For Official Use Only CLR Review Independent Evaluation Group 1. CPS Data Country: Turkey CPS Year: FY12 CPS Period: FY12 – FY16 CLR Period: FY12-FY16 Date of this review: August 3, 2017 2. Ratings CLR Rating IEG Rating Development Outcome: Moderately Satisfactory Moderately Satisfactory WBG Performance: Good Good 3. Executive Summary i. Turkey is an upper middle income country with a GNI per capita of US$9,950 in current US dollars (2015). Based on the latest data available, the percentage of people living below the national poverty line fell from 2.3 percent in 2012 to 1.6 percent in 2015, and the Gini coefficient remained at about 39-40 during the program period, compared with an average index of about 32 in 2014 for the OECD countries. Political stability contributed to good economic performance prior to the CPS. After the start of the CPS, however, political tensions erupted and, combined with spillovers from continued conflict in neighboring Syria and Iraq, heightened political instability in the country. Turkey accommodated over 1 million refugees from Syria alone, which strained host community resources. During the review period, annual real growth was in the 2-4 percent range, a significant slowdown compared to the 9 percent in 2010-11. Revisions to the national accounts data following the issuance of the Completion and Learning Review (CLR) offer a more positive picture of economic growth during the review period that underscores the Turkish economy resilience to shocks. Yet, persistently large external deficits in the 5-8 percent of GDP range financed by mostly short-term debt continued to make the economy sensitive to changes in external financing conditions. ii. The government set out its objectives in the Ninth Development Plan for 2007-13 and the 2012-14 Medium-Term Program. Four priorities stood out: (i) pursue sound macroeconomic and structural fiscal policies to maintain stability and reduce vulnerabilities, (ii) improve the investment climate and labor market to increase competitiveness and create jobs, especially for women and youth, (iii) reform education, health service provision, and social welfare to increase productivity and promote equal opportunity, and (iv) continue reforms of energy and water sectors, and invest in increasing energy efficiency. In support of the governm ent’s objectives, the WBG Country Partnership Strategy (CPS) pursued reforms in three areas for enhancing competitiveness and employment, improving equity and public services, and deepening sustainable development. iii. At progress report stage, the country faced an increasingly fragile economic situation and a deteriorating political environment. The program was modified to reflect changing priorities, but adjustments fell short of a robust response to increasing economic vulnerabilities. Some adjustments were made to the program, reflecting less than anticipated demand in lending for social services, and a rethinking of the area of governance and transparency. The planned CLR Review CLR Reviewed by: Peer Reviewed by: Manager/Coordinator Juan José Fernández-Ansola Albert Martínez Pablo Fajnzylber Consultant, IEGHE Consultant, IEGHE Manager, IEGEC Surajit Goswami Takatoshi Kamezawa, Lourdes Pagaran Consultant, IEGHE Sr. Evaluation Officer, IEGEC CLRR Coordinator, IEGEC For Official Use Only CLR Review 2 Independent Evaluation Group engagement in early childhood education did not materialize, and was merged with social and public services. Moreover, the deterioration in the economic and political environment motivated a shift in emphasis in the governance area, to support improved transparency as a key aspect of sustaining investor confidence. The CPS was extended by one year to include FY16, in part to allow the CPS period to be aligned with the political cycle, as parliamentary elections were scheduled for mid-2015. iv. Actual IBRD lending during FY12-FY16 was US$4.3 billion, compared with the planned US$6.5 billion; while IFC financing was US$3.6 billion,1 and MIGA’s guarantee gross exposure increased from US$470 million in FY13 to US$1.4 billion in FY16.2 WBG lending reflected the authorities’ preference for Development Policy Operations (DPOs) and credit lines over Bank instruments with high perceived transaction costs (Investment Project Financing—IPFs), and challenged IBRD to identify areas where it could provide strategic value added, and IFC to demonstrate innovation and good practices, as in governance and gender. DPOs represented about 45 percent of the new IBRD financing in the CPS—compared with the 31 percent planned under CPS and CPSPR—and covered environmental sustainability and energy, competitiveness and savings, and shared growth. Investment Project Financing was US$2.4 billion—primarily in energy, SME access to finance, health, and land registration —compared to the US$4.4 billion planned under the CPS and CPSPR. v. IFC played an important role—particularly in the energy sector, development of sustainable cities, and access to finance. IFC’s program increased in size during the CPS period, and Turkey became IFC’s second largest client globally. Long term finance reached US$3.6 billion, far exceeding the US$2.5-2.8 billion expected under the CPS. This was facilitated in part by synergies between IBRD and IFC that were exploited during the CPS. For example, DPL work —including knowledge work—set the stage for the enabling environment and overall strategic framework for the energy sector, which was subsequently used to step up IFC engagement with private partners in energy. This approach points to possible new avenues of future joint interventions that would emphasize IBRD’s catalytic role—IBRD helping develop policy frameworks and strategies to enable private activity supported by IFC—in a country with increased sophistication and selective demand for WBG support. The WBG demonstrated synergies across IBRD, IFC, and MIGA, particularly in support of Small and Medium Enterprises (SMEs) and exporters, and in investing in energy efficiency. vi. On balance, IEG rates the overall development outcome as Moderately Satisfactory. In Focus Area 1, there was limited progress in increasing domestic savings and enhancing external resilience while progress was mixed on the investment and business climate objective. The objective on sustaining macroeconomic stability, domestic savings, strengthen exports and external resilience had multiple dimensions not reflected in the two outcome indicators that covered a narrow range of the objective. Corporate governance was improved through more extensive firm audits, and enhanced reporting and disclosure requirements. In Focus Area II performance was adequate, with some progress on gender equality and a more inclusive labor market, and evidence of improved equity in the provision of health services. While work remains to be done in health to improve client satisfaction, broad measures of health outcomes show progress in improving health outcomes during the program period. In Focus Area III, good progress was made in increasing the supply of energy and use of renewable energy, mixed progress on improving the sustainability of 1 IFC contributed close to US$4.5 billion if we include about US$1 billion in mobilization of other financing. 2 To put in perspective, the combined IBRD/IFC financing to Turkey averaged about US$1.6 billion a year during the CPS, compared with average total annual medium and long term debt financing of US$71 billion in 2015-6 according to the IMF, and gross external financing requirements of US$200 billion annually. Just the amortization of the government’s short and medium term external debt amounted to about US$6 billion in 2016. IBRD’s single borrower limits constrain the Bank’s possible exposure to Turkey. For Official Use Only CLR Review 3 Independent Evaluation Group Turkish cities, and limited achievements in strengthening environmental management and adaptation to climate change. vii. IEG rates the WBG performance as Good. The CPS supported the government’s priorities and was adjusted during the PLR to reflect changing priorities, although the adjustment was not robust enough to reflect economic vulnerabilities. The program areas were selective, but program objectives were unfocused owing to their many dimensions, which diminished the program’s impact. Development policy operations and project lending were complemented by economic and sector work and technical assistance; however, the non-lending portfolio was spread thinly over many areas. The IFC interventions were included explicitly in program targets, which has not been a feature of other WBG programs. Still, some indicators were weakly linked to program interventions and objectives, and a few program objectives were underpinned by a plethora of indicators derived from individual projects which do not constitute a coherent whole and focus, and made assessment difficult. Risks were appropriately identified, but the CLR does not discuss if risks to the program materialized and how they were mitigated, if at all. Program implementation was generally adequate, but hampered in some instances by slow inter-governmental decision-making, especially for IPF financing. There were synergies across the WBG, which also coordinated effectively with other partners in refugee work and the municipal sector. viii. IEG agrees with CLR lessons on weaknesses of the results framework, need for long term engagement and sequenced interventions, challenges for new IPF lending, and need for a demand driven Advisory Services and Analytics (ASA) agenda. IEG notes three additional lessons from this review: • Effective use of development policy operations and knowledge work, is critical for setting the stage for IFC engagement in a sector. In the case of Turkey, IBRD helped develop policy frameworks and sector strategies in energy, which enabled private activity supported by IFC in this sector. • Formal agreements between IFC and IBRD are not enough to ensure effective coordination. In the case of Turkey, the Bank-IFC Joint Implementation Plan (JIP) on sustainable Turkish cities, which involved coordination of multiple financing and advisory services between IFC and WB, was hampered to a large extent by inadequate progress under IBRD’s Sustainable Cities project, still in its early stage of implementation. At the same time, joint interventions outside the JIP in the energy sector worked very well as the sequence of IBRD and IFC operations were delivered as planned. • Program objectives with many dimensions require a set of interventions and outcome measures commensurate with the complexity of the objectives. In the case of Turkey, the objectives on macroeconomic stability and competitiveness, and female labor participation would have required a set of interventions that addressed their multiple dimensions. 4. Strategic Focus Relevance of the WBG Strategy: 1. Congruence with Country Context and Country Program . Turkey is an upper middle income country with a GNI per capita of US$9,950 in current US dollars (2015). Turkey’s economy grew on average by 3 percent annually in real terms during the review period, with persistently large external deficits in the 5-8 percent of GDP range financed mostly by short-term debt, making the economy sensitive to changes in external financing conditions. The economy experienced significant volatility, with growth close to 9 percent in 2010-11 followed by a correction to 2.2 percent in 2012 and a modest recovery to 3-4 percent in 2013-15. Revisions to the national accounts data following the issuance of the CLR offer a more positive picture of growth during the review period that underscores the resilience of the Turkish economy to shocks. Inflation was high on average, and also volatile (6-9 percent range), and real policy interest rates generally negative. For Official Use Only CLR Review 4 Independent Evaluation Group 2. The government set out its objectives in the Ninth Development Plan for 2007-13 and the 2012-14 Medium-Term Program. Four priorities stood out: (i) pursue sound macroeconomic and structural fiscal policies to maintain stability and reduce vulnerabilities, (ii) improve the investment climate and labor market to increase competitiveness and create jobs, especially for women and youth, (iii) reform education, health service provision, and social welfare to increase productivity and promote equal opportunity, and (iv) continue reforms of energy and water sectors, and invest in increasing energy efficiency. 3. In support of the government’s objectives, the WBG’s country program pursued the strategic objectives of enhancing competitiveness and employment, improving equity and public services, and deepening sustainable development. There were synergies exploited across IBRD, IFC, and MIGA were, particularly in support of SMEs and exporters, and investing in energy efficiency. The areas selected were congruent with the country’s development goals, and the WBG’s work program was in sectors where it had shown capacity to deliver in the past. The selection of areas also was in line with broad areas identified subsequently as important by the Systematic Country Diagnostic. 4. At progress report stage the CPS faced an increasingly fragile economic situation and a more complex political environment. The CPS was extended by one year to include FY16, in part to allow the CPS period to be aligned with the political cycle, as parliamentary elections were scheduled for mid-2015. As the CLR notes, some adjustments were made to the program, reflecting less than anticipated demand in lending for social services, and a rethinking of the area of governance and transparency. The planned engagement in early childhood education did not materialize, and the area of education was merged with social and public services. Support in the area of governance was originally defined narrowly around public financial management and improving the efficiency social services. The deterioration of the economic and political environment motivated a shift in emphasis to support improved transparency as a key aspect of sustaining investor confidence. 5. Relevance of Design. The WBG strategy addressed the key challenges facing the country and reflected the government’s own strategy. At progress report stage, the program was adjusted to reflect changing priorities, but adjustments fell short of a robust response to increasing economic vulnerabilities. The objectives of the program were generally supported by WBG interventions, although in some objectives the interventions were not commensurate with the complexity of the stated program objectives – for example on macroeconomic stability and competitiveness, and contribution to female labor force participation. WBG interventions had a good combination of development policy operations in areas where the government intended to pursue reforms, and a mix of projects, economic sector work, and technical assistance in the remaining areas of the program. However, there were some instances—such as the sustainable cities objective—where a program objective was supported by an incoherent collection of projects that lacked focus and an adequate anchor. 6. A positive aspect of a number of Bank ASA interventions was that they were programmatic, allowing to follow up on issues as they arose and complementing well the development of lending interventions. At the same time, the non-lending portfolio was spread thinly over many areas which makes difficult an assessment of its contribution to program objectives. As the CLR notes, unlike the lending program, the ASA agenda was not always demand driven with proven ownership. This was a program where IFC played a substantial role—particularly in the energy sector, development of sustainable cities, and access to finance—and synergies across IBRD, IFC, and MIGA contributed to achieve program objectives. Selectivity 7. The overall program was selective in terms of the focus areas. It built on adequate country diagnostics and ASA support, and based on consultations with the authorities, who had strong expectations about Bank support in specific reform areas. The non-lending program went beyond the support of lending interventions—providing global knowledge in certain areas of government interest and building the knowledge base in other areas of potential future involvement —and had a broad scope that made it significantly less selective than the lending program. Some objectives attempted too much in terms of scope and number of interventions, and made the program seem unfocused in For Official Use Only CLR Review 5 Independent Evaluation Group those particular areas, including indicators that belonged under different objectives. IFC investments and advisory activities were focused on enhancing private sector competitiveness, its capacity to create jobs through new investments, especially in SMEs, and helping improve the efficiency of the energy sector. Alignment 8. Although the original CPS was prepared prior to the WBG adoption of the twin goals, program interventions aimed at enhancing the socio-economic condition of key target groups through labor market activation of women and youth and early childhood development and the development of private sector gender equity certification. Moreover, IFC emphasized investments in less developed areas and the promotion of financial inclusion. 5. Development Outcome Overview of Achievement by Objective: Focus Area I: Enhancing Competitiveness and Employment 9. This focus area had three objectives: (i) sustain macroeconomic and financial stability, and strengthen exports, domestic savings, and external resilience, (ii) improve the investment and business climate, deepen and broaden access to finance, and increase employment, and (iii) improve governance through enhanced transparency to ensure a level playing field. Objective 1: Sustain macroeconomic and financial stability, and strengthen exports, domestic savings, and external resilience 10. The two indicators for this objective were to increase the uptake under the new voluntary pension scheme, and increase the number of tax payers filing income tax as a result of the new income tax law. The Bank supported this objective through the Competitiveness and Savings DPL (FY13) and the Sustaining Shared Growth DPL (FY15). 11. The CLR reports that 6.2 million people contributed to a private pension plan as of April 2016, which represents a doubling of the number of participants in 2012. This is corroborated by information from other sources such as the US Social Security Administration3 indicating that 6.4 million people contributed to a private pension plan. As regards the number of taxpayers filing income tax, the CLR reports that the new income tax law has not been ratified and that consequently there is no major increase in the number of taxpayers by end 2016. 12. The objective as formulated has several dimensions, which are not reflected properly by the two indicators. A broader assessment of the objective —including on exports, aggregate domestic savings, and external resilience—based on information of the 2014 and 2016 IMF Article IV consultations reveals that the aggregate private savings-investment balance remained in a deficit of around 5 percent of GDP during the program period. Indeed, there is little evidence of a boost in domestic savings as noted by IEG’s ICRR for the Competitiveness and Savings DPL (FY13). The operation’s targets on private pensions chosen for domestic savings are likely to measure private portfolio shifts rather than an aggregate increase in savings, calling into question the appropriateness of the voluntary pension uptake indicator to measure domestic savings. This is confirmed by the IMF’s 2016 Article IV consultation which shows that Turkey’s private savings are low by international comparison and have been falling since 2003, and points to a low private savings rate as the primary cause of external vulnerabilities. The private sector saving rate averaged 18 percent of GDP over 1998-2003, but dropped to 9 percent in 2013 and has stayed below 13 percent since 2010. Moreover, while exports grew during the program period, the external current account deficit was in the 6-8 percent of GDP range, keeping Turkey dependent on significant external financing.4 External 3 International Update: Recent Developments in Foreign Public and Private Pensions , September 2016. 4 Towards the end of the review period annual external financing needs were in the 25-30 percent of GDP range. For Official Use Only CLR Review 6 Independent Evaluation Group resilience remained in question owing to the continued increase of external financing needs and deterioration of market confidence. In hindsight, objective #1 could have focused on a narrower objective such as savings, and its indicators be more directly linked to the objective and the interventions. (Partially Achieved) Objective 2: Improve the investment and business climate, deepen and broaden access to finance, and increase employment 13. The objective had nine indicators. Three on investment and business climate: patent applications, company registries, and export growth in firms benefiting from IBRD financing. Five on deepening and broadening access to finance: SME sales growth, reducing non-performing loans, IFC reaching SME clients and farmers, increasing corporate bond issuance, and increasing the savings in financial institution by women, and one on increasing employment: IFC’s investment portfolio companies to add 70,000 jobs. The Bank provided support through the Fourth Export Finance Intermediation Loan (FY08), the Second Access to Finance for SMEs project (FY10), the Competitiveness and Savings DPL (FY13), and the Sustaining Shared Growth DPL (FY15). 14. Investment and business climate. The CLR reports delays in the ratification of the new Patent Law and no increase in new patent applications. The CLR also notes that there is no information about the inclusion of companies in registries across Turkey through the integrated company regulation system (MERSIS). Export growth in firms benefiting from IBRD financing was 6 percentage points higher annually on than average sector export growth, which was the program target. 15. Deepen and broaden access to finance. IEG’s ICRR of the Second Access to Finance for SMEs (FY10) notes that preliminary evidence suggests that on average SMEs that received IBRD financing did better than those that did not on both employment and sales. In addition, of the financial institutions that received IBRD financing, half had an NPL ratio below the sector average of 2.7 percent, and the other half exceeded the average. The CLR indicates that IFC’s investment portfolio intermediaries exceeded both the program targets for SME clients (100,000) and farmers (120,000). Owing to global and local uncertainties, the corporate bond market did not grow as expected, and thus fell short of target. The percentage of women saving at a financial institution increased from 2 percent in 2011 to 5.5 percent in 2014, exceeding the program target for 2015. On a design issue, the percentage of women saving at a financial institution indicator belongs under the gender/inclusion objective #5 rather than under this objective. 16. Increasing employment. Based on IFC’s information, IFC’s real sector portfolio companies provided about 66,000 additional jobs, close to the 70,000 program target. 17. Using alternative measures such as Doing Business Report to measure the business and investment environment, and financial development, suggests that there has been no progress in improving the business environment and even a deterioration in financial management. According to the Doing Business Report, Turkey in 2017 (#69 out of 190 countries) is in a similar place compared to 2012 (#71 out of 183 countries). Its financial market development has shown a deterioration according to the Global Competitiveness Index from the World Economic Forum —82/138 in 2015 compared to 44/144 in 2011. In addition, the latest joint financial assessment by WB-IMF5 notes that bankruptcies have been rising, the current view of credit quality is dim, and the knock-on impact of non-financial corporation distress on banks is likely to be significant. To a large extent, this reflects serious domestic and external shocks, which, together with increasing private indebtedness, have contributed to weaker business confidence. In this context—and despite IFC’s positive contribution to SME employment—national unemployment increased from 9 percent in 2012 to 11 percent in 2016 according to the IMF.6 5 Turkey: Financial Sector Assessment Program—Financial System Stability Assessment, February 3, 2017. 6 Article IV consultations for 2013 and 2017. For Official Use Only CLR Review 7 Independent Evaluation Group 18. On balance—taking into account little progress on the investment climate, progress on increasing employment, and adequate results on deepening and broadening access to finance —this objective was Partially Achieved. Objective 3: Improve governance through enhanced transparency to ensure a level playing field 19. In a deteriorating economic environment, the purpose of this objective was to improve transparency as a key aspect of sustaining investor confidence. The indicator for the objective was to increase the number of firms with independent audits. The Bank provided support through the First Sustaining Shared Growth DPL (FY15) and the Competitiveness and Savings DPL (FY13). In addition, this objective was supported by trust-funded activities on Strengthening Public Internal Audit Function (FY12), the TF SAFE (Strengthening Accountability and Fiduciary Environment): Enhancing the Supreme Audit Function of the Turkish Courts of Accounts (FY 14), and a Corporate Governance TA (FY14). 20. The threshold for independent audits was lowered by a Council of Ministers Decree of March 14, 2014, implying and enhancement of transparency through the audit of a larger number of firms. The CLR reports that the number of firms with independent audit were expected to increase to 5,000 by end-2016 — compared to a target of 3,500 in 2015. IEG’s ICR review of the Competitiveness and Savings DPL (FY13) notes that the number of firms completing independent audits increased from 700 in 2012 to 3,600 in 2014. More broadly, the review notes substantial progress on enhancing reporting and disclosure requirements, and on strengthening corporate governance. This objective was Achieved. 21. IEG rates the outcome of WBG support under Focus Area 1 as Moderately Unsatisfactory. Progress was limited on increasing domestic savings and enhancing external resilience, while it was mixed on the investment and business climate. The program showed substantial progress on improving corporate governance. Focus Area II: Improving Equity and Social Services 22. This focus area had two objectives: (i) improve the quality and equity of social services, and (ii) make progress toward gender equality and inclusive labor markets. Objective 4: Improve the quality and equity of social services 23. This objective had three indicators, to: (i) reorganize the Ministry of Health to focus exclusively on the health sector’s stewardship functions by 2015, (ii) organize public hospitals in hospital unions and pay them based on performance contracts within a global budget, and (iii) increase cervical cancer screening among women aged 20-69. The Bank, which has had a long-term involvement in Turkey’s health sector, supported this objective through the Health Transformation and Social Security Reform project (APL2) (FY09), a follow on operation to the Health Transition Project (APL1) (FY04) that also supported activities on improved health service quality, and the more recent Health System Strengthening and Support project (FY16). IFC contributed to this objective by investing in two education services companies and eight health care operations. 24. Legislation on the Ministry of Health reorganization was approved on November 3, 2011 and then implemented, enabling the ministry to focus on policy formulation, regulation and monitoring. As of September 2015, all public hospitals were organized in public hospital unions with performance contracts for managers and global budgets. The CLR reports that cervical cancer screening has increased in percentage of women aged 20-697 by more than the target—a sign of improvement in the quality of healthcare—although the actual numerical achievement for the screening is difficult to assess from the documents available. OECD data for 2013 reports that cervical cancer screening was about 60 percent for women aged 20-69 – compared to a target of 49 percent by 2016 in this age cohort. 7 The Bank operation supporting this objective is targeting a different age cohort, from 30 to 65. For Official Use Only CLR Review 8 Independent Evaluation Group 25. The first two indicators were process oriented, referred to the health supply side, and were insufficient to measure improvements in the quality and equity of social services. IEG’s ICR review of the Project in Support of Restructuring of Health (FY09) remarked that client satisfaction had declined owing to long waiting times and insufficient medical personnel. Moreover, the family medicine model did not achieve the intended results, as shown by a decline in the share of family medicine visits. However, the Bank’s long standing support to the health sector through two APLs and the recently approved health project in FY16 suggests significant contributions to improvements in the quality and access to health, and to better health outcomes. IEG’s ICR review of the Health Restructuring (FY09) project indicated that broad health outcomes in Turkey have improved, including maternal mortality rates and infant mortality rates between 2009-2013. It also noted that there is more regional equity in access to health services. According to the ICR of the Health Restructuring project (FY09), the main driver of these improvements has been increased health expenditures as a percent of GDP. Additional information from the region underscored the difficulty of improving the quality of the health system while dealing with the pressures from an unprecedented influx of refugees during the review period. 26. The improvements in broad health outcomes are confirmed by other sources, such as the World Economic Forum’s (WEF) Global Competitiveness Report for 2013 and 2017, the OECD, and Lancet. According to the WEF, broad health measures—tuberculosis cases, HIV prevalence, and life expectancy—have improved tangibly during the program period, which suggests overall progress in health outcomes.8 A report by the OECD9 notes Turkey’s success in expanding access to health services and delivering universal health coverage, which benefited the poor and improved equity in the system. A Lancet (2013) article10 confirmed the improvements in broader health outcomes and access to health-care services for all citizens, especially for the poorest population groups. 27. This objective also included work on education and social protection.11 The Bank conducted an Education Study (FY13), and ESW on Improving Educational Outcomes in Turkey (FY14) and School Based Management in Turkey (FY15), and Regional Poverty Dynamics (FY16). The CLR, however, does not report on how this ESW affected, if at all, education and social policy. More broadly, the lack of a more substantive WBG engagement in education and social protection is surprising, particularly in light of the FY14 Country Opinion Survey that identified education quality as the top development priority, and as an area where WBG prospective support was considered most valuable. 28. On balance—taking into account progress on the supply side and expanded access to health services, together with progress on broad measures of health outcomes —this objective is rated at Mostly Achieved. Objective 5: Make progress on gender equality and a more inclusive labor market 29. The three indicators for this objective were to have at least 20 companies granted new Gender Equity Certification by end-2015, contribute to increase labor force participation through support of 900 women-owned SMEs through IFC financing, and improve access for Social Assistance beneficiaries to Active Labor Market Programs. The Bank supported this objective through the Promoting Gender Equity in the Labor Market and Entrepreneurship project (FY13), IFC financing of SMEs, particularly women-owned, the Sustaining Shared Growth DPL (FY15), Vocational Training Programs (FY14), ISKUR technical assistance, and economic sector work on Jobs Activation (FY14). 30. Seventeen or eighteen firms have received the New Gender Equity Certification,12 and IFC financed operations reached 2,613 women-owned enterprises through its SME sector portfolio. 8 The Global Competitiveness Report, World Economic Forum, 2013 and 2017 Editions. 9 OECD Reviews of Health Care Quality: Turkey: Raising Standards, OECD Health Division, November 25, 2014. 10 Atun, R. et al, Universal Health Coverage in Turkey: Enhancement of Equity, Lancet, 2013, Vol. 382, pp. 65-99. 11 Education and social policy to be informed by WB Economic and Sector Work. 12 The CLR reports seventeen, and the website of Kagider—the relevant Turkish institution—reports eighteen. For Official Use Only CLR Review 9 Independent Evaluation Group However, the specific number of social assistance beneficiaries included in active labor market programs could not be assessed owing to poor quality of data. 31. The contribution to increasing female labor force participation (FLFP) is an objective spanning a set of complex issues, and is affected by different factors and not a single WBG intervention. 13 The WBG engagement in this CPS did not match the complexity of the challenge of female labor force participation. Nonetheless, FLFP reached 29.3 percent in 2014, in line with the Sustaining Shared Growth DPL target for 2015 (32.6 percent). 32. On balance, this objective is rated as Mostly Achieved. 33. IEG rates the outcome of WBG support under Focus Area 2 as Moderately Satisfactory. There is evidence on improvement of broad health outcomes and of equity in the provision of health services, and some progress in contributing to gender equality and inclusive labor markets. Focus Area III: Deepen Sustainable Development 34. This focus area had three objectives: (i) increase the supply of energy and use of renewable energy, and implement actions to deal with climate change, (ii) strengthen environmental management and adaptation to climate change, and (iii) improve the sustainability of Turkish cities. Objective 6: Increase the supply of energy and use of renewable energy, and implement actions to deal with climate change 35. The five indicators for this objective were to improve the supply of reliable and efficient energy, increase renewable energy generation, IFC contributing to reaching about 7.2 million electricity customers through its power portfolio, save energy through energy efficient SMEs and renewable energy credit lines, and increase gas storage capacity. The Bank supported this objective through the Renewable Energy Integration project (FY14), the Private Sector Renewable Energy Efficiency project (FY09) and its additional financing (FY12), the Third Programmatic Environmental Sustainability and Energy Sector DPL (FY12), the Energy Community of South East Europe project (FY11), the SME Energy Efficiency project (FY13), and the Gas Sector Development project (FY06) and its additional financing (FY14). 36. Although there was no formal joint program IBRD-IFC, the good results of energy sector interventions suggest further scope for strategic IFC-IBRD engagement with Turkey. The IBRD’s support of reforms and for framing a sector strategy paved the way for IFC’s support of priva te activity in the sector, magnifying the catalytic effect of both IBRD and IFC. 37. Renewable energy supply connected to the grid increased by 20,012 MW compared with a target of 10,000 MW under the program. Renewable energy generation was 31.5 percent of total generation in June 2016—exceeding the program target of 30 percent—compared to about 20 percent in 2009. 38. In joint financing with EBRD, commercial banks, and private investors, IFC helped reach 7.5 million customers through its power portfolio, compared with the target of 7.2 million under the program. More generally, private sector renewable energy capacity increased significantly—the sum of the total increase during the CPS period amounted to 20,012 MW —suggesting positive demonstration effects from the IFC projects. 39. The cumulative savings from energy efficiencies in SMEs and renewable energy credit lines reached 3,772 GWh compared with the 4,372 GWh target under the program. The CLR notes that the target was not met owing in part to the inability to promote energy efficient investments as intended by credit lines under the SME Energy Efficiency (FY13) project. While some SMEs borrowed to buy 13 Focusing solely on employers only solves half of the problem. Other aspects include affordable child care opportunities, more focus and awareness of cultural issues in Turkish society that limit the role of women, and educational programs targeting broad segments of society to promote men-women coexistence in the workplace. For Official Use Only CLR Review 10 Independent Evaluation Group energy-efficient machinery, they eschewed use of project funds to avoid having to document the higher energy efficiency requirement under the project. 40. The CLR reports that the Gas Sector Development project (FY06) is on track. Yet, based on information available to IEG there was no increase in gas storage capacity during the program period.14 41. On balance this objective is rated as Mostly Achieved. Objective 7: Strengthen environmental management and adaptation to climate change 42. The three indicators for this objective were to improve the Water Basin management, complete a draft Integrated Water Basin Management plan and establish a Basin Commission in selected pilot basins, and establish Natural Capital Accounts in two selected water basins. The Bank supported this objective through the Third Programmatic Environmental Sustainability and Energy Sector project (FY12), TA on National Watershed Management (delivered FY13), Sustainable Water – Water Supply and Sanitation (FY16), Environmental and Natural Resources Management Programmatic Technical Assistance (FY15), and the Diagnostic of Natural Capital saving and Sustainable Growth (FY15). 43. The CLR reports that as of early 2013, Protection Action Plans were completed for all 25 river basins in Turkey. IEG’s project evaluation, however, suggests that action plans were completed with EU and Turkish financing which raises the issue of attribution. Water basin commissions were established as envisaged under the program. However, no Natural Capital Accounts were established in the two selected water basins as priority was given to developing valuation methodology and to other cases studies in the forest and water sectors. 44. The CLR notes that country-level performance was affected adversely by persistent delays in the ratification of the water law, which intended to improve adaptation to climate change through enhanced water resource management. As a result, River Basin Management Plans—including climate change adaptation measures for water basins—were not completed. 45. On balance this objective is rated as Partially Achieved. Objective 8: Improve sustainability of Turkish cities 46. This objective had seven indicators: (i) enhanced access to urban services, (ii) municipal governance, (iii) improved metro services, (iv) new tramway lines, (v) reduce untreated wastewater discharge into the Aegean Sea, (vi) retrofit buildings to resist major earthquake in Istanbul province, and (vii) improve customer satisfaction with Land registry services. The Bank supported this objective through the Municipal Services project (FY05) and its additional financing (FY10), the Kadikoy-Kartal Metro project (FY09), IFC’s Izmir Tramway and Wastewater projects, the Istanbul Seismic Risk Mitigation and Emergency Preparedness project (FY05) and its additional financing (FY10), and the Land registration and Cadaster Modernization project additional financing (FY15). 47. In line with the program target, about 6.3 million additional people in urban areas got access to improved water services (1.8 million), improved sanitation (over 1 million) and solid wastewater collection (3.4 million). On governance, a Citizen Report Card was developed as a pilot in the Manisa municipality, and then scaled up to six municipalities through a local NGO with EU funding. The new Istanbul Kardikoy-Kartal Metro commuter line was developed with IFC support and the CLR claims that it has benefited significantly people using public transportation, but additional ridership fell short of program target. The IFC-financed Izmir tramway construction is under way but there are some delays, and tramway construction was not completed during the CPS period as planned. There was also a delay in the IFC-financed Izmir Water Treatment Plant, resulting in no tangible impact on the reduction of untreated waste water discharge into the Aegean Sea. Over 800 buildings were retrofitted to resist a major earthquake, exceeding the target of 763 buildings during the program period. Land registry The CLR expected the indicator—targets for end-2016 and end-2020—to be achieved, and reports that the 14 Gas Sector Development project (FY06) is on track. For Official Use Only CLR Review 11 Independent Evaluation Group services have improved significantly as evidenced by an increase in the customer satisfaction rate from 40 percent in 2008 to 90 percent in 2015 (compared with the 85 percent program target). 48. The WBG engagement under this objective was based on a collection of projects without an adequate anchoring project or overarching framework, and thus lacked coherence. Program outcome indicators reflected performance targets for each project. The planned Sustainable Cities project, which was not delivered under this CPS, could have provided the anchor needed for this objective, and give more coherence to the WBG engagement. In this regard, the Bank-IFC Joint Implementation Plan (JIP) has been disappointing because IFC investments in urban infrastructure were not matched by progress under IBRD’s Sustainable Cities project. 49. On balance this objective was Mostly Achieved. 50. IEG rates Focus Area 3 as Moderately Satisfactory. Good progress was made in increasing the supply of energy and use of renewable energy, and improving the sustainability of Turkish cities, but limited progress in strengthening environmental management and adaptation to climate change. Overall Assessment and Rating 51. IEG rates the overall development outcome as Moderately Satisfactory. The program made uneven progress across focus areas and objectives. Under Focus Area I substantial progress was made in deepening and broadening access to finance and increasing employment in IFC’s real sect or portfolio companies. Progress was mixed on the investment and business climate. The objective on sustaining macroeconomic stability, domestic savings, strengthen exports and external resilience had multiple dimensions not reflected in the two outcome indicators that covered a narrow range of the objective. Taking a broader view of the objective, Turkey’s progress in increasing domestic savings and enhancing external resilience was fairly limited. Corporate governance was improved through more extensive firm audits, and enhanced reporting and disclosure requirements. In Focus Area II performance was adequate, with some progress on gender equality and a more inclusive labor market, and evidence of improved equity in the provision of health services. While work remains to be done in health to improve client satisfaction, broad measures of health outcomes show progress in improving health outcomes during the program period. In Focus Area III, good progress was made in increasing the supply of energy and use of renewable energy and adequate progress on improving the sustainability of Turkish cities, but achievements were limited in strengthening environmental management and adaptation to climate change. Objectives CLR Rating15 IEG Rating16 Moderately Focus Area I: Enhancing Competitiveness and Employment Partially Achieved Unsatisfactory Objective 1: Sustain macroeconomic and financial stability, and strengthen exports, domestic savings, and external resilience Partially Achieved Partially Achieved Objective 2: Improve the investment and business climate, deepen Partially Achieved Partially Achieved and broaden access to finance, and increase employment Objective 3: Improve governance through enhanced transparency Fully Achieved Achieved to ensure a level playing field Moderately Focus Area II: Improving Equity and Social Services Partially Achieved Satisfactory Objective 4: Improve the quality and equity of social services Fully Achieved Mostly Achieved Objective 5: Make progress on gender equality and a more Partially Achieved Mostly Achieved inclusive labor market 15 The CLR uses only two ratings for objectives: Fully Achieved and Partially Achieved. Following the shared approach on ratings, the CLR’s five ratings of Partially Achieved and three of Fully Achieved for the objectives yields a Moderately Unsatisfactory rating for the overall Development Outcome. 16 IEG uses the rating system of the shared approach: Achieved, Mostly Achieved, Partially Achieved, Not Achieved, and Not Verified. For Official Use Only CLR Review 12 Independent Evaluation Group Moderately Focus Area III: Deepen Sustainable Development Partially Achieved Satisfactory Objective 6: Increase the supply of energy and use of renewable Fully Achieved Mostly Achieved energy, and implement actions to deal with climate change Objective 7: Strengthen environmental management and Partially Achieved Partially Achieved adaptation to climate change Objective 8: Improve sustainability of Turkish cities Partially Achieved Mostly Achieved 6. WBG Performance Lending and Investments 52. At the start of the CPS period, IBRD had eighteen ongoing operations totaling nearly $5.3 billion. The portfolio included investment operations in municipal services, gas sector, land registration, energy efficiency, and access to finance for SMEs. Five trust funded activities for $108 million provided complementary financing for health, renewable energy and energy efficiency, internal audit, and watershed rehabilitation. 53. IBRD approved US$4.3 billion in new commitments during FY12-FY16 – about 45 percent in development policy financing and the rest in project financing (including additional financing). This fell short by more than US$2 billion from the US$6.5 billion planned at progress report stage, when the single borrower limit was increased. The shortfall reflected much less than planned project financing – US$2.4 billion against US$4.4 billion planned.17 Nine projects were approved against seventeen planned – the rest were dropped or postponed.18 Additional financing approved for a number of existing operations was not enough to close the gap between planned and actual financing. Sixteen trust funded activities for over $85 million provided complementary financing, primarily in energy, and also for public finance and internal audit. 54. During the review period IBRD committed resources were disbursed at a faster rate (34 percent disbursement ratio) than the ECA region (23 percent) and the Bank (21 percent). The ongoing project portfolio performance appears to have improved significantly compared to closed projects as indicated by good supervision ratings and high disbursement ratios. The CLR attributes this improvement to intensive portfolio monitoring that resulted in early detection of problems. 55. The Turkey portfolio showed significantly lower risk—both in terms of number of projects and committed amounts—than the ECA Region and Bank wide portfolios. During FY12-16, the Turkey portfolio had 8 percent of the projects at risk compared to 16 percent for the ECA Region and 21 percent Bank-wide. Performance of closed projects was mixed. Although in terms of overall commitments Turkey fared better than the Bank as a whole and ECA in FY12-FY16, it performed less well compared to both ECA and the Bank when considering closed projects. Of the fourteen projects validated by IEG during the review period, seven were rated satisfactory, one moderately satisfactory, five moderately unsatisfactory, and one highly unsatisfactory. The latter—Istanbul Municipal Infrastructure project (FY07)—suffered from significant problems at every stage, from quality at entry, to supervision and overall implementation, including by the borrower. With respect to active operations, management assessments report that all twelve projects were making satisfactory 17 The CLR notes three reasons for the slippages: slow inter-government decision making, administrative and procedural complexity within government for new IBRD lending, and ambivalence in the government about the value-addition of certain IBRD financing. 18 Two projects were dropped: US$300 million Long-Term Finance Guarantee project and a US$50 million Water Basin Management project; and a number of proposed interventions were postponed such as the Second Sustained Shared Growth DPL (for US$500 million), the Geothermal Development project (for US$300 million), and the Sustainable Cities project (for US$300 million). US$1.9 billion in financing came from DPLs, and of the rest ($2.375 billion), US$1.4 million was IPF for energy, US$550 million for access to finance, and US$425 million for health, MSME development, and land registration. For Official Use Only CLR Review 13 Independent Evaluation Group progress towards achieving their development objectives, which appears optimistic given the mixed results of projects at exit. 56. There were 29 IFC investment projects—US$3 billion of net commitment—at the inception of the review period that were active during the review period. About two-thirds of these investments were in financial sector, including those for trade finance. During FY12-16, IFC committed another US$4.4 billion,19 through ninety new investments. At the end of the review period, about 55 percent of the investments were in the financial sector, including those for trade finance and about 24 percent in infrastructure, including those in the electricity sector. Of the 119 investments that were active during the review period, all but eleven, are still active. Of the eleven that closed during the review period, IEG has reviewed four investments, and rated three Mostly Successful or better and the fourth Mostly Unsuccessful or worse. 57. MIGA gave coverage for US$1.4 billion for eleven investments, with the largest shares in financial services (57 percent) and transportation (28 percent). These guarantee operations complemented well the interventions of IBRD and IFC under the program. During the review period, IEG completed an evaluation of a guarantee project for the non-honoring of a sovereign financial obligation (NHSO). IEG found no material shortcomings from MIGA as the guarantee was cancelled owing to external circumstances. Lessons from IEG’s evaluation indicates that a better reading of the political situation and dynamics between sub-national entities and national agencies may be helpful in pricing risk and assessing the expected development outcome for future MIGA NHSO projects. Analytic and Advisory Activities and Services (ASA) 58. During the review period, the Bank supported a program of analytic work and advisory activities and services including 21 Economic and Sector Works (ESWs) and 32 Technical Assistance (TA) tasks. Some of this work was done under a programmatic approach (for example, jobs-activation ESW, and PFM and food safety TA) to ensure continuity and follow-up in knowledge services, and included technical assistance programs on financial literacy, labor markets, competitiveness, watershed dialogue, assistance to parliament, sustainable cities, energy, private sector development, PPPs, and SOE governance. All in all, the program of AS A supported well the Bank’s lending program, but was not as focused as the lending program and was not always demand driven with proven ownership. 59. IFC had one advisory service (AS) project, amounting to US$2.6 million that was approved before the review period, implemented during the review period, and closed recently. During the review period, IFC approved three new AS projects which are still active in energy and water, and city development, amounting to over US$7.6 million of total funds. The closed project was rated Unsuccessful at Completion by IFC but has not been validated by the IEG. The insurance product developed in this advisory service could not be piloted owing to lack of demand from the target market (the drillers). Results Framework 60. The results framework reflected a logical chain beginning with the country’s development goals, issues and obstacles, outcomes and intermediate indicators to which WBG expects to contribute, and WBG instruments supporting the program objectives. A positive aspect of Turkey’s results framework was that IFC interventions in finance and energy were included explicitly in program targets, which has not been a feature of other WBG programs. In a number of instances, however, program objectives were complex and multi-dimensional but the indicators were narrowly focused— not matching the complexity and level of ambition of the objectives (for example, objective #1). In other instances, indicators referred to processes and outputs rather than outcomes. Moreover, some indicators were weakly linked to program interventions and objectives (for example, see objective #1). Finally, a few program objectives were underpinned by a plethora of indicators derived from individual 19 Including about US$1 billion in mobilization of other financing. For Official Use Only CLR Review 14 Independent Evaluation Group projects which do not constitute a coherent whole and focus (for example, objectives #2 and #8), and make assessment difficult. Partnerships and Development Partner Coordination 61. The CLR underscores the effective coordination with the EU in various interventions focused on Syrian refugee work. Additional coordination took place with EBRD in energy, the French Agency for Development (AFD) in the municipal sector, and European Investment Bank (EIB), Asian Infrastructure Investment Bank (AIIB), GIZ—the German official development organization, and the Swedish International Development Cooperation Agency (SIDA) on other operations. These agencies operated in parallel with the Bank in these areas, and their contributions are not reflected in the WBG’ results framework. 62. IFC and EBRD invested jointly in a Turkish bank. Since EBRD has the largest exposure to Turkey with €1.9 billion in investments in 2015, the CLR could have analyzed in more detail how EBRD and IFC collaborated effectively in Turkey, thus possibly providing lessons for other countries. Safeguards and Fiduciary Issues 63. There were no substantiated INT cases in Turkey during FY12-FY16. 64. Based on IEG project completion reviews, compliance with the safeguard policy requirements was satisfactory overall. The main exception was the Istanbul Municipal Infrastructure project (FY07), where improper application of social safeguard policy requirements, especially on Land Acquisition and Involuntary resettlement, led to the cancellation of the loan. Moreover, in the Electricity Distribution and Rehabilitation project (FY07), compliance with social safeguards was rated moderately unsatisfactory. According to IEG’s ICR review, private land was furtively acquired during implementation, without prior Bank knowledge, and only a partial social audit was prepared specifying that the landowners were compensated per the national legislation. Ownership and Flexibility 65. There was broad government commitment to the program as the authorities expressed strong interest in the areas of Bank intervention. According to the CLR, the government expressed preference to commit to operations that guarantee smooth implementation in terms of legislative compliance, and make use of domestic procurement and financial management systems. All in all, government ownership and support was expressed in the way the Bank program was implemented. Some projects under the program suffered from weak ownership (for example, in municipal infrastructure), and, unlike the lending program, the ASA agenda was not always demand driven with proven ownership. The modifications to the program and results framework at progress report stage reflected WBG flexibility in adapting to new realities and changing government priorities. WBG Internal Cooperation 66. IFC and IBRD cooperated quite effectively under the Turkey program, and IFC participated actively with investments and advisory services in many WBG program areas. Unlike with other WBG programs, IFC’s contributions were included explicitly in the results framework which made its contributions more tangible in terms of achieving program objectives. The cooperation was most effective in the areas of energy, municipal and transport infrastructure, financial institutions with an emphasis on energy efficiency, access to finance for SMEs and women entrepreneurs, deepening of capital markets, private health and education, and enhancing the competitiveness of Turkish firms, including their expansion to other emerging markets. Based on a number of MIGA guarantees where IFC was also an investee, IFC and MIGA cooperation was effective. 67. Some structured mechanisms for internal cooperation mentioned by the CLR (Joint Implementation Plan—JIP) did not work well in the sustainable cities WBG engagement. At the same time, joint interventions outside the JIP in the energy sector worked very well. For Official Use Only CLR Review 15 Independent Evaluation Group Risk Identification and Mitigation 68. The CPS identified economic risks emanating macroeconomic vulnerabilities, political risks, particularly as they affect governance and the investment climate, regional security risks from the deterioration in the situation in neighboring countries, and risks of natural disasters. The key to mitigating the main economic risks was economic management and in particular measures to contain and reduce the current account deficit. As discussed under Focus Area I, vulnerabilities have increased during the program, and not been offset by good economic management. 69. On the political risks, the main mitigations to be applied were systematic policy dialogue and institutional capacity building. In practice the political situation has continued to deteriorate, and the result—despite the mitigation—has been significant delays in some areas of the program owing primarily to slow inter-governmental decision-making in a protracted electoral cycle, and sometimes weak ownership of projects. 70. The CLR does not discuss if risks to the program materialized, and how they were mitigated, if at all. Overall Assessment and Rating 71. IEG rates WBG performance as Good. The WBG strategy—under both the CPS and the CPS progress report—addressed the key challenges facing the country and reflected the government’s own strategy. The objectives of the program were well supported by WBG interventions. A few adjustments were made to the program at progress report stage, reflecting less than anticipated demand in lending for social services, and a rethinking of the area of governance and transparency. Although the CPS remained relevant at that stage, IEG would have expected a more robust reaction in response to changed economic circumstances, particularly to increase macroeconomic resilience in the face of a more fragile economic environment compared to the beginning of the CPS. 72. The WBG interventions had a good combination of development policy operations in areas where the government intended to pursue reforms, and project lending, economic sector work, and technical assistance in the remaining areas of the program. A positive aspect of a number of Bank ASA interventions was that they were programmatic, allowing to follow up on issues as they arose and complementing well the development of lending interventions. Yet, the non-lending portfolio was spread thinly over many areas which makes an assessment of its practical impact more difficult. 73. The results framework included IFC interventions, which has not been a feature of other WBG programs. Still, some indicators were weakly linked to program interventions and objectives (for example, see objective #1), and a few program objectives were underpinned by a plethora of indicators derived from individual projects which do not constitute a coherent whole and focus (for example, objectives #2 and #8), and make assessment difficult. The CPS identified economic risks emanating macroeconomic vulnerabilities, political risks, particularly as they affect governance and the investment climate, regional security risks from the deterioration in the situation in neighboring countries, and risks of natural disasters. Unfortunately, the CLR does not discuss if risks to the program materialized—they did—and how they were mitigated, if at all. Program implementation was generally adequate, but hampered in some instances by slow inter-government decision-making, administrative and procedural complexities to deal with IBRD IPF lending, and ambivalence in some ministries with regards to the value-addition of IBRD lending. Two IPF projects had safeguard compliance issues at closing. There were synergies across the program, with IFC playing a substantial role—particularly in the energy sector, development of sustainable cities, and access to finance. WBG coordinated effectively with other development partners in refugee work and the municipal sector. Bank performance on closed projects, however, was mixed and fared well below ECA averages in terms of both commitment amount and number of projects. For Official Use Only CLR Review 16 Independent Evaluation Group 7. Assessment of CLR Completion Report 74. The CLR provided a candid assessment of program performance based on the results framework as modified in the progress report. Yet, the evidence for some objectives was insufficient and the analysis of WBG program contribution to country outcomes is thin. IEG would have liked to see a thorough analysis of risks to the program, particularly in light of the risks that materialized in the economic and political spheres. The CLR could have provided a more explicit assessment of cooperation with other development partners—such as EBRD—to extract lessons for other countries. A discussion of fiduciary and safeguard issues also would have been helpful. 8. Findings and Lessons 75. IEG agrees with CLR lessons on weaknesses of the results framework, need for long term engagement and sequenced interventions, challenges for new IPF lending, and need for a demand driven ASA agenda. IEG adds the following lessons from the review: • Effective use of development policy operations and knowledge work, is critical for setting the stage for IFC engagement in a sector. In the case of Turkey, IBRD helped develop policy frameworks and sector strategies in energy, which enabled private activity supported by IFC in this sector. • Formal agreements between IFC and IBRD are not enough to ensure effective coordination. In the case of Turkey, the Bank-IFC Joint Implementation Plan (JIP), which involved coordination of multiple financing and advisory services between IFC and WB, was hampered to a large extent by inadequate progress under IBRD’s Sustainable Cities project, still in its early stage of implementation. At the same time, joint interventions outside the JIP in the energy sector worked very well as the sequence of IBRD and IFC operations were delivered as planned. • Program objectives with many dimensions require a set of interventions and outcome measures commensurate with the complexity of the objectives. In the case of Turkey, the objectives on macroeconomic stability and competitiveness, and female labor participation would have required a set of interventions that addressed their multiple dimensions. Annexes CLR Review 17 Independent Evaluation Group Annex Table 1: Summary of Achievements of CPS Objectives – Turkey Annex Table 2: Turkey Planned and Actual Lending, FY12-FY16 (in million US$) Annex Table 3: Analytical and Advisory Work for Turkey, FY12-FY16 Annex Table 4: Turkey Grants and Trust Funds Active in FY12-16 Annex Table 5: IEG Project Ratings for Turkey, FY12-16 Annex Table 6: IEG Project Ratings for Turkey and Comparators, FY12-16 Annex Table 7: Portfolio Status for Turkey and Comparators, FY12-16 Annex Table 8: Disbursement Ratio for Turkey, FY12-16 Annex Table 9: Net Disbursement and Charges for Turkey, FY12-16 Annex Table 10: Total Net Disbursements of Official Development Assistance and Official Aid Annex Table 11: Economic and Social Indicators for Turkey, 2012 – 2015 Annex Table 12: List of IFC Investments in Turkey (US$, 000) Annex Table 13: List of IFC Advisory Services in Turkey Annex Table 14: IFC net commitment activity in Turkey, FY12 - FY16 (US$, 000) Annex Table 15: List of MIGA Activities 2012-2016 (US$, millions) Annexes CLR Review 19 Independent Evaluation Group Annex Table 1: Summary of Achievements of CPS Objectives – Turkey CPS FY12-FY16 – Focus Area 1: Enhanced Competitiveness Actual Results IEG Comments and Employment Objective 1: Sustained macroeconomic and financial stability and strengthened exports, domestic savings, and external resilience Indicator (i): Increased uptake of Progress was supported by the DPL new voluntary pension scheme. Competitiveness and Savings (P127787, FY13) and the first DPL Sustaining Shared Growth Baseline: 3.1 million participants (P146322, FY15). The number of participants in in 2012 the voluntary pension scheme increased from 1.2 Target: No specific target was million in 2012 to 4.2 million in 2013 and 5.5 set million people were expected for 2015 (see Management: S for project P127787). Turkeys’ Transition report prepared as part of the Integration, Inclusion, Institutions/ Country Economic Memorandum TA (P133570, FY15), reports that as of July, 4th 2014 4.65 million participants were enrolled in the private pension scheme. An external source document confirms that 6.4 million people contributed to a private pension plan, a figure similar to what the CLR report (6.2 million people reached in April 2016). Achieved. Indicator (ii): New income tax The first DPL Sustaining Shared Growth law results in increased number (P146322, FY15) reports the “enactment of a new Major of taxpayers file income tax. income tax law” as a trigger to Pillar A “Improving Outcome the Business Climate and Enhancing Measures Baseline: 523,982 in 2012 Transparency”. The Program Document mentions Target: 10% increase by 2014 that “on June 12, 2013, a draft Income Tax Law was submitted to the Parliament, merging the existing income and corporate tax laws into a single code with the aim to expand the tax base and simplify the existing legislation”. The CLR reports that the new Income Tax Law has not been ratified and that consequently there is no major increase in the number of taxpayers by end 2016. Not Achieved. Objective 2: Improved investment and business climate; deepened and broadened access to finance; increased employment Indicator (i): Increase in new Progress was supported by the first DPL patent applications. Sustaining Shared Growth (P146322, FY15). Increase in new patent applications was set as a Baseline: 5,600 in 2013 result Indicator of Pillar A “Improving the Business Target: No specific target was Climate and Enhancing Transparency”. The set Program Document reports that “domestic patent applications are expected to triple from 5600 in 2013 to 16000 in 2018” and set a baseline of 5,600 (2013) and target: 20% increase (2016). No ISR is available for this operation. The CLR reports that there has been some delays in the ratification of the new Patent Law and that the Annexes CLR Review 20 Independent Evaluation Group CPS FY12-FY16 – Focus Area 1: Enhanced Competitiveness Actual Results IEG Comments and Employment target was not met (by end-FY16 there were only 5,512 new patent applications). Not Achieved. Indicator (ii): Implementation of The CLR-RF reports that there is no information integrated company regulation available, that the Government does not publicly system (MERSIS) leading to disclosed the data. Not verified. inclusion of all companies in all of the [238] registries across Turkey. Baseline: 204 companies registered in 2012. Target: No specific target was set. Indicator (iii): Export growth in Progress was supported by the Fourth Export firms benefiting from IBRD Finance Intermediation Loan – EFUL IV financing relative to sector (P096858, FY08). IEG: S reports that “export export growth is greater than growth attributable to the project was observed zero. through the increase in the export sales of participating firms, which exceeded that of the Target: Higher than sector sectors to which the firms belonged” and that average “compared to the export growth of their respective sectors, the participating firms outperformed by an average 6 percentage point per year”. Achieved. Indicator (iv): Sales growth in Progress was supported by the Second Access to SMEs benefiting from IBRD Finance for SMEs Project (P118308, FY10). financing greater than zero Management: S reports that “beneficiary SMEs adjusted for inflation. increased their sales in equivalent dollar amount by USD286 million over the life of the project” and Target: Higher than sector that the project was highly efficient in generating average sales “the median sales growth for beneficiary SMEs was 14.5 percent after receiving the loan (average of 40 percent, after excluding outliers)”. In addition, the ICRR reports that “Preliminary evidence suggest from these comparisons suggest that, on average, SMEs that received financing before 2015 (treatment group) outperformed SMEs that did not receive loans until 2015, in terms of employment and sales”. Achieved. Indicator (v): Gross non- Progress was supported by the Second Access to performing loans (NPL) ratios Finance for SMEs Project (P118308, FY10) that for financial institutions supported the Kalkinma (TKB), Ziraat and Vakif benefiting from IBRD financing Bank; by the Fourth Export Finance do not exceed the average for Intermediation Loan (P096858, FY08) that the banking sector (2.7 percent supported the TSKB and Eximbank financial as of end-2011, BRSA). institutions and by the First Access to Finance for Small and Medium Enterprises Project (P082822, Target: Lower than sector FY06) for Halkbank. average IEG: S for project P118308 reports that the quality of the project-financed portfolio was exceeded, as Annexes CLR Review 21 Independent Evaluation Group CPS FY12-FY16 – Focus Area 1: Enhanced Competitiveness Actual Results IEG Comments and Employment the non- performing loans (NPL) ratio was only 0.7%, against a target of 7%, which was lower than the “average for the SME sector that had an The ICRR reports that NPL ratio of 3.5% as of end-March 2015” (from “Baseline and target value Management: S). The ICRR reports that the NPL identified during the ratio for VakifBank was 0.2%. but does not report preparation of the CSDPL on the individual values for Kalkinma (TKB) and were based on interim data Ziraat Banks. rather than end of year Management: S for project P096858 reports that figures. According to the the achieved target was that NPL were 3% Central Registry Agency, (US$25.2 million), in December 2014, lower than actual end of year data for sector weighted NPL ratio in the economy (4% in corporate bond issuances June 2014) and 2.7% (10 NPLs) by number of are TL44.4 billion, TL57.9 loans, all measured among loans included in the billion and TL68.5 billion TL project, exceeded the target (less than 5% of all for 2012, 2013 and 2014, loans in the project). The ICRR also mentions that respectively “the project’s NPL ratio is much lower than the sector-weighted average of 4%”. The ICRR does not disaggregate data between the two financial institutions. Finally, Management: S for project P082822 reports that Halkbank NPL decreased by 29.7% between 2008 and 2009 to 5.07%, under sector average (7.58%). Half of the financial institutions had NPL below sector average (2.7% according to the baseline) and the other half above sector average. Partially Met. Indicator (vi): IFC estimates The CLR indicates that the Target was met and leveraging through local that about 759,000 SMEs and 112,182 additional financial intermediaries farmers were reached. IFC leverage was made financing to about 100,000 SME through support to 11 institutions that financed clients and 120,000 farmers about 1.35m SME loans and 307,000 farmers. Achieved. Indicator (vii): Increase in IEG: MS for the Competitiveness and Savings corporate bond issuance. DPO (P127787, FY13), reports that corporate bonds issued increased from 35.7 TTL billion in Baseline: TL 50.3 billion (2013). 2012 to TL 66.4 in 2014, above the target of TL35 Target: 50 billion (2015). billion (baseline was TL27 billion and then revised at TL 44.4 billion in 2012, see Management: S). The Program Document for the first DPL Sustaining Shared Growth (P146322, FY15) reports that the target was TL 50 billion for 2015, but no ISR was prepared for this operation to assess progress for 2015 (TL 44.5 billion reported in the CLR-RF). In addition, the value for 2014 differs from what is reported in the CLR-RF (TL 44 billion). 2014 and 2015 Data released by the Capital Markets Board of Turkey and data from the country team supports the CLR position that the target for 2013 was Not Met. Not Achieved. Annexes CLR Review 22 Independent Evaluation Group CPS FY12-FY16 – Focus Area 1: Enhanced Competitiveness Actual Results IEG Comments and Employment Indicator (viii): Percentage of The CLR reports that 5.5% was achieved in 2014 woman saved at a financial (according to Findex 2014 released in September institution in the past year, 2015, a global survey conducted in 3-4 year female (% age 15+) intervals). Findex data available in the Bank’s data Baseline 2 % (Findex 2011) systems report that 5.4% was achieved in 2014. Target: 3.3% (Findex 2015) Achieved. Indicator (ix): IFC’s real sector The CLR reports that 66,367 additional jobs. portfolio companies will provide Based on DOTS, it is estimated that IFC’s real about additional 70,000 jobs. sector portfolio companies provided about 66,000 additional jobs (not counting those in the financial sector). Mostly Achieved. Objective 3: Improved governance through enhanced transparency to ensure a level playing field. Indicator (i): Increase in number The Program Document of the First DPL of firms with independent audit: Sustaining Shared Growth (P146322, FY15) Baseline: 2500 in 2013. indicates that, as a prior action, “The Borrower Target: 3500 in 2015. also has published the Council of Ministers Decree 2014/5973 in Official Gazette No. 28941 on March 14, 2014, which reduced the thresholds for independent audit, thereby increasing the number of companies subject to independent audit (…) As a result, approximately 3,500 companies will be subject to independent audit for the 2014 financial reporting period”. The value reported in the CLR (more than 5,0000) is an expected value for after the end of the CAS period (end 2016). IEG:MS for the Competitiveness and Savings DPL (P127787, FY13) notes that the number of firms completing independent audits increased from 700 in 2012 to 3,600 in 2014. Achieved. CPS FY12-FY16 –Focus Area 2: Improved Equity and Actual Results IEG Comments Social Services Objective 4: Improved quality and equity of social services Indicator (i): Ministry of Health Progress was supported by the Health Objective 4 also included is reorganized and focuses Transformation and Social Security Reform work on education and social exclusively on the health Project APL 2 (P102172, FY09). IEG: MU reports protection. The Bank Major sector’s stewardship functions that the Decree Law 663 on the Organization and conducted an Education Outcome by 2015. Duties of the Ministry of Health and Its Affiliates Study (FY13), an ESW on Measures (the PHeI, the PHoI and the Pharmaceutical and Improving Educational Medical Devices Agency) was approved on Outcomes in Turkey (FY14) November 3, 2011 and that the reorganization of and School Based the Ministry of Health to enable it to focus on Management in Turkey policy formulation, regulation and monitoring was (FY15), and Regional completed. Achieved. Poverty Dynamics (FY16). Annexes CLR Review 23 Independent Evaluation Group CPS FY12-FY16 –Focus Area 2: Improved Equity and Actual Results IEG Comments Social Services Indicator (ii): All public hospitals Progress was supported by the Health organized in public hospital Transformation and Social Security Reform unions and paid on the basis of Project APL 2 (P102172, FY09). Management: performance contracts within a MU reports that 100% of the public hospitals are global budget organized in public hospital unions with performance contracts for managers and global budgets, as of September 2015. Achieved. Indicator (iii): Cervical cancer The CLR reports that cervical cancer screening Management: MU for the screening among women aged increased by 83.6% of the total of the 3.3 million Health Transformation and 20-69 increased. women in the target group, surpassing the target, Social Security Reform according to 2014 data from the Ministry of Project APL 2 (P102172, Baseline: 19% in 2012. Health’s Public Health Institution. FY09) and the 2013 Health Target: increase by 30% by The Health System Strengthening and Support and Demographic Survey do 2016 project (P152799, FY16) PAD reports cervical not report on screening for cancer screening indicators; one of the PDO cervical cancer. indicators relates to the early detection of cervical OECD data for 2013 reports cancer and intermediate result indicator 4 to the that cervical cancer percent of target population screened for cervical screening was about 60% for cancer among women 30-65. The project was women aged 20-69 (see approved at the end of the CPS and consequently Source). No more recent could not deliver results during the CPS period; data was found. the contribution of the WBG to this indicator is not verified. Not Verified. Objective 5: Progress made toward gender equality and inclusive labor markets Indicator (i): At least 20 The Promoting Gender Equity in Labor Market companies granted new and Entrepreneurship project (P12943, FY12 and Gender Equity Certification by P133741, FY13) supported the development of a end of 2015. Gender Equity Certification. The implementation Baseline: Zero in 2011. progress Report indicates that the Program started with the participation of 12 firms and that at the end of June 2012 the certification of 8 firms was completed. No other Bank’s document report progress after June 2012. The CLR reports that 17 firms have received the certification. The webpage of the Turkish institution (Kagider) in charge of awarding such certification reports that 18 firms have received the certificate. Mostly Achieved. Indicator (ii): Contribution to The CLR reports that IFC operations reached increased female labor force 2,613 women owned enterprises though its SME participation through support to sector portfolio. IFC operations reached 3,239 900 women owned SMEs women owned SMEs - although two loans through IFC financed SMEs. specifically supporting lending to women have not reported yet. Achieved. Indicator (iii): Improved access The Vocational Training Programs (P120514, Likewise, the report for Social Assistance FY14) and the ISKUR-TA (P107762) supported produced for the ESW beneficiaries to Active Labor the preparation of a study to evaluate the impact Programmatic Jobs: Market Programs as measured of vocational training programs for jobseekers Activation of Low Skilled Annexes CLR Review 24 Independent Evaluation Group CPS FY12-FY16 –Focus Area 2: Improved Equity and Actual Results IEG Comments Social Services by the number of people (see Operations Portal). The study reports Youth and Women (FY14) enrolled in ISKUR programs indicates that “İŞKUR has come a long way since P131099 and the Program through social solidarity 2008, significantly expanding its coverage (from Document for the first DPL foundations (semi-autonomous 30,000 trainees in 2008 to 464,000 in 2012, Sustaining Shared Growth public agencies) representing 19.6% of the registered (P146322, FY15) does not unemployed”). As the CLR reports, most recent report on the number of Baseline 2012: 9500 data is not available as “ISKUR started registering Social Assistance Target: 40000 by end FY15. SA beneficiaries into the database but then beneficiaries (as measured stopped due to the quality of data” although the by the number of people CLR- reports 335,000 for 2015. Not Verified. enrolled in ISKUR programs). CPS FY12-FY16 – Focus Area 3: Deepened Actual Results IEG Comments Sustainable Development Objective 6: Improved supply of reliable and efficient energy, increased use of renewable energy sources and climate actions under implementation Indicator (i): Improved supply Various lending operations contributed to this The CLR reports the of reliable and efficient energy objective: the Renewable Energy Integration contribution of the IFC Akfen by adding at least 10,000 MW project (P144534, FY14), the Private Sector Enerji project, supporting a new generation capacity by Renewable Energy and Energy Efficiency Project renewable energy platform 2015. (P112578, FY09 and additional financing P124898, company with a portfolio of FY12), the Third Programmatic Environmental operational hydropower and Sustainability and Energy Sector DPL (P121651, solar projects of 211MW and FY12) and the Energy Community of South East an additional 178MW under Europe Project (P110841, FY11). construction and The last ISR:S of the CAS period for project development. The 2016 P144534 reports that 5,000 MW of wind energy project’s Environmental and capacity has been installed by September 2016 Social Annual Monitoring (baseline was 2,700MW, representing an increase Report indicates progress in of 2,300 MW in term of wind capacity). The last relation to the completed and Major ISR: S of the CAS period for project P112578 under construction power Outcome reports that the capacity of renewable of thermal plants. Measures heating plants was 947.5 MW in June 2016 and that 422.30MW of generation capacity of renewable energy (other than hydropower); 228MW of renewable energy (wind); 181.30 MW of renewable energy (geo-thermal); 13 MW of renewable energy (solar) and 525 MW of hydropower was constructed under the project by June 2016. Management: S for project P110841 reports that the renewable capacity connected to the grid under the project increased to 395 MW by December 2015. The sum of the total increase in capacity, as of the end of the CAS period, represents an increase in 20,012MW. Achieved. Indicator (ii): Renewable The last ISR: S of the CAS period for project electricity generation as a P112578 reports that renewable electricity percentage of total generation generation represented 28.9% of total generation increased from 19.7% as of June 2016 (end of the CAS period). On the Annexes CLR Review 25 Independent Evaluation Group CPS FY12-FY16 – Focus Area 3: Deepened Actual Results IEG Comments Sustainable Development (correction from 18%) in 2009 basis of information published by the Turkey to 30% or more in 2015. Electricity Transmission Company (TEIAS, see data), the CLR reports that renewable energy generation (including hydro, solar, wind and geothermal energy) represented 31.5% of total generation. Achieved. Indicator (iii): IFC reaching The CLR-RF reports that 7.5 million Customers through its power have been reached through IFC`s power generation/distribution portfolio generation/ distribution portfolio. It is estimated that companies about 7.2 million 12.3 million customers were reached through the electricity customers SEDES (project 27559) and Enerjisa (29390 and Baseline: 4.1 million 26016) projects. Achieved. customers in FY11 Target: 7.2 million in FY15 Indicator (iv): Cumulative The SME Energy Efficiency (P122178, FY13) and According to online energy savings of 4,372 GWh Private Sector Renewable Energy and Energy calculations, P112578 or 1.5% of 2013 total annual Efficiency Project – (P112578, FY09 and additional reports 2,283 Tcal savings demand by 2016 to be financing P124898, FY12) supported this outcome. which represents an achieved through SME EE and The last ISR: S of the CAS period for project equivalent of 2,655.13 GWh. RE credit lines. P112578 reports 2,283 Tcal savings in heat or electricity -an equivalent of 2655.13 GWh - as of June 2016. The last ISR: MS of the CAS period for project P122178 reports that 1,116,004 MWh (1,116 GWh) were achieved as energy savings as of June 2016. The cumulative savings reached about 3,771.13 GWh, similar to what the CLR-RF reports (3772 GWh) which is below the target. Mostly Achieved. Indicator (v): Increasing gas The Gas Sector Development Project (P093765, storage is critical for Turkey's FY06 and its additional financing P133565, FY14), energy security. supported this Outcome. The last ISR: S of the project (September 2016) reports no progress in Baseline: 2.6 bcm in 2013 relation to the increased natural gas storage Target: 19% increase by 2016 capacity. However, it reported that the storage and 38% increase by 2020 capacity was 90% built for Phase 1 and 30% built with the completion of phase 1 for Phase 2. Not Achieved. and phase 2 of the Tuz Golu gas storage project, respectively. Objective 7: Strengthened environmental management and adaptation to climate change Indicator (i): Improved Water The Third Programmatic Environmental Basin Management: Protection Sustainability and Energy Sector project (P121651, action plans prepared for FY12) supported this indicator. The PPAR:S Turkey’s 25 river basins, reports that Action plans for all 25 river basins were taking into account principles completed by 2014, through financing from the EU of the Water Framework and from the Turkish government. Management :S Directive. reports that 19 action plans were prepared by 2012 and that “as of early 2013, Protection Action Plans Baseline: 4 in 2009; Annexes CLR Review 26 Independent Evaluation Group CPS FY12-FY16 – Focus Area 3: Deepened Actual Results IEG Comments Sustainable Development Target: at least 20 by end- have been completed for all 25 river basins in 2012. Turkey.” Achieved. Indicator (ii): Completion of The TA National Watershed Management draft Integrated Water Basin (P129244, FY12) supported the development of a Management plan and National Basin Management Strategy for 2012- establishment of Basin 2023, including basin protection action plans for Commission in selected pilot various basins. The final report produced as part of basin. the Sustainable Urban WSS (FY16) P150112 and the final report Valuing Water Resources in Turkey, product of the Environmental and Natural Resources Management Programmatic TA Program (P151227, FY15), indicates the existence of a water basin commissions. Achieved. Indicator (ii): Establishment of The Diagnostic of Natural Capital Saving and Natural Capital Accounts in Sustainable Growth (P149686, FY15) supported two selected water basins. policy dialogue with the government in relation to natural capital accounts. A basin was selected to carry out a pilot study and a diagnostic note was prepared. As reported in the CLR-RF, no NCA was established in two selected basins given that the priority was given to valuation methodology and to other case studies on Forest and Water sectors, financed as part of the Environmental and Natural Resources Management Programmatic TA Program (P151227, FY15). Not Achieved. Objective 8: Improved sustainability of Turkish cities Indicator (i): An additional The Municipal Services Project (P081880, FY05) The CLR-RF reports that 420,000 people in four cities and its additional Financing (P110770, FY10), Project investments helped under the Municipal Services supported this outcome. The last ISR:MS of the to surpass the target with Project have gained access to CAS period reports, as of May 2016, that 6.28 over 2.5 million people, data enhanced urban services, e.g., million additional people in urban areas were from the project P081880 is water supply, sewerage, and provided with access to improved water services much different. solid waste management. (1.83 million), with improved sanitation (1.03 million) and with solid water collection (3.42 million). Achieved. Indicator(ii): Municipal The Citizen Report Card (CRC) was developed in . governance: Performance 2012 as a pilot in the Manisa municipality improvement efforts and (completed in 2011, see Manisa information), after competition underway among receiving support from the WBG for the launching of local public administrations to a workshop. The Bank has also delivered a five-day receive higher rating based on “CRC Exposure, Learning and Dialogue” workshop Citizen Report Card. during March 27-31, 2015 in Ankara as part of the Baseline: 1 pilot municipality Programmatic Public Expenditure Review and (Manisa). Financial Management Study (P130699). The Target: 6 municipalities workshop included about 45 participants from nine city councils and municipalities (see program information). Six additional CRCs are undertaken with the same methodology and with the support of the same NGO and therefore could not be directly attributed to the WB program. Not Achieved. Annexes CLR Review 27 Independent Evaluation Group CPS FY12-FY16 – Focus Area 3: Deepened Actual Results IEG Comments Sustainable Development Indicator (iii): New Istanbul Project for this outcome was supported by the Kardikoy-Kartal Metro Kadikoy-Kartal Metro project (P112398, FY09), commuter line. processed by a joint IBRD-IFC team under the Additional 419,000 people Bank ‘subnational finance initiative. IFC project benefit from improved services 27309 Kadikoy-Kartal Metro (FY09) supported the by 2016. construction of the line. The Annual Monitoring Baseline: 150,000 people in Report review concluded in June for the IFC 2013. project does not report on ridership levels and additional commuters. However, additional information provided by the team indicates that ridership has increased and reached 317,547 people on average, during a week day, as of December 2015. Data for the January-August 2016 period indicates an average weekday ridership of 237,433 people. Partially Achieved. Indicator (iv): Two new Izmir IFC 34306-Izmir Tramway project supports the As reported in the CLR-RF: electrified tramway lines and construction of two urban tramway lines and the “Note: measurable impact improved traffic management. acquisition of the rolling stock for a planned total of falls outside of CPS period] about 21km. The Annual Monitoring Report, issued Expected to be operational in in December 2016 reports that “The construction of 2018”. the lines started in 2014, with slight delay in the program…. At the time of the visit, both lines were under construction and almost 40 % of the project has been constructed”. The 31733 Izmir Muni project supports the development of a traffic management system in the city. The PDS Subsequent Disbursement document reports that “The last visit to the IMM to discuss the development was in October 2015, together with the IFC’s Industry Specialist (…) the implementation of the project is expected to be completed on time” but no completion report was found to verify completion. Partially Achieved. Indicator (v): Discharge of The IFC 32078 Izsu Wastewater project supported untreated wastewater progress to this outcome. The Supervision Site reduction into the Aegean Sea Visit Findings document issued in July 2016 does through expansion of the IFC not report on the progress of the works. As financed Izmir Waste Water reported in the CLR-RF there is no reportable Treatment Plant. results yet since “there was a delay in construction Baseline: 605,000m3 /day due to Izmir Muni changing contractors, however treated in 2012 the project is on track to be operational by end- Target: 821,000m3/day treated 2016.” Not Achieved. by 2016 Indicator (vi): A total of 806 Progress was supported by the Istanbul Seismic public buildings in the Istanbul Risk Mitigation and Emergency Preparedness Province Project (P078359, FY05 and Additional Financing retrofitted/reconstructed to (P122179, FY10). IEG: S reports that 806 public resist a major earthquake buildings were retrofitted/reconstructed. Achieved. Annexes CLR Review 28 Independent Evaluation Group CPS FY12-FY16 – Focus Area 3: Deepened Actual Results IEG Comments Sustainable Development compared to 2014 target of 763 buildings. Target: 763 buildings retrofitted Indicator (vii): Customer Progress was supported by the Land Registration satisfaction rate for Land and Cadaster Modernization Project AF (P106284, Registry services improved. FY15). The last ISR:S of the CAS period reports Baseline: 40% in 2008. that customer satisfaction rate for land registry Target: 85% by end-2015 services increased from 40% to 90% by December 2015. Achieved. Annexes CLR Review 29 Independent Evaluation Group Annex Table 2: Turkey Planned and Actual Lending, FY12-FY16 (in million US$) Proposed Proposed Approved Proposed Approved Closing Outcome Project ID Project Name Amount Amount IBRD FY FY FY Rating (CPS) (CPSPR) Amount Project Planned Under CPS/CPSPR 2012-2016 P121651 ESES DPL 3 2012 2012 2013 600.0 600.0 IEG: S Private Sector RE and EE P124898 2012 2012 500.0 500.0 Project-AF P127787 CSDPL 2013 2013 2014 600.0 800.0 IEG: S SME ENERGY P122178 2013 2013 2019 200.0 201.0 LIR: MS EFFICIENCY P130864 TR SME III 2013 2013 2018 200.0 300.0 LIR: S Health System P152799 2013 2016 2020 200.0 134.3 LIR: S Strengthening & Support DROPPED Allocation to be decided 2013 100.0 DROPPED Development Policy Loan - DROPPED 2014 350.0 DROPPED tbd Areas of Access to Finance: SME or exporters Areas of Education / DROPPED Employment 2014 700.0 DROPPED Areas of Sustainable Cities / Disaster / Watershed / Energy Turkey Sustaining Shared P146322 2015 2015 2015 500.0 500.0 Growth DPL Water Basin Management DROPPED 2015 50.0 DROPPED and Rehabilitation Gas Sector Development P133565 2015 2015 400.0 400.0 AF POSTPONED Sustainable Cities 2015 300.0 POSTPONED Innovative Access to P147183 2015 2015 2019 250.0 250.0 Finance Geothermal Energy POSTPONED 2015 300.0 POSTPONED Development (plus CTF) Long Term Finance DROPPED Gurantee (300 Million 2015 DROPPED USD)-tbd Sustaining Shared Growth POSTPONED 2016 500.0 POSTPONED DPL-2 National Disaster Risk DROPPED 2016 300.0 DROPPED Mitigation DROPPED Health 2016 100.0 DROPPED DROPPED Financial Sector Operation 2016 300.0 DROPPED Total Planned 3,450.0 3,000.0 3,685.3 Project Unplanned Under CPS/CPSPR 2012-2016 Renewable Energy P144534 2014 2019 300.0 LIR: S Integration LRCMP - Additional P154259 2016 90.6 Financing P157691 MSME & LESCF Project 2016 2020 200.0 LIR: MS Annexes CLR Review 30 Independent Evaluation Group Proposed Proposed Approved Proposed Approved Closing Outcome Project ID Project Name Amount Amount IBRD FY FY FY Rating (CPS) (CPSPR) Amount Total Unplanned 0.0 0.0 590.6 On-Going Project during the CPS/CPSPR period P066149 SEC EDUC 2005 2012 104.0 IEG: MU ANATOLIA WATERSHED P070950 2004 2012 20.0 IEG: S REHAB P077328 RAIL RESTRUCT (APL#1) 2005 2014 184.7 IEG: MS SEISMIC RISK P078359 2005 2016 400.0 IEG: S MITIGATION P081880 MUNICIPAL SERVICES 2005 2017 275.0 LIR: MS P082822 TR Access to Fin for SMEs 2006 2012 180.2 IEG: S ELECTRICITY P085561 GENERATION REHAB & 2006 2012 336.0 No Rate RESTRUCTU P093765 GAS SECT DEVT 2006 2021 325.0 LIR: S P096262 AVIAN FLU - TR 2006 2012 34.4 IEG: S P096801 ELECT DISTRIB REHAB 2007 2013 269.4 IEG: MU P096858 TR EFIL IV 2008 2015 600.0 IEG: S ISTANBUL MUNICIPAL P100383 2007 2013 322.2 LIR: U INFRASTRUCTURE PROJ. Proj. in Support of Restruc. P102172 2009 2016 75.1 IEG: MU of Health Land Regis & Cadastre P106284 2008 2021 203.0 LIR: S Modernization Proj P110841 ECSEE APL#6 (TURKEY) 2011 2016 220.0 LIR: S P112578 PVT SECTOR RE and EE 2009 2017 500.0 LIR: S ACCESS TO FINANCE P118308 2010 2015 500.0 LIR: S FOR SME II P123073 REGE DPL 2 2011 2012 700.0 IEG: S Total On-Going 0.0 0.0 5,249.0 Source: Turkey CPS and CPSPR, WB Business Intelligence Table 2b.1, 2a.4 and 2a.7 as of 4/25/17 LIR: Latest internal rating. MU: Moderately Unsatisfactory. MS: Moderately Satisfactory. S: Satisfactory. HS: Highly Satisfactory. Annexes CLR Review 31 Independent Evaluation Group Annex Table 3: Analytical and Advisory Work for Turkey, FY12-FY16 Country Proj ID Economic and Sector Work Fiscal year Output Type Turkey P123074 PPER 3 FY12 Public Expenditure Review (PER) Turkey P123771 CRISIS, RECOVERY & JOBS FY12 Sector or Thematic Study/Note Turkey P127675 RIO+20 GREEN GROWTH POLICY PAPER FY12 Not assigned Turkey P128606 TURKEY URBANIZATION REVIEW FY15 Sector or Thematic Study/Note Turkey P129248 Family Medicine Study FY13 Sector or Thematic Study/Note Country Economic Memorandum Turkey P129350 Turkey CEM: Trading up to High Income FY14 (CEM) Turkey P129423 Education Study FY13 Sector or Thematic Study/Note Turkey P130699 Turkey PPER FY14 Public Expenditure Review (PER) Turkey P131099 Programmatic Jobs--Activation FY14 Sector or Thematic Study/Note Turkey P132094 Improving Educational Outcomes in Turkey FY14 Sector or Thematic Study/Note Country Economic Memorandum Turkey P133570 Turkey Lessons Flagship FY15 (CEM) Turkey P144290 Turkey Customs Union FY14 Sector or Thematic Study/Note Turkey P146343 Turkey Regular Economic Report FY14 Sector or Thematic Study/Note Turkey P148207 School Based Management in Turkey FY15 Sector or Thematic Study/Note Turkey P149638 Turkey Energy Milestones and Challenges FY16 Sector or Thematic Study/Note Turkey P150112 Sustainable Urban WSS FY16 Sector or Thematic Study/Note Turkey P153660 Defining the Transport Work Program FY16 Sector or Thematic Study/Note Turkey P160625 Policy Note Response to Refugee Crisis FY16 Sector or Thematic Study/Note Turkey P160627 Regional Poverty Dynamics FY16 Sector or Thematic Study/Note Turkey P160629 Fiscal Horizontal Disparities FY16 Sector or Thematic Study/Note Turkey P160630 Regional Labor Market Dynamics FY16 Sector or Thematic Study/Note Proj ID Technical Assistance Fiscal year Output Type Turkey P127354 Financial Literacy Task FY12 Not assigned Turkey P127856 Reform for Competitiveness FY14 Not assigned Turkey P128383 TR FSD TA (FSAP follow-up, Capital Marke FY13 Not assigned Turkey P128493 HD TA FY12 Not assigned Turkey P128598 TCA Strengthening TA FY14 Not assigned Turkey P129244 WATERSHED DIALOGUE FY13 Not assigned Turkey P129435 TR Promoting Gender Equity FY12 Not assigned Turkey P130537 Programmatic PFM Study FY13 Not assigned Turkey P131181 Parliamentary Technical Assistance FY14 Not assigned Turkey P131766 Turkey #10269 Strength Solvency Superv. FY15 Not assigned Turkey P132968 TR - FSD TA 2 FY14 Not assigned Turkey P133309 Pharmaceuticals Study FY14 Sector or Thematic Study/Note Turkey P133345 Sustainable Cities Action Plan Pilot FY15 Not assigned Turkey P133649 Poverty Measurement and Monitoring TA FY14 Not assigned Turkey P133668 HD TA FY13 Not assigned Annexes CLR Review 32 Independent Evaluation Group Turkey P133741 Turkey -Promoting Gender Equity FY14 Not assigned Turkey P144940 Support to Sharing Lessons from Turkey FY14 Sector or Thematic Study/Note Turkey P145065 Turkey Green Growth Follow-up TA FY14 Not assigned Turkey P145352 Turkey Public-Private Partnership FY14 Not assigned Turkey P145480 Justice Sector Performance Measurement FY14 Not assigned Turkey P145557 Programmatic Food Safety TA-3 FY14 Not assigned Turkey P146361 Turkey Water Dialogue TA FY15 Not assigned Turkey P146494 Private Sector Development TA FY15 Not assigned Turkey P146501 Energy Efficiency Institutional Review FY15 Not assigned Turkey P146626 Financial Inclusion and Deepening FY15 Not assigned Turkey P147496 Social Monitoring - Energy FY15 Not assigned Turkey P147805 Programmatic Public Financial Management FY15 Not assigned Turkey P149686 Diagnosis of Natural Capital Accounting FY15 Not assigned Turkey P150890 Turkey PPP FY15 FY16 Not assigned Turkey P159176 Regional Pilot:ECA-TK Creditworthiness A FY16 Not assigned Turkey P159277 SOE Governance FY16 Not assigned Turkey P159281 Savings & Fin. Sector Diversification FY16 Not assigned Source: WB Business Intelligence 04/25/17 Annexes CLR Review 33 Independent Evaluation Group Annex Table 4: Turkey Grants and Trust Funds Active in FY12-16 Project Approval Closing Approved Outcome Countries Project name TF ID ID FY FY Amount Rating Renewable Energy Integration Turkey P155510 TF A1619 2016 2018 1,000,000 Technical Assistance Project Turkey: Public Finance Management Turkey P158799 Reform Implementation Support TF 19355 2016 2018 780,000 Project EU/IPA Energy Sector Technical Turkey P151934 TF 19255 2015 2020 12,788,261 LIR: S Assistance Program - Phase 2 Project Turkey P144534 Renewable Energy Integration TF 16958 2014 2019 50,000,000 LIR: S EU/IPA Energy Sector Technical Turkey P131921 TF 16532 2014 2017 13,764,688 LIR: S Assistance Project Turkey P126101 PMR TURKEY TF 15591 2014 2017 3,000,000 Turkey P132189 Turkey SME Energy Efficiency Project TF 14579 2013 2019 940,000 Turkey P132189 Turkey SME Energy Efficiency Project TF 14580 2013 2019 900,000 Turkey P132189 Turkey SME Energy Efficiency Project TF 14581 2013 2019 900,000 Turkey P132189 Turkey SME Energy Efficiency Project TF 14582 2013 2019 900,000 Strengthening the Public Internal Audit Turkey P128662 TF 11904 2012 2015 494,000 Function Turkey P126101 PMR TURKEY TF 10793 2012 2016 350,000 Strengthening Institutional Capacity for Turkey P124429 One Health Strategic Planning and TF 98646 2011 2014 480,000 Economic Analysis Private Sector Renewable Energy and Turkey P112578 TF 94498 2009 2015 70,000,000 LIR: S Energy Efficiency Project Private Sector Renewable Energy and Turkey P112578 TF 94499 2009 2015 30,000,000 LIR: S Energy Efficiency Project IDF Grant for Internal Audit Capacity Turkey P114507 TF 93782 2009 2012 496,000 Building Anatolia Watershed Rehabilitation Turkey P075094 TF 53306 2005 2012 7,000,000 LIR: S GEF Project (Black Sea) Total 193,792,949 Source: Client Connection as of 04/25/17 ** IEG Validates RETF that are 5M and above Annexes CLR Review 34 Independent Evaluation Group Annex Table 5: IEG Project Ratings for Turkey, FY12-16 Total Exit Country Proj ID Project name Evaluated IEG Outcome IEG Risk to DO FY ($M) MODERATELY 2012 Turkey P066149 SEC EDUC 104.6 MODERATE UNSATISFACTORY ANATOLIA WATERSHED MODERATELY 2012 Turkey P070950 15.2 MODERATE REHAB UNSATISFACTORY 2012 Turkey P082822 TR Access to Fin for SMEs 726.6 SATISFACTORY MODERATE 2012 Turkey P096262 AVIAN FLU - TR 31.4 SATISFACTORY NEGLIGIBLE TO LOW ISTANBUL MUNICIPAL HIGHLY 2012 Turkey P100383 22.4 NEGLIGIBLE TO LOW INFRASTRUCTURE PROJ. UNSATISFACTORY 2012 Turkey P121651 ESES DPL 3 574.3 SATISFACTORY SUBSTANTIAL MODERATELY 2013 Turkey P096801 ELECT DISTRIB REHAB 110.2 NEGLIGIBLE TO LOW UNSATISFACTORY MODERATELY 2014 Turkey P077328 RAIL RESTRUCT (APL#1) 148.0 SIGNIFICANT UNSATISFACTORY MODERATELY 2014 Turkey P127787 CSDPL 823.6 SIGNIFICANT SATISFACTORY 2015 Turkey P096858 TR EFIL IV 855.7 SATISFACTORY MODERATE ACCESS TO FINANCE FOR 2015 Turkey P118308 500.0 SATISFACTORY MODERATE SME II 2016 Turkey P078359 SEISMIC RISK MITIGATION 563.1 SATISFACTORY LOW Proj. in Support of Restruc. of MODERATELY 2016 Turkey P102172 65.5 MODERATE Health UNSATISFACTORY 2016 Turkey P110841 ECSEE APL#6 (TURKEY) 211.2 SATISFACTORY LOW Total 4,751.9 Source: AO Key IEG Ratings as of 04/25/17 Annex Table 6: IEG Project Ratings for Turkey and Comparators, FY12-16 Total Total RDO % RDO % Outcome Outcome Region Evaluated Evaluated Moderate or Lower Moderate or Lower % Sat ($) % Sat (No) ($M) (No) Sat ($) Sat (No) Turkey 4,751.9 14 90.2 57.1 51.2 64.3 ECA 18,048.9 201 91.5 77.1 65.0 57.7 World 102,718.1 1,228 83.2 71.2 59.2 45.6 Source: WB AO as of 04/25/2017 * With IEG new methodology for evaluating projects, institutional development impact and sustainability are no longer rated separately. Annexes CLR Review 35 Independent Evaluation Group Annex Table 7: Portfolio Status for Turkey and Comparators, FY12-16 Fiscal year 2012 2013 2014 2015 2016 Ave FY12-16 Turkey # Proj 11 13 14 14 15 13 # Proj At Risk 1 2 2 - - 1 % Proj At Risk 9.1 15.4 14.3 - - 7.8 Net Comm Amt ($M) 4,742.2 5,763.0 5,095.9 4,334.6 3,924.1 4,772 Comm At Risk 269.4 581.5 711.0 - - 312 % Commit at Risk 5.7 10.1 14.0 - - 5.9 ECA # Proj 256 246 280 290 279 270 # Proj At Risk 47 47 37 36 47 43 % Proj At Risk 18.4 19.1 13.2 12.4 16.8 16.0 Net Comm Amt ($M) 23,091.9 24,699.7 26,927.9 26,544.5 27,637.3 25,780 Comm At Risk 2,668.4 3,844.0 2,635.4 3,533.8 4,350.5 3,406 % Commit at Risk 11.6 15.6 9.8 13.3 15.7 13.2 World # Proj 2,029 1,964 2,048 2,022 1,975 2,008 # Proj At Risk 387 414 412 444 422 416 % Proj At Risk 19.1 21.1 20.1 22.0 21.4 20.7 Net Comm Amt ($M) 173,706.1 176,202.6 192,610.1 201,045.2 220,331.5 192,779 Comm At Risk 24,465.0 40,805.6 40,933.5 45,987.7 44,244.9 39,287 % Commit at Risk 14.1 23.2 21.3 22.9 20.1 20.3 Source: WB BI as of 11/30/16 Annexes CLR Review 36 Independent Evaluation Group Annex Table 8: Disbursement Ratio for Turkey, FY12-16 Fiscal Year 2012 2013 2014 2015 2016 Overall Result Turkey Disbursement Ratio (%) 36.7 37.4 20.3 35.6 34.0 33.5 Inv Disb in FY 1,021.9 722.2 313.8 519.5 523.4 3,100.8 Inv Tot Undisb Begin FY 2,784.0 1,931.8 1,546.3 1,457.9 1,537.5 9,257.5 ECA Disbursement Ratio (%) 25.9 24.2 22.8 23.5 17.5 22.7 Inv Disb in FY 3,498.4 2,925.8 2,612.0 2,664.4 2,275.6 13,976.3 Inv Tot Undisb Begin FY 13,495.7 12,113.7 11,467.5 11,342.1 13,028.9 61,447.9 World Disbursement Ratio (%) 20.8 20.6 20.8 21.8 19.5 20.7 Inv Disb in FY 21,048.2 20,510.7 20,757.7 21,853.7 21,152.9 105,323.2 Inv Tot Undisb Begin FY 101,234.3 99,588.3 99,854.3 100,344.9 108,600.3 509,622.0 * Calculated as IBRD/IDA Disbursements in FY / Opening Undisbursed Amount at FY. Restricted to Lending Instrument Type = Investment. AO disbursement ratio table as of 11/30/16 Annex Table 9: Net Disbursement and Charges for Turkey, FY12-16 Period Disb. Amt. Repay Amt. Net Amt. Charges Fees Net Transfer FY12 1,595,230,882.2 776,207,638.6 819,023,243.5 218,644,222.0 5,103,522.7 595,275,498.8 FY13 729,798,826.7 768,322,130.9 (38,523,304.3) 179,271,495.9 912,831.7 (218,707,631.8) FY14 1,137,385,485.0 834,215,386.9 303,170,098.1 136,950,889.7 3,663,909.6 162,555,298.8 FY15 981,046,816.8 798,994,536.3 182,052,280.5 121,442,553.2 3,645,516.4 56,964,210.9 FY16 522,302,887.2 1,172,353,388.5 (650,050,501.3) 109,646,066.0 1,259,755.4 (760,956,322.7) Report 4,965,764,897.7 4,350,093,081.2 615,671,816.6 765,955,226.8 14,585,535.9 (164,868,946.1) Total World Bank Client Connection 12/1/16 Annexes CLR Review 37 Independent Evaluation Group Annex Table 10: Total Net Disbursements of Official Development Assistance and Official Aid Development Partners 2012 2013 2014 2015 Australia 0.9 0.18 0.06 .. Austria 39.62 33.85 30.35 .. Belgium -3.84 -3.39 -3 .. Canada 0.11 2.44 0.41 .. Czech Republic 0.15 0.86 0.12 0.44 Denmark 0.74 0 3.56 .. Finland 0.24 1.48 4.23 .. France -21.34 -35.49 182.57 .. Germany 28.95 228.75 343.87 .. Greece 2.58 0.39 0.6 0.46 Iceland .. .. .. .. Ireland 0.01 1.46 0.19 .. Italy -3.12 -3.11 -3.08 .. Japan 33.5 -10.33 28.76 .. Korea .. -0.42 -2.76 .. Luxembourg 0.13 .. .. .. Netherlands 0.29 0.59 0.65 1.58 New Zealand .. .. .. .. Norway 2.19 3.27 3.22 .. Poland 0.03 0.05 0.07 .. Portugal 0.06 0.07 0.07 .. Slovak Republic 0.04 .. .. .. Slovenia 0.15 0.1 0.08 0.05 Spain 1.54 -0.95 1.32 .. Sweden 12.33 12.79 12.33 10.89 Switzerland 1.49 1.4 2.74 .. United Kingdom 13.66 8.53 13.97 .. United States 14.08 16.07 73.82 .. DAC Countries, Total 124.49 258.59 694.16 Adaptation Fund .. .. .. .. African Development Bank [AfDB] .. .. .. .. African Development Fund [AfDF] .. .. .. .. Arab Fund (AFESD) .. .. .. .. AsDB Special Funds .. .. .. .. Arab Bank for Economic Development in Africa [BADEA] .. .. .. .. Caribbean Development Bank [CarDB] .. .. .. .. Climate Investment Funds [CIF] .. .. 1.4 .. Council of Europe Development Bank [CEB] 77.12 106.21 53.07 33.28 Annexes CLR Review 38 Independent Evaluation Group Development Partners 2012 2013 2014 2015 European Bank for Reconstruction and Development [EBRD] .. .. .. .. EU Institutions [EU] 2914.58 2493.94 2698.28 .. Food and Agriculture Organisation [FAO] .. 0.53 .. .. Global Alliance for Vaccines and Immunization [GAVI] .. .. .. .. Global Environment Facility [GEF] 3.31 1.9 2.94 .. Global Green Growth Institute [GGGI] .. .. .. .. Global Fund .. .. .. .. International Atomic Energy Agency [IAEA] .. .. .. .. International Bank for Reconstruction and Development [IBRD] .. .. .. .. International Development Association [IDA] -5.88 -4.93 .. .. IDB Special Fund .. .. .. .. IFAD .. .. 0.05 .. International Finance Corporation [IFC] .. .. .. .. International Labour Organisation [ILO] 0.43 0.72 .. .. IMF (Concessional Trust Funds) .. .. .. .. Islamic Development Bank [IsDB] -0.97 -0.97 0.05 .. Montreal Protocol .. .. .. .. Nordic Development Fund [NDF] .. .. .. .. OPEC Fund for International Development [OFID] 0.8 -0.89 -2.17 .. OSCE .. .. .. .. UNAIDS .. .. .. .. UNDP 0.53 0.38 0.24 2.71 UNECE .. .. .. .. UNFPA 1.41 1.36 1.03 1.04 UNHCR 8.35 .. .. .. UNICEF 0.87 0.84 0.94 1.19 UN Peacebuilding Fund [UNPBF] .. .. .. .. UNRWA .. .. .. .. UNTA .. .. .. .. WFP .. 2.45 2.74 0.09 World Health Organisation [WHO] 0.06 0.17 0.44 1.01 Other Multilaterals .. .. .. .. Multilateral, Total 3000.62 2601.71 2759.02 Bulgaria .. .. .. .. Croatia .. .. .. .. Cyprus .. .. .. .. Estonia 0.09 0.17 .. .. Hungary 0.42 0.54 0.21 .. Israel 0.09 0.05 0.14 0.05 Annexes CLR Review 39 Independent Evaluation Group Development Partners 2012 2013 2014 2015 Kazakhstan .. .. .. .. Kuwait (KFAED) -14.13 -15.36 -9.5 -8.95 Latvia 0.03 0.05 0.03 0.02 Liechtenstein .. .. .. .. Lithuania .. .. .. 0.01 Malta .. .. .. .. Romania 0.67 0.15 0.08 0.61 Russia 0.56 .. .. .. Saudi Arabia .. .. .. .. Chinese Taipei .. .. .. .. Thailand .. .. .. .. Timor Leste .. .. .. .. Turkey .. .. .. .. United Arab Emirates -2.04 -2.43 -2.37 .. Other donor countries .. .. .. .. Bill & Melinda Gates Foundation .. 2 1.17 2.8 Non-DAC Countries, Total -14.31 -16.83 -11.4 Development Partners Total 3110.8 2843.48 3441.78 Source: OECD Stat, [DAC2a] as of 12/1/16 Annex Table 11: Economic and Social Indicators for Turkey, 2012 – 2015 Turkey ECA World Series Name 2012 2013 2014 2015 Average 2012-2015 Growth and Inflation GDP growth (annual %) 2.1 4.2 3.0 4.0 3.3 0.9 2.5 GDP per capita growth 0.3 2.3 1.3 2.5 1.6 0.5 1.3 (annual %) GNI per capita, PPP (current 18,300.0 18,840.0 19,190.0 19,360.0 18,922.5 28,765.1 14,729.9 international $) GNI per capita, Atlas method 10,700.0 10,800.0 10,630.0 9,950.0 10,520.0 25,089.0 10,595.9 (current US$) (Millions) Inflation, consumer prices 8.9 7.5 8.9 7.7 8.2 1.4 2.7 (annual %) Composition of GDP (%) Agriculture, value added (% 8.8 8.3 8.0 8.6 8.4 2.2 3.9 of GDP) Industry, value added (% of 26.7 26.6 27.1 26.5 26.7 25.6 28.0 GDP) Services, etc., value added 64.5 65.1 64.9 64.9 64.8 72.2 68.1 (% of GDP) Gross fixed capital formation 20.3 19.9 23.3 (% of GDP) 20.3 20.3 20.1 20.3 Gross domestic savings (% 15.0 14.1 15.8 15.7 15.1 22.9 24.5 of GDP) Annexes CLR Review 40 Independent Evaluation Group Turkey ECA World Series Name 2012 2013 2014 2015 Average 2012-2015 External Accounts Exports of goods and 26.3 25.6 27.9 28.0 26.9 41.7 30.2 services (% of GDP) Imports of goods and 31.5 32.2 32.1 30.8 31.6 38.8 29.6 services (% of GDP) Current account balance (% (6.1) (7.7) (5.5) (4.5) -5.9 0.0 0.0 of GDP) External debt stocks (% of 43.1 47.8 51.6 .. 47.5 0.0 0.0 GNI) Total debt service (% of GNI) 7.1 7.6 7.1 .. 7.2 0.0 0.0 Total reserves in months of 5.5 5.6 5.7 5.6 5.6 6.8 13.3 imports Fiscal Accounts /1 General government revenue 35.0 37.2 36.4 37.0 36.4 (% of GDP) General government total 36.6 38.4 37.3 38.0 37.6 expenditure (% of GDP) General government net lending/borrowing (% of 1.1 1.4 1.4 1.2 1.3 GDP) General government gross 36.2 36.1 33.5 32.9 34.7 debt (% of GDP) Health Life expectancy at birth, total 74.6 74.9 75.2 .. 74.9 76.7 71.2 (years) Immunization, DPT (% of 97.0 98.0 96.0 96.0 96.8 94.6 85.3 children ages 12-23 months) Improved sanitation facilities 93.7 94.1 94.5 94.9 94.3 93.0 66.7 (% of population with access) Improved water source (% of 98.1 99.2 100.0 100.0 99.3 95.6 83.4 population with access) Mortality rate, infant (per 14.2 13.2 12.3 11.6 12.8 10.3 33.2 1,000 live births) Education School enrollment, 30.2 27.6 - - 14.4 74.2 43.0 preprimary (% gross) School enrollment, primary 98.6 106.9 - - 51.4 103.1 105.2 (% gross) School enrollment, 85.1 114.6 - - 49.9 103.4 74.7 secondary (% gross) Population Population, total (Millions) 74,849,187 76,223,639 77,523,788 78,665,830 76,815,611 901,961,345 7,218,239,265 Population growth (annual 1.8 1.8 1.7 1.5 1.7 0.4 1.2 %) Urban population (% of total) 71.8 72.4 72.9 73.4 72.6 70.6 53.2 Source: DDP as of 12/5/16 *International Monetary Fund, World Economic Outlook Database, November 2016 Annexes CLR Review 41 Independent Evaluation Group Annex Table 12: List of IFC Investments in Turkey (US$, 000) Investments Committed in FY12-FY16 Project Institution Project Greenfield Net Net Net Project Short Name Cmt FY Primary Sector Name Project Size ID Number Status Code Loan Equity Comm 34636 Taxim Capital 802162 2016 Active Collective Investment Vehicles G 20,147 20,147 20,147 35128 Burgan Turkey 788588 2016 Active Finance & Insurance E 110,000 40,000 - 40,000 Nonmetallic Mineral Product 35338 Trakya Cam VIII 721 2016 Active G 110,000 40,000 - 40,000 Manufacturing 36167 Fibabanka Equity 695986 2016 Active Finance & Insurance G 200,000 39,920 39,920 79,840 36318 Seker MSME 532405 2016 Active Finance & Insurance G 75,000 50,000 - 50,000 36326 UNIT Equity 727451 2016 Active Electric Power G 142,500 142,500 142,500 36711 AkCez II 809072 2016 Active Electric Power G 163,185 105,632 - 105,632 36747 RHOL Equity 723524 2016 Active Construction and Real Estate E 215,000 215,000 215,000 36772 Akfen Energy 627269 2016 Active Electric Power G 100,000 100,000 100,000 36827 HKA Hedge 778447 2016 Active Utilities G 4,500 4,500 - 4,500 37063 DCM TSKB Climate 725 2016 Active Finance & Insurance G 75,000 75,000 - 75,000 37093 MMI Metro Line 622411 2016 Active Infrastructure G 120,071 65,301 - 65,301 37112 DCM Finansb DPR2 510236 2016 Active Finance & Insurance E 100,000 100,000 - 100,000 37310 Etlik Swap 763244 2016 Active Health Care G 3,000 3,000 - 3,000 37661 Revo Capital 1002373 2016 Active Collective Investment Vehicles G 8,000 8,000 8,000 37872 Karaca Hydro 1004739 2016 Active Electric Power G 94,000 44,000 - 44,000 37925 Odeabank Equity 746927 2016 Active Finance & Insurance E 113,500 75,000 75,000 150,000 38655 Karaca Swap 1004739 2016 Active Electric Power G 3,000 3,000 - 3,000 31029 Kayseri Health 693344 2015 Active Health Care G 145,661 39,590 - 39,590 32258 Gama Enerji 730929 2015 Active Electric Power G 245,000 165,000 165,000 33677 Etlik Health 763244 2015 Active Health Care G 340,455 82,181 - 82,181 33950 YKL Sustainable 50670 2015 Active Finance & Insurance E 96,000 64,000 - 64,000 34358 Adana Health 775144 2015 Active Health Care G 208,563 43,661 - 43,661 Annexes CLR Review 42 Independent Evaluation Group Project Institution Project Greenfield Net Net Net Project Short Name Cmt FY Primary Sector Name Project Size ID Number Status Code Loan Equity Comm 34488 Abank EE 51410 2015 Active Finance & Insurance G 75,000 50,000 - 50,000 34552 HKA 778447 2015 Active Utilities G 182,789 70,000 20,000 90,000 34669 Soda Sanayii 506073 2015 Active Chemicals E 25,000 24,866 24,866 35012 Izmir Railcars 713525 2015 Active Infrastructure G 24,949 16,303 - 16,303 35827 Odeabank GrMortg 746927 2015 Active Finance & Insurance E 175,475 44,500 - 44,500 35828 Iyzico 797907 2015 Active Finance & Insurance G 3,000 3,000 3,000 35939 Zenium 800477 2015 Active Information G 259,000 25,000 25,000 36017 Seker Bond Swap 532405 2015 Active Finance & Insurance G 16,500 16,500 - 16,500 36080 Izsu Sewerage 725495 2015 Active Infrastructure G 16,436 12,327 - 12,327 36153 FinansL EE II 5023 2015 Active Finance & Insurance G 60,000 40,000 - 40,000 36320 Adana B Loan 775144 2015 Active Health Care G 87,322 - - - 36337 Adana Swap 775144 2015 Active Health Care G 3,500 1,889 - 1,889 36341 Sekerbank swap 532405 2015 Active Finance & Insurance G 530 530 - 530 36631 ATF I 805584 2015 Active Collective Investment Vehicles G 40,000 40,000 40,000 36641 Mercury 806044 2015 Active Wholesale and Retail Trade G 20,000 15,000 15,000 36703 GTFP AL BARAKA T 804058 2015 Active Finance & Insurance E 25,000 25,000 - 25,000 36724 GTFP TEB 6075 2015 Active Finance & Insurance E 125,000 95,000 - 95,000 36788 Sekerbank RI 2 532405 2015 Active Finance & Insurance G 1,315 1,278 1,278 2,556 32036 Viking Services 725004 2014 Active Oil, Gas and Mining G 125,000 50,000 - 50,000 32669 Fiba Sub Loan 695986 2014 Active Finance & Insurance G 40,000 40,000 - 40,000 32915 Odea Bank SME 746927 2014 Active Finance & Insurance G 50,000 50,000 - 50,000 32940 Chipita Turkey 747429 2014 Closed Food & Beverages G 14,630 14,630 - 14,630 33528 Astra Dorms 759549 2014 Active Education Services G 10,267 10,267 10,267 Professional, Scientific and 33645 Logo 762406 2014 Closed G 12,509 12,509 2,700 15,209 Technical Services Annexes CLR Review 43 Independent Evaluation Group Project Institution Project Greenfield Net Net Net Project Short Name Cmt FY Primary Sector Name Project Size ID Number Status Code Loan Equity Comm Nonmetallic Mineral Product 33753 Cimko Cement II 506487 2014 Active E 65,000 40,000 - 40,000 Manufacturing 33922 Seker Sub 532405 2014 Active Finance & Insurance G 50,000 50,000 - 50,000 33943 Mersin Port 767984 2014 Active Transportation and Warehousing G 953,000 65,720 - 65,720 33995 Elif Turkey 755014 2014 Active Chemicals E 20,000 20,000 - 20,000 34009 OzU II 724224 2014 Active Education Services G 25,000 25,000 - 25,000 34061 Tiryaki II 635463 2014 Active Agriculture and Forestry E 40,000 30,000 - 30,000 34306 Izmir Tramway 713525 2014 Active Infrastructure G 291,602 75,862 - 75,862 34448 Recordati Ilac 779886 2014 Active Chemicals E 68,525 34,234 - 34,234 34457 Transatlantic 776686 2014 Active Oil, Gas and Mining G 60,000 40,000 - 40,000 35153 Seker RI 1 532405 2014 Active Finance & Insurance E 3,824 3,731 3,479 7,210 31274 Finansbank DPR 510236 2013 Active Finance & Insurance E 153,030 75,000 - 75,000 31623 Mediterra CP 711306 2013 Active Collective Investment Vehicles G 20,000 20,000 20,000 31733 Izmir Muni 713525 2013 Active Infrastructure G 230,662 58,523 - 58,523 31836 KKagit 715906 2013 Closed Pulp & Paper G 50,000 50,000 - 50,000 31983 Superfilm 723226 2013 Active Plastics & Rubber G 120,000 45,000 - 45,000 32026 OzU 724224 2013 Active Education Services G 42,500 42,500 - 42,500 32078 Izsu Wastewater 725495 2013 Active Infrastructure G 51,829 35,892 - 35,892 32241 Is Leasing EE/RE 730624 2013 Active Finance & Insurance G 45,000 35,000 - 35,000 32285 CPLF-ModernKarto 51229 2013 Active Pulp & Paper E 11,300 8,000 - 8,000 32420 Sanko Tekstil 734804 2013 Active Textiles, Apparel & Leather G 25,000 25,000 - 25,000 32503 Farcan ACWA 742253 2013 Closed Electric Power G 125,000 125,000 - 125,000 32583 Plato 739345 2013 Active Education Services G 12,000 6,000 - 6,000 32659 Earlybird 742167 2013 Active Collective Investment Vehicles G 25,000 25,000 25,000 Annexes CLR Review 44 Independent Evaluation Group Project Institution Project Greenfield Net Net Net Project Short Name Cmt FY Primary Sector Name Project Size ID Number Status Code Loan Equity Comm 32902 Asyaport 761836 2013 Active Transportation and Warehousing G 75,000 52,691 - 52,691 32928 GTFP FIBABANKA 695986 2013 Active Finance & Insurance E 45,000 341,380 - 341,380 33143 TSKB Pol. Abatem 725 2013 Active Finance & Insurance G 75,000 75,000 - 75,000 33154 Deniz Covered B. 764659 2013 Closed Finance & Insurance G 292,029 69,526 - 69,526 33700 GTFP ODEA BANK 746927 2013 Active Finance & Insurance E 112,500 266,724 - 266,724 Nonmetallic Mineral Product 33711 Sisecam Bond 4377 2013 Active G 75,000 40,000 - 40,000 Manufacturing 28467 Tiryaki 635463 2012 Closed Agriculture and Forestry E 200,000 30,000 - 30,000 30579 Seker Bond 532405 2012 Active Finance & Insurance G 137,595 25,000 - 25,000 31085 YKB DPR 51411 2012 Active Finance & Insurance E 414,499 75,000 - 75,000 31112 TSKB Sustainable 725 2012 Active Finance & Insurance E 75,000 75,000 - 75,000 31113 ABank-Women 51410 2012 Active Finance & Insurance G 40,000 25,000 - 25,000 31114 Fibabanka Women 695986 2012 Active Finance & Insurance G 49,828 30,000 - 30,000 31474 MNT 705744 2012 Active Health Care G 30,000 30,000 14,149 44,149 31531 Finansbank RI II 510236 2012 Closed Finance & Insurance E 3,125 3,125 3,125 6,251 31929 UHG RightsIssue 574160 2012 Active Health Care E 893 893 893 32197 UHG RightsIss II 574160 2012 Active Health Care E 6,250 6,250 6,250 Sub-Total 8,205,793 3,444,157 980,574 4,424,731 Annexes CLR Review 45 Independent Evaluation Group Investments Committed pre-FY12 but active during FY12-16 Project Institution Project Greenfield Net Net Net Project Short Name CMT FY Primary Sector Name Project Size ID Number Status Code Loan Equity Comm 27559 SEDAS 672104 2011 Active Electric Power G 624,500 75,000 - 75,000 29390 Enerjisa-II 50781 2011 Active Electric Power E 863,673 72,760 - 72,760 29413 Abank Sub Loan 51410 2011 Active Finance & Insurance E 143,813 50,000 - 50,000 30306 GTFP Alternatif 51410 2011 Active Finance & Insurance E 81,000 81,000 - 81,000 30548 GTFP TSKB 725 2011 Active Finance & Insurance E 25,000 25,000 - 25,000 30631 UHG - ADM 574160 2011 Active Health Care G 25,000 25,000 25,000 30769 Deniz Agri DPR 621859 2011 Active Finance & Insurance G 412,830 71,043 - 71,043 26241 Eurasia Capital 612218 2010 Active Collective Investment Vehicles G 13,587 5,301 5,301 28146 Seker II Agri 532405 2010 Active Finance & Insurance E 93,991 95,096 48,003 143,099 29117 YKL Health,EE/RE 50670 2010 Active Finance & Insurance E 50,000 45,000 - 45,000 29343 GTFP Yapi Kredi 51411 2010 Active Finance & Insurance E 25,000 572,081 - 572,081 29472 TCE Ege 647724 2010 Active Transportation and Warehousing G 84,200 20,000 - 20,000 26648 Assan Aluminum 631946 2009 Active Primary Metals E 231,000 30,000 - 30,000 26653 GTFP Seker Bank 532405 2009 Active Finance & Insurance E 85,000 356,252 - 356,252 27191 Rotor Elektrik 621808 2009 Active Electric Power G 289,150 71,514 - 71,514 27309 Istanbul K Metro 622411 2009 Active Transportation and Warehousing G 1,224,909 67,903 - 67,903 27378 May Seed 623249 2009 Closed Agriculture and Forestry G 20,300 7,200 - 7,200 27904 IZGAZ 636010 2009 Active Utilities E 562,200 50,000 - 50,000 27963 ModernKarton WCI 51229 2009 Active Pulp & Paper E 143,000 40,000 - 40,000 Nonmetallic Mineral Product 27965 Trakya Cam VI 721 2009 Active E 158,000 58,000 - 58,000 Manufacturing 26016 Enerjisa 50781 2008 Closed Electric Power G 3,085,939 247,705 - 247,705 26158 TEBTierI 6075 2008 Closed Finance & Insurance G 100,000 100,000 - 100,000 Annexes CLR Review 46 Independent Evaluation Group Project Institution Project Greenfield Net Net Net Project Short Name CMT FY Primary Sector Name Project Size ID Number Status Code Loan Equity Comm 26376 Atateks 615520 2008 Active Textiles, Apparel & Leather E 74,100 25,000 - 25,000 25000 NBG/Finansbank 510236 2007 Active Finance & Insurance E 275,000 275,000 259,186 534,186 25504 Turkish PEF II 567213 2007 Active Collective Investment Vehicles G 38,420 32,016 32,016 25832 Unitim 572015 2007 Closed Textiles, Apparel & Leather E 30,000 29,000 - 29,000 Nonmetallic Mineral Product 24757 Sanko Cement 506487 2006 Active E 330,400 75,000 - 75,000 Manufacturing 21759 TSKB Sub Loan 725 2005 Active Finance & Insurance G 50,000 50,000 - 50,000 10470 Turkish PEF 53217 2002 Active Collective Investment Vehicles G 10,000 10,000 10,000 Sub-Total 9,150,010 2,589,553 379,507 2,969,060 TOTAL 17,355,803 6,033,710 1,360,081 7,393,791 Source: IFC-MIS Extract as of end July 31, 2016 Annexes CLR Review 47 Independent Evaluation Group Annex Table 13: List of IFC Advisory Services in Turkey Advisory Services Approved in FY12-16 Project Impl Impl Project Primary Total Funds, Project Name ID Start FY End FY Status Business Line US$ 600641 Turkey Green Buildings Project 2016 2019 ACTIVE FAM 1,200,000 601067 ECA Energy & Water Solutions for Corporates 2016 2019 ACTIVE CAS 4,370,422 601115 ECA Cities Platform IP 2016 2018 ACTIVE INR 2,050,000 Sub-Total 7,620,422 Advisory Services Approved pre-FY13 but active during FY12-16 Project Impl Impl Project Primary Total Funds, Project Name ID Start FY End FY Status Business Line US$ 557205 SEGEF Geofund Turkey 2007 2016 CLOSED CAS 2,620,239 Sub-Total 2,620,239 TOTAL 10,240,661 Source: IFC AS Data as of 7-31-16 Annex Table 14: IFC net commitment activity in Turkey, FY12 - FY16 (US$, 000) Pre-FY12 Percentages 2012 2013 2014 2015 2016 Financial Markets 993,328 33.5% 236,251 254,526 147,210 221,086 494,840 Trade Finance (TF) 1,034,333 34.8% 608,103 95,000 Agribusiness & Forestry 7,200 0.2% 30,000 30,000 Manufacturing 257,000 8.7% 168,000 108,864 24,866 40,000 Tourism, Retail, Construction & 0.0% 15,000 215,000 Real Estates (TRP) Health, Education, Life Sciences 25,000 0.8% 51,292 48,500 50,476 167,321 3,000 Oil, Gas & Mining 0.0% 90,000 Infrastructure incl. Transport 604,882 20.4% 272,106 141,582 283,630 464,933 Telecom, Media, and 0.0% 25,000 Technology Collective Investment Vehicles 47,318 1.6% 45,000 40,000 28,147 Total 2,969,060 100.0% 317,543 1,396,234 568,132 871,902 1,245,920 Source: IFC MIS as of 12-2-16 Annexes CLR Review 48 Independent Evaluation Group Annex Table 15: List of MIGA Activities 2012-2016 (US$, millions) Project Max Gross ID Contract Enterprise FY Sector Investor Status Issuance 12360 Orfin Finansman AS 2015 Active Banking France 57.7 12118 Adana Integrated Health Campus Project 2015 Active Health Services Luxembourg 157.5 12516 Üsküdar-Ümraniye-Çekmeköy Metro Line 2015 Active Transportation France 192.9 France - Financial Germany - 9416 Turkish Eximbank 2015 Active 333.2 Services United Kingdom -United States Germany - 12870 YZG Sağlık Yatırım A.Ş. 2015 Active Health Services 51.7 Luxembourg 12580 Izmir Metro Project 2015 Active Transportation Germany 32.6 12240 Izmir Tramway 2014 Active Transportation Germany 91.1 11781 Izmir Marine Transportation Project 2013 Active Transportation Germany 65.5 9401 Kadikoy-Kartal-Kaynarca Metro Project 2011 Active Transportation Germany 409.2 Total 1,391.4 Source: MIGA 12-2-16