|1. Project Data:
ICR Review Date Posted:
|Urban Development Program
Project Costs(US $M)
Loan/Credit (US $M)
Cofinancing (US $M)
|AfDB; AFD; KfW
Board Approval Date
|General education sector (22%), General industry and trade sector (22%), General water sanitation and flood protection sector (22%), Roads and highways (22%), General public administration sector (12%)|
|Participation and civic engagement (20% - P)
Land administration and management (20% - P)
Decentralization (20% - P)
Urban services and housing for the poor (20% - P)
Municipal governance and institution building (20% - P)|
||ICR Review Coordinator:
||Christopher David Nelson
|2. Project Objectives and Components:|
a. Objectives: The project was intended to be the first phase of a two-phase Adaptable Program Loan (APL). The purpose of the APL, as described on page 3 of the Project Appraisal Document was to support Mauritania’s central and local governments to:
(i) improve living conditions and promote employment opportunities in the main towns of Mauritania, especially in slums; and
(ii) strengthen the institutional framework and capacity for urban and land management.
The project development objectives were identical to the APL purpose.
The wording of the objectives in the Development Credit Agreement (DCA) (Schedule 2) was slightly different, although there is no difference in intent. “The objective of the Project is to assist the Borrower in:
(a) improving living conditions and promoting employment opportunities in the main towns and peri-urban areas; and
(b) strengthening the institutional framework to carry out the Borrower’s urban reform program, including (i) capacity building in urban administrations and communities, and (ii) improving land tenure registration.”
The project objectives were revised during the 2010 Additional Financing for the project. The revised objective was to support Mauritania’s central and local governments to:
(i) Improve access to basic services and infrastructure in targeted urban areas; and
(ii) Increase access to micro-finance and income-generating activities for the slum population.
The change in the project objectives did not affect the target areas or target populations (e.g., residents in poorly serviced urbanized areas). The additional financing provided funds to expand investments in urban areas other than the capital. A new project objective was added at the time related to micro-finance, however, the project paper did not specify whether or how much financing would be allocated to the relevant component. At the time of the restructuring/Additional Financing, the key performance indicators established for the project were modified to reflect IDA core indicators, and targets were adjusted (generally raised) according to progress made at that time. Several key performance indicators related to institutional strengthening were removed. This review also notes that the text of the Additional Financing Project Paper states that the additional funding was intended to be used for labor-intensive works that would provide income to residents of the target areas. The indicator was not included as a formal project indicator, but the Project Paper states that the financing would create 36,000 employment months.
b. Were the project objectives/key associated outcome targets revised during implementation?
If yes, did the Board approve the revised objectives/key associated outcome targets?
Date of Board Approval: 06/26/2010
c. Components:The project included four components, as follows:
1. The provision of basic infrastructure in the main cities, principally in slums, and serviced sites (Project Original: US$M 75.85; Project Actual: US$M 96.86). This component included funds for slum upgrading in Nouakchott, investments in infrastructure to support commercial activities in Nouakchott (a cattle market; a fish market; etc.); new serviced land in Nouakchott; basic infrastructure (roads, drainage, social service facilities) in the 12 regional capitals; and water supply and electricity extension in Nouakchott. Funds were on-lent to the implementing agency and national utilities responsible for the site-development and water and electricity extension investments. This was the only component that received funds from the Additional Financing approved in June, 2010.
2. Micro-credit (Project Original: US$M 6.90; Project Actual: US$M 20.61; component was entirely financed by the Government). Microfinance was to be provided through a government-run institution and to be used for land tenure regularization or land acquisition, home construction or improvement, or small- or home-based enterprises. The original objective related to this component was to create or improve employment conditions for 20,000 workers and to lend 12,500 microfinance loans (2,500 loans to microenterprises, which were supposed to create 10,000 jobs, and 10,000 for housing or latrine construction or improvement). While the Additional Financing explicitly added a project objective related to microfinance, the Project Paper did not specify that any additional financing from the government would be allocated to the component, and no additional targets were set.
3. Institutional and capacity building (Project Original: US$M 8.05; Project Actual: US$M 19.5). This component provided technical assistance, training, and other support for capacity building for community development, relevant NGOs, the government-run microfinance organization, municipalities, and government bodies responsible for urban planning and transport, land management, decentralization, the environment, and land registration and regulation.
4. Auditing, monitoring, and operating costs of implementing agencies (Project Original: US$M 6.56; Project Actual: US$M 10.01). This component financed incremental operating expenditures of project implementing agencies.
d. Comments on Project Cost, Financing, Borrower Contribution, and DatesProject Costs: Actual project costs totaled US$ 156.34 million, vs. US$ 99.06 million at appraisal – a 57 percent increase. The additional costs came from additional activities agreed in 2010 and financed through Additional Financing of US$ 25.5 million equivalent. The additional activities were to scale up activities under the part of Component 1 that financed basic infrastructure in the 12 regional towns (not including the capital) – paved and unpaved roads, water network extensions, and electricity transmission and distribution lines and street lighting.
Project Financing: The original project financing changed over the course of implementation in several ways. First, it does not appear that an expected US$ 9 million in cofinancing from the African Development Bank, the French Agency for Development, or the German Kreditanstalt fur Wiederaufbau materialized – there is no mention of it in the Additional Financing PAD or in the ICR. Second, the project received Additional Financing in 2010 in an amount of SDR16.9 million (US$ 25.5 million equivalent at the time) to expand the infrastructure component in the regional capitals. Finally, government contributions to the project increased significantly above the appraisal estimate (see below).
Borrower Contribution: The Borrower was expected to contribute US$ 20.06 million at appraisal, and an additional US$ 2.40 million at the time of the Additional Financing. However, assuming that there was no external cofinancing, given the ICR’s estimate of the total project costs US$156.34 million by the end of the project, the Government likely contributed approximately US$ 56 million. This would have gone toward additional contributions to Components 1 (urban infrastructure) and 2 (microfinance).
Project Dates: The project was originally expected to close on December 31, 2006. There were significant delays in project implementation – including several years during which the central government was overthrown and an associated period of time during which IDA projects were not able to disburse. Nearly all project funds were disbursed by early 2010, however, because of the availability of additional IDA funding for Mauritania at that time, project Additional Financing was arranged, which extended the closing date to June 30, 2012. A final extension of the closing date was made to December 31, 2012.
|3. Relevance of Objectives & Design:|
a. Relevance of Objectives:i. Relevance of Original Objectives
The relevance of the original objectives of the project is rated as Substantial. They were relevant to country conditions at the time of project design and appraisal and remain relevant at this time. Conditions in urban areas of Mauitania have been unable to keep up with the rapid influx into cities of impoverished people from rural areas resulting from long-standing drought conditions, leading in turn to inadequate roads, water supply, sanitation, drainage and access to electricity. The poverty reduction strategies of the Government of the Islamic Republic of Mauritania (GIRM) at the time of project design and currently focuses on improvements in urban infrastructure and strengthening of institutions related to urban administration and infrastructure. The World Bank’s Country Assistance Strategies for Mauritania throughout project development and implementation have included support for investment in urban infrastructure and strengthening of urban institutions. The project under evaluation was designed as an Adaptable Program Loan (APL), with a second phase to follow the project being evaluated. As of the preparation of Additional Financing, the stated intention was still to proceed with a second phase. However, a separate US$ 25 million project (not a second phase of the APL) targeting the capacity of municipalities through performance-based transfers has instead been prepared and presented to the Bank’s Board of Directors. The objectives of the new project are consistent with those of this project.
ii. Relevance of Restructured Objectives
The relevance of the revised objectives of the project is rated as Modest. While the relevance of the first restructured objective (to improve access to basic services and infrastructure in targeted urban areas) can be judged to be substantial, there is little to no information available regarding the second objective (to increase access to micro-finance and income-generating activities for the slum population). While it can be imagined that increasing income-generating activities was (and will remain) relevant in Mauritania, there is no documentation that access to micro-finance was necessary or was a constraint to another objective or target. The Country Assistance Strategy for Mauritania mentions only that microfinance in the country is emerging, but no targeted assistance is or was envisaged.
b. Relevance of Design:i. Relevance of Original Design
The relevance of the design of the original project is rated as Substantial. The project design, while complex and with multiple sub-components and implementing agencies, was relatively straightforward in terms of the linkages between activities, expected outcome, and project objectives, with the exception noted below. The majority of project activities and financing was directed to labor-intensive infrastructure investments in slum upgrading, the provision of community infrastructure, and extension of water and electricity services. The project also financed activities related to the strengthening of municipal administrations, central government bodies responsible for infrastructure, and community and non-governmental organizations, as well as project implementation costs. Although the PAD did not include outcome indicators related to institutional capacity (it only included a target number of staff trained), the Financing Agreement did include outcome targets, although those were difficult to quantify.
The framing of the original objectives was likely too ambitious due to the inclusion of the creation of 20,000 jobs as part of the objectives and performance indicators. These objectives are referred to consistently as “jobs”, and the PAD referenced jobs and employment conditions related to a combination of cattle and fish-market construction and microfinance lending. In contrast, the Results Framework referenced “50,000 person/months” of jobs created as an indicator tied to the project output of “Infrastructure in 12 cities”. While project design did promote labor-intensive construction of infrastructure, long-term employment creation, including through microfinance lending, was unlikely to be significant. The objectives were re-framed as part of the 2010 Additional Financing to remove “employment opportunities” and to include increasing access to microfinance and “income-generating activities”.
ii. Relevance of Restructured Design
The relevance of the design of the restructured project is rated as Modest. The project design related to the first restructured objective remained reasonably straightforward, as described in section b.i. above. However, there was no description of project activities related to the second restructured objective (increase access to micro-finance and income-generating activities for the slum population). Outcome indicators included “jobs created” and “number of lines of micro-credit provided to slum dwellers”; although a focus on labor-intensive works would be likely to directly result in the creation of short-term jobs for residents of targeted areas, there was no description of microfinance activities, institutions, or management that would lead to additional lines of micro-credit. The project paper did not specify additional financing for micro-finance from either the IDA credit or the government, and it is unclear why a specific objective was established for it.
|4. Achievement of Objectives (Efficacy) :|
i. Achievement of Original Objectives
The achievement of the first original objective (to improve living conditions and promote employment opportunities in the main towns of Mauritania, especially in slums) is rated as Substantial, with the caveats that the term “employment opportunities” is now understood to refer to temporary employment created by labor-intensive works financed by the project.
Information provided in the Additional Financing Project Paper included progress up to 2010 with respect to key outcome and output indicators, as follows:
- 250,000 direct project beneficiaries (vs. an original program target of 541,590;
- 163,00 people in slums in Nouakchott with access to improved services (vs. a target of 163,000 people);
- 2,946 improved latrines built under the project (vs. an original target of 10,000)
- 1,375 plots developed and sold (vs. an original target of 1,100)
- Halving of the cost of water in (project-targeted) slums, from $2.00/m3 to $1.00/m3;
- Daily potable water consumption increased from 15 to 41 liters/person/day (vs. a target of 25 l/p/d).
- 107,165 employment months created, (vs. a target of 50,000 employment months)
The outcomes under the first original objective – which, it is noted, necessarily overlap to some degree with project outputs due to the nature of the project – seem unlikely to have been achieved without the project interventions – both the financing made available for the infrastructure investments and the oversight provided under the project appear to have been necessary preconditions of achievements.
The second original objective (to strengthen the institutional framework and capacity for urban and land management) was removed during the 2010 Additional Financing. While the PAD included only a few indicators related to the objective, the Financing Agreement included additional outcome indicators. The ICR notes at the outset that the indicators were set, but does not comment on their achievement. Separately, the PAD included as output indicators increases in the transfer of funds to municipalities and in municipality incomes (revenues); these were tracked. The following results related to the objective are highlighted:
- 33 percent increase in municipal revenues (vs. a target of 50 percent). The ICR notes that municipal revenues in Nouakchott increased substantially more than 50 percent, but that of the regional capitals fell short due to underlying weaknesses in the local economies;
- 1,300 percent increase in transfers from central government to municipalities (vs. an original target of 600 percent and a revised target of 2,000 percent);
- 100,042 land titles regularized and registered (vs. a target of 27,970)
In addition to targets established at appraisal, the project resulted in additional positive social, gender, and poverty impacts, including improved access to various economic and social facilities. The ICR reports that the primary slum upgrading program and methodology under the project is being scaled up and expanded nationally by the Government and is planned to be mainstreamed in the regional capitals. A large majority of inhabitants in the upgraded area consider that both housing and transport have improved. The ICR believes that the work under the project has led to greater decentralization and public participation in infrastructure investments decision-making. Finally, over the course of the project the Government’s approach to urban settlement has radically changed, from one of neglect to one of active improvement.
Based on the above indicators, the successful implementation of the infrastructure components under the project, the ongoing commitment of the government to slum upgrading and municipal strengthening, and indications in the ICR that several improvements were made to (i) regulations related to land ownership and development, (ii) surveying and demarcation of land parcels, and (iii) the urban planning and management code, the achievement of the original second objective is judged to be Substantial.
ii. Achievement of Restructured Objectives
The first restructured objective resulting from the 2010 Additional Financing was “to improve access to basic services and infrastructure in targeted urban areas”; key performance indicators were revised in some cases to reflect IDA Core Indicators. Targets for specific types of impacts were adjusted, some significantly. In particular, the overarching indicator from the original PAD (that the 2-phase APL would impact 541,590 people) was removed and replaced with “(number of) people in slums with access to improved urban services”, with a target of 370,000 Direct Project Beneficiaries. Outcomes and outputs related to the restructured objective are as follows:
- 377,000 direct project beneficiaries (vs. an original program target of 541,590 and a revised target of 370,000);
- 181,035 people in slums in Nouakchott with access to improved services (vs. a target of 163,000 people);
- 22,337 people in urban areas provided with access to improved water sources (vs. a target of 7,030);
- 25,305 people with improved drainage services (vs. a target of 20,775);
- 26,514 people with access to improved sanitation under the project (which appears to be lower than the original target of 10,000 improved latrines);
- Halving of the cost of water in (project-targeted) slums, from $2.00/m3 to $1.00/m3;
- Daily potable water consumption increased from 15 to 41 liters/person/day (vs. a target of 35 l/p/d).
The outcomes under the restructured first objective – as is the case under the original first objective – seem unlikely to have been achieved without the project interventions and are judged to be Substantial.
The achievement of the revised second objective (to increase access to micro-finance and income-generating activities for people living in slums) is judged to have been Modest, based on the following stated outcomes and notes:
- 22,110 active microfinance loans (vs. a target of 30,531);
- 160,895 lines of micro-credit provided to slum dwellers (vs. an original target of 12,500 and a revised target of 89,446);
- US$ 19.7 million in micro-finance lines of credit (vs. a target of US$ 6.0 million).
- 5,145 homes purchased or improved through housing microfinance loans (vs. an original target of 7,500)
This review notes that the description of the achievement of objectives of this component do not provide adequate information regarding the actual success of the project. For example, it is not clear whether the number of “lines of microcredit” are to different borrowers, or if a far few number of borrowers borrowed serially from the micro-finance institution. It is not clear if the US$ 19.7 million in micro-finance lines of credit represents lending over the life of the project, or whether it is the current amount of loans outstanding. The fact that the US$ 19.7 million in micro-finance lines of credit is very close to the funding cited as the amount of Government transfers to the micro-finance institution could indicate that borrowers are not repaying the institution (therefore increasing the amount of loans outstanding but reducing the funds available for re-lending) and that the institution does not generate profits or equity that can be used for additional lending. As the ICR did not include any information about the implementation of the component, this evaluation is not able to judge whether the project had an impact on the outcome of the revised second objective.
In addition, the ICR notes that 225,630 “jobs” were created (vs. a target of 143,000), however, in other documents it appears as though “employment-months” generated by the project were being tracked. Because of the lack of clarity and because these may be direct outputs of the project, this evaluation has not factored them into the rating for the achievement of the objective.
While in theory ratings for efficiency should be provided for the project under both the original project objectives and the restructured project objectives, this review was not able to do so using the information provided in the ICR. This review notes, however, that efficiency evaluations for both the original first objective (improve living conditions…) and the restructured first objective (improve access to basic services…) would effectively be the same. There is insufficient information to judge the efficiency under the second original objective (strengthen the institutional framework…) and under the second restructured objective (increase access to micro-finance…). This review judges the project efficiency rating as Modest, based on the information provided in the ICR, for both the original objectives and the revised objectives.
The project PAD undertook separate economic analyses for several project components, including for upgrading of each of target slum areas in Nouakchott, for the development of a cattle market and of a fishery market, for roads construction, and for the extension of water supply. Rates of return estimated through these analyses ranged from 13 to 43 percent for the slum upgrading (based on an estimate of the increase in land values); 13 percent and 14 percent for the cattle market and fishery market; 32 percent for the roads construction (also based on an estimate of the increase in land values); and 16 percent for the water supply expansion, based on the additional consumption enabled by the investment.
The ICR was unable to replicate the original analyses, and the data for the original analysis was not available. With respect to the cattle and fish markets, information provided to the ICR team was used to undertake limited economic analyses that indicated ERRs of, respectively 6.4 percent and negative 18 percent. The low rates of return were due to limits on lease amounts at the markets; the ICR notes that benefits to sanitation and health were not included in the analysis.
In addition, the ICR conducted an ex-post economic analysis of five sub-components of the infrastructure component, incorporating water consumer surplus, health improvements from water and sanitation investments, and the increased value of land due to improved drainage and paved road construction, which are considered only a part of the total economic benefits of the project. In addition, the analysis was undertaken only for the period up to 2012. This analysis indicated an ERR of 18 percent and an NPV of a reported US$ 7.6 million at a discount rate of 10 percent. (A separate calculation showed the NPV to be US$ 6.7 million.) Extending the analysis to a more normal time period (20+ years) would generate a significantly higher economic return.
This review notes the difficulty in estimating an economic rate of return for such a complex, multi-component and multi-location project. A minor question is related to the estimate of the project’s contribution to the added value to land in the targeted slums. This amount forms the largest part of the benefits to the project (between 45 and 38 percent of total project benefits); it would have been helpful had the analysis indicated how much of the value added could be attributed to the project and how much to general escalation of land values in Nouakchott over the project period.
The project did not experience significant cost overruns. The ICR did not calculate other figures of efficiency, such as the cost per improved road; cost per km of water network extension; cost per electricity investment; or overall cost per km2 of upgraded slum area; etc. It is therefore not possible to judge the relative cost of investments relative to similar projects.
No information was provided with respect to the micro-finance program (e.g., collection or loan delinquency rates, profitability indicators, the annual growth of the loan portfolio and the number of individual clients, etc.) that could be used to judge efficiency of the investments. While numbers of credits “granted” was provided, there was no information on or evaluation of the effect on the recipients of microfinance lending.
a. If available, enter the Economic Rate of Return (ERR)/Financial Rate of Return at appraisal and the re-estimated value at evaluation:
* Refers to percent of total project cost for which ERR/FRR was calculated