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Implementation Completion Report (ICR) Review - Second Rural Sector Support


  
1. Project Data:   
ICR Review Date Posted:
04/30/2014   
Country:
Rwanda
PROJ ID:
P105176
Appraisal
Actual
Project Name:
Second Rural Sector Support
Project Costs(US $M)
 38.99  39.29
L/C Number:
CH408
Loan/Credit (US $M)
 35.00  32.8
Sector Board:
Agriculture and Rural Development
Cofinancing (US $M)
   
Cofinanciers:
Board Approval Date
  06/24/2008
 
 
Closing Date
10/31/2012 10/31/2012
Sector(s):
General agriculture fishing and forestry sector (50%), Irrigation and drainage (30%), Agro-industry marketing and trade (20%)
Theme(s):
Other rural development (33% - P) Rural services and infrastructure (33% - P) Water resource management (17% - S) Rural policies and institutions (17% - S)
         
Prepared by: Reviewed by: ICR Review Coordinator: Group:
Ebru Karamete
Ridley Nelson Christopher David Nelson IEGPS1

2. Project Objectives and Components:

a. Objectives:
The same project development objective was stated in the Financing Agreement (p. 5) and the Project Appraisal Document: " to increase agricultural production and marketing in marshland and hillside areas targeted for development under the Project in an environmentally sustainable manner.

The Project was the second phase of a 17 years Adaptable Program Loan with the long term programmatic objective to help the Government of Rwanda achieve its strategic goal of unlocking rural growth in order to increase incomes and reduce poverty. The Phase 3 Project was approved by the Bank's Board in March 2012 and the project became effective on June 20, 2012.

b. Were the project objectives/key associated outcome targets revised during implementation?
No

c. Components:
1. Marshlands and hillsides rehabilitation and development (Appraisal Estimate US$ 26.5 million; Actual US$ 27.1 million).
This component aimed to accelerate agricultural intensification by expanding irrigated area in cultivated marshlands and increasing the use of sustainable land management practices on associated hillsides. The main activities included rehabilitating and/or developing irrigation infrastructure on at least 3,300 ha of marshland and supporting the adoption of sustainable agricultural intensification practices on at least 9,900 ha of surrounding hillsides.

2. Strengthening commodity chains (Appraisal Estimate US$ 5.5 million; Actual US$ 5.3 million).
This component aimed to support the commercialization of smallholder agriculture in targeted marshland and hillside areas by diversifying and intensifying production, promoting agricultural value addition, and expanding access to markets. Specific tasks included: strengthening farmer organizations and cooperatives to improve their governance mechanisms and instilling sound business practices; improving production technologies to improve production and productivity of marshland and hillside farming systems; rural investments for economic infrastructure for farmer organizations, cooperatives, nongovernmental organizations (NGOs), and districts for strategic investments in public goods and services (community grain drying and storage facilities, rural roads); and knowledge generation and dissemination that supported diagnostic studies, market surveys, and problem-focused applied research.

3. Project coordination and support (Appraisal Estimate US$ 6.3 million; Actual US$ 6.6 million).
This component supported the Project Support and Coordination Unit (PSCU) to ensure: (i) efficient execution of administrative, financial management, and procurement functions; (ii) coordination of project activities among the various stakeholders; (iii) timely implementation and monitoring of environmental and land-use management frameworks mandated by World Bank safeguards policies; and (iv) establishment and operation of the M&E system.

d. Comments on Project Cost, Financing, Borrower Contribution, and Dates
Project Costs:
Total project costs slightly increased from US$38.99 million estimated at the time of appraisal to US$ 39.3 million at project closing, so actual costs were 100.8 % of appraisal.

Financing:
By project closing, IDA Credit disbursements, at US$ 32.8 million was less than the original Credit of US$ 35.0 million. It was expected at appraisal that beneficiaries in Rwanda would provide US$ 1.99 million by closing, actual financing from beneficiaries was the same as estimated. The financing gap that resulted from unforeseen increases in fuel prices and construction material and changes in exchange rate was covered with reallocation from other components, selecting lower cost irrigation schemes and increase of Borrower contribution.

Borrower Contribution:
The Borrower provided US$ 4.5 million, 225% of the appraisal estimate of US$ 2.0 million.

Dates:
There was no extension of closing date and the project closed on October 31, 2012, the original closing date.


3. Relevance of Objectives & Design:

a. Relevance of Objectives:
High.
The Project Development Objective was relevant to country priorities and strategies. In 2007, when the project was being prepared, approximately 90 % of Rwanda's population lived in rural areas, and approximately 80 % engaged in subsistence agriculture (ICR p. 1). Also, rural poverty was high, rural households living below the poverty line of US$ 1 per day was 67 % in 2008 (ICR p.1). Major issues in rural areas were: declining labor productivity in agriculture, declining average farm size (0.2 ha of arable agricultural land net of permanent pasture per rural resident), worsening land degradation and fragile food security. The Government recognized that raising agricultural productivity, increasing production, and meeting the demand of the domestic food markets was necessary to increase food security and reduce poverty. National Agricultural Policy included such goals. The World Bank assisted the Government to design a three-phase Adaptable Program Loan (APL) to help implement its strategy. An urgent priority for Government to address its structural food deficit and to increase the share of marketed production was the development for irrigation of 60,000 ha of marshlands, along with the sustainable development of surrounding hillsides. These were the two main pillars supported by this 2nd Phase of Adaptable Program Loan series.

The objective was relevant to the recent Country Assistance Strategy (2009-2013). Accordingly, Outcome 1.1. 'agricultural production sustainably raised', includes support for raising agricultural production by targeting investments in a few focused and complementary areas with emphasis on sustainable approaches.

b. Relevance of Design:
High

In general the results framework was logical and relevant. Project activities were logically linked to the project development objective of increasing agricultural production and marketing in marshland and hillside areas targeted for development under the Project in an environmentally sustainable manner. Component 1 aimed to address the agricultural production increase sub-objective through development and sustainable rehabilitation of irrigated area and Component 2 aimed to address the increasing of agricultural marketing sub-objective via promoting agricultural value addition and expanding access to markets. Activities such as strengthening farmer organizations and cooperatives, improving production technologies to improve production and productivity of marshland and hillside farming systems; rural investments for grain drying and storage facilities, and rural roads all linked to the marketing sub-objective.


4. Achievement of Objectives (Efficacy) :

The project development objective is divided into 3 sub-objectives: (i) Increase agricultural production in marshland and hillside areas targeted for development; (ii) Increase agricultural marketing in marshland and hillside areas targeted for development; (iii) to do so in environmentally sustainable manner.


The results evidence is based on the Ministry of Agriculture's statistics (crop assessments) done every year covering the project area, beneficiary surveys (government's household survey done 3 months before project closing and impact assessment done at project closing) and M&E data and reports from cooperatives. The project assessment survey carried out a comprehensive qualitative and quantitative analysis that included a comparison group of non-beneficiaries. The ICR mission included consultations with about 500 stakeholders and focus group discussions so that the findings of the beneficiary assessment could be validated.

(i) Increase agricultural production in marshland and hillside areas targeted for development is rated High.

Outputs:
9 sites of irrigated marshland were developed under the project, including seven sites rehabilitated or extended and two sites newly developed, in total 3,324 ha.
8 dams were built in five sites.
164 km primary canals, 160 km secondary canals, 70 km drainage canals and 44 km access roads were built.
A Ministerial Order establishing Water Users Associations in irrigation schemes was approved by the Cabinet in September 2011.
Water Users Associations committees were elected and trained in 23 marshlands and they started to collect fees from users.

Intermediate Outcomes:
At least 3,300 additional ha of irrigated marshland have been rehabilitated or developed by the project. The target was achieved at 100%. The project brought 3,324 ha of new marshland into operation.
At least 75% of the farmers in irrigated marshlands rehabilitated or developed by the project (Phase 1 and 2) are paying water charges through water user associations. The target was achieved to a level of 126%, i.e. 95% of farmers were paying water fees.

Outcome:

The production of rice in marshlands rehabilitated or developed under this project increased by 167 %, exceeding the target of 100 % increase above baseline. Farmers who are not project beneficiaries and who operate in non-rehabilitated marshlands have no access to irrigation and can plant only one season each year and obtain rice yields from 2.7 to 3.3 t/ha. Before marshlands were developed farmers' average annual income was Rwandan Franc 347.164/ha compared to Rwandan Franc 3.6 million/ha on marshland improved or developed under the project.


(ii) Increase agricultural marketing in marshland and hillside areas targeted for development is rated Substantial.

The project addressed this sub-objective mainly by supporting and strengthening cooperatives.

Outputs:
Of the 83 cooperatives supported by the project, 81 were assisted by their local service providers to develop business plans. The project also supported cooperatives to have professional managers as well as to establish effective governance structures including: a) establishing governance organs (general assembly, executive and audit committees, marketing committee); b) obtaining official registration at District and Rwanda Cooperative Agency (RCA); and c) raising initial capital and assets.

Through rural investments under the local development fund the project provided 30 drying bays for rice production in marshlands, 5 storage centers for rice, 8 storage centers for other commodities and 2 collection centers for vegetables.
The cooperative collection system support was a key factor in strengthening cooperatives as well as helping expand farmers' access to the financial sector. Farmers were required to open bank accounts to receive payments from the cooperatives (according to the impact assessment, 80 % of beneficiary farmers had savings accounts and 48 % had access to credit).

Intermediate Outcomes:
80 cooperatives were supported by the project had quality business plans under implementation (the target was achieved at 101%). The project team subsequently stated that the cooperatives are now producing annual financial statements and being audited regularly by RCA.
An additional 15 cooperatives were supported for the production and marketing of certified maize and potato seed. The target of 5 additional cooperatives was achieved at 211%.
On at least 75% of the rural infrastructure sub-projects funded through the Local Development Fund, the majority of users surveyed were fully satisfied by one year following the sub-project completion. The target was achieved at 130%. The Impact Assessment revealed that finally over 65% of users were very satisfied with the facilities provided under the local development fund and over 98% were either very or fully satisfied with the infrastructure provided.

Outcome:

The project and the ICR chose to measure this objective by presenting increased value of agricultural commodities marketed through cooperatives rather than showing increased marketing by beneficiary farmers through all different marketing channels which would be difficult to trace. The project team stated that cooperatives were key in Rwanda in bringing small-holders together so that the beneficiaries were able to achieve the scale of production and access to markets previously unavailable to them. Therefore, a major focus of the project was to support and strengthen cooperatives in order to increase production and marketing of agricultural commodities. The project team also noted that the project discouraged farmers from selling outside cooperatives because not only would they make more money through cooperatives' marketing power but also receive better pricing on inputs through increased purchasing power.

For these reasons a main project indicator used for measuring this outcome specified that at least 20 cooperatives with business plans and supported by the project would have increased their revenues from sales by 50% relative to the baseline. The actual was 67 cooperatives so this target was achieved to a level of 335%. The Impact Assessment Survey (2012) documented that 67 cooperatives had achieved revenue increases exceeding 50% compared to their respective baseline; these included 18 cooperatives that increased revenues by more than 1,000%. The project team also subsequently provided information that the cooperatives supported by the project have been sharing dividends, and reinvesting capital to diversify cooperative business and reduce risks associated with single crop exposure. Additional evidence provided has shown that the cooperatives increased the marketed share from 35% in 2008 (2008 FINSCOPE Survey) to 70% at project closing. The cooperatives have also been adding value to commodities through post-harvest technology including drying, threshing, shelling, packaging, and labelling and gaining a foothold in some quality markets. The achievement of this objective is rated substantial.


(iii) to do so in environmentally sustainable manner is rated High

Intermediate Outcomes:
At least 9,900 incremental hectares of hillsides were sustainably developed by the project so the target was achieved to a level of 102%, i.e. 10,096 ha additional (for a total of 24,581 ha) received treatment for protection against soil erosion using erosion control structures such as terraces, conservation tillage, and contour bunding or by planting permanent crops or permanent vegetation.

Outcome:
Farmers' adoption of sustainable marshland or hillside intensification technologies was measured in the Impact Assessment Survey (2012). The baseline was 25 % of households and the actual achieved was 98 % of households (exceeding the target of at least 50% of households). Adoption of sustainable intensification technologies was defined as adoption of at least two of the following: soil fertility management, Integrated Pest Management, conservation tillage, contour bunding, construction of erosion control structures including terraces, vegetative strips, and agro-forestry practices.. The uptake rates for specific technologies were: 79% using Integrated Pest Management, 88% using vegetative strips, and 78% using agro-forestry, while radical terracing was used by 14% and 22% and conservation tillage by 30% and 36% of marshland and hillside households, respectively.


Overall Adaptable Program Loan Outcome

The long term programmatic objective, was to help the Government of Rwanda achieve its strategic goal of unlocking rural growth in order to increase incomes and reduce poverty (PAD p 5). It was noted by the ICR (p. 35) that the 3 phase Adjustable Program Loan preparation did not take into account the need to establish a baseline for the program indicators establishing with-project /without-project comparisons to be able to evaluate program results. This created an attribution problem regarding poverty reduction and other broader welfare changes enabled by project-induced benefits. Similarly, M&E design chose household income as an indicator for the overall program goal. This choice was not very sound as household income/expenditure is impacted by many other factors in addition to farming income.. Program indicators and results were:

1. Change in the average level of household incomes among program direct beneficiary households: The baseline for Program Indicator 1 came from the Impact Assessment Survey at the end of Phase 1 and measures income from sales in beneficiary households (Rwandan Franc 48,840). The Impact Assessment for Phase 2 used the figure of Rwandan Franc 232,000, which was the mean annual consumption expenditure per adult equivalent for Phase 1 beneficiaries taken from the 2010/2011 Integrated Household Living Conditions Survey. These two baselines were not comparable as one measures income and the other consumption. So, no conclusion from these could be drawn. However, it was possible to compare the figure for RSSP beneficiaries with a control group from the same Integrated Household Living Conditions Survey dataset. The control group was for all rural households outside Kigali (not benefiting from RSSP) where at least one household member had a main job on the family farm (Their average expenditure was Rwandan Franc 214,964). Accordingly, RSSP beneficiaries had higher consumption levels than their comparators in Rwanda.
2. Change in the percentage of program direct beneficiary households under the poverty line: The baseline of 65.7 % for Indicator 2 was taken from the Impact Assessment Survey for Phase 1. The equivalent figure for 2010/11 from the Integrated Household Living Conditions Survey data was 39.3% for Phase 1 and 2 beneficiaries, a significant reduction in the proportion of beneficiary households below the poverty line. Overall, the rural poor in Rwanda remain at 48.7% but this is a far larger population than the project population . According to the results of the Impact Assessment done at the end of the project, socioeconomic well-being improved beneficiary versus non-beneficiary households, i.e project beneficiaries are more likely to own durables and have better access to electricity and health insurance.
3. On the change in the average level of rice yields per hectare in districts having marshlands rehabilitated or developed by the Program the baseline was 2.7 t/ha and actual was 5.68t/ha in 2012 average for Districts and 6.7t/ha for Phase 2 beneficiaries. Indicator 3 was measured from Ministry of Agriculture crop assessment surveys. The districts in which the project had rehabilitated or developed marshlands were identified, and the average crop yield calculated by simply dividing total production in those districts by area under rice production. The Project direct beneficiary production data were available from the M&E department.


5. Efficiency:

High.
The ICR presented an economic analysis that covered 100 % of project costs. (p. 17). The Economic Rate of Return analysis (ERR) used a 21 year discounted cash flow model in 2008 prices. Annual benefits and costs of marshland and hillside developments were calculated using farm models aggregated to project level. Annual returns on rural infrastructure investments were calculated for representative infrastructure such as drying bays and storage facilities. Secondary benefits were included such as milk and cattle production and fisheries due to higher incomes. Spillover effects to outside areas were not included.

The results showed that the financial and economic returns from the project’s investments were substantial. The economic Net Present Value of Rwandan Franc 57 billion (US$ 90 million), with an ERR of 47 %, compared favorably to the economic Net Present Value estimated at appraisal of RWF 25 billion, with an ERR of 34 %. The financial Net Present Value of RWF 65 billion (US$ 140 million) was higher than the economic Net Present Value because of adjustments for import duties and fertilizer subsidies. When the project-induced benefits from fisheries and cows were included in the analysis, the Net Present Value was RWF 85 billion (US$ 135 million), mainly because of higher yields and output prices for the hillside developments, giving an ERR of 91 %.

According to the ICR, the main drivers of this significant increase in rice production were the project’s marshland investments in irrigation and drainage infrastructure. This infrastructure regulated and increased the water supply and permitted two cropping seasons.

The sensitivity analysis showed that total project returns were not very sensitive to changes in assumptions. However returns on the marshland sub-component could be erased with a 4 percent fall in the price/yield of paddy or a 14 percent increase in investment costs. The economic Net Present Value on the rural infrastructure sub-component was Rwandan Franc 2.4 billion and would have been zero if the paddy rice price fell by more than 28 % on the rural infrastructure.

No administrative or operational inefficiency issues were reported, in fact there was an efficiency gain. Activities were completed ahead of schedule, 12 months before closing.

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
Coverage/Scope*
Appraisal:
Yes
34%
100%
ICR estimate:
Yes
47%
100%

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

6. Outcome:

Relevance of objectives and design were high.. The sub-objective of increased agricultural production in marshland and hillside areas targeted for development was rated high; the sub-objective of increased agricultural marketing in marshland and hillside areas targeted for development was rated substantial The sub-objective of doing so in environmentally sustainable manner was rated substantial. Efficiency was rated high due to positive economic efficiency results.

a. Outcome Rating: Highly Satisfactory

7. Rationale for Risk to Development Outcome Rating:

The ICR argues (p. 22) that the technologies financed by the project are attractive to farmers and easy to adopt, therefore farmers will most likely continue to invest in them. The ICR finds some risk on cooperatives’ and Water User Associations’ commitment to the continued strengthening and accountability of marshland schemes. although, the project provided capacity development to these groups. They are mostly new institutions and there is a risk that their operation may initially have weaknesses. Regarding the risk that government's commitment at the central and district levels to continue providing effective services to cooperatives will decline, this appears low since the government was committed throughout the project and currently is expected to continue the institutional reforms, and the programs that the project started.

a. Risk to Development Outcome Rating: Moderate

8. Assessment of Bank Performance:

a. Quality at entry:
The project design benefited from several strategic studies funded by a PHRD grant, as well as updated national policies and strategies. Also, as the 2nd Phase Project of an Adaptable Program Loan, the design benefited from implementation arrangements and lessons from phase 1. Main lessons at that time were: designing a simple project with several straightforward components and a manageable implementation plan; developing and applying a clear guide for the selection of marshlands to be rehabilitated or developed by the project; building capacity among project beneficiaries (specifically, cooperatives) and building capacity in the project coordination unit to ensure effective implementation of the safeguards policies. These were all sound lessons supported by the evidence.

The results framework was in general sound and monitoring and evaluation arrangements were sufficient with the exception of monitoring the longer-term overall Adaptable Program Loan indicators, as well as the outcome indicators for measuring the marketing objective. The development objective and key outcome and intermediate outcome indicators were mostly well linked, but the marketing outcome indicator, which was a proxy indicator was insufficient (See Section 4).


Implementation arrangements planned were adequate and included the Project Support and Coordination Unit that was established in the first phase as part of the Ministry of Agriculture. The unit was to be responsible for the management and coordination of project activities, including the facilitation of support to implementing local
agencies and beneficiary groups. A Program Advisory Committee working under the direction of the Ministry of Agriculture would provide general guidance regarding the implementation of Project activities.

The risk assessment at appraisal missed several risks. As pointed out in the ICR (p.22), project specific risks consisted of technical and design issues, implementation and institutional issues, financial management and accountability of the Project Support and Coordination Unit , procurement, and social and environmental impacts. The following risks were not mentioned: (i) individual beneficiaries’ and households’ capacity to continue activities supported by the project in a sustainable manner; (ii) cooperatives’ and Water User Associations’ commitment to the continued strengthening and accountability of marshland schemes; (iii) government’s explicit commitment at the central and district levels to continue providing effective services to cooperatives.

Quality-at-Entry Rating: Satisfactory

b. Quality of supervision:
The task team was mainly field-based, providing responsive advice for resolving issues (e.g. the financing gap), carrying out regular implementation support missions that were appreciated by the Government, providing resolution for complex contractor issues, helping the Project Implementation Unit and Ministry of Agriculture build capacity to comply with multiple safeguard requirements; and helping to achieve a functional M&E system.

The team built strong working relationships with the government that helped achieve outcomes and triggers for phase 3 project. One slight shortcoming is that the team could have been more pro-active in revising the outcome indicator for the marketing related objective in order to be able to better monitor this outcome.

Quality of Supervision Rating: Satisfactory

Overall Bank Performance Rating: Satisfactory

9. Assessment of Borrower Performance:

a. Government Performance:
The ICR reported (p.23) that the central and local level Government demonstrated a high level of commitment to, and ownership of, the Adaptable Program Loan and Phase 2 design and implementation. Several examples are: alignment of the project with poverty and agricultural strategies, proactive engagement of the Ministry of Agriculture as well as the President, the doubling of government counterpart funds; a proactive and effective Project Advisory Committee; and, the Government's formulation and approval of important policies initiated for the project (rice marketing policy, Water User Association legal framework, implementation and full funding of resettlement action plan for marshlands schemes, changes in staff incentives for the Project Support and Coordination Unit).

Government Performance Rating: Highly Satisfactory

b. Implementing Agency Performance:
As the government decided to streamline 47 separate Project Coordination Units of projects funded by different donors to 4 Project Coordination Units, the Project Support and Coordination Unit was merged with another Bank project Land Management, Water Harvesting and Hillside Irrigation Project (LWH)’s Project Coordination Unit. According to the Project team, the merger brought a lot of cross fertilization and positive lessons. The new Single Project Implementation Unit employed 120 people and approximately half of the staff is based in the provinces. According to the ICR (p. 24), staff of the Project Support and Coordination Unit / the later Single Project Implementation Unit were committed to the project’s quality implementation. Examples include the following. The timely resolution of implementation issues enabled project objectives and targets to be met one year ahead of the formal closing date. The single Project Implementation Unit demonstrated adequate compliance with project agreements and mission action plans. Fiduciary arrangements and processes were effective, including implementation of the procurement plan and performance in preparing consistently unqualified project audit reports. The single Project Implementation Unit maintained productive partnerships with all implementation partners and stakeholders. By hosting numerous delegations from developing countries, the single Project Implementation Unit demonstrated a desire to be innovative and to document results.

Implementing Agency Performance Rating: Highly Satisfactory

Overall Borrower Performance Rating: Highly Satisfactory

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

a. M&E Design:
The design of the M&E system was built on the Phase 1 project. . The system was decentralized involving district-level M&E officers and cooperative officers with some basic M&E skills. The results framework and supporting indicators in general were linked with the PDO. Two shortcomings in M&E design were: (i) The project’s marketing objective lacked well-defined performance indicators, although the M&E system included a number of proxy indicators. (ii) The project did not provide results-focused performance indicators for the cooperatives; the cooperatives’ performance was measured by increases in their revenues only, rather than changes in commodity volumes and values marketed. The ICR reported that (p. 8) Phase 3 project incorporates additional indicators on cooperative performance and marketing to strengthen and evaluate the sustainability of cooperatives.

b. M&E Implementation:
The M&E system developed quarterly and annual reports on performance targets and progress toward triggers for Phase 3. The decentralized M&E system provided data from the field, including from cooperatives and the Ministry of Agriculture (crop assessment data). Independent evaluations were: commodity chain and other technical studies to sharpen Component 2 interventions (especially for rice); a mid-term report (2010); the Oxford Policy Management final evaluation report updating performance indicators and impact assessment; and Government’s ICR. However the details of the impact assessment (i.e. survey methodology) was not provided in the ICR; the impact assessment report was subsequently provided by the project team. An issue that was not mentioned by the ICR is that the monitoring of the Adaptable Program Loan Program achievements had a weakness: the indicator 'change in household income' was not monitored consistently.

a. M&E Utilization:
The M&E system was used to inform decision-making and resource allocation. Weekly presentations by the M&E team facilitated management decisions based on real-time physical and budget implementation. The quarterly and annual reports were used by the Ministry of Agriculture management to inform project planning and oversight needs; the Ministry of Finance and Economic Planning officials for their project performance reports and high-level quarterly reviews; the Prime Minister’s Office for project/policy monitoring; and the Bank task teams as key inputs for supervision / implementation missions.

M&E Quality Rating: Substantial

11. Other Issues:

a. Safeguards:
The project was a Category B project and the following safeguards were triggered by the project: Environmental Assessment OP/BP 4.01, Natural Habitats OP/BP 4.04, Pest Management OP 4.09, Involuntary Resettlement OP/BP 4.12, projects on International Waterways OP/BP 7.50. Environmental Assessment , The Environmental and Social Management Framework, Pest Management Policy, and Resettlement Policy Framework documents were publicly disclosed in January 2008, prior to project appraisal. The Environmental and Social Management Framework covered potential impacts on Natural habitats, which was also reflected in sub-project investments. As part of the sub-project selection a comprehensive Environmental and Social Impact Assessment for 13 potential target marshlands was prepared. The Pest Management Plan focused on Integrated Pest Management Practices for target crops. The project complied with the riparian guidelines which involved informing and getting concurrence from six affected countries, confirming that water diverted did not cause any negative impact in those countries. The notifications were sent in May 2008 and no unfavorable response was received. Compliance with environmental safeguards was rated 'satisfactory' throughout the life of the project. During implementation, the project improved watershed management in the target areas.


The rating for social safeguards was also satisfactory throughout the life of the project with two exceptions when it was downgraded to moderately satisfactory initially. The Resettlement Policy Framework was disclosed in January 2008 that established guidelines for preparing Resettlement Action Pans. However, initial compliance with social safeguards was complicated by unfamiliarity with their implementation, the late assignment of Project Support and Coordination Unit responsibilities for resettlement activities and high turnover among district authorities. These factors caused minor delays. The main concern was to resettle and compensate people affected by the rehabilitation of marshlands; by the Mid Term Review resettlement was proceeding smoothly. The project team was closely involved with beneficiaries to ensure timely compensation, open bank accounts, providing training in crop intensification, and setting up and utilizing a grievance redress mechanism to address any issues due to resettlement. 13 Resettlement Action Plans were developed and disclosed. prior to project completion, the team developed a Resettlement Completion report that the Bank team found of good quality, which was also disclosed.

b. Fiduciary Compliance:
The Financial Management Unit in the Project Coordination Unit implemented all financial management recommendations in the Project Appraisal Document. The unit, which carried over from the Phase 1 Project, was adequately staffed. All the project's interim financial reports were submitted to the Bank on time. All 8 supervision missions awarded the project a satisfactory rating for financial management. All of the 5 audit reports gave an unqualified opinion.

Procurement performance was also generally satisfactory and improved during implementation. Prior to project start-up, the Project Support and Coordination Unit procurement team had prepared a procurement plan and procurement manual (including a manual for the community-based works), which the Bank found satisfactory. A review of contracts in the project procurement plan showed two bid and two contract execution delays during implementation. By the project’s last year, the procurement team was conducting field visits to monitor contracts and had helped to improve management decision-making.

c. Unintended Impacts (positive or negative):

d. Other:



12. Ratings:

ICR
IEG Review
Reason for Disagreement/Comments
Outcome:
Highly Satisfactory
Highly Satisfactory
 
Risk to Development Outcome:
Moderate
Moderate
 
Bank Performance:
Satisfactory
Satisfactory
 
Borrower Performance:
Highly Satisfactory
Highly Satisfactory
 
Quality of ICR:
 
Satisfactory
 
NOTES:
- 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 ICR offers a number of lessons of which the following are the most important (with some reformulation of language):
A marshland investment model including: investment in irrigation networks in marshlands and associated hillsides; adoption of sustainable agricultural practices; improvement in agricultural value chains; and, access to markets and supporting farmer organizations offers a potentially valuable framework for replication. This Rwanda case is a useful model. It has become the basis for similar work by other development partners and is laying the foundation for a national irrigation roll-out and further agricultural intensification in Rwanda and elsewhere.

Approaches that enhance farmers’ business skills, promote value chains, and link farmers to financial institutions provide sustainable benefits. It is vital to strengthen farmers’ business skills and knowledge through relevant and practical approaches, such as participatory and market-responsive value chain approaches, farmer-based extension, and training for large numbers of lead farmers. Additionally, linking farmer groups and cooperatives to savings and financial institutions, can ensure the sustainability of project investments.

A programmatic approach to a financing mechanism enabling several phases is advantageous for consolidating, scaling up, and sustaining project benefits while ensuring clear criteria, direction and initiatives for new interventions. This is important for long term rural sector investments and reforms.

Water User Associations should be established and strengthened at the start of irrigation works. This approach instills ownership and understanding of the irrigation schemes, of how they function and of the roles and responsibilities of all water users. The approach also reinforces the need to operate and maintain the infrastructure (a public good) properly and to separate that responsibility from the cooperative, which essentially engages in private productive and entrepreneurial activities.

14. Assessment Recommended?

Yes
Why?
The Project is one of the few successfully implemented projects in that sector and area. The evidence suggests it has had a significant impact in terms of poverty reduction and bringing prosperity in rural areas. Due to the important lessons it could bring to the region and the Bank, further assessment would be valuable.

15. Comments on Quality of ICR:

The ICR was well written, comprehensive and lessons were particularly well formulated. The only issue was that the M&E system section was not very clear, Limited information was presented on impact assessment, and various other data resources and surveys.

a. Quality of ICR Rating: Satisfactory

(ICRR-Rev6INV-Jun-2011)
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