The World Bank Implementation Status & Results Report Institutional Capacity Building Project (P168180) Institutional Capacity Building Project (P168180) EUROPE AND CENTRAL ASIA | Uzbekistan | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2019 | Seq No: 4 | ARCHIVED on 28-Jun-2021 | ISR46721 | Implementing Agencies: Ministry of Finance, Republic of Uzbekistan Key Dates Key Project Dates Bank Approval Date: 24-May-2019 Effectiveness Date: 16-Dec-2019 Planned Mid Term Review Date: -- Actual Mid-Term Review Date: Original Closing Date: 30-Nov-2024 Revised Closing Date: 30-Nov-2024 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective is to strengthen public financial management and enable the market operation of the corporate sector. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Improving Public Financial Management:(Cost $10000000.00 M) Improving Conditions for Market Operation of the Corporate Sector:(Cost $16000000.00 M) Improving Support Mechanisms for Reforms:(Cost $5000000.00 M) Project Management:(Cost $2000000.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Substantial Moderate Implementation Status and Key Decisions Overall Progress: The government stakeholders continue to show full ownership of and commitment to the Project. The task team is supporting the PIU and project beneficiaries in the implementation of the project. There is tangible progress in most components, although some activities are affected by the COVID imposed restrictions, as described below. Disbursements are slightly lower than anticipated but selections of consultants and equipment, especially for Component 1 (Public Financial Management) and Component 2 (work with State Asset Management Agency) have progressed well. Privatization. The Bank looks forward to agreeing with the Government on the selection of the pilot/s for privatization. PIU Capacity: The Bank looks forward to soonest completion of hiring and onboarding of new procurement specialist. 6/28/2021 Page 1 of 10 The World Bank Implementation Status & Results Report Institutional Capacity Building Project (P168180) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Substantial Moderate Moderate Macroeconomic Substantial Substantial Moderate Sector Strategies and Policies Substantial Substantial Substantial Technical Design of Project or Program Substantial Moderate Moderate Institutional Capacity for Implementation and High Substantial Substantial Sustainability Fiduciary Substantial Moderate Moderate Environment and Social Substantial Low Low Stakeholders High Substantial Moderate Other Substantial Moderate Moderate Overall Substantial Substantial Moderate Results PDO Indicators by Objectives / Outcomes Improved public financial management IN00993472 ►Budgeting processes, public internal control and audit, and public sector accounting standards reflect international good practices (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target PEFA indicators related to budget improved, internal Reforms under reforms under reforms under control and audit Value consideration consideration implementation follows international good practices, accounting follows IPSAS Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 Measures evolution of improvements in the adoption of international good practices/standards. Although Comments: the interim targets are delayed, the indicator is on track to achieve the end target. Market Operation of the Corporate Sector IN00993445 6/28/2021 Page 2 of 10 The World Bank Implementation Status & Results Report Institutional Capacity Building Project (P168180) ►Corporate governance of SOEs reflects OECD Corporate Governance Standards (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Draft Presidential Decree Draft Presidential SOE aggregate report Newly created agency approving application of Decree approving for Top [30] produced Value with low capacity (ASAM) OECD principle application of OECD and published by SOE guidelines principle guidelines ownership agency Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 This measures the gradual adoption by Government and SOEs of good corporate governance following applicable OECD guidelines. The interim targets are delayed, but indicator is on track to achieve end Comments: target. The team provided comments to Privatization draft law and State Property Management draft law (including corporate governance provisions). IN00993471 ►Number of SOEs privatized (more than 50% of shares divested) and number of infrastructure PPPs completed (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 6.00 Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 Measures the number of SOEs privatized and PPPs developed under the project (e.g., feasibility study funded under the PPF). At minimum, two out of six in the end target number must be privatized. The Comments: indicator is on track to achieve the end target, with two PPP deals being prepared together with IFC; and pre-privatization processes discussed with SAMA for several companies. Intermediate Results Indicators by Components Improving Public Financial Management IN00993473 ►Improved public investment management (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Multiyear investment planning introduced in Reforms under Reforms under Reforms under 50% of ministries and Value consideration consideration consideration a sustainable training program and capacity established. Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 The TOR for PIM framework has been developed by PIU under MOF and was sent to MIFTfor review and Comments: comments on May 5. IN00993476 ►Staff trained on all PFM areas (of which female) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 400 (of which 100% of Value 0.00 0.00 0.00 potential female 6/28/2021 Page 3 of 10 The World Bank Implementation Status & Results Report Institutional Capacity Building Project (P168180) beneficiaries are included) Date 01-Sep-2018 15-Oct-2020 27-May-2021 31-Dec-2024 Comments: Refers to number of staff of MoF and other relevant agencies trained on PFM international best practices IN00993480 ►Improved internal audit (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Gradual implementation of the new IA methodology and new IA Reforms under Reforms under Reforms under Value management software consideration consideration implementation in 30% of line ministries. 20 trainers trained and training program developed Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 Measures evolution of adoption of internal audit in line with international good practices. Additional comments as at June 22, 2021: External consultant has been selected and contracted by the Comments: MOF, the first preliminary draft report is under review. Based on the findings of the final report, the Draft Law on Internal audit will be proposed to the GOV (expected Jan-Feb, 2022). IN00993483 ►Gradual enhancement of budget process (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Marked improvements 2018 PEFA Scores are D 2018 PEFA Scores are D 2018 PEFA Scores are in PEFA Assessments for PI 8.1, 8.2, and 8.3; for PI 8.1, 8.2, and 8.3; D for PI 8.1, 8.2, and Value - score of C for PI 8.1, PI 16.2 and 16.3; and PI PI 16.2 and 16.3; and PI 8.3; PI 16.2 and 16.3; 8.2 and 8.4; PI 16.2 17.2 17.2 and PI 17.2 and 16.3 and PI 17.2 Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 Measures evolution of improvements in budget processes. Specifically on PEFA Indicators related to performance plans for service delivery (PI 8.1), performance achieved for service delivery (PI 8.2), resources evaluation for services delivery (PI 8.4), medium-term expenditure ceilings (PI 16.2), alignment Comments: of strategic plans and medium term budgets (PI 16.3), and guidance on budget preparation (17.2). Interim update as at June 22, 2021: the external consultant has been selected, and the work is under process. IN00993485 ►New public internal control framework implemented following international good practices (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Gradual roll-out of new PIC framework with 10% at the central Reforms under Reforms under Reforms under level of government Value consideration consideration implementation implementing. 50 trainers trained and training program developed. Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 6/28/2021 Page 4 of 10 The World Bank Implementation Status & Results Report Institutional Capacity Building Project (P168180) Evolution of the public internal control framework towards international good practices (that is adoption of risk-based approaches, practices endorsed by PEMPAL, and other bodies including the Insitute of Internal Auditors ) Comments: Interim update as at June 22, 2021: the external consultant has been selected, and the preliminary draft report in IC diagnostic has been submitted to MOF for review. Following the final delivery, the IC framework will be proposed for the MOF's review (expected Jan-Feb, 2022). IN00993487 ►New public sector accounting and financial reporting standards implemented following international good practices (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Piloting completed. Applicable accounting and financial reporting standards and software updated Reforms under Reforms under Reforms under based on lessons from Value consideration consideration consideration pilot. Certification system for new standards initiated. 50 trainers trained and training program developed. Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 Evolution of public sector accounting towards international good practices (that is the adoption of IPSAS based standards). Comments: Interim update as at June 22, 2021: the external consultant has been selected; the work is under process. Improving Conditions for Market Operation of the Corporate Sector IN00993475 ►Strategic mapping of existing SOEs (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 2,800.00 2,800.00 3,000.00 Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 Refers to the number of entities identified and categorized by ASAM. The target is achieved, as original Comments: target was approximate. IN00993478 ►3 Core legislative acts reviewed and updated (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target SOE Strategy adopted (March 2021) incl Corp Governance provisions. Accounting Outdated laws on Outdated laws on and Audit Laws Value accounting, auditing and accounting, auditing and updated, IFRS and Updated 3 core laws corporate governance corporate governance ISA adopted via Government Regulation. State Property Management Law commented by 6/28/2021 Page 5 of 10 The World Bank Implementation Status & Results Report Institutional Capacity Building Project (P168180) the WB, exp to be adopted by Dec 2021. Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 Refers to the legislation update process with respect to laws on accounting, auditing, privatization and corporate governance. The work is ongoing, so far comments were provided to Privatization draft law and Comments: State Property Management draft law (including corporate governance provisions). IN00993479 ►Percentage of SOEs using IFRS for financial reporting and publicly disclosing the reports (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 6.00 80.00 Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 Refers to the number of SOEs publishing their IFRS statements (out of top-100 SOEs). Comments: IN00993482 ►Largest SOEs follow high standards of transparency and are subject to the high quality accounting, disclosure, compliance and auditing standards, as per Chapter VI of the OECD Guidelines (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 30.00 Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 Refers to the number of SOEs publishing their financial statements. As of ISR date (May 2021), 6 SOEs publish their financial statements but mainly missing key parts such as auditors' report or accompanying Comments: notes. IN00993484 ►Boards are formed at largest 30 SOEs and given an authority and competencies for strategic guidance and monitoring of SOE management (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 30.00 Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 Refers to the number of the SOEs with functioning supervisory boards. As of ISR date (May 2021), the Comments: process has only begun and yet to be tracked. IN00993486 ►Number of SOE restructuring plans adopted (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 6.00 Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 Refers to the number of SOE restructuring plans adopted with support under the Project. As of ISR date Comments: (May 2021), MOF and SAMA are progressing, yet to be tracked. IN00993488 6/28/2021 Page 6 of 10 The World Bank Implementation Status & Results Report Institutional Capacity Building Project (P168180) ►Number of SOEs privatization public calls announced (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 10.00 Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 Refers to SOEs prepared for privatization under the project and with public calls announced. The GoU announced public call for 18 companies slated for privatization in January 2021. Pre-privatization process Comments: is ongoing. However, the 18 companies' privatization deals were not prepared fully under the IBL project. IN00993489 ►Number of bids received per privatization transaction (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 2.00 Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 Refers to the number of bids received per privatization transaction supported under the project. The target Comments: achievement is delayed due to delay in privatization implementation process. IN00993490 ►New laws/regulations on PPP enacted and implemented (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Reform options under New laws on PPP Value PPP law passed PPP law passed discussion under implementation Date 15-Mar-2019 30-Apr-2020 27-May-2021 31-Dec-2024 This measures the gradual implementation of new laws on PPP. On January 22, 2021, the President of Uzbekistan signed Law No. 669, which addresses gaps in the Law No. 537 “On Public-Private Comments: Partnership” adopted on May 10, 2019 IN00993491 ►Staff trained on corporate governance, privatization and PPP development (of which female) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 30.00 40.00 Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 Refers to number of staff trained on corporate governance, privatization and PPP development disaggregated by gender. On track. Comments: Staff of Ministry of Finance, State Assets Management Company and Uzassets - 30 total, out of which 3 (three) female took part in the training events organized on corporate governance and privatization. IN00993492 ►Number of PPPs developed for the market (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 5.00 6/28/2021 Page 7 of 10 The World Bank Implementation Status & Results Report Institutional Capacity Building Project (P168180) Date 01-Sep-2018 15-Oct-2020 27-May-2021 31-Dec-2024 Refers to the number of PPPs developed for the market with support under project (i.e., under the PPF). Two deals - Radiotherapy PPP and Hospital PPP - implemented together with IFC are under preparation, Comments: projected to come to the market in FY22. IN00993493 ►Number of bids received per PPP transaction (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 3.00 Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 Refers to the number of bids received per PPP transaction. Radiotherapy PPP deal is under preparation Comments: and projected bids are expected in the fall of 2021. IN00993494 ►3 monitoring tools adopted for SOE oversight and governance (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 3 tools adopted (SOE Weak monitoring of performance Weak monitoring of SOE Weak monitoring of SOE SOE fin performance monitoring framework, fin performance and fin performance and Value and corporate KPIs in line with good corporate governance corporate governance governance practices, and SOE arrangements arrangements arrangements performance monitoring portal) Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 Monitoring tools for SOE oversight and governance in line with OECD principles. The achievement of the intermediate targets are delayed due to extended period of ToR development for SOE monitoring Comments: platform, but expected to be achieved by June 2022. End target remains on track. Improving Support Mechanisms for Reforms IN00993477 ►No. of new laws and regulations reviewed by the Economic Council (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 5.00 Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2023 Refers to the number of laws reviewed by the Economic Council. implementation is delayed because Comments: Economic Council is unable to hold meetings due to COVID-19 related travel restrictions. IN00993481 ►Number of Advisory Notes Prepared by technical experts to support the work of the Council (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 15.00 6/28/2021 Page 8 of 10 The World Bank Implementation Status & Results Report Institutional Capacity Building Project (P168180) Date 15-Mar-2019 15-Oct-2020 27-May-2021 01-Jan-2021 Refers to the number of outputs/technical advisory notes of technical experts in supporting the Economic Council. implementation is delayed because Economic Council is unable to hold meetings due to COVID- Comments: 19 related travel restrictions. Project Management IN00993474 ►Percentage of citizens (participating in thematic groups and/or providing through the MOF website) who report that the engagement process was effective (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 90.00 Date 15-Mar-2019 15-Oct-2020 27-May-2021 31-Dec-2024 This indicator will measure the perception of citizen representatives in the thematic groups with respect to the effectiveness of the citizen engagement approach under the project. During FY21, the government has been working on two avenues for citizen engagement under the IBL project. To adjust to the regulatory environment for the creation of Public Councils, the Ministry of Finance (MoF) and State Assets Management Agency (SAMA) -the two major beneficiary agencies - plan to engage the wider public through the State-Owned Enterprises reform and management. This is already included in the Strategy for management and reform of enterprises with state participation in 2021-2025 in 2021-2022” action plan (included as an appendix to the Resolution No. 166 of the Cabinet on Ministers dated March 29th,2021). In particular, the action plan calls for a measure to “Establish public control over Comments: the activities of enterprises with state participation”. During FY21, SAMA, the agency in charge of this activity, agreed to a process for implementation, including working with the Bank team in the coming months (in FY22) to get the best global practice on social accountability to develop the mechanisms for public engagement in SOEs and privatization reforms. In addition, in FY21, the project Implementing agencies have engaged in the civic dialogue by using a special website –project.gov.uz. This platform publishes all draft laws for public consultation before they go to Parliament. Thus, draft laws and government documents that the project will contribute to need to be discussed there, including the most recent draft of the Insolvency Law, which was posted on the website project.gov.uz before being submitted to Parliament in early 2021. Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P168180 IDA-64310 Effective USD 33.00 33.00 0.00 0.50 32.50 1.5% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P168180 IDA-64310 Effective 24-May-2019 19-Jul-2019 16-Dec-2019 30-Nov-2024 30-Nov-2024 6/28/2021 Page 9 of 10 The World Bank Implementation Status & Results Report Institutional Capacity Building Project (P168180) Cumulative Disbursements PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 6/28/2021 Page 10 of 10