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Implementation Completion Report (ICR) Review - Waemu Capital Market Development Project

1. Project Data:   
ICR Review Date Posted:
Project Name:
Waemu Capital Market Development Project
Project Costs(US $M)
 408.6  252.7
L/C Number:
C3863, CB005
Loan/Credit (US $M)
 102.6  100.6
Sector Board:
Cofinancing (US $M)
 242.3  152.09
CIDA, AFD, MIGA, France, Borrower, Local Sources of Borrowing Country
Board Approval Date
Closing Date
09/30/2009 06/30/2012
Capital markets (58%), Roads and highways (42%)
Regional integration (67% - P) Other financial and private sector development (33% - S)
Prepared by: Reviewed by: ICR Review Coordinator: Group:
Brian Ames
Fareed M. A. Hassan Christopher D. Gerrard IEGPS2

2. Project Objectives and Components:

a. Objectives:

    The Project Development Objective (PDO) of the West Africa Economic and Monetary Union (WAEMU) Capital Market Development Project (CMDP) as presented in the Project Appraisal Document (PAD) is to develop the capital markets in the WAEMU region, and mobilize public and private financing for the region’s infrastructure development.(PAD, page 3). The PDO reported in the Development Credit Agreement (DCA) was to assist the Borrower -- the Banque Ouest-Africaine de Développement (BOAD) -- in developing the UEMOA (Union Economique et Monetaire des Etats de 1 ’Afiique de I’Ouest) capital market and in mobilizing public and private financing for the infrastructure development in such region. (DCA, page 18). Hence, there is a minor difference in language regarding the PDO as presented in the PAD and the DCA, with the later emphasizing “to assist the borrower in developing the capital markets” versus the direct aim “to develop the capital markets”. This review uses the objectives in the credit agreement as the benchmark for the evaluation

b. Were the project objectives/key associated outcome targets revised during implementation?

c. Components:

The CMDP originally consisted of a Technical Assistance (TA) component (US$3.52 million), a line of credit (LOC) component (US$89.00 million), a Guarantee Facility (GF) component (US$US$70 million) supported by the International Development Agency (IDA), the Multilateral Investment Guarantee Agency (MIGA), and the French Development Agency (AFD), and a Project Implementation component (US$3.2 million). However, due to persistent implementation problems, the project underwent a Level I restructuring in June 2008, in which the Guarantee Facility component was eliminated, several of the activities in the other components were readjusted, the Monitoring and Evaluation (M&E) framework was revised to reflect these changes, and the closing date was extended to September 30 2011. The project went through a subsequent Level II restructuring in September 2011 in which the closing date was extended until June 30, 2011 in order to allow sufficient time for the restructured project to be implemented. The components of the restructured project are set forth below:

    Component 1. Technical Assistance and Institutional Support (cost estimated at appraisal: US$13.0 million; cost estimated at restructuring: US$X.XX million; actual cost: US$X.XX million): This component provided technical assistance to strengthen the regulatory framework for regional capital market operations and technical assistance and training to help strengthen the capacity of the key institutions responsible for regulating and overseeing regional capital markets. TA to the West Africa Development Bank (Banque Ouest-Africaine de Développement or BOAD) aimed to improve its productivity, facilitate the development of a reference rate for bonds issued within the region, and prepare sub-projects to be covered under the GF. TA to the capital markets regulator (Conseil Régional de l’Epargne Publique et des Marches Financiers or CREPMF) focused on improving the regulatory framework for equity and bond markets. TA and training to the West African regional central bank (Banque Centrale des Etats de l’Afrique de l’Ouest or BCEAO) aimed to facilitate training seminars for market participants. TA to the West Africa Economic and Monetary Union (WAEMU) Commission focused on studying the harmonization of the tax regimes across the region for medium-term bonds and other financial or capital market instruments, and to the Regional Stock Exchange (Bourse Régionale des Valeurs Mobilières or BRVM) to carry out training for its staff and market participants. Although this component remained unchanged following the Level I restructuring, the RF was consolidated to focus more specifically on outcomes.

    Component 2. Line of Credit (cost estimated at appraisal: US$163.1 million; cost estimated at restructuring: US$XX.XX million; actual cost: US$XX.XX million): This component extended a credit line to promote economic integration among WAEMU countries by providing necessary long-term resources to fund the foreign currency portion of projects which fostered regional integration. IDA funding would be allocated to the public sector components of selected investment projects that required preferential and/or long-term financing. BOAD would on-lend the resources on preferential terms (25-year maturity, 7-year grace period, and 2 percent per annum interest rate) and transfer the foreign exchange risk of the credit to the borrower. During the Level I restructuring, this component was modified to align it with market demands by increasing the ceiling for financing individual projects to US$20 million and expanding the eligibility criteria to include non-road infrastructure projects and cross-border projects related to food security.

    Component 3. The Guarantee Facility supported by IDA, MIGA, and AFD (cost estimated at appraisal: US$227.3 million; cost estimated at restructuring: US$0 million; actual cost: US$0 million): This component was originally intended to target the financing gap for private projects by catalyzing private investments in small- and medium-sized infrastructure projects, including privatizations, by mitigating critical risks which constrained investors’ interest, and by facilitating access to these instruments for relatively small projects. As a well-positioned intermediary within the region, BOAD would help in accelerating the identification and processing of small to medium size infrastructure projects. The IDA guarantee would be deployed in riskier sectors/transactions when one or several of its features were considered to be critical from a risk management and/or market perspective. During the Level I restructuring , this component was modified with the guarantee facility being cancelled, MIGA agreeing to analyze and provide guarantees to projects presented by BOAD based on MIGA's own guidelines and procedures, and strengthening of BOAD’s capacity to develop its own guarantee product.

    Component 4: Project Coordination, Management, Monitoring &Evaluation (cost estimated at appraisal: US$2.1 million; cost estimated at restructuring: US$X.XX million; actual cost: US$X.XX million): This component was intended to ensure overall project coordination, management, and administration through a Project Coordination Unit (PCU) within BOAD, Project Component Managers, and a Steering Committee. The component also provided TA to improve coordination and synergy between the key regional institutions.

d. Comments on Project Cost, Financing, Borrower Contribution, and Dates

The WAEMU CMDP was a Financial Intermediary Loan (FIL) financed by an IDA credit in the amount of SDR 67.0 million (US$96.39 million equivalent) to BOAD for the benefit of the eight WAEMU countries (Benin, Burkina Faso, Cote d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo) which share the same currency (the CFA franc), the same central bank (BCEAO), and the same development bank (BOAD). The credit was appraised on June 4, 2003; approved by the Bank Board on February 26, 2004; became effective on July 29, 2005; was restructured on June 18, 2008; had a mid-term review on January 29, 2008; and was closed on June 30, 2012 (33 months after the expected closing date at appraisal).

3. Relevance of Objectives & Design:

a. Relevance of Objectives:

The PDO of the WAEMU CMDP is consistent with the development objectives of WAEMU governments to remove infrastructure constraints, develop the human and economic potential of the region, attract private investment in infrastructure, and promote economic integration. Having put in place key laws, regulations, and institutions in support of the development of a regional capital market, regional government authorities are now placing priority on deepening the financial sector through an action plan aimed at enhancing regional capital market activities, including by strengthening the key institutions, such as BOAD, CREPMF, BCEAO, BRVM, and the WAEMU commission. The PDO is also relevant to the objectives of the World Bank’s Regional Integration Assistance Strategy (RIAS) and individual country strategies. The RIAS aims to help develop a unified regional financial market, promote region-wide infrastructure services, and create an enabling environment for private investment based on greater financial market integration, unfettered capital movements, and a harmonized tax policy. Member states’ CASs identify the development of infrastructure through public/private partnerships as a priority objective. Finally, the CMDP is consistent with the Bank’s Africa Strategy (March 2011), which places emphasis on reducing the infrastructure gap and improving the business environment in member countries.

The relevance of objectives rating is high.

b. Relevance of Design:

The design of the WAEMU CMDP was consistent with its PDO. The project was intended to assist in strengthening the regulatory framework for regional capital market operations, improving the capacity of institutions involved in the regional capital market, providing medium- and long-term financing for public infrastructure projects, and providing political and commercial risk mitigation instruments to catalyze longer term financing of small and medium-sized regional infrastructure projects. This was to occur through the provision of technical assistance and institutional support, lines of credit, and guarantees to mitigate private investors’ risks. Alternative project designs were considered, including financing projects under credit lines through Bank country assistance programs in individual countries, limiting the scope of the project to a LOC to BOAD without links to strengthening of the capital market, and separating the operation into two parallel projects, one with TA and a LOC and the other with a guarantee facility. These options were rejected due to concerns about project coordination across country programs, the importance of developing capital market instruments, and the need to ensure synergy among the project components. However, the project design was overly optimistic given the limited institutional capacity of regional countries and institutions. The technical assistance component did not include an adequate stakeholder analysis and severely underestimated the importance of market intermediaries for project implementation. Pre-design work was limited and did not include a detailed demand analysis for the LOC nor took into account regional priorities for non-road infrastructure projects. And the guarantee facility required the identification of strong and capable intermediaries prior to the commencement of operations. Although the Level I restructuring addressed many of these design problems, it happened late in the process.

The relevance of design is rated modest.

4. Achievement of Objectives (Efficacy) :

Although the CMDP included an overarching PDO and PDO-specific indicators, the indicators were weak, not directly relevant to the PDO, and suffered problems of attribution. In addition, the project did not define any intermediate objectives and instead established intermediate performance indicators around each of the project’s components. As a consequence, the weak link between the intermediate output indicators and the PDO indicators, as well as between the PDO indicators and the PDO itself, impeded the ICR’s assessment of causal connections. It is also unfortunate, as pointed out in the ICR, that the problems with the indicators were not addressed during the restructuring. As a result, the ICR had to resort to providing alternate evidence to assess the achievement of the PDO since they were not captured by the Results Framework (RF). While laudable, the ICR’s assessment unfortunately still mixed outputs (means to an end) with outcomes (the end result).

    Efficacy in achieving the project’s objectives prior to restructuring was unsatisfactory for the reasons stated in the ICR. Although there was success in deploying the project’s TA component, implementation of the LOC and Guarantee Facility remained poor and fraught with delays. Up to the point in time when the CMDP was restructured, no infrastructure projects had been financed under the LOC and no guarantees had been issued under the Guarantee Facility. Moreover, none of the PDO or intermediate indicators had been met and the project’s disbursement rate was only 2%. Efficacy in achieving all three objectives prior to restructuring was Unsatisfactory.

    The assessment below is conducted on the basis of the achievement of each of the project’s three objectives after restructuring.

    PDO Objective: Develop the Capital Markets in the WAEMU region

    Performance with regard to achieving this objective was substantial following the project’s restructuring. Although the number of companies listed in the regional stock market (PDO indicator 2) did not increase measurably, the number of companies issuing bonds in the regional market (PDO Indicator 1) increased from 25 (baseline) to 48 by the project’s closing (just below the target of 50). BOAD over-performed regarding achieving the target of issuing at least CFAF 10 billion in bonds per year in the regional market (intermediate outcome indicator 1) and adopted a new prudential framework in line with international best practices (Intermediate outcome indicator 4). However, it did not achieve the target of being rated by international ratings agencies (intermediate outcome indicator 3) at closing. CREPMF achieved 86% of its target of inspecting all commercial financial intermediaries, the regional stock exchange, the central depository, and the settlement bank (intermediate outcome indicator 2). The monetary authorities met the target of putting in place new rules and regulations for credit ratings in relation to the removal and substantial relation of bank guarantee requirements (intermediate outcome indicator 5). And the WAEMU Commission partially achieved the target of adopting harmonized tax regimes on financial products, as six out of the eight member countries implemented the regime by closing (intermediate outcome indicator 6). As the ICR rightfully concluded, despite the project’s poor design and inadequate RF, the regulatory framework and cost structure of the regional financial market has improved and the credibility and capacity of the regional regulatory body has been strengthened.

    Efficacy in achieving the first intermediate objective is rated Substantial.

    PDO Objective: Mobilize Public and Private Financing for the Region’s Infrastructure Development

    This objective was broadly achieved. By the closing date, the project’s line of credit was fully disbursed to regional infrastructure projects in compliance with IDA’s fiduciary system (intermediate outcome indicator 7). Altogether, 11 sub-projects were financed resulting in the construction of key portions of four regional corridors amounting to 953.8 kilometers of interstate roads. In addition, the port of Lomé was upgraded. Importantly, the project’s LOC was able to leverage resources from BOAD, donors, and the private sector at a ratio of 1 to 6 in support of regional infrastructure development. BOAD has also been transformed into a strong regional institution that, going forward, will be able to extend public and private project finance (as well as TA) to regional member countries.

    Efficacy in achieving the second objective is rated High.

5. Efficiency:

Both the PAD and the ICR argued that it is not possible to quantify the economic and social benefits of the project as a whole due to the nature of some of the activities and the problem of attribution. Hence, a cost effectiveness and financial analysis was not carried out at appraisal and the ICR did not attempt to quantify the expected gains to be had from the project. Instead, both the PAD and ICR made qualitative inferences regarding the project’s expected economic and social gains. These included: (1) increased investment and growth arising from greater availability of long-term capital and financial market integration; (2) improved competitiveness on account of a reduction in transport costs and greater access to the regional market; and (3) transformation of the BOAD into a more profitable regional development finance institutions with a larger stock of capital and a benchmark issuer of bonds in the regional market. Both the PAD and the ICR noted that economic and financial analysis conducted for each of the infrastructure investments financed under the project’s LOC indicated an economic rate of return in excess of 12 percent. Efficiency gains under the project also included a halving of the time required to process the listing and issuance of bonds in the regional market, a reduction in cumulative transit time (by 16 hours) and maintenance cost (by up to 35 percent) along the improved road corridors, and a 30 percent increase in the volume of activity at the port of Lomé (2007-11) despite the number of vessels using the port remaining constant.

    Efficiency in achieving project’s objectives is rated Modest.

    a. If available, enter the Economic Rate of Return (ERR)/Financial Rate of Return at appraisal and the re-estimated value at evaluation:

Rate Available?
Point Value
ICR estimate:

* Refers to percent of total project cost for which ERR/FRR was calculated

6. Outcome:

The ICR rated the project’s outcome on the basis of a weighted average of the achievement of the project’s objectives prior to restructuring (which it rated “Unsatisfactory”) and after restructuring (which it rated “Moderately Unsatisfactory”), with the weights being a function of the relative disbursement levels at each point in time (2 percent versus 98 percent). Based on this approach, the ICR rated the overall outcome of the project as “Moderately Unsatisfactory”.

This ICR Review concurs that achievement of the project’s objectives prior to restructuring was “Unsatisfactory”, but it rates efficacy after restructuring as being “Moderately Satisfactory”. While it is true that limitations in project design resulted in significant delays in implementation and the eventual need to drop some of the project’s activities, the restructured project nevertheless broadly achieved its development objectives, with efficacy of the first objective being “substantial” and of the second objective being “high”. Moreover, in addition to efficacy (achievement of objectives), the overall outcome rating takes into account the “high” relevance of the project’s objectives and the “modest” relevance of the project’s design and efficiency in achieving the project’s objectives. In light of the above, and using a weighted average of efficacy up to and after restructuring, the overall outcome is rated “Moderately Satisfactory”.

a. Outcome Rating: Moderately Satisfactory

7. Rationale for Risk to Development Outcome Rating:

The PAD considered the project as “modest risk” due to concerns that: (1) the regional policy makers, regulators, and intermediaries could fail to implement key reforms and provide the investment capital necessary for a well-functioning regional bond market; (2) the lack of institutional capacity could undermine project implementation; and (3) there could be shortfalls in donor co-financing. Although there were delays in co-financing arrangements, these risks were largely mitigated through assurances at the highest political level in the region, the provision of TA and institutional support, and donor coordination. As pointed out in the ICR, the project’s main deliverables were with regard to the provision of regional infrastructure, institutional capacity building, and financial market regulatory framework. Roads and port infrastructure developed under the project are largely irreversible once constructed and the existence of road maintenance funds in most WAEMU member states should contribute to the maintenance of this infrastructure. While it is true that timely follow up regarding institutional capacity building and regulatory reforms will be important to maintain the gains achieved, the WAEMU Commission and its members have approved a Regional Economic Program which includes a strong commitment to deepen the regional capital markets and to provide the necessary resources to sustain the project’s institutional changes. Finally, implementation capacity at BOAD is expected to be sustained long after the project’s closing as experts recruited under the PCU have been permanently hired.

a. Risk to Development Outcome Rating: Moderate

8. Assessment of Bank Performance:

a. Quality at entry:

The Bank’s performance regarding quality at entry was unsatisfactory. There were substantial flaws in project design as evidenced by the fact that the project required significant restructuring due to delays in the implementation of activities, the lack of demand for the guarantee facility, and the lack of disbursement of the LOC facility. The ICR rightly points out that project design was too complex relative to the limited institutional capacity to manage and coordinate the plethora of activities and beneficiaries. Delays arose in part due to the need to receive approval of the guarantee facility by the various national parliaments and judicial opinions from their respective supreme courts. Internal procedures of each of the various co-financiers contributed to delays in the implementation of the LOC. And delays in the signing of agreements between the Bank and both CIDA and BOAD delayed the roll out of the TA component. Other key deficiencies included inadequate assessment of demand for the guarantee facility, failure to identify capacity deficiencies at BOAD, insufficient flexibility to include non-road infrastructure, and the lack of identification of key risks and the required mitigating measures. The RF was also poorly designed and specified, with poorly defined and relevant PDO indicators, no intermediate objectives, and a lack of clear links in the causal chain between the project’s inputs, outputs, outcomes and objectives.

Quality-at-Entry Rating: Unsatisfactory

b. Quality of supervision:

The quality of supervision was unsatisfactory. Bank supervision was severely deficient. Although there were regular supervision missions, the generally satisfactory ratings given in the Implementation Status Reports up through mid-2007 were overly optimistic and masked the depth and scope of poor project implementation (i.e., delays in the implementation of the TA component, a 2 percent disbursement rate for the LOC component, and the lack of demand for the guarantee facility component). According to the ICR, this was due to inadequate skill mix and lack of pro-activeness of the task team. Had there been more effective supervision, the restructuring of the project could have taken place much earlier and project objectives could have been achieved in a timelier manner. In this regard, the mid-term review should have been programmed and taken place earlier in the project cycle. The restructuring of the project did address many of the main design flaws (i.e., refocusing and alignment of project activities in line with the borrower’s institutional capacity, cancelation of the guarantee facility, revision of the eligibility conditions of the LOC to include non-road infrastructure projects and increasing the ceiling for individual projects, and increased TA to BOAD for risk mitigation). And the measures taken to improve disbursements under the LOC paid off, with nearly full disbursement achieved by the project closing date (which had to be extended twice). However, the Bank failed to address the deficiencies in the design of the RF during the restructuring with a view to better align the outcome indicators with the PDO. As a result, it is difficult to properly assess whether the project achieved its objectives without resorting to information outside of the RF.

Quality of Supervision Rating: Unsatisfactory

Overall Bank Performance Rating: Unsatisfactory

9. Assessment of Borrower Performance:

a. Government Performance:

There was strong commitment on the part of the WAEMU commission and the member countries within the region to deepen the financial market. Member governments’ national parliaments ratified the credit guarantee and the eight Supreme Courts provided the corresponding legal opinions required for project effectiveness, albeit with some delay. There were also delays by member countries in approving and procuring finance for the individual sub-projects. In addition, capacity constraints at the country-level project implementation units contributed to delays in disbursement of the project’s LOC component. Following the political turmoil in Cote d’Ivoire, which affected the activities of both the regional stock exchange and the regional capital markets regulator based in Abidjan, the regional authorities took timely decisions to relocate these bodies to Bamako.

Government Performance Rating: Moderately Satisfactory

b. Implementing Agency Performance:

BOAD was the principal regional agency responsible for project implementation. The senior management was committed to overall project implementation and was instrumental in ensuring the implementation of the specific institutional reforms within BOAD. However, as the ICR pointed out, although the changes in BOAD management did not significantly impact the project, the layers of hierarchy within BOAD undermined the ability of the project coordinator (who was a low level BOAD staff member) to make decisions. The PIU did have good quality technical staff and key technical experts hired under the project were retained by BOAD. Unfortunately, there were delays in securing M&E specialists which undermined project monitoring. There were no substantive procurement problems, however, and the unethical action by a project accountant was handled in a timely manner

Implementing Agency Performance Rating: Moderately Satisfactory

Overall Borrower Performance Rating: Moderately Satisfactory

10. M&E Design, Implementation, & Utilization:

a. M&E Design:

The PAD discussed the institutional framework for monitoring and evaluating project performance (PAD, pp. 17-18), including with regard to the structure, location, and responsibilities of the PCU and the guidance to be received from the PSC, which consisted of representatives of all project beneficiaries and one person representing all of the governments. Although key performance indicators for each of the three project components were listed in the text of the PDO (PAD, p. 3) and in Project Design Summary (PAD, Annex 1), there was no explicit and comprehensive RF that linked inputs to outputs to outcomes and to objectives and that discussed the causal links between each of the indicators. Moreover, several of the outcome indicators posed problems regarding attribution (i.e., the number of firms listed on the regional stock exchange, the number of companies issuing bonds, and the value of bonds of bonds issued in the regional currency).

b. M&E Implementation:

In addition to being constrained by the poor design of the M&E framework, M&E implementation was affected by delays in recruiting M&E specialists and overly optimistic performance ratings in the initial Implementation Status Reports (ISRs). The ICR did not discuss in any detail the positive and/or negative institutional experience of the PCU in overseeing the implementation of the M&E framework. It also did not elaborate upon the experience in collecting data and in measuring performance outcomes. It is clear from the ISRs that the review of the various performance indicators during project implementation was done in a selective and uneven manner.

a. M&E Utilization:

The delays experienced in the implementation of the project’s activities and in the progress of key performance indicators—particularly that regarding the LOC disbursement rate—were used as the basis for restructuring the project. However, as indicated in the ICR, the Bank and the borrower missed an important opportunity during the project restructuring to strengthen the M&E framework to ensure better and more direct linkage between the indicators and the project’s objectives. Instead, the indicators related to the guarantee facility were dropped, resulting in the remaining two outcome indicators being linked only to the capital market development aspect of the PDO with none capturing the infrastructure development aspect.

M&E Quality Rating: Negligible

11. Other Issues:

a. Safeguards:
As indicated in the PAD and ICR, BOAD prepared an Environmental and Social Management framework whose procedures were in compliance with World Bank Safeguard Policies and screened sub-projects for environmental and social impacts. The project supported the development of environmental and social units within BOAD that were responsible for the management of the safeguard policy for all projects financed by BOAD.

b. Fiduciary Compliance:

As indicated in the PAD, BOAD has an acceptable financial and accounting system with well-qualified staff and extensive experience in managing projects financed by donors. Its financial statements were regularly prepared in accordance with International Accounting Standard and were audited annually by the BCEAO and an internationally recognized auditing firm. BOAD’s procurement capacity was assessed at entry. While considerable capabilities existed, there was a need to update BOAD’s procurement procedures and a procurement specialist was recruited before the credit became effective. Although there were delays in procurement related to the LOC in the early stage of the project, procurement management was significantly improved after project restructuring. The unethical practice on the part of an accountant assigned to the PCU was addressed and the individual’s contract was terminated.

c. Unintended Impacts (positive or negative):

Neither the PAD nor the ICR identified any unintended impacts nor does there appear to be any.

d. Other:

12. Ratings:

IEG Review
Reason for Disagreement/Comments
Moderately Unsatisfactory
Moderately Satisfactory
Both the ICR and IEG Review rated outcome before restructuring as unsatisfactory, However, the IEG Review rates outcome after restructuring as satisfactory (compared to the ICR's rating of moderately unsatisfactory) since the project broadly achieved its objectives--albeit with delay and with the removal of one of its components--with relevance of the objectives rated high, and relevance of design and efficiency rated modest. 
Risk to Development Outcome:
Bank Performance:
Moderately Unsatisfactory
Bank performance in terms of quality at entry and quality of supervision were both highly deficient. The project was restructured very late in the process and required two extensions of the closing date in order to allow sufficient time for disbursements to occur and the objectives to be achieved. 
Borrower Performance:
Moderately Satisfactory
Moderately Satisfactory
Quality of ICR:
- When insufficient information is provided by the Bank for IEG to arrive at a clear rating, IEG will downgrade the relevant ratings as warranted beginning July 1, 2006.
- The "Reason for Disagreement/Comments" column could cross-reference other sections of the ICR Review, as appropriate.

13. Lessons:

The four main lessons learned from the implementation of the CMDP are:

1. Effectiveness conditions should be realistic.It took the CMDP a year and a half to become effective. This was mainly due to cross-conditionality between the development credit and the guarantee facility agreements and by requirement that the credit guarantee be ratified by the eight national Parliaments with corresponding legal opinions from the eight Supreme courts. The Bank should ensure that effectiveness conditions can be realistically met within a reasonable time frame or else project implementation will be delayed.

2. Multi-donor operations require a streamlined implementation arrangement.The CMDP experienced delays in implementation due to conflicting funding procedures and inconsistent procurement procedures between key donors. The establishment of a common account managed by a lead donor and a system of parallel financing (versus co-financing) can be more efficient and avoid duplication of procedures that delay project implementation.

3. Ex-ante demand analyses and stakeholder assessments can improve project outcomes. Project design did not include demand and stakeholder assessments. As a result, the guarantee facility was never activated (on account of a lack of demand) and the LOC initially excluded important non-road regional infrastructure projects (due to a lack of stakeholder assessment). Demand analyses and stakeholder assessments should become a routine part of project design and monitoring.

4. Comprehensive RFs ensure that project outcomes are measurable and achievable. The CMDP’s RF was severely deficient, with the causality between inputs, outputs, and outcomes not well specified and the PDOs too high level and not solely attributable to the project. Well specified RFs and M&E frameworks ensure that outcomes are attributable to project activities and allow for mid-course corrections when performance is not in line with expectations. Efforts should be redoubled to ensure that all Bank projects have adequate RFs at entry.

14. Assessment Recommended?


15. Comments on Quality of ICR:

The ICR was comprehensive and its tone candid. It included a useful and detailed assessment of the key factors that affected project implementation and outcomes. It also appropriately underscored the deficiencies in M&E in general, and in Bank design at entry, particularly regarding the less-than-adequate RF. In this regard, it made a valiant effort to “fill the gap” by identifying results that could be directly linked to the achievement of the PDO, but that were not fully reflected in the M&E framework. The ICR needed to make a stronger case for its relatively lower overall outcome rating after restructuring and relatively higher rating of quality of supervision versus quality at entry, given the equally severe deficiencies involved at entry and during supervision. It also could have benefited from some edits. For example, outcome is rated as moderately unsatisfactory in the text on page 12, but moderately satisfactory in Table 3 on page 17.

a. Quality of ICR Rating: Satisfactory

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