OFFICIAL DOCUMENTS Supplemental Letter No. 2 REPUBLIC OF MACEDONIA February 7, 2014 International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Re: Loan No. 8332-MK (Skills Development and Innovation Project) Performance Monitoring Indicators Dear Sirs and Mesdames: This refers to paragraph A. 1, Section II of Schedule 2 to the Loan Agreement between the Borrower and the International Bank for Reconstruction and Development (the Bank) for the Loan -MK (Skills Development and Innovation Project). The Borrower hereby confirms to the Bank that the indicators set out in the attachment to this letter shall serve as the basis for the Borrower to monitor and evaluate the progress of the Project and the achievement of the objectives thereof. Very truly yours, REPUBLIC OF MACEDONIA By Authorized presentative / p enai Attachment to Supplemental Letter No. 2 Loan No. 8332-MK (Skills Development and Innovation Project) Performance Monitoring Indicators Project Development Objective: The PDO is to improve transparency of resource allocation and promote accountability in higher education, enhance the relevance of secondary technical vocational education, and support innovation capacity in Macedonia. PDO Level Results Indicators Base-line Cumulative Target Values Frequency Data Responsibili Descriptio Source! ty for Data n YR 1 YR 2 YR3 YR 4 YR 5 Meod Coection Method Collection ology There are 5 public universitie sin Macedonia Formula 1. % of public universities MoES's andmda receiving financing based on new, 0 progress Department underpinni transparent funding model. rorts for Higher ngdfuning SEducation funding 0 0 0 40% 80 % Annual model made publicly available and accessible 2. % of public universities O 0 0 0 20% 60% 80 % Semi- Project MoES's There are accredited, utilizing new quality institut institut instituti annual progress Department 5 public assurance and accreditation Not ions ions ons monitorin reports for Higher universitie measures developed in accordance mechanism accredi accredi accredi g report Education s in with Bologna-defined EU norms in existence ted ted ted Macedonia and practices. 3. % increase in number of E To be 10% 20% 30% The secondary TVET students provided by reference benefiting from practical training TVET population in SME and large sized firms. schools in is all 2nd, YR 1 3rd and 4th School grade School TVET secondary Annual schools and TVET u tra VET Center students data Increase is measured as a% from baseline 4. Share of private funding 0 0 5% 15% 20% 25% Semi- Progres FITD financing mobilized as a percentage of FITD annual s mobilized investments in innovation monitorin reports by activities. g report of FITD participant s in FITD grants programs as a % of total FITD investment 5. % of beneficiaries that sign E] 0 0 5% 10% 15% 20% Semi- Project FITD Beneficiari collaborative agreements between annual progress es are firms and academia. reports participant s in all 4 type of grant programs Intermediate Results Component 1 - Higher Education Finance Reforms and Implementation of Quality Assurance Norms Intermediate Results Baseline Cumulative Target Values Frequ Data Respo Description Indicators YR 1 YR 2 YR3 YR 4 YR 5 ency Source/ nsibili Methodolog ty for y Data Colle __ _ction 1. Implementation of new E The new Funding Performa New Semi- Consultant's PMU higher education funding funding model, nce fundin annual report and model. model is formula indicator g Project not and s and model progress develope implementa results approv reports d tion plan framewo ed by developed rk for the monitori GOM ng and evaluatio n defined 2. Number of public 0 0 2 3 5instituti Semi- Consultant's PMU universities that have Legal institutio institut ons annual report and and completed an external framework ns ions evaluated Project MoES evaluation utilizing new adopted evaluated evaluat progress quality assurance institutions ed reports measures developed in evaluated accordance with Bologna- defined EU norms and practices. 3. Board of Quality I Board of Requireme Strategy Strateg Strategy Board of Semi- Board of PMU Assurance and Quality nts for for y for for Quality annual Quality Accreditation achieves Assuranc ENQA meeting achievi achievin Assurance Assurance membership in ENQA e and membershi ENQA ng g and and (the European Association Accredit p identified members membe members Accreditati Accreditatio for Quality Assurance in ation and hip rship hip on n report Higher Education) NOT a strategy for requirem imple impleme achieves member meeting ents mented nted full of those approved member ENQA requiremen by MoES status in ts ENQA developed 4.National Technology Not in TTO TTO TTO TTO TTO Annua TTO TTO Transfer Office (TTO) existence blueprint establish operati operation operational I internal established and prepared ed and onal al reports operational after a begins landscape operation analysis s 5. IP related cases handled 0 5(pa) 10(pa) 20(pa) 30(pa) Annua TTO TTO for industry as measured I internal by number of patent 2 (p) 2(p)) 10(p) 15(p) reports landscape analysis(PA), patents filed(P) and 10(1) 15(1) 25(1) technology in- licensing(importation of technology) 6. Domestic inventions 0 0(p) 2(p) 3(p) 15(p) Annua TTO TTO by RTIs commercialized 0(1) 0(1) 1(1) 2(1) 1 internal as measured by number of 5(c) 10(c) 15(c) 25(c) reports patents filed(P), licenses(L), and contract research (C ) Component 2 - TVET quality and relevance 1. The TVET action plan Not in The model / / / / Semi- Project VET The action plan that promotes general and existence is adopted annual progress Cente will specify: a) broader technical by the reports r and main milestones education and Minister of PMU in process of competence- based Education delayed tracking learning adopted and of the students b) Science consolidation of the existing occupations; c) social partnership between educators, I employers and relevant government agencies. 2. % of TVET 0 50% 100% 100% 100% Semi- Project VET There are 14 occupational standards annual progress Cente professional developed by professional reports r and fields fields PMU In definition of standards social partners will have a key role in articulating the 'competencies' expected in any professional field. 3. % of updated TVET 0 / / 30% 70% 100% Semi- Report from VET Report will curricula in line with annual expert Cente check the occupational standards consultant r and alignment of working PMU each updated with VET curriculum Center against the competences covered under the new occupational standards 4. % Increase in number To be 10% 20% 30% Semi- School VET Increase is of companies providing determine annual administrati Cente measured as a % practical training to d in YR 1 ve data r and from baseline secondary TVET students. PMU 5. Share of updated No 30 % 50% 70% Semi- Project VET Key sectors of TVET secondary school informati / / annual progress Cente the local programs targeting key on reports and r and economy are sectors of the local available; Proposa report from PMU those which have economy. To be Review of 1 for expert high employment undertake the schools optimiz consultant level (top 3-5 n in YR1 network ation working employers and with TVET covering 80% of operatio all employment) nal plan and/or high approve employment d growth (top quintile) and /or high productivity ( top quintile in ____________________ ___ _________ ______the last j_years) 6. Manual and training Not in /IManua Manual Manual Semi- Project VET materials for quality existence I and and and annual progress Cente delivery of new curricula trainin training training reports r and adopted g materials materials PMU materi piloted adopted al develo Component 3 - Improving the innovative capacity of enterprises and collaboration with research organizations Intermediate Results Baseline Cumulative Target Values Frequency Data Responsib Descriptio Indicators YRlI YR2 YR3 YR4 YR 5 Source! ility for n Methodo Data _____________ _ ____ logy Collection 1. Share of resources 0 5% 20% 50% 80% 100% Semi-annual Progress FITD dedicated to Fund for monitoring reports Innovation and Technology report of FITD Development (FITD) instruments disbursed 2. Number of companies E: 0 0 5 10 15 /Semi-annual Project FITD Accelerato, 'accelerated' via the FITD monitoring Process r which Accelerator program report reports supports firm creation will have a 3. # of beneficiary firms to 0 0 5 15 25 30 Semi-annual Progress FITD Beneficiar introduce new/improved monitoring of ies of products report reports accelerator of FITD s, mini and matching Igrantsg 4. # of beneficiary firms to 0 0 0 1 2 4 Semi-annual Progress FITD Beneficiar introduce new processes monitoring of ies of tech report reports extension of FITD programs that achieve standardiz ation/certif ication 5. % of beneficiaries 0 20% 40% 50% 60% 70% Semi-annual Progress FITD Firms receiving training and monitoring of (mostly in mentoring report reports accelerator of FITD )) would receive guidance etc in advance of funding Component 4 - Project Management and monitoring and evaluation Intermediate Results Baseli Cumulative Target Values Frequen Data Source/ Responsi Description Indicators ne YR1 YR2 YR3 YR4 YR5 cy Methodolog bility for y Data Collectio 0_ n 1. Evaluations for Not in Design Follow up Evaluation Annual Reports of PMU and Innovation grants existe complet data reports Evaluation FITD designed, conducted and nce ed; collected completed design and reports reported Base and and results those of line data analyzed disseminat results collecte ed d 2.Skills Observatory Skills Skills EMIS Mechani Website The info Annual Project PMU and established, providing Obser observat complemen sms for platform on progress MoES information about TVET vatory ory ted with a data available platform reports and HE performance to is not establis module for collectio for public to being the public in hed and performanc n agreed access info updated at existe fully e of the and on least twice nce staffed formal tracer performance per year TVET and studies of TVET HE systems conducte and HE d