation approach in the project was weak, making the assessment of the project's achievements difficult. Baseline information, where it was necessary for the purposes of comparison with final outputs, seems not to have been collected or at least was not provided in the ICR.
  • The approach to estimating the efficiency of the project is problematic. The ICR's position is that all the various economic returns Mauritania's mining sector is likely to generate in the future are an outcome of the capacity-building project. While the project did make a contribution to increasing FDI in Mauritania's mining sector (and the project's efficiency is rated Substantial), various data in the ICR appear to indicate that an interest in Mauritania's mining potential was already increasing prior to 1999, when the project became effective. However, an analytical effort to estimate the economic benefits attributable to the project as opposed to those that would have occurred in its absence is lacking, and investments for capacity building are confused with those in actual mining operations that will take place.
  • 6. Ratings:ICROED ReviewReason for Disagreement/Comments
    Outcome:
    SatisfactoryModerately SatisfactoryThe outcome is rated "Moderately Satisfactory" (a rating which does not exist on the ICR's 4-point scale) because although the project's relevance and efficiency may be seen as Substantial, the efficacy rating is Modest based on (i) most of the targets for increased FDI not having been met; (ii) the lack of indication that measures were taken to build capacity for enforcing laws and regulations and for monitoring sector developments; and (iii) the lack of staff capacity in 2 agencies for most of the project's duration. OED's 6-point scale requires a rating of Moderately Satisfactory for projects of this type.
    Institutional Dev.:
    SubstantialSubstantialHowever, SIGE and SIGM lacked staff with capacity for much of the project period despite, according to the Project Appraisal Document, the project's provision of training; the ICR does not report whether capacity building for law & regulation enforcement, and for monitoring sector developments, was done.
    Sustainability:
    LikelyLikely
    Bank Performance:
    SatisfactorySatisfactoryHowever, evaluation of the project's impact was erroneous, as no attempt was made to distinguish between the contribution that capacity building made to mining sector growth and economic returns to the country above those that might have occurred in the absence of the project, and no explicit targets for FDI and other indicators were formulated despite their being presented as key for assessing the achievement of the project's broad objective.
    Borrower Perf.:
    SatisfactorySatisfactory
    Quality of ICR:
    Unsatisfactory

    7. Lessons of Broad Applicablity:

    The OED review considers the following as important lessons:
    • Institutional development often requires long gestation periods, hence ongoing institutional reform and capacity building projects should carefully identify issues that potential future projects might address in a strategic context. This may also have the beneficial effect of strengthening borrower commitment to institutional change over the long run.
    • While capacity development efforts aimed to increase private sector investment may be relatively successful, a longer period than envisaged may be required before the the investments and benefits expected are actually generated.

    8. Audit Recommended?  Yes

              Why?  In addition to verifying the Outcome rating, an assessment would evaluate the mining sector reforms undertaken and derive additional lessons from the project's experience.

    9. Comments on Quality of ICR:

    The ICR is rated Unsatisfactory for the following reasons:
  • A lack of sufficient detail on (i) the training activities for capacity building (i.e. nature of the training, impact, etc.); (ii) the substance of the mining sector reforms and how they created an enabling environment; and (iii) the outcomes and outputs of 2 sub-objectives, capacity building to enforce laws and regulations and to monitor sector developments. This made it difficult to properly assess the extent to which the objectives were achieved.
  • The ICR was poorly organized and therefore difficult to follow.
  • There are errors in the table for Actual Project Costs by Procurement Arrangements in Annex 2: Project Costs and Financing, including for the total project cost figure.
  • Many of the lessons provided are in fact findings or factual statements of what occurred in the project--and not lessons per se. The lessons that are presented are mainly about the relations between the Bank Task Team, Project Implementation Unit and Government. Of interest would also have been what was learned, for example, from (i) the slower-than-expected transition from exploration to exploitation; (ii) the difficulties experienced in developing staff capacity; and (iii) the response of the private sector in terms of the relative importance of the different components to attract FDI.

  • © 2012 The World Bank Group, All Rights Reserved. Terms and Conditions