Document of The World Bank FOR OFFICIAL USE ONLY Report No: 74454-MR RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF MR - BUSINESS ENVIRONMENT ENHANCEMENT PROJECT CREDIT 4448 Approved on May 22, 2008 TO THE ISLAMIC REPUBLIC OF MAURITANIA January 8, 2013 Finance and Private Sector Development Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. ABBREVIATIONS AND ACRONYMS BCM Banque Centrale de Mauritanie CPI Commissariat pour la Promotion de l'Investissement DGPIP Direction Generale a la Promotion de l'Investissement Prive DGPSP Direction Generale de la Promotion du Secteur Prive FSAP Financial Sector Assessment Program GIRM Government of the Islamic Republic of Mauritania IMF International Monetary Fund M&E Monitoring and Evaluation MAED Ministere des Affaires Economiques et du Developpement MAURIPOST Mauritania Post Office MFI Microfinance Institution PDO Project Development Objective PE Public Enterprise PIU Project Implementation Unit PPF Project Preparation Fund PPP Public-Private Partnership PSD Private Sector Development SEZ Special Economic Zone SOMELEC Mauritania Power Company TA Technical Assistance Regional Vice President: Makhtar Diop Country Director: Vera Songwe Sector Manager: Paul Noumba Um Task Team Leader: Korotoumou Ouattara 2 MAURITANIA MR - BUSINESS ENVIRONMENT ENHANCEMENT PROJECT CONTENTS A. SUMMARY ....................................................... 6 B. PROJECT STATUS.......................................... ........ 6 C. PROPOSED CHANGES ..................................... ......... 7 ANNEX 1: Results Framework and Monitoring ................................. 16 ANNEX 2: Implementation Schedule ............................... ......... 19 3 Restructuring Status: Draft Restructuring Type: Level one Last modified on date : 01/08/2013 1. Basic Information Project ID & Name P102031: Bus Environment Enhancement Country Mauritania Task Team Leader Korotoumou Ouattara Sector Manager/Director Paul Noumba Um Country Director Vera Songwe Original Board Approval Date 05/22/2008 Original Closing Date: 11/30/2013 Current Closing Date 11/30/2013 Proposed Closing Date [if applicable] 11/30/2014 EA Category C-Not Required Revised EA Category C-Not Required-Not Required EA Completion Date Revised EA Completion Date 2. Revised Financing Plan (US$m) Source Original Revised BORR 2.00 2.00 IDA 5.00 5.00 ZBIL 0.00 0.00 Total 7.00 7.00 3. Borrower Organization Department Location Ministry of Economy and Mauritania Finance MAED Mauritania 4. Implementing Agency Organization Department Location PIU@MAED Mohamadou Moussa Wagu6 Mauritania 4 5. Disbursement Estimates (US$m) Actual amount disbursed as of 12/12/2012 1.90 Fiscal Year Annual Cumulative 2013 1.00 2.90 2014 1.30 4.20 2015 0.80 5.00 Total 5.00 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N Does the restructured projects trigger any new safeguard policies? If yes, please select N from the checklist below and update ISDS accordingly before submitting the package. 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes The overall project development objective (PDO) is to enhance the business climate through improvements in the financial, legal and judiciary sectors, and regulatory environment for business, and the support of measures to restructure selected public enterprises (PEs). Original PDO outcome indicators: (1) Non performing loans at commercial banks improve (2) Number of procedures required to establish a business is reduced (3) Percent of commercial and financial court decisions that are published on the GIRM website increases 7b. Revised Project Development Objectives/Outcomes [if applicable] The overall project development objective (PDO) is to enhance the business climate for financial institutions and other targeted private sector enterprises in Mauritania. The revised PDO Outcome indicators are: (1) Number of procedures required to establish a business is reduced (2) Percentage of credits reported to the credit registry increases. 5 MAURITANIA BUSINESS ENVIRONMENT ENHANCEMENT PROJECT RESTRUCTURING PAPER A. SUMMARY 1. This Level I restructuring of the Mauritania Business Environment Enhancement Project (BEEP) is being undertaken at the request of the Borrower, the Islamic Republic of Mauritania during the mid-term review held in September 2012. After about 30 months of implementation, the Project needs restructuring for two main reasons: (i) to improve the very slow progress in implementation and disbursement; and (ii) to align project objectives with new Government priorities in investment climate reforms for private and financial sector growth and development. To show its commitment and eagerness to see the Project achieve results, the Government has taken some key steps by reorganizing the Agency for the promotion of private sector development and in charge of the business environment reforms, passed a new investment code to attract local as well as international investors, and created a Special Economic Zone in Nouadhibou for the investors to operate. With a new impetus created with the midterm review, and a Government new financial sector strategy, a restructured BEEP will, therefore, be implemented in an atmosphere where momentum and favorable political economy exist to undertake reforms that will see the investment climate improve to allow the Private sector to strive and create jobs. 2. The restructuring would amend the Project's legal documents by: (i) revising the Project Development Objective (PDO); (ii) modifying, eliminating originally planned project activities and adding others that are more consistent with the PDO; (iii) reallocating funds accordingly across old and new disbursement categories; (iv) revising the Results Framework to be coherent with the restructured components and activities; and (v) extending the closing date by a year from November 30, 2013 to November 30, 2014. This first extension of the closing date is necessary to make the revised PDO, which maintains the core focus of the Project, achievable. The activities being dropped, including support to public enterprises are not of highest relevance to the Project objectives. Without an extension, on-going activities will be negatively affected. No new safeguards policies are being triggered and thus safeguards remain at the same level C. There are no audit issues. B. PROJECT STATUS 3. The project was subject to a late start due to political instability in the country. It took more than a year after the Project was approved on May 22, 2008, to be declared effective on December 28, 2009. This was due to the situation prevailing in the country which suffered a military coup in 2008 that overthrew the President. That event triggered OP 7.30 and a suspension of all Bank activities in Mauritania. Project activities only started after OP 7.30 was lifted in 2009 and the Bank resumed its operations in Mauritania. 6 4. The Project is rated moderately unsatisfactory as implementation has been slow overall and disbursement low, standing at 39% at end September 2012. This represented a 28% increase in a year. A number of activities, primarily related to the strengthening of the financial sector were implemented in the early days of the project. Then the Project Implementation Unit (PIU) which was part of CPI (Commissariat pour la Promotion de l'Investissement) under the purview of the Prime Minister was eliminated and Project staff members who were employees of CPI were dismissed. To avoid penalties for the elimination of the Project PIU which was a violation of the Financing Agreement, the legal remedy applied by the Borrower was to have the Project temporarily managed by an existing PIU. It took more than a year to reconstitute the Project staff who are now paid with project proceeds in a PIU which is under the purview of the Ministry of Development and Economic Affairs (MAED). However, the new coordinator has been in place since only July 2012. C. PROPOSED CHANGES 5. The investment climate in Mauritania continues to be difficult for enterprises operating in the country. The latest Doing Business 2013 report ranks Mauritania 167th out of 185 countries on the ease of doing business. This continuous low ranking, year after year, has gotten the authorities concerned. To improve Mauritania's image abroad and locally, the Government of the Islamic Republic of Mauritania (GIRM) is more than ever determined to undertake investment climate reforms aimed at enhancing the business environment for the development of the private sector. Hence, during the mid-term review of September 2012, GIRM asked the Bank to support its efforts in investment climate/Doing Business reforms in the following priority areas: (i) starting a business; (ii) paying taxes; and (iii) getting credit. The project will thus be refocused accordingly. This means abandoning planned activities directed at public enterprises, in order to put more emphasis on investment climate reform activities that have a direct impact on the private and financial sectors. Project Development Objectives 6. The original project development objective (PDO) was to: "enhance the business climate through improvement in the financial, legal and judiciary sectors and regulatory environment for business and the support of measures to restructure selected Public enterprises (PEs)." 7. The original PDO outcome indicators were: (i) Non performing loans at commercial banks improve; (ii) Number of procedures required to establish a business is reduced; and (iii) Percent of commercial and financial court decisions that are published on the GIRM website increases. 8. In line with the proposed changes and Government new priorities to focus on investment climate reforms to enhance private and financial sector development, the new proposed PDO reads as follows: "enhance the business climate for financial institutions and other targeted private sector enterprises in Mauritania." 7 Results/indicators 9. By the mid-term review, key original project indicators were generally not met. Two of the three PDO indicators were not realized and the third was only partially met. Half of the six intermediate result indicators were achieved, but only partially. Some indicators, including the outcome indicator pertaining to the level of non-performing loans were difficult to measure as they were not directed related to project activities. Key performance indicators are, thus, being revised in Annex 1 in light of agreed upon activities, for better measurability and attribution of project outcomes to activities being funded. 10. The proposed revised PDO outcome indicators are: (i) Number of procedures required to establish a business is reduced; and (ii) Percentage of credits reported to the credit registry increases. 11. The revised PDO indicators reflect the refocus of the Project. The revised PDO is more likely to be achieved as it is more in line and consistent with Government actions and commitments with respect to investment climate reforms. Components 12. Originally, the project was to be implemented through two technical components and one administrative component. The proposed changes will affect all three project components. Originally planned activities will be either modified or dropped and replaced with new ones as explained below and summarized in Table 1. Component 1: Improving the Business Climate to Foster Private Sector Development 13. This component supports the Government of Mauritania's efforts to: (i) strengthen the financial sector and thus improve access to finance; (ii) improve the legal and judicial framework for business and financial activities; and (iii) streamline the regulatory environment and reduce the administrative barriers for commercial activities. Component 1.1: Strengthening the Financial Sector 14. This subcomponent was to finance activities to: (i) strengthen the institutional capacity of the Central Bank of Mauritania (BCM); and (ii) strengthen the banking and microfinance sectors. 15. Completed activities. Several achievements have been made including: (i) adoption of new Central Bank statutes, (ii) a new Banking law and a new microfinance law were adopted and several Central Bank directives accompanied these new laws; (iii) an accounting framework for banks was developed; (iv) independent external audits were conducted for all banks in operation. As per the recommendations of the Financial Sector Assessment Program (FSAP), several new banks received a license from BCM thus increasing the number of banks operating in Mauritania and the level of competition. With the entry of internationally-renowned banks which had all the required systems in place, there has been a significant decline in interest rates due to increased competition. With financial and technical assistance from First Initiative, a financial sector 8 development strategy was drafted and validated at a workshop before its approval by Council of Ministers. The Restructured Project will be consistent with the recommendations of the Strategy. 16. On-going activities: Several other activities are underway and progressing well including: (i) a new secured line of communication between BCM and financial institutions for data reporting; and (ii) provision of long term technical assistance on supervision to BCM, in collaboration with the International Monetary Fund (IMF). 17. New activities: The proposed new activities under this subcomponent include: (i) improvement of the Central Bank Credit registry to improve access to finance; and (ii) supervision manual and accounting plan for insurance companies which may in the future come under the supervision of BCM. Support for the modernization of the payment system that was requested by the Central Bank has not been included among new activities due to a lack of funding. Component 1.2: Improving the Legal and Judicial Framework for Business and Financial Activities 18. Originally, this subcomponent was supposed to finance the following activities: (a) Developing laws and regulations for the creation, perfection and enforcement of mortgages and the improvement of laws and regulations for movable property, accompanied by the development of a modem commercial and credit registry; (b) Simplifying debt collection and contract enforcement mechanisms; (c) Strengthening judicial capacities with respect to commercial law, financial law and commercial dispute resolution; (d) Strengthening ethics in the judiciary; (e) Developing judicial statistics and indicators to monitor progress of the judiciary; and (f) Improving the dissemination of legal information. 19. Completed activities: Of all the originally planned activities, only those related to: simplification of debt collection contract enforcement mechanisms which yielded a new law, and training of commercial court judges have been undertaken. Technical assistance to set up a new mediation and arbitration center in the chamber of commerce was also carried out. In the restructured project, most of the remaining activities will be dropped as they do not contribute to achieving the new Government priorities and project development objective. 20. New activities: The proposed new activities include: (i) support for the revision of the commercial code and key implementing decrees; (ii) support to the Direction du Patrimoine (Directory of Patrimony) for organizing and securing land titles as a modification of the originally planned activity (a); and (iii) support for the modernization and computerization of the commercial registry located at the Chamber of commerce and commercial courts in Nouakchott and Nouadhibou. 9 Component 1.3: Streamline the regulatory Environment for Business 21. Support under this subcomponent was to be provided for the following activities: (a) Preparing reforms to improve the business climate such as facilitating business start-up, simplifying corporate taxation, improving cross-border trade; and (b) Developing an incentive system for private investment and developing appropriate institutional arrangements for investment promotion. 22. Completed activities: Support for the development of a private investment promotion system was partially carried out with technical assistance for the new investment code, and a study on special economic zones (SEZ). The investment code was adopted by the Council of Ministers on June 28, 2012 and by Parliament in July 2012. A special economic zone was set up in Nouadhibou and will operate under the new investment code and appropriate implementation decrees that need to be passed. 23. On-going activities: None of the reforms (starting a business, simplify corporate taxation, and trading across borders) have seen much progress as the government entity in charge of carrying the reforms was very unstable and not well organized to deliver any results. Only starting a business reform will continue under the restructured project. 24. New activities: In response to Government's request, the proposed new and modified activities focus on support to the newly created private sector investment promotion agency (DGPSPI - Direction Generale de la Promotion du Secteur Prive) to undertake the following: (a) Investment climate/Doing Business reforms in the areas of (a) enterprise creation, (b) paying taxes and (c) access to credit. That would entail establishment and operationalization of a "One-Stop Shop" for enterprise creation. (b) Promote public-private dialogue and dissemination of Public-Private Partnership (PPP) methodologies including the preparation of a new Private Sector Development (PSD) strategy. (c) Operationalization of the Nouadhibou Special Economic Zone including formulation of appropriate decrees for the new investment code. Component 2: Building Public-Private Partnerships and Productivity Enhancement 25. This component was to support activities to improve corporate governance in a select group of PEs as well as several reforms measures in the Mauritanian electricity sector to attract increased private sector investments and participation in the local power market. 26. Completed activities: On-going activities such as the audit of MAURIPOST, the electricity tariff study of SOMELEC, and an investment plan for the electricity sector have made substantial progress and will be completed. These activities also happen to be very important to inform the new Mauritania Gas-to-Power Project in preparation. All activities not yet started under this component will be dropped to accommodate Government new priorities and provide more support to the new private sector development agency (DGPSP). I DGPSP which was created on May 20, 2012 replaces CPI which housed the PIU before it was officially abolished and all staff fired on January 9, 2011 by decree No. 004-2011. 10 Table 1: Original and Revised Project Components and Activities Status of Original Components & Activities Revised Components & Activities atvity 1. Improving the Business Climate to Foster 1. Improving the Business Climate to Foster Private Private Sector Development Sector Development L.A Strengthening the Financial Sector L.A Strengthening the Financial Sector 1.A.1 Strengthening the Institutional 1.A.1 Strengthening the Institutional Capacity of Capacity ofBCM BCM New inspection manual for supervision and on- New inspection manual for supervision and on-the job Continue the job training training Supervisory framework and training for Supervisory framework and training for supervision of Continue supervision of non-bank financial institutions non-bank financial institutions Training for supervision on new risks (anti- Drop money laundering, new instruments (electronic banking, leasing, and factoring)2 Training and technical assistance to staff in Drop supervision techniques and procedures Support provided to BCM to upgrade its capacity Drop to monitor and analyze financial and monetary statistics Improve data reporting with a secure communication New line between banks and BCM (including equipment) Modernizing the BCM credit bureau New Insurance: procedure manual for on/off-sight supervision New and insurance chart of accounts 1.A.2 Strengthening the Commercial Banking 1.A.2 Strengthening the Commercial Banking and and Microfinance Sectors Microfinance Sectors Revision of the banking law and accompanying New banking law and accompanying decrees Done decrees Revision of the microfinance law and New microfinance law and implementing decrees Done implementing decrees Feasibility study on refinancing mechanism for Feasibility study on refinancing mechanism for Done microfinance institutions microfinance institutions (MFIs) Preparation of commercial bank chart of accounts New commercial bank chart of accounts Continue & training of banks and auditors External audit of commercial banks External Audit of all commercial banks Continue 1.B Improving legal and judicial framework for 1.B Improving legal and judicial framework for business and financial activities business and financial activities Development of a legal framework for the Support to "Direction du patrimoine" to organize and Modified creation, perfection and enforcement of security secure the land title registry over immovable and movable assets Simplification of debt collection and contract Adoption of a law on loan recovery Done enforcement mechanisms Training and specialization of judges in Training and specialization of judges in commercial Done commercial and financial law and financial law and workshop banking/justice sector Strengthening of ethics in the judiciary Drop Development of judicial statistics Drop Improvement in the dissemination of legal Drop 2 Training of supervisors on new risks (anti-money laundering, new instruments (electronic banking, leasing, and factoring) is being dropped due to lack of funding. Alternate funding will be sought to undertake that activity which remains important for the stability and soundness of the financial sector. 11 Status of Original Components & Activities Revised Components & Activities atuvity activity information; assistance for the strengthening of access to legal information (GLIN) Development of an action plan for the Drop enforcement of judgments; strengthening judiciary inspection Study on the organization and operationalization of a Done Central Commercial Registry Computerization of the Central commercial registry Continue including support to chamber of commerce and commercial courts in Nouakchott and Nouadhibou Support for update of the commercial law and New implementing decrees 1. C Improving the business environment 1. C Improving the business environment 1. C.1 Strengthening public institutions in 1. C.1 Strengthening public institutions in charge of charge ofpromoting Private Sector promoting Private Sector Investment Investment Funding of a technical adviser to DGPIP Technical Assistance (TA) for DGPIP Done Development of a strategic plan for the Private Sector Strategy Modify and promotion of private investment and sustainable continue private sector development Definition and implementation of a Drop communication strategy Development and maintenance of a specific Drop website to centralize information on DGPIP activities, and existing regulation Support to DGPIP and GIRM for Support new DGPSP and GIRM for outreach and private Continue workshops/forum, trade fairs, promotion sector development and investment promotion activities materials, etc. 1. C.2 Support to reforms aimed at improving the 1. C.2 Support to reforms aimed at improving the business environment and fostering growth business environment and fostering growth Regulatory reforms to improve competitiveness Support for Doing Business/Investment climate reforms Modify & including taxation, labor, and regulations dealing in starting a business, paying taxes and getting credit and Continue with firm's creation and closure One stop shop for enterprise creation Regulatory reforms to improve investment Support for new investment code implementation decrees Modify & incentives including Investment code, for operationalization of Nouadhibou SEZ Continue commercial code and implementation decrees. Feasibility studies for Nouadhibou special Feasibility study for Special Economic zones (SEZ) Done economic zone Fund for sector studies (feasibility studies, Drop market studies) 2. Building Public-Private Partnership and 2. Building Public-Private Partnership and Productivity Enhancement Productivity Enhancement 2.A Improving corporate governance for public 2.A Improving corporate governance for public enterprises enterprises Audits and restructuring plans for PEs Audit and restructuring plan for Mauripost Done 2.B Enhancing the long-term sector expansion 2.B Enhancing the long-term sector expansion planning planning functions functions Electricity tariff study for SOMELEC Electricity tariff study for SOMELEC Done Electricity Sector Investment plan Electricity Sector Investment plan. Done 3. Support for project implementation 3. Support for project implementation Monitoring and Evaluation Monitoring and Evaluation Continue External audits External audits Continue Operating costs New 12 Institutional arrangements 27. As per the original institutional arrangements, a steering committee will continue to oversee the PIU and provide strategic guidance. A Prime Minister's decree3 organizing the MAED made the Ministry the official anchor of the Project which was originally under Direction Gndrale a la Promotion de l'Investissement Privd (DGPIP)4, and then CPI which was eliminated on December 16, 2010 because its linkage to the Prime Minister's office was not working well either. The original minimum required Project staff included a coordinator, a financial management specialist, a procurement specialist, and an internal auditor. As per the midterm review recommendations, a monitoring and evaluation (M&E) specialist, and an accountant will have to be added to the new PIU under MAED which has been functional since September 2011 and was assessed satisfactory during the midterm review. However, the Government arritd formally establishing the PIU as well as the recruitment of remaining PIU staff will need to be completed no later than February 15, 2013 with organization and attribution satisfactory to IDA. All PIU staff members will be consultants recruited in accordance with World Bank Consultant Guidelines (i.e. none of them will be civil servant). Financing 28. Project Costs have been revised as shown in Table 2 below. Table 2: Project Costs (US$) Project Costs (US$) Components/Activities Current Actual' Proposed US$ US$ US$ 1. Improving the Business Climate to Foster 3,000,000 1,052,000 3,100,000 Private Sector Development 1.1. Strengthening the Financial Sector 1,000,000 369,000 1,374,000 1.2. Improving the Legal and Judicial Framework for 1,000,000 76,000 280,500 Business and Financial Activities 1.3. Streamlining the Regulatory Environment for 1,000,000 607,000 1,445,500 Business 2. Building Public-Private Partnerships and 1,500,000 446,500 1,100,000 Productivity Enhancement 2.1. Improving Corporate Governance in Public 1,100,000 211,000 270,000 Enterprises 2.2. Enhancing the Long Term Electricity Sector 400,000 235,500 830,000 Expansion Planning Functions 3. Support for Implementation 500,000 143,000 800,000 External audits & other consultants 250,000 122,000 70,500 Material & equipment 250,000 21,000 44,500 Operating costs2 0 0 685,000 Total 5,000,000 1,641,500 5,000,000 Notes: (1) Data as of September 31, 2012 (2) Operating costs include costs for utilities and office supplies, bank charges, communications, vehicle operation, maintenance, public awareness-related expenses, travel and supervision, and salaries of contractual and temporary staff, but excluding salaries, fees, honoraria, and bonuses of members of the Recipient's civil service. 3 Decree No. 082-2012 4 DGPIP was created in May in 2007 by decree No. 130-2007 to be responsible for private sector development and promotion under the purview of the Presidency. 13 29. The revised financing plan is shown in Table 3. Table 3: Financing Plan Total Components (in $US) FY10-12 FY13 FY14 FY15 c onen component (1) Improving the 800,000 740,000 1,008,500 551,500 3,100,000 Business Climate to Foster Private Sector Development (2) Building Public- 400,000 700,000 0 0 1,100,000 Private Partnerships and Productivity Enhancement (3) Support for 100,000 160,000 291,500 248,500 800,000 Implementation Total FY 1,300,000 1,600,000 1,300,000 800,000 Total Cumulative 1,300,000 2,900,000 4,200,000 5,000,000 5,000,000 30. Reallocations of Project proceeds among components will be made as shown in Table 4. The revised category of expenditures includes a new credit category (4) that includes operating costs that was not part of the original project agreement. This is to allow the Project to finance the cost of operating the PIU as requested by the Borrower. Category (4) will thus replace Category (1) which is included in the Table for memory with the amount already spent as revised allocation. All future expenses under the Project will be financed out of Category (4). Table 4: Reallocations Category of Expenditure Allocation % of Financing In XDR Current Revised Current Revised Current Revised (1) Goods and consultants' (1) Goods and consultants' 2,440,000 828,900 90% 90% services for the project services for the project including Training and including Training, and audits audits. 1 (2) Training and Audits for (2) Training and Audits for 380,000 21,400 90% 90% retroactive financing retroactive financing (3) Refund of project (3) Refund of project 380,000 196,700 Amount Amount preparation advance preparation advance payable payable pursuant to pursuant to Section 2.07 Section 2.07 ofthe ofthe General General Conditions Conditions (4) Goods and consultants' 0 2,153,000 90% 90% services for the project including Training, audits, and operating costs2 Total amount Total amount 3,200,000 3,200,000 1 1 Notes: 1: For memory. Original Category used before restructuring 2: New category to be used for all future disbursements after restructuring 14 Financial management 31. Financial management (FM) arrangements remain the same to those described in the PAD except that any reference to DGPIP will be replaced with PIU or MAED as appropriate. During the midterm review, the FM arrangements were assessed satisfactorily. The same team of FM specialist and Coordinator will be responsible of implementation of the recommendations of the midterm review action plan related to internal control, external audit and accounting software. Implementation of this action plan will allow further strengthening of the financial management team. Procurement 32. Procurement arrangements remain the same to those described in the PAD except that any reference to DGPIP will be replaced with PIU or MAED as appropriate. An updated Procurement Plan has been prepared and submitted to IDA for approval. Closing date 33. It is proposed to extend the closing date by a year until November 30, 2014. This extension is necessary to accommodate and implement the Government's new approach and priorities, the institutional changes that provide new opportunities, and the streamlined design and indicators. Also, as mentioned earlier, implementation of the project was delayed for a total of two years because of: (i) a late effectiveness of the project caused by political unrest; and (ii) the difficulties encountered with the project implementation unit. This will be the first extension of the project closing date. 34. The extension will, thus, permit to complete planned project activities to allow the achievement of the PDO. New activities such as one-stop-shop for enterprise creation and overhaul of the credit registry that were added as a result of refocusing the Project to align it better with Government priorities will need long term contracts for technical assistance and goods that go beyond the current closing date of November 30, 2013. 35. The Project remains the main instrument that the Government is relying on to accompany them to undertake priority reforms to improve the investment climate in the country. BEEP will help the authorities achieve results of preliminary key actions such as a new investment code, creation of a Special Economic Zone and reorganization and revitalization of the Agency for Private Sector Promotion and Development, and a new Financial Sector Strategy. Implementation schedule 36. Project activities are scheduled to be implemented through November 2014, i.e., until FY15. See Annex 2 for proposed implementation schedule. 15 Mauritania Business Environment Enhancement Project ANNEX 1: Results Framework and Monitoring Project Development Objective (PDO): Enhance the business climate through improvement in the financial, legal and judiciary sectors and regulatory environment for business and the support of measures to restructure selected Public enterprises (PEs). Revised Project Development Objective: Enhance the business climate for financial institutions and other selected private sector enterprises in Mauritania. D=Dropped Cumulative Target Values** C=Continue PDO Level Results N= New Unit of Baseline* Data Source/ Respusibility Indicators* R=Revised Measure YR 1 YR 2 End of Project Frequency Methodology for Data 10/30/2013 10/30/2014 target Collection 11/30/2014 Indicator One: Non D Percent 20 -- -- performing loans at commercial banks improve Indicator Two: C Number 9 9 7 5 Yearly DB report MAED/PIU Number of procedures required to establish a business is reduced Indicator Three: D Percent 0 Percent of commercial and financial court decisions that are published on the GRIM website increases Indicator four: N Percent 30 40 50 50 Quarterly BCM BCM/PIU Percentage of credits reported in the credit registry INTERMEDIATE RESULTS D=Dropped Cumulative Target Values luC=Continue Rsosblt PDO Level Results 8 N= New Unit of Baseline* End of Data Source/ Responsibility Indicators R=Revised Measure YR 1 YR 2 Project Frequency Methodology for Data 10/30/2013 10/30/2014 target Collection 11/30/2014 Intermediate Result (Component One): Improving the Business Climate to Foster Private Sector Development Revised Intermediate Result (Component One): NA Intermediate Result N Number 0 50 100 100 Quarterly DGPSP/MAED MAED/PIU indicator one: Number x of direct project beneficiaries (of which E 5% are female) Intermediate Result N Yes/No No OSS OSS is created OSS is OSS is Quarterly DGPSP/MAED MAED/PIU indicator two: A one- exists operational operational stop-shop (OSS) for enterprise creation is established and operational Intermediate Result C Percent 47.6 45.0 30.0 30.0 Yearly DB report MAED/PIU indicator three: Cost to start up a business is reduced (% of GNI per capita) Intermediate Result C Number 19 15 7 7 Yearly DB report MAED/PIU indicator four: Number of days needed to start a business decreases Intermediate Result D Percent 68..2 indicator five: Percentage of tax on gross revenue decreases Intermediate Result C Number 37 37 25 25 Yearly DB report MAED/PIU indicator six: Number of tax payments per year decreases 17 Intermediate Result N Yes/No Commercial Commercial Commercial Commercial Quarterly Commercial courts PJU indicator eight: The registry is registry is registry is registry is &Chamber of commercial registry is outdated updated computerize computerized Commerce computerized and Id and and operational operational _operational Intermediate Result (Component Two): Building Public-Private Partnerships and Productivity Enhancement Revised Intermediate Result (Component Two): NA Intermediate Result D 0 indicator One: Number of performance contracts signed for key PEs Intermediate Result D No plan Final report indicator Two: exists available as Investment plan for of electricity is 11/30/2012 completed** Notes: * Baseline for old, continued indicator is January 1, 2008 and June 30, 2012 for new indicators **Indicator dropped because activity is completed. 18 Mauritania Business Environment Enhancement Project ANNEX 2: Implementation Schedule5 COMPONENTS SUBCOMPONENTS MAIN ACTIVITIES 2009-2012 2013 2014 Y1 Y2 Y3 Y4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 11mproving .A. Strengthening the Business climate financial sector to foster private sector 1.A.1 Strengthening the development Institutional Capacity of BCM New inspection manual for supervision and on-the job training Supervisory framework and training for supervision of non-bank financial institutions Secure line between banks and BCM Modernizing the BCM credit bureau Insurance: procedure manual for on/off- sight supervision Insurance: chart of accounts 1.A.2 Strengthening the Commercial Banking and Microfinance Sectors New banking law and decrees New microfinance law and decrees Commercial bank chart of accounts & training Feasibility study on refinancing mechanism for MFIs External Audit of commercial banks 1.B Improving legal Support to "Direction du and judicial patrimoine" to organize framework for and secure the land title business and registry financial activities Adoption of a law on loan recovery Training and specialization of judges in commercial and financial law and workshop banking/justice sector Study on the organization and operationalization of a Central commercial registry Computerization of the Central commerce registry including support to chamber of commerce and commercial courts in 5 Calendar year. 2009-2012 2013 2014 COMPONENTS SUBCOMPONENTS MAIN ACTIVITIES 2009-201 2 2 3 2014 Y1 Y2 Y3 Y4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Nouakchott and Nouadhibou Support for update of the commercial law and implementing decrees 1.C Improving the 1.C.1 Strengthening business public institutions in environment charge ofpromoting Private Sector Investment TA for DGPIP Support new DGPSP and GIRM for outreach and private sector development and investment promotion activities 1.C.2 Support to reforms aimed at improving the business environment and fostering growth Support for DB/IC reforms, PP dialogue, and one-stop shop Support for new investment code & decrees for operationalization of SEZ Feasibility study for SEZ Private Sector Strategy Study 2.A Improving Audit and restructuring corporate plan for Mauripost governance for public enterprises 2.B. Enhancing the SOMELEC Electricity tariff long-term sector study expansion Electricity sector investment planning functions lan. 3.Support for 3.A.Coordination and Monitoring and evaluation Project Monitoring and External audits implementation evaluation 20