Public Disclosure Copy The World Bank Implementation Status & Results Report E-Society and Innovation for Competitiveness (EIC) Project (P115647) E-Society and Innovation for Competitiveness (EIC) Project (P115647) EUROPE AND CENTRAL ASIA | Armenia | Transport & ICT Global Practice | IBRD/IDA | Specific Investment Loan | FY 2011 | Seq No: 12 | ARCHIVED on 30-Jun-2016 | ISR24426 | Implementing Agencies: Enterprise Incubation Foundation, e-Government Infrastructure Implementation Unit OJSC (EKENG) Key Dates Key Project Dates Bank Approval Date:30-Nov-2010 Effectiveness Date:18-May-2011 Planned Mid Term Review Date:25-Oct-2013 Actual Mid-Term Review Date:03-May-2013 Original Closing Date:31-Dec-2014 Revised Closing Date:30-Jun-2016 Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective (PDO) is to address constraints to competitive e-Society and enterprise innovation in Armenia by strengthening the underlying infrastructure and enabling environment. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name E-Society Infrastructure Development:(Cost $4.70 M) Fostering Enterprise Innovation:(Cost $17.53 M) Project Management:(Cost $1.77 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Moderately Satisfactory  Satisfactory Overall Implementation Progress (IP)  Moderately Satisfactory  Moderately Satisfactory Overall Risk Rating  Moderate  Moderate 6/30/2016 Page 1 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report E-Society and Innovation for Competitiveness (EIC) Project (P115647) Implementation Status and Key Decisions Implementation Status and Key Decisions (Public Disclosure] This is the last ISR for the e-Society and Innovation for Competitiveness Project. It is based on the preliminary assessment of the performance of the components of the project: Component 1 – e-Society Infrastructure Development: All sub-component activities have been successfully completed in a timely way and exceeded Target values. Access to Internet services has risen from ~15% of the Armenian population to 73.35%, exceeding the target of 50% by nearly half. The improved availability and quality of internet services at affordable prices supported increased demand for computers. Thus, Citizen Access to Computers likewise rose from ~15% of the population in 2009 to 57.4% by Project Closure, exceeding the target by 7.4%. The increased availability of computers and access to the Internet gave rise to Development of Knowledge and Technology intensive industries, which measured in terms of the ratio of IT/ITES Sector revenue in GDP, rose from a baseline of 1.5% to 5.29%, exceeding the target of 2.2% by over 140%. This substantial increase in new IT/ITES businesses led to similar growth in IT/ITES Sector Employment, which grew from 5,190 to 12,685 people employed at Project Closure, exceeding the target of 6,900 by more than double. In terms of residential broadband household in villages, penetration has risen from ~8.3% to 41.6%, exceeding target of 30% by over 30%. The installed Rural Wi-Fi with free Internet access points has been benefiting 344 villages with population under 1,000. The increased demand was driven in part by a dramatic price drop in retail broadband access as a percentage of monthly salary, which was ~14% in 2009, and fell to 1.95%, which was less than half of the targeted 5% of average monthly salary. Under the Digital Citizen Program providing for acceptability and security of electronic signatures, a Certification Authority was created for Armenia which issued 1,022,262 electronic certificates since its establishment, far away exceeding its target of 5,000 certificates issued. This was a by-product of the totality of initiatives under the e-Society Project, which encouraged the Armenian populace to broadly embrace the e-Society in their transactions. Indeed during the same period, through the revolving fund Computer for All Program, the number of Armenian households owning a computer has also been increased dramatically from ~3,500 to 34,491 households, which exceeded its 15,000 computer loan target by nearly 230%. Component 2 – Fostering Enterprise Innovation was the overall objective of Component 2 to promote the creation, growth and competitiveness of knowledge and technology-driven enterprises, while at the same time encouraging traditional sectors to adopt new technologies. It was comprised of four Sub-components, as follows: Financial Support for Innovation in Knowledge and Technology-intensive Firms, which included: Innovation Matching Grants, which on a competitive basis fully disbursed its loan proceeds through one innovation matching grant program supporting the start-up and expansion of Armenian technology-based businesses throughout the country and through two regionally-focused innovation matching grant programs dedicated to “start-ups” in Gyumri and Vanadzor areas. Out of 200 Applications for multiple Calls under all three innovation matching grant programs, 31 firms were selected for awards between $10,000-50,000 and totaling $1.2 million, matched by ~$850,000 in co-investment by the entrepreneur-innovators, with the result that the target of 27 matching grants approved was exceeded by about 10% and a pipeline of solid tech business deals was generated for the attendant Venture Fund; Seed and Early-stage Venture Fund (VC) serves an important function in being able to offer follow-on stage long-term growth financing to qualifying tech firms which were launched through the Project’s three innovation matching grant programs. The VC Fund was established by the Project as the first such fund to provide equity capital financing in Armenia and as an uncommon instrument in World Bank innovation practice. As such, the VC Fund concept presented significant technical challenges in implementation, which the Bank team successfully overcame. The ultimate goal of establishing the Venture Capital Fund in Armenia was to foster innovation, create business linkages with key technology markets, attract FDI, and contribute to development of IT infrastructure. The Government’s commitment to match private investment in the VC Fund dollar-for-dollar up to $3 million served as a critical catalyst in attracting private investors and a professional fund management team with executives situated in Armenia, Singapore and London, with links to Silicon Valley. The Government’s commitment to match private investment in the VC Fund dollar-for-dollar up to $3 million served as a critical catalyst in attracting private investors and a professional fund management team with executives situated in Armenia, Singapore and London, with links to Silicon Valley. Thus, the VC Fund was able to achieve its targeted funding of Committed Capital, which has been called and will be fully disbursed to the Fund prior to expiration of the Bank’s Loan. Meanwhile, the Fund has invested more than $1.6 million and committed a further $1.1 million in 11 Armenian SME technology companies, which is one short of the target of 12 projects financed by the Venture Fund. Support to IT/Knowledge-intensive Industry Development: The project co-financed establishment of number of IT/Innovation centers, among which: Mobile Lab (mLab), Microsoft Innovation Center (MIC), Armenian-Indian Center for Excellence, Armenian National Engineering Lab (ANEL), Innovative Solutions Technology Center (ISTC). The Bank's co-financing allowed the government to leverage private sector funds and capacity. The centers trained more than 5000 participants annually in the areas of Programming, Engineering, Mobile, Business/management and more than 100 startups were accelerated on their premises. Armenia IT representation program was developed under the project; it has provided a mentorship program to startups on competitive basis. 30 startups were selected and received mentorship, 10 startups received an extensive mentorship by US experts to 5 startups were presented to the potential US investors. Establishment of the Gyumri Technology Center (GTC), which was founded in a 19th Century pedagogical institute building, whose roof and floors had collapsed during the 1988 Earthquake and sat vacant, until the GTC started its main activities in January 2014 after completing a full 6/30/2016 Page 2 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report E-Society and Innovation for Competitiveness (EIC) Project (P115647) refurbishment of the building through the Bank’s Loan proceeds. GTC was designed to provide firms in and around Gyumri with access to tech know-how, services and facilities previously unavailable on the region. By now, GTC is fully operational providing acceleration space to start ups as well as ongoing training programs. Seven events were recently organized, which more than 670 people participated. Moreover, GTC serves to generate interest and applications for the Innovation Matching Grant Program and for the Gyumri StartUp Grants. So far, 99 enterprises have benefited from GTC, exceeding the target of 50, and GTC’s paid occupancy is maintained at 97.9%, well above the anticipated target of 80% by Project completion. Establishment of the Vanadzor Technology Center (VTC) stemmed from restructuring of the national broadband network subcomponent, which became unnecessary to finance through the Bank’s Loan when private investors entered the market. VTC construction work progressed on an accelerated pace to achieve completion and disbursement of funds prior to expiration of the Bank’s Loan. Meanwhile, a multitude of activities have taken place through VTC, such as Business Development consultancy providing mentoring services to 8 enterprises and help in establishment of 3 start-up technological teams. Assistance to teams participating in Vanadzor Startup Grants resulted in 4 teams receiving grants and the possibility that they will grow into new companies in Vanadzor. VTC training was continued through a competitively selected consortium, during which 1,334 participated. 6/30/2016 Page 3 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report E-Society and Innovation for Competitiveness (EIC) Project (P115647) 6/30/2016 Page 4 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report E-Society and Innovation for Competitiveness (EIC) Project (P115647) 6/30/2016 Page 5 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report E-Society and Innovation for Competitiveness (EIC) Project (P115647) 6/30/2016 Page 6 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report E-Society and Innovation for Competitiveness (EIC) Project (P115647) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Moderate  Moderate Macroeconomic  --  Low  Low Sector Strategies and Policies  --  Low  Low Technical Design of Project or Program  --  Moderate  Moderate Institutional Capacity for Implementation and Sustainability  --  Low  Low Fiduciary  --  Moderate  Moderate Environment and Social  --  Low  Low Stakeholders  --  Low  Low Other  --  --  -- Overall  --  Moderate  Moderate Results Project Development Objective Indicators PHINDPDOTBL  Access to Internet Services (number of subscribers per 100 people) (Number, Core) Baseline Actual (Previous) Actual (Current) End Target Value 15.00 73.36 73.36 50.00 Date 30-Nov-2010 29-Mar-2016 23-Jun-2016 29-Mar-2016 Comments The indicator data is cumulative against comulative target of 50% PHINDPDOTBL  IT/ITES Employment (number of people) (Number, Core) Baseline Actual (Previous) Actual (Current) End Target Value 5190.00 12685.00 12685.00 6900.00 Date 30-Nov-2010 13-Nov-2015 23-Jun-2016 30-Jun-2016 6/30/2016 Page 7 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report E-Society and Innovation for Competitiveness (EIC) Project (P115647) Comments The indicator data is cumulative against comulative target of 6900. PHINDPDOTBL  Access to computers (% of population using a computer) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 15.00 57.40 57.40 50.00 Date 30-Nov-2010 29-Mar-2016 23-Jun-2016 30-Jun-2016 Comments The indicator data is cumulative against comulative target of 50% PHINDPDOTBL  Development of Knowledge and Technology intensive industries (Ratio of IT/ITES Sector revenue in GDP) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.50 5.29 5.29 2.20 Date 30-Nov-2010 29-Mar-2016 23-Jun-2016 30-Jun-2016 Comments the indicator data is cumulative against a cumulative end target of 2.2 % PHINDPDOTBL  VTC facility is ready for occupancy (Date, Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- -- 01-Jul-2016 30-Jun-2016 Date -- -- 23-Jun-2016 -- Comments The indicator data is cumulative 6/30/2016 Page 8 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report E-Society and Innovation for Competitiveness (EIC) Project (P115647) Overall Comments The refurbishment of the facility has been completed and is ready for occupancy. Intermediate Results Indicators PHINDIRITBL  Price of retail broadband access as a % of average monthly salary (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 14.00 1.38 1.95 5.00 Date 30-Nov-2010 29-Mar-2016 23-Jun-2016 30-Jun-2016 Comments The indicator data is cumulative against cumulative target of 5% PHINDIRITBL  Number of electronic certificates issued (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 92546.00 1022262.00 5000.00 Date 30-Nov-2010 29-Mar-2016 23-Jun-2016 30-Jun-2016 Comments The indicator data is cumulative against a comulative end target of 23,000 (sum of each year in the Results Framework) PHINDIRITBL  Percentage of households owning a computer (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 10.00 57.00 57.40 40.00 Date 30-Nov-2010 29-Mar-2016 23-Jun-2016 30-Jun-2016 Comments The indicator data is cumulative 6/30/2016 Page 9 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report E-Society and Innovation for Competitiveness (EIC) Project (P115647) PHINDIRITBL  Number of households owning a computer purchased under the Computer for All program (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 3500.00 30991.00 34491.00 15000.00 Date 30-Nov-2010 29-Mar-2016 23-Jun-2016 30-Jun-2016 Comments The indicator data is cumulative against a comulative end target of 15,000. PHINDIRITBL  Number of Matching grants approved (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 33.00 31.00 8.00 Date 30-Nov-2010 29-Mar-2016 23-Jun-2016 30-Jun-2016 Comments Two grants were cancelled. The indicator data is cumulative against a cumulative target of 27 grants (sum of each year in the Results Framework). PHINDIRITBL  Number of projects financed through the Venture Fund (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 8.00 11.00 3.00 Date 30-Nov-2010 29-Mar-2016 23-Jun-2016 30-Jun-2016 Comments The indicator data is cumulative against a cumulative end target of 12 projects. 6/30/2016 Page 10 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report E-Society and Innovation for Competitiveness (EIC) Project (P115647) PHINDIRITBL  Number of projects prepared and presented to potential investors (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 56.00 210.00 9.00 Date 30-Nov-2010 29-Mar-2016 29-Mar-2016 30-Jun-2016 Comments The indicator data is cumulative against a cumulative end target of 35 (sum of each year data in the Results Framework) PHINDIRITBL  Number of enterprises benefited from GTC (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 32.00 99.00 50.00 Date 30-Nov-2010 31-Dec-2015 23-Jun-2016 30-Jun-2016 Comments The indicator data is cumulative against a cumulative end target of 50 enterprises. PHINDIRITBL  Occupancy rate of GTC (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 97.80 99.20 80.00 Date 30-Nov-2010 29-Mar-2016 23-Jun-2016 30-Jun-2016 Comments The indicator data is cumulative against a comulative end target of 80% 6/30/2016 Page 11 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report E-Society and Innovation for Competitiveness (EIC) Project (P115647) PHINDIRITBL  Number of sales and investments generated by the representative office (million USD) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.20 3.00 1.15 Date 30-Nov-2010 29-Mar-2016 23-Jun-2016 30-Jun-2016 Comments The indicator data is cumulative against a comulative end target of 1.15 million PHINDIRITBL  Number of manpower trained and certified under the project (number of people) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 3532.00 16572.00 150.00 Date 30-Nov-2010 30-Jun-2015 23-Jun-2016 30-Jun-2016 Comments The indicator data is cumulative against a cumulative end target of 650 people (sum of each year in the Results Framework) PHINDIRITBL  Residential broadband household penetration in the villages under the project scope (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 8.30 41.60 41.60 30.00 Date 31-Dec-2009 29-Mar-2016 23-Jun-2016 -- Comments The indicator data is cumulative against a cumulative target of 30 Overall Comments Data on Financial Performance Disbursements (by loan) 6/30/2016 Page 12 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report E-Society and Innovation for Competitiveness (EIC) Project (P115647) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P115647 IBRD-79630 Effective USD 24.00 24.00 0.00 22.92 1.08 96% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P115647 IBRD-79630 Effective 30-Nov-2010 26-Jan-2011 18-May-2011 31-Dec-2014 30-Jun-2016 Cumulative Disbursements Restructuring History Level Approved on 16-Sep-2011 ,Level 2 Approved on 09-Jul-2014 ,Level 2 Approved on 07-Aug-2015 Related Project(s) There are no related projects. 6/30/2016 Page 13 of 13 Public Disclosure Copy