For Official Use Only CLR Review Independent Evaluation Group 1. CAS/CPS Data Country: Kosovo CAS/CPS Year: FY12 CAS/CPS Period: FY12- FY16 CLR Period: FY12 - FY16 Date of this review: May 11, 2017 2. Ratings CLR Rating IEG Rating Development Outcome: Satisfactory Moderately Satisfactory WBG Performance: Good Good 3. Executive Summary i. Kosovo is a lower middle income country with GNI per capita of $3,702 in 2016. Due to its recent turbulent past, Kosovo is considered a fragile and conflict affected country. About 30 percent of the population lived in poverty and about 10 percent lived in extreme poverty in 2011. Inequality remains high, but has been declining: the Gini coefficient has changed from 31.8 in 2009 to 26.7 in 2013. Employment rates are the lowest in Europe: 29.7 percent in 2012 and 28.0 in 2016. The country’s human development index (HDI), at 0.741 in 2015, is one of the lowest in the Balkan region, next to Albania and Bosnia and Herzegovina, both ranked 85 th among 188 countries. At the time of the CPS preparation, Kosovo’s key development challenges were to create employment of good quality and mitigate accumulated environmental damage. After the armed conflict ended in 1999, the economy grew at about 6 percent per year until 2009, but growth slowed down to 3.5 percent during 2009-2011 and to 3.2 percent during 2012-2016. An inadequate and inconsistent supply of energy remains the key bottleneck to development. Environmental issues have become more prominent as the mitigation cost rises and the country seeks to meet EU’s environmental standards. ii. The government strategy, Visions of Economic Development Priorities 2011-2014, sought to address critical issues in infrastructure, agriculture, governance and the rule of law, education and labor markets, financial sector, and legal and institutional framework for business. The WBG Country Partnership Strategy (CPS) helped the government address some of these challenges under Pillar I (Accelerate broad-based economic growth and employment generation) and Pillar II (Improve environmental management). This is the WBG’s first full CPS for Kosovo since the country became a member of the World Bank in 2009. The CPS implementation was affected by an internal political crisis in 2014 that undermined the government’s ability to undertake policy reforms and follow-up on project-specific agreements. The WBG responded to the crisis by delaying the preparation of the Performance and Learning Review (PLR) and extending the CPS period by one year, to FY16. iii. IEG rates the development outcome as moderately satisfactory. The program mostly achieved five out of its seven objectives -- in environment, infrastructure, agriculture, private sector development, and education and skills. In particular, WBG-supported interventions helped to reduce the pollution levels in Pristina, strengthen sustainability of the financial sector, increase farm productivity, and improve monitoring capabilities in education. The program partially achieved its CLR Reviewed by Peer Reviewed by CLR Review Manager/Coordinator Jorge Garcia-Garcia Lev Freinkman Pablo Fajnzylber and Igor Artemiev Consultant, IEGHE Manager, IEGEC Consultants, IEGHE Lourdes Pagaran Senior Evaluation Officer, IEGEC For Official Use Only CLR Review 2 Independent Evaluation Group objectives in employment and social inclusion, and public financial management. There was limited progress in preparation for replacement of the Kosovo A power plant and enhancing employment opportunities – the objectives that are directly linked to Kosovo’s key development challenges of entrenched low employment level and inadequate capacity in power generation. iv. IEG assesses overall WBG performance as Good. The strategy supported the government’s development priorities, and the interventions were appropriate for delivering program results. The program was focused on two pillars and its objectives had substantial relevance and were well- supported by Advisory Services and Analytics (ASA) products, which were of good quality overall. However, the CPS results framework was fragmented, with 26 outcomes and 31 indicators, making it difficult to assess program achievements. There was close synergy with IFC, especially in the energy sector. In addition, the Bank worked closely with other development partners, especially with the EU and USAID, the country’s largest financial partners, and with Danish DANIDA and Swiss SDC, which provided significant co-financing for the Bank’s program. During the review period, Kosovo’s portfolio at exit performed better than its comparators (ECA and Bank-wide). The WBG’s support helped to accelerate the development of country systems, including through strengthening capacity of the Central Bank, decentralization of school management system, and progress in harmonization of environmental standards with the EU. The risks to the CPS program were clearly identified, but the CLR provides insufficient information on how the Bank mitigated when they materialized. On the Bank safeguards, the CLR reports satisfactory compliance with environmental and social policies. However, the latest Inspection Panel report found the Bank in non-compliance by failing to apply the involuntary resettlement policy in the Lignite Power Technical Assistance Project and noted limitations in the monitoring of the resettlement policy under the Second Additional Financing for Energy Sector Clean-up and Land Reclamation Project. The report also noted that the Management’s Action Plan has already addressed the shortcomings identified by the Panel. On the Performance Standards, an investigation of the Compliance Adviser Ombudsman found IFC in compliance with its procedures, but raised concerns about the effectiveness of IFC’s environmental and social requirements and the applicability of its sustainability framework to Advisory Services. v. IEG largely agrees with the CLR’s findings, lessons and recommendations, especially on the need to keep design of the program simple, to have fewer outcomes and results indicators, and a stronger link between outcomes and indicators. vi. IEG adds the following lessons:  Alignment with EU accession objectives is critical to the success of the WBG program. In the case of Kosovo, the program objective in focus area 2 that was well aligned with the country’s EU accession agenda and reflected the current priorities of the accession process achieved most of its intended outcomes.  Kosovo suffers from a long-term problem of low employment, more marked in women than men. The experience of the WBG program suggests that, besides rapid economic growth, expanding employment and increasing labor force participation requires policy reforms to generate structural changes in both the demand and supply of labor. Employment programs, like the ones supported by the CPS, on their own are unlikely to produce that change, but they produce a temporary relief and may divert attention of policymakers from necessary long-term reforms. 4. Strategic Focus Relevance of the WBG Country Partnership Strategy: 1. Congruence with Country Context and Country Program. Kosovo’s main development challenges, as identified at the time of the CPS preparation in 2010, have been to create employment of good quality and mitigate effects of accumulated environmental damage. The government realized it needed to create a favorable climate for private sector development to ensure rapid and sustainable growth and reduce the country’s dependency on remittances and foreign aid. Its strategy, Visions of For Official Use Only CLR Review 3 Independent Evaluation Group Economic Development Priorities 2011-2014, sought to address issues in infrastructure, governance and the rule of law, education and labor markets, financial sector, legal and institutional framework for business, and agriculture. The government also needed to address the country’s environmental problems to reduce health hazards and meet the terms of EU accession. The WBG Country Partnership Strategy (CPS) helped the government address some of these challenges under Pillar I, accelerate broad-based economic growth and employment generation; and Pillar II, improve environmental management. 2. Kosovo has grown rapidly in the last 15 years, but the growth slowed down in 2012-2015 and its per capita income remains among the lowest in Europe. After the conflict in Kosovo ended in 1999 the economy grew at about 6 percent per year until 2009, but growth slowed down to 3.5 percent during 2009-2011 and to 3.2 percent in 2012-2016. Kosovo is a lower middle income country with GNI per capita (Atlas method) stood at $3,702 in 2016 and its human development index (HDI), at 0.741 in 2015, is one of the lowest in the Balkan region, next to Albania and Bosnia and Herzegovina, both ranked 85th among 188 countries. In the Doing Business ranking Kosovo was 117th among 183 countries in 2011, but it moved up to 60th among 190 countries in 2016. Internal conflict and economic conditions led many to leave the country; today, there is one emigrant for every five Kosovo residents. 3. About 30 percent of the population lived in poverty and 10 percent lived in extreme poverty in 2011. Inequality remains high, but has been declining: the Gini coefficient has changed from 31.8 in 2009 to 26.7 in 2013. Employment rates for people aged 20-64 were 29.7 percent in 2012 and 28 percent in 2016. Unemployment and inactivity is especially widespread among women and young people. Indicators for education and health show there is a serious problem: net secondary enrollment was 75 percent, with women less likely to complete their secondary education, and maternal mortality rate averaged 16.5 per 100,000 births in 2000-2010. An inadequate and inconsistent supply of energy and serious transport bottlenecks constrain private sector development. Environmental issues, largely linked to coal-based power generation, have become more prominent as the costs of mitigating environmental degradation rise. 4. Relevance of Design. The program objectives were relevant to the country’s development goals. The interventions were aligned with the CPS objectives and well-supported by AAA products. The expected synergy across the WBG and coordination with other key development partners, given limited IDA envelope, were considered key building blocks to achieve program objectives. But the contribution of several interventions to the country’s development goals is less clear. This is the case for some of the program interventions on private sector development (Objective 2), agriculture and employment (Objectives 3 and 5), where their links to growth acceleration and employment generation were weak. Moreover, the program’s design was fragmented, with seven CPS objectives, which contrasts with the limited number of activities supporting each objective. The dispersed program objectives and results indicators, undermined the focus and impact of the program. Selectivity 5. The CPS was selective by concentrating on two focus areas reflecting both the government’s priorities and the relatively small size of the Bank’s resource envelope. The selection of the areas of engagement was informed by past Bank experience in Kosovo and the solutions that proved to be effective in the neighboring countries. Selection of CPS objectives was based on adequate country diagnostics. Still, the program was not sufficiently selective in terms of program objectives and outcomes, with 26 outcomes and 31 indicators covering too many areas relative to the IDA envelope size, especially under the Focus Area 1. To enhance its selectivity, the program could have chosen fewer objectives and fewer indicators and paid more attention to defining desirable outcomes to measure better the contribution of WBG interventions. Alignment 6. The Kosovo CPS was well aligned with the WBG’s corporate goals of reducing poverty and increasing shared prosperity in a sustainable manner, even though the strategy was produced before the goals were put in place. The program supported objectives and interventions in agriculture, education, health, employment, public financial management and environment, where progress was For Official Use Only CLR Review 4 Independent Evaluation Group essential to reduce poverty and increase shared prosperity. It also supported objectives in infrastructure, education, and private sector development, where progress is essential to encourage growth. 5. Development Outcome Overview of Achievement by Objective: The assessment of the development outcome is based on the updated program results framework as presented in the Performance Learning Review (PLR) of the country partnership strategy. Focus Area I: Accelerating Broad-Based Growth and Employment Generation 7. Objective #1. Strengthening infrastructure, with a focus on energy. The objective was supported by the Energy Sector Cleanup and Land Reclamation Project (FY06) and its two-additional financing (FY07 and FY13), the Kosovo Energy Efficiency and Renewable Energy Project (FY14), an IFC transaction support for the Kosovo Electricity Distribution Company (KEDS, FY13), an IFC post- privatization support project for KEDS (FY14), a Balkan Renewable Energy Project (FY13), and a Country Environmental Analysis (FY13). The objective had four specific outcomes and associated indicators:  Complete preparations for replacing the 50-year old Kosovo A power plant with a private sector financed replacement power plant, in line with the relevant environmental directives of the EU’s acquis communautaire. This outcome was to be measured by the following indicators by the end of the CPS period: (i) the tender has been successfully concluded and a winning bidder has been announced, (ii) on the basis of the environmental (ESIA) and poverty (PSIA) social impact assessments, the proposed Partial Risk Guarantee (PRG) has been negotiated with Government and the winning bidder, and (iii) the PRG project has been prepared for Board consideration. The government announced a preferred bidder in November 2015, but is still negotiating a final agreement with the winner. The initial ESIA has been completed, but it may require further revisions due to the proposed changes in the project design. Respectively, the partial risk guarantee has not been negotiated because the assessments must be finalized first. [Partially achieved.]  Improved quality of service, with secure supply to all paying customers, and elimination of the need for subsidies from Government and donors to pay for electricity purchases and investment in the Distribution Company. The specific targets under this outcome indicator included privatization of the Kosovo Electricity Distribution Company (KEDS) to ensure the following improvements in the sub-sector performance: (i) reduction in electricity losses by 5 percent, (ii) reduction in electricity import prices by 21.8 percent, and (iii) elimination of government subsidies to distribution. The government privatized the KEDS in May 2013, which generated significant improvements in the quality of service. Technical and commercial losses fell from 38 to 32 percent between 2011 and 2015, with the fall driven mainly from a decline in commercial losses from 21 to 16 percent, meeting the target of 5 percent reduction (Annual Report of the Kosovo Energy Regulatory Office, p. 49, at http://ero-ks.org/2016). The government terminated all subsidies to the KEDS, and IFC estimates that the cost of imported electricity fell by 30 percent, saving EUR 42 million. Consumption load-shedding (the deliberate shutdown of electric power in a part of a power-distribution system when the demand strains the capacity of the system) fell from 154 to 67 megawatt-hours between 2012 and 2015. Last, the distribution company collected 95.2 percent of the electricity billed in 2015, exceeding the past collection ratios (i.e., 89 percent in 2012). Presumably, this improvement reflects a better service for consumers and more willingness of consumers to pay for the service. IFC was the lead adviser on the KEDS privatization. After receiving complaints from local and international NGOs that IFC-led privatization might raise significant environmental and social concerns the Compliance Adviser Ombudsman Office for IFC audited the project, and found that IFC addressed adequately the risks the complaint had raised, but it expressed For Official Use Only CLR Review 5 Independent Evaluation Group concerns about the applicability of its sustainability framework to Advisory Services. [Achieved]  Improvement in energy efficiency in the building sector and institutional strengthening of a to- be created Energy Efficiency Agency to promote energy efficiency. The specific targets included: (i) at least 25-30 public buildings have been retrofitted, (ii) revised building codes have been established, and (iii) households have access to finance to retrofit their homes. The country team shared with IEG the findings from the latest project supervision mission, indicating that renovation work has started in 13 public buildings, but none of them have been fully completed. It also reported that new national legislation related to energy performance of buildings had been adopted in 2016 and it reflected the corresponding EU directive, while the respective rulebook remains under development. The latter means that the revised building codes have not yet been established. The commercial banks just opened their first credit lines for households and companies to support investments in energy efficiency improvements. Additional information provided by the IFC team informed that based on the special project verification report (issued in December 2016), 172 small renewable energy efficiency loans have been granted to households? for a total of $2.6 million; these loans brought annual energy savings of 1,400 mWh and reduced CO2 emissions by 629 tons. The government established the Energy Efficiency Agency (KEEA) in April 2012 with support from the Bank’s Energy Efficiency Project. The World Bank country team noted that the project has enhanced the capacity of the KEEA to implement energy efficiency projects. This information could not be confirmed but it is noted that the project supporting this objective is experiencing implementation delays and is currently rated MU in the last ISR of October 2016. [ Partially Achieved]  Increased use of renewable resources for electricity generation. At the end of the CPS, it was expected that at least 25 bankable projects would have been prepared for private sector investment in renewable resources, and a financing mechanism for private sector renewable energy projects is in place. The CLR reports that (i) IFC and the European Bank for Reconstruction and Development supported the introduction of a new financing mechanism, but it is not yet available for qualified investors and is not fully bankable as required by IFC standards; and (ii) 24 projects are being prepared for private sector investment in renewable resources. Additional information provided by the country team based on the data from the national regulator, indicated that 8 renewable energy projects have become operational and additional 21 have received final authorizations to start construction, exceeding the target of 25 bankable projects. While the finalization of the new financing mechanism has been delayed, the qualified private investors have access to alternative sources of funding, given the evidence of the existing project pipeline. [Mostly Achieved] With two Partially Achieved, one Mostly Achieved and one Achieved, this objective was rated as mostly achieved, on balance. The available evidence is stronger for outcomes where good progress was made -- in power distribution, triggered by successful privatization, and in expansion of renewable generation. At the same time, the preparation of the tender for construction of the new generation plant has been slow and developments in the area of energy efficiency fell short of the targets. 8. Objective 2. Promote private sector development and financial strengthening . The objective was supported by the Business Environment Technical Assistance Project (FY05), the Financial Sector Strengthening and Market Infrastructure Project (FY08), the Real Estate Cadaster and Registration Project (FY10), the Kosovo Social Inclusion and Local Development grant (FY11), the First and Second Sustainable Employment DPOs (FY11, FY12), IFC’s Investment Climate Project (FY13), a ROSC on accounting and auditing standards (FY12), a Financial Sector Assessment Program (FY13), a FIRST TA (FY14), and IFC/Bank Balkan Financial Infrastructure program 1. The objective had six specific outcomes and associated indicators: 1 IEG was unable to locate the details of this program in the Operations Portal. For Official Use Only CLR Review 6 Independent Evaluation Group  Simplified processes for doing business introduced. The targets were (i) to reduce the share of firms facing problems with business licensing and regulation from 38 to 28 percent, (ii) the reduce average number of days to start a business to 11, and (iii) reduce cost of starting a business to 1.2 percent of income per capita. The BEEPS surveys show that 31 percent of firms considered licensing and regulation still being a problem in 2013; no updated information is available. The PLR reports that the average number of days needed to start a business had declined from 58 to 11 in 2011-14, while respective costs were reduced from 104.6 percent of per capita income to 1.2 percent. The Doing Business (DB) indicators confirm a significant and quite broad improvement in various areas of business environment, measured by both the change in Kosovo’s rankings and relative to the best performing countries (distance to the frontier). Overall DB ranking improved from 117th in the 2012 DB report to 60th in DB2017. This was driven in part by drastic changes in rankings for Starting a business (from 168 th to 13th) and for Property registration (from 73rd to 33rd). The 2016 DB Report estimated the average cost of starting a business at 14.5 percent of income per capita, which represents a significant achievement relative to the 2011 baseline, but fell short of the target of 1.2 percent. WBG project support directly contributed to this achievement through TA to reduce business compliance cost, development of e-registration for business, and the establishment of one stop shops. [Mostly Achieved]  Property and cadastral services have improved. The targets were (i) to reduce the average number of days to register standard residential property from 30 to 20 days, and (ii) to have facilities of 22 municipal cadastral offices (MCOs) upgraded. The supervision report for the Bank’s Cadaster project informs that the average number of days to register residential property fell to 10 in 2016. Data from Doing Business also show some (but more modest) reduction in time needed for property registration: the number of days to register property (both residential and commercial) fell from 32 in 2012 to 27 in 2014, remaining unchanged since then. Meanwhile, the number of real estate transactions registered annually increased from 27,500 in 2008 to 33,620 in 2016, indicating some market deepening and possibly an improvement in property rights security. The number of MCOs with facilities being re- engineered reached 23, exceeding the target. [Achieved]  Creation of new small and micro enterprises. The target was to create 300 new small and micro enterprises with the contribution from the Social Inclusion and Local Economic Development (SILED) grant. Additional information provided by the country team from the final evaluation report for the project, prepared for the Community Development Fund, a project PIU, in April 2014, informs that 256 applicants benefitted from the grant’s seed funding to create SMEs, falling short of the target. [ Mostly Achieved]  Increase entry of formalized SMEs. The program targets were to increase (i) the annual number of newly registered companies by at least 15 percent above the 2011 baseline value of 7,879, and (ii) the share of female-owned businesses by at least one percentage point. The CLR reports that the actual increases in registration exceeded 20 percent each year over the 2012-2015 period and reached 27.6 percent in 2015. Additional information provided by team based on data from the Kosovo Business Registration Agency show the number of newly registered businesses in 2016 at 10,549, or 34 percent higher than the 2011 baseline and exceeding the target. Out of those registered in 2016, 21 percent were owned by females, which exceeds the baseline of 15.6 percent presented in the PLR by more than five percentage points, exceeding the target. [Achieved]  Stronger financial system. There were three specific targets: (i) reform of the payment system on the basis of implementation of real Time Gross Settlement; (ii) harmonization of regulations with the new Banking Law; and (iii) increased conformity with EU practices in financial reporting and auditing. These targets were achieved. The new payment system was launched in July 2016 and is fully operational. About 70 existing financial sector regulations were revised to make them consistent with the new Law. And some progress in regulatory harmonization with the EU was also made, specifically based on the adoption of the IBAN For Official Use Only CLR Review 7 Independent Evaluation Group system. According to the Bank’s project supervision reports, reforms in the legal and supervisory framework were broadly successful. These efforts made a direct contribution to overall strengthening of Kosovo’s financial sector as suggested by the changes in several key indicators of financial soundness between 2013 and 2015. Specifically, the ratio of regulatory capital to risk-weighted assets increased from 16.8 to 19 percent; the ratio of non-performing loans net of provisions to capital fell from 7.9 to 3 percent; the return on assets increased from 0.9 to 2.6 percent, and the return on equity increased from 9.5 to 23.7 percent. On the other hand, the ratio of liquid assets to short-term liabilities fell from 126 percent to 37 percent. All capital ratios are well above regulatory minima, according to the latest IMF report. [Achieved]  The sustainability of the Central Bank of the Republic of Kosovo and its capacity to supervise banks and non-bank financial institutions have been strengthened. The specific target was for the Central Bank of Kosovo (CBK) to develop a plan to ensure its access to long-term resources and to supervise Kosovo’s main banks and pension funds on a regular basis, while increasing the preparedness for potential crisis situations. While this target has been achieved, it does not guarantee a de facto strengthening supervisory capacity of the Central Bank. Additional information from the latest IMF review (March 2017) suggests that the CBK has been making strong progress in establishing and implementing a macro-prudential policy framework, which is a critical instrument of risk management in the euroized economy with no independent monetary policy such as Kosovo. Overall, according to the IMF, the banking sector remains in good health and has increased lending. [ Achieved] With four Achieved and two Mostly Achieved, this objective was Mostly Achieved: Good progress was made in the areas of business environment, financial sector, creation of new small and micro enterprises, and increased entry of formalized SMEs. 9. Objective 3: Strengthening agricultural development. The objective was supported by the Agricultural and Rural Development Project (FY11), a Danish trust fund (FY11), and a grant for social inclusion and local development (FY11). The objective had two specific outcomes and associated indicators:  Promote competitiveness and growth in the livestock and horticulture sub-sectors. The outcome targets were: (i) at least 420 agricultural enterprises have adopted improved products and processes, and (ii) 1,400 new agricultural micro and small enterprises have been established during 2014-2015. The latest ISR for the Agricultural and Rural Development Project reports that 647 enterprises had adopted new products and processes, exceeding the program’s target. Two additional information provided to IEG by the country team indicate that this outcome was achieved. Based on the data from the Kosovo Agency of Statistics, the second target was exceeded, with about 2,100 enterprises created between 2014 and the first half of 2016 (http://ask.rks-gov.net/en/kosovo-agency-of-statistics). Additionally, a project impact assessment report, prepared for the DANIDA in May 2016, finds that the participating enterprises increased their yields, area planted, outputs, and profits, indicating that they reduced their unit costs and could compete better in agricultural markets. Agricultural exports from Kosovo has increased approximately by 15 percent between 2012 and 2015, also suggesting an improvement in sector competitiveness. [Achieved]  Women farmers targeted through the awareness campaign. More women farmers engaged in agriculture and agribusiness in Kosovo. Strengthen capacity of the Ministry of Agriculture to provide support to women farmers. The targets were that at least 10 percent of grant beneficiaries and at least 25 percent of training participants are female farmers. The share of women receiving grants reached 14 percent in 2015, exceeding the target of 10 percent. On the other hand, women participation in the grant preparation program increased from zero in 2011 to 20 percent in 2015, a substantial increase but short of the 25 percent target. Women participation shows a stronger than expected women’s response to the program. But based on the two indicators reviewed, IEG cannot infer whether the Ministry of Agriculture strengthened its capacity to support women farmers. [Mostly Achieved] For Official Use Only CLR Review 8 Independent Evaluation Group On balance, this objective was Mostly Achieved: the specific targets selected under the first outcome was met and the second outcome targets were largely met, and land and labor productivity increased. 10. Objective 4: Investing in education and skills. The objective was supported by two investment operations, the Institutional Development for Education Project (FY08) and the Education Systems Improvement Project (FY16), and two development policy operations (DPO) for Sustainable Employment (FY11, FY12). The objective had two specific outcomes and associated indicators:  Strengthening the central and local capacities to monitor financial and quality trends and plan and carry out investment. This was to be achieved by (i) transferring budgetary autonomy to schools in 35 municipalities; and (ii) use of the national educational management and information system (EMIS) to report about dropout and retention rates disaggregated by gender and community by 85 percent of municipalities. These actions were largely implemented and resulted in decentralization of financial management in education and expanding autonomy to schools in 31 out of 38 municipalities. The shortfall reflects the fact that municipalities in Northern Kosovo did not participate in the reform. Currently, 80 percent of the country’s municipalities use the national EMIS to report about dropout and retention rates disaggregated by gender and community, close to the program target of 85 percent. Also, the Ministry of Finance introduced a regular annual reporting on education expenditure. [Mostly achieved]  Improved opportunities for relevant training and life-long learning. The targets under this outcome included: (i) developing and approving a document containing the accreditation criteria and the administrative instructions for a National Qualification Framework; and (ii) making publicly available the decisions about the accreditation of the training providers. These two actions were carried out. Moreover, several additional steps have been taken to improve training opportunities, including 29 training providers have been accredited by the National Qualification Authority, the list of those providers was made publicly available, and Government has referenced the national Framework with the European Qualification Framework which, the CLR says, is expected to improve both labor mobility and referencing of qualifications. The review agrees that the reliable accreditation system represents an important step in the process of upgrading the national training system, as it generates transparent information about the quality of trainers and helps potential users to select one trainer over another. Thus, the actions implemented in this area have a potential to strengthen long-term incentives across the training system. [Mostly achieved] Overall, this objective was mostly achieved, with considerable progress on both outcome measures. 11. Objective 5: Promoting sustainable employment and social inclusion. The objective was supported by two Sustainable Employment DPOs (FY11, FY12), a Social Inclusion and Economic Development Project (FY11, trust fund), a Second Kosovo Youth Development Project (FY11, trust fund) and its additional financing (FY14), and TA to the Ministry of Health through the Swiss Development Cooperation. The objective had four specific outcomes and associated indicators:  Employment opportunities enhanced. The target was to expand short term employment opportunities through (i) piloting a public works program (PWP) with participation of subnational authorities, and (ii) expanding public work programs. The available evidence suggests that the government introduced two new targeted public work programs in 2011 and 2012 as part of the reform package supported by two World Bank DPOs, but those were not called “pilots” at the time. The program received considerable interest from municipal authorities. 44 municipal applications for participation were competitively selected by the Government for financing, representing 29 Kosovo municipalities. Respectively, about 5,000 jobs were created under these PWPs; of those employed, 34 and 46 percent, respectively, received social assistance benefits. During 2013-2015 similar PWPs were continued and employed a total of about 5,800 people. Thus, the original pilot policy intervention sponsored by the Bank lending was sustained, but there is no evidence of it being scaled-up relative to the 2011-12 level. [Mostly Achieved] For Official Use Only CLR Review 9 Independent Evaluation Group  The capacity for labor market monitoring strengthened. The target was to complete the development of a new Labor Market Information System. The development of the new system was completed and by now it became fully operational. The new system supports an internet- based registry of unemployed people, job vacancies, and provides assistance to job seekers. The system is well integrated with information management systems of other government agencies. [Achieved]  The health insurance law passed as necessary condition to improve access to health care. The target, passing the health insurance law, was met; but its implementation (which constituted another target under this outcome) has not started, as of April 2017. [ Partially Achieved]  Supporting social cohesion [in the poorest villages and in mixed/minority communities], and promoting inter-ethnic collaboration among youth, especially from marginalized and vulnerable groups. There were three targets under this outcome indicator: (i) to build or rehabilitate 31 basic community infrastructure objects; (ii) create or expand at least 300 MSMEs with the socially inclusive approach in the process of implementing this infrastructure program; and (iii) to ensure that at least 18 Youth Centers have developed sustainable strategies. Additional information provided by the country team from the final evaluation report for the SILED project, prepared for the project PIU in April 2014, confirms that 31 community infrastructure facilities were rehabilitated with project support, and 256 applicants received seed funds for SME creation. The report also indicates that 64 percent of the total grant recipients belonged to the marginalized groups (women, minorities, and youth) suggesting that inclusiveness criteria were applied in grant administration. Further, a monitoring report for the Kosovo Youth Project (April 2015) informs that 1,291 local youth benefited from the assistance under the project and the operations of 16 Youth Centers contributed to social cohesion, but it concludes that “sustainability of the centers remains yet fragile for majority of the youth centers” (p. 32). [Partially Achieved] On balance, this objective was Partially Achieved: progress in the selected areas of labor markets development was relatively strong, but there was limited progress in improving access to health and social cohesion. Overall, progress towards objective of “promoting sustainable employment”, which is the core development challenge in Kosovo, remains limited. 12. Objective 6: Strengthening public financial management, procurement and anti- corruption efforts. The objective was supported by the Public Sector Modernization Project (FY10), two Sustainable Employment DPOs (FY11, FY12) and a Country Fiduciary Assessment report (FY12) assessing the national systems of public procurement and public financial management. The objective had three specific outcomes and associated indicators:  Long-term focus on public financial management with strengthened internal controls and audit, and strengthened external audit. The specific target selected for this indicator was to reduce deviations between actual and budgeted public expenditures. The target would be achieved if the actual expenditure deviated by no more than 10 percent from budgeted expenditures in no more than one of the last three years. The 2016 PEFA assessment of Kosovo reports a broad improvement in the aggregate fiscal discipline, which reflects progress made by the government in both budget formulation and execution. The corresponding PEFA score (indicator PI-1) has improved from C in the 2009 assessment to B in 2015. The specific CPS target was achieved: over the period of 2012-2014 the deviation exceeded 10 percent only once, in 2014. The CLR does not discuss developments in the areas of audit and internal control, but the 2016 PEFA does not show much progress in these areas. In fact, the scores for non-salary internal control (PI-20) and internal audit (PI-21) have deteriorated: from B in 2009 to C+ in 2015, and from B+ to C+, respectively. Furthermore, the 2016 PEFA assessment expresses a particular concern over the weakening in expenditure commitment controls that have led to increases in payments arrears. [Partially Achieved] For Official Use Only CLR Review 10 Independent Evaluation Group  Increased bidder participation in public procurement tenders and cost savings achieved. The result would be achieved if 15 percent more bidders participate in public procurement relative to the baseline value of 8,270 bidders. The CLR reports a 10 percent increase, but that information could not be verified by the IEG because project supervision reports (ISRs) did not report it. The ISR#12 for the Public Sector Modernization Project (December 2016) reports that 8,500 businesses are considered to be potential bidders, which suggests the target of 15 percent increase is unlikely to be achieved soon. The same report also informs that in 2016 the Central Procurement Agency estimated that budget cost savings of 500,000 euros were realized from procurement for five product categories, and for government procurements, for which contracts have been awarded, there were 4.3 bidders per contract. The latter number indicates a much higher level of procurement competition than in 2008 (when there were 1.7 bidders per contract, per ISR#4, September 2012). [Partially achieved]  Transparent and coherent pay and grading structure introduced in the core civil service. There were two specific targets: (i) full introduction of a new grading system, and (ii) providing that across civil service bodies civil servants receive equal base pay for posts of equal grade and salary step. The new job classification system was approved by the Government in May 2016, but it has not been fully implemented: so far the equal pay system has covered new hires only because the new grading salary structure related to job classification is not in place yet. [Partially Achieved] On balance, this objective was partially achieved, with limited progress on the three outcome measures. 13. IEG rates the outcome of WBG support under Focus Area I as moderately satisfactory. Of the six objectives under this focus area, four were either achieved or mostly achieved and two were partially achieved. The program made good progress in advancing its objectives of investing in education and skills, strengthening infrastructure, strengthening agricultural development, and promoting private sector development and financial strengthening, but achieved limited progress in attaining the objectives of promoting social inclusion and sustainable employment, and strengthening public financial management. Focus Area II: Improving Environmental Management 14. Objective 7: Reduce the environmental footprint of development activities, reducing environmental hazards to human welfare, and moving towards harmonization with EU environmental standards. The objective was supported by an Energy Sector Cleanup and Land Reclamation Project (FY06) and its two additional financings (FY07, FY13), and a Country Environmental Analysis (CEA) for Kosovo (FY13). The objective had five specific outcomes and associated indicators:  Broader appreciation of environmental issues and of strategies for addressing them throughout Government and among stakeholders. The specific targets for this indicator were: (i) the Government’s completion of an Environmental Action Plan and a State of the Environment Report, and (ii) harmonization with the EU requirements most of the national environmental legislation. The government has completed the above-mentioned Action Plan and Report, and it has been making progress in harmonization of Kosovo’s environmental legislation with the EU -- the overall rate of conversion of EU environmental directives into national legislation reached 60 percent (KEPA, State of the Environment 2015, p. 90). [Achieved]  Pollution in mining operations has been reduced and environmentally sound mining operations have been strengthened. The specific targets were: (i) to open the Mirash open pit mine and make operational the new wet ash handling system, and (ii) air pollution indicators for PM10, NO2 and SO2 to fall below the January 2015 level. The first target was achieved: the Mirash mine and the new ash handling system for Kosovo A power plant became operational in November 2013. This helped to reduce the average pollution levels in central Pristina. The For Official Use Only CLR Review 11 Independent Evaluation Group reported improvements were as follows: for SO2 – a decline from 11.2 µg per cubic meter in 2010 to 5.9 in January 2015; for particulate matter, less than 10 microns in diameter (PM10) – from 74.7 µg per cubic meter to 51.7, respectively. However, no improvement was recorded for NO2 emissions: its pollution level increased from 20.8 µg per cubic meter in 2010 to 27.7 in 2015. Moreover, as reported by the Kosovo Environmental Protection Agency, the permitted pollution level of 50 µg per cubic meter for PM10 for Pristina was exceeded in 73 days during 2015, 53 days in 2016, and 46 days during the period of November 2016-January 2017. These frequencies exceed the existing 35 days per year limit. [Source: Air Quality Report for the Time Period of November–December 2016 and January 2017, Table 1, available at http://www.ammk-rks.net/?page=2,7,429] [Mostly achieved].  Initiate and enable Kosovo Energy Corporation (KEK) to achieve land reclamation for natural habitats, agriculture, resettlement or other land use purposes. The KEK has made some progress in land reclamation. In total, about 830 hectares of land in the KEK’s overburden areas have been reclaimed, which constitutes 68 percent of the overburdened area. However, this achievement fell short of the target of 80 percent. [ Mostly Achieved]  Removal of highest priority hazardous substances from storage tanks at the gasification site. The agreed targets were: (i) to remove 6,000 tons of hazardous substances from storage tanks at the gasification site, and (ii) to treat 15,000 tons of material with low organic content. These targets were achieved. The project ICR reports that as of August 2016, 22,116 tons of hazardous substances (tars, benzene, phenols, methanol, and oily components) had been removed and treated at licensed facilities in Europe, while 15,000 tons of less dangerous material were treated locally. [Achieved]  The program for the New Kosovo Power Plant (KRPP) adheres to good environmental practices and options for deriving energy from renewable sources. The targets were: (i) preparation of a low-carbon strategy for Kosovo, and (ii) establishment of a regular environmental monitoring of air, soil and groundwater pollution in the new power plant area. This was achieved as (a) a low-carbon growth strategy has been prepared, based on the special Study (completed in September 2015), and (b) three automatic and continuous air quality monitoring stations were installed, and soil and water monitoring programs were prepared, and they have been providing regular data for an environmental and social impact assessment in the new plant’s area. [Achieved] On balance, this Objective was Mostly Achieved. 15. IEG rates the outcome of WBG support under Focus Area II satisfactory. The activities in this focus area have led to a broader appreciation of what needs to be done to improve the environment, the pollution in the mining area and in Pristina has been reduced, the Kosovo Energy Corporation succeeded in reclaiming more than 800 hectares of contaminated land and removing hazardous substances from the storage tanks, the preparation of the construction of the New Kosovo Power Plant adheres to good environmental practices, and the country is moving its environmental standards closer to those of the EU. The satisfactory outcome rating acknowledges the exceptional development impact achieved in this focus area, particularly the significant reduction of pollution in Pristina. Overall Assessment and Rating 16. On balance, IEG rates the development outcome as moderately satisfactory. The program mostly achieved five out of seven objectives, in infrastructure, education and skills, promoting private sector development, strengthening agricultural development, and environment. The program partially achieved its objectives in employment and social inclusion, and public financial management. For Official Use Only CLR Review 12 Independent Evaluation Group Objectives CLR Rating2 IEG Rating Focus Area 1: Accelerating Broad-Based Growth and Partially achieved Moderately Satisfactory Employment Generation Objective 1: Strengthening infrastructure, with a focus on Partially achieved Mostly achieved energy Objective 2: Promote private sector development and Achieved Mostly Achieved financial strengthening Objective 3: Strengthening agricultural development Achieved Mostly achieved Objective 4: Investing in education and skills Partially achieved Mostly achieved Objective 5: Promoting sustainable employment and Partially achieved Partially achieved social inclusion Objective 6: Strengthening public financial management, Partially achieved Partially achieved procurement and anti-corruption efforts Focus Area 2: Improving Environmental Management Achieved Satisfactory Objective 7: Reduce the environmental footprint of development activities, reducing environmental hazards Achieved Mostly Achieved to human welfare, and moving towards harmonization with EU environmental standards 6. WBG Performance Lending and Investments 17. Fourteen credits for $176 million were active during the program period (FY12-FY16). Of those, nine credits for $80 million corresponded to projects active when the CPS was approved, and five credits for $96 million approved during the CAS period. Of the five planned new credits, four were approved. Out of 14 projects in the portfolio, five credits ($74 million) financed infrastructure works (roads, energy, water). Four credits ($53 million) went to the social sectors and employment (education, health, employment), three credits ($21 million) went for private sector development, one credit ($20 million) went to agriculture, and one credit ($8 million) went for public financial management. Kosovo also benefited from 14 grants and trust funds, for $94 million; of these, 11 grants ($84 million) supported employment and social inclusion programs and one grant ($8.5 million) supported agriculture and rural development. 18. Kosovo’s portfolio performance at exit is better than its comparators. During the review period, the lending portfolio for Kosovo had on average better outcome ratings at exit than the averages for the Bank and the ECA Region when measured by number of projects but worse ratings when measured by value. Of the five projects that closed during the period and validated by IEG, four were rated moderately satisfactory, and one was rated moderately unsatisfactory. Of the eight active projects, six were self-rated satisfactory or moderately satisfactory, and two moderately unsatisfactory. 19. The IFC investment portfolio consists of four projects for a total of $23.2 million, falling short of its target to provide direct financing for $40–50 million. IFC explains the low value by the inadequate levels of transparency and integrity of the Kosovar companies. During the CPS period IFC committed only two loans for a total of $7.5 million and issued a short-term revolving trade finance guarantee to the bank which was a recipient of one of the loans. This loan aimed at supporting SME lending and a 2 The final CLR submitted to IEG rated the development outcome as Satisfactory. Following the shared approach, four objectives rated partially achieved and three achieved (out of 7 objectives) would yield an overall DO rating of Moderately Unsatisfactory (not Satisfactory). Following IEG’s CLR Review, the country team informed IEG that it had revised its CLR rating for development outcome to Moderately Satisfactory to align with the shared approach. The CLR with the revised DO rating was resubmitted to the Board through a Corrigendum. For Official Use Only CLR Review 13 Independent Evaluation Group South-South investment in Kosovo. The other loan was to a microfinance institution targeting small entrepreneurs in rural areas. While IFC did not reach its targets for own account financing, it mobilized $319 million from third parties for the privatization of the Kosovo Electricity Distribution Company, one of the largest private sector investments in Kosovo. IFC investment operations were not linked to any outcome indicator in the CPS Results Matrix. During the review period, one loan was self-rated Successful, while the other loan has not been rated in DOTS. IEG did not validate performance of IFC investment projects in Kosovo over the review period. 20. During the CPS period MIGA issued a guarantee to an Austrian bank to strengthen its mandatory reserve coverage for $47 million. A similar guarantee to a German bank was issued in 2011 and remains active. The total amount of MIGA exposure in Kosovo is $97 million. Analytic and Advisory Activities and Services 21. During the review period, the Bank’s analytical and advisory work (ASA) consisted of 24 pieces, of which 12 were economic and sector work (ESW) and 12 were technical assistance (TA). The 12 ESW pieces consisted of one policy note on environment, six pieces assessing financial sector issues, accounting and auditing, debt management and public expenditure, two pieces on energy, two pieces on employment, and one piece on export diversification. The TA also covered several areas: environment, statistical capacity, power sector and other infrastructure, health, digital economy, and capacity of the Central Bank. 22. IFC provided eight advisory service projects during the CPS period. Four advisory service projects for $14 million were active when the CPS started, and other four projects for $9.6 million were initiated during FY12-16. The new advisory projects were for the new thermal power plant Kosova e Re, post-privatization support for power distribution company KEDS, and two investment climate projects. All these new activities, but the Kosova Re (affected by delays in the closure of a tender), are active and performing well. The advisory for privatization of KEDS and Kosovo Corporate Governance projects were closed with a Successful rating for development outcome. An additional effort to start a power-purchasing agreement transaction in solid waste and introduce industrial standards and technical regulations to facilitate export expansion were self-rated Mostly Unsuccessful. IEG reviewed and issued Evaluative Notes for two IFC advisory projects, rating Successful the advisory for KEDS privatization and Mostly Unsuccessful the International Standards and Technical Regulations project. Besides those projects specific to Kosovo, six IFC regional advisory projects for $12 million were active, but the share of funds allocated to Kosovo is unknown; two of those six were closed and self- rated Successful, one was a report, and the three remaining are still active. Results Framework 23. The results framework had some sound elements, but generally it was weak. It presented a logical chain: the program interventions sought to address critical constraints to the economic development of the country and the program objectives supported the achievement of the country’s development goals. However, the results framework was fragmented and complicated, with 26 outcomes and 31 indicators. A better designed results framework would have permitted to assess more accurately the program results. The clarity of links between program objectives, Bank interventions, and results indicators was uneven: they were clear in some sectors (e.g. infrastructure and environment), and they were less so in others (e.g. private sector development, education, and employment). In agriculture, there was a gap between the program’s ambitious objective (competitiveness) and its basic indicators (enterprises created). Some of the results indicators reflected either inputs or intermediate results, necessary but not sufficient to deliver the desired program outcomes. Some results indicators had baseline values but many others did not. The results framework was the weakest in the agriculture, employment and social inclusion areas. For instance, in the employment area, the selected indicators did not reflect clear understanding of what drives unemployment in Kosovo (absence of a theory of change). It remains difficult to see the link between the problem of long-term unemployment and improvement in local capacities of selected labor market institutions supported under the program. Moreover, the indicators were inadequate to capture the For Official Use Only CLR Review 14 Independent Evaluation Group gender dimension of labor market developments. In other cases, the outcome indicators were not well defined, as e.g. in the case of agricultural competitiveness. Partnerships and Development Partner Coordination 24. The WBG coordinated its assistance with other development partners, especially the EU and USAID, the largest donors to the country, and with which it worked closely in energy, education, agriculture, and governance. The WBG also worked with other donors, such as the Danish DANIDA and the Swiss SDC, through TF-financed projects and joint analytical work that the Bank and IFC carried out on its own or in cooperation with the partners. Given its importance for the Government, and the large financial EU contribution to Kosovo, the EU accession agenda could have been better reflected in the WB program objectives and especially in the results framework. The CPS objectives contain several references to Kosovo’s goal of EU integration (harmonization of banking regulations, environmental regulations, vocational certification system), but there is no way to measure actual progress towards the regulatory harmonization with the EU because the CPS overlooked integrating those issues into the results framework. Safeguards, Fiduciary Issues and Performance Standards 25. The CLR indicates consistent integration of relevant capacity building activities in almost all interventions during the review period and reports satisfactory compliance with the existing environmental and social safeguard policies. However, the ICRs and ICRRs of three completed investment projects indicated inadequate impact mitigation activities in the energy and education sectors. 26. An Inspection Panel (Panel) investigation was registered in June 2015 following a request from residents of Hade and Obiliq municipality, reporting alleged harms associated with Bank-supported projects. The Panel investigation report (September 2016), dealt with resettlement and land issues related to World Bank operations in Kosovo, including Lignite Power TA Project (closed in FY12), the Second Additional Financing for Energy Sector Clean-Up and Land Reclamation Project (CLRP-SAF), and the proposed Kosovo Power Project (KPP). All three interventions fall within the CPS period under review. Although the Panel found the monitoring and supervision activities under the Energy Sector Clean-up and Land Reclamation Project to be in compliance with the resettlement policy, the panel however recorded management failure to apply the resettlement policy in the Lignite Power Technical Assistance Project. A Management’s Action Plan was prepared in response to the Panel’s findings and is reported to have already addressed the shortcomings identified by the Panel. Further, the Compliance Adviser Ombudsman (CAO) for IFC initiated an investigation as a result of complaints regarding the IFC Advisory Services project to support privatization of the electricity distribution company (KEDS). The CAO found IFC in “material compliance” with its procedures, but it raised concerns about the effectiveness of IFC’s environmental and social requirements and the applicability of its sustainability framework to Advisory Services. 27. According to the Vice Presidency for Integrity (INT), there were no substantiated INT cases in Kosovo during the period FY12 to FY16, but INT received six complaints on four projects. Ownership and Flexibility 28. The program covered areas that were part of the government’s development plan and the authorities broadly maintained their commitment to the program. Because of strengthened cooperation with the authorities, the project ratification process was accelerated and the implementation performance improved, but the political deadlock in 2014 slowed progress across several reform areas, including civil service, procurement, and privatization. The PLR preparation was also delayed because of the political deadlock. During this period, as pointed out in the PLR (page 14), the caretaker government’s decision to finance other infrastructure works, especially the motorway to FYR Macedonia, raised concerns about its priorities, especially with respect to investments in the power sector, a key element in the government’s plan and the Bank’s strategy to promote the development of the private sector. The Bank showed some flexibility in reacting to these circumstances. The CPS cycle was extended, allowing for delivery within the current CPS cycle of two new projects, whose For Official Use Only CLR Review 15 Independent Evaluation Group preparation was delayed for reasons largely outside of the WBG control. But the Bank made only marginal adjustments to the original program at the PLR. WBG Internal Cooperation 29. The Bank, IFC and MIGA prepared a joint CPS in which they sought to complement each other’s activities. The joint efforts were reflected in objectives 1 (energy) and 2 (private sector development and financial strengthening). The WBG internal cooperation was the most effective in the energy sector, with clear division of labor between the Bank and IFC. The CLR reports separately on IFC when it assesses program implementation, and highlights IFC’s central role in the energy sector. Risk Identification and Mitigation 30. The CPS identified the following risks: medium-term macroeconomic instability, given the country’s track record on fiscal management; turmoil in international markets affecting the financing for power projects; the weak country’s governance; and insufficient local institutional capacity. The CLR reports that except for the macroeconomic risk, the other risks constituted “the main obstacles to fully achieving results”. On macroeconomic risks, one not identified in the CPS was the continued sluggishness in the EU economy, which affected Kosovo’s economic performance but not its macroeconomic management. During the program period, the country was under Stand-By Arrangements with the IMF, to which the country adhered scrupulously. The latest review of the Arrangements (March 2017) by the IMF’s Executive Board concluded that Kosovo has performed strongly under the program, as macroeconomic and fiscal performance has improved. Overall Assessment and Rating 31. IEG assesses overall WBG performance as Good. On design, the WBG selected objectives that supported key government’s development priorities, and it chose interventions appropriate for delivering the program and achieving the objectives. The program was selective by focusing on two pillars and the program objectives had substantial relevance and were based on adequate country diagnostics. However, the program objectives were too broad relative to program resources. The results framework was fragmented and complicated, and the links between program objectives, Bank interventions, and results indicators were uneven. 32. On implementation, the WBG coordinated its assistance with other development partners, especially with the EU and USAID, the country’s largest ones. Internally the Bank, IFC, and MIGA coordinated well their activities, seeking to complement each other’s programs and gain from the synergies of that cooperation. IFC activities in privatization advisory and post-privatization support for KEDS were effective in upgrading performance of the power distribution sub-sector. The risks to the CPS program were clearly identified, but the review provides insufficient information on how the Bank mitigated the risks when they materialized. The Bank made an effort to be responsive to internal political developments in Kosovo by extending the CPS cycle by one year to allow more time to consult with the new government in preparation for the next Country Partnership Framework. On Bank safeguards, the CLR reports satisfactory compliance with environmental and social safeguard policies, but the latest Inspection Panel report found the Bank in non-compliance with the involuntary resettlement policy in one energy-related project. On fiduciary aspects, there were no unsubstantiated cases, but the INT received six complains on four projects. Implementation reports for several projects did not report on the indicators selected for the program. 7. Assessment of CLR Completion Report 33. The CLR presents adequate information about the design and implementation of the program, but fell short of providing sufficient evidence to support the development outcome ratings. Additional information had to be provided by the country team following the issuance of IEG’s review for regional comments. The lessons section contains useful findings and recommendations. However, the CLR did not follow the shared approach in arriving at the overall development outcome rating. Moreover, the CLR made conclusions regarding its ratings on the basis of the results framework that did not fully For Official Use Only CLR Review 16 Independent Evaluation Group reflect the revisions made at the PLR. The CLR does not present some critical information on safeguards compliance and it does not report on MIGA exposure in Kosovo. 8. Findings and Lessons 34. IEG agrees with the CLR’s findings, lessons and recommendations, especially on the need to keep design of the program simple, to have fewer outcomes and results indicators, and a stronger link between outcomes and indicators. 35. IEG adds the following lessons:  Alignment with EU accession objectives is critical to the success of the WBG program. In the case of Kosovo, the program objective in focus area 2 that was well aligned with the country’s EU accession agenda and reflected the current priorities of the accession process achieved most of its intended outcomes.  Kosovo suffers from a long-term problem of low employment, more marked in women than men. The experience of the CPS implementation suggests that, besides rapid economic growth, expanding employment and increasing labor force participation requires policy reforms to generate structural changes in both the demand and supply of labor. Public employment programs like the ones supported by the CPS are unlikely to produce that change on their own, but they palliate the problem and may divert the attention of policymakers from necessary long-term solutions. Annexes CLR Review 17 Independent Evaluation Group Annex Table 1: Summary of Achievements of CPS Objectives – Kosovo Annex Table 2: Kosovo Planned and Actual Lending, FY12-FY16 Annex Table 3: Analytical and Advisory Work for Kosovo, FY12-FY16 Annex Table 4: Kosovo Grants and Trust Funds Active in FY12-16 Annex Table 5: IEG Project Ratings for Kosovo, FY12-16 Annex Table 6: IEG Project Ratings for Kosovo and Comparators, FY12-16 Annex Table 7: Portfolio Status for Kosovo and Comparators, FY12-16 Annex Table 8: Disbursement Ratio for the Kosovo, FY12-16 Annex Table 9: Net Disbursement and Charges for Kosovo, FY12-16 Annex Table 10: Total Net Disbursements of Official Development Assistance and Official Aid for Kosovo Annex Table 11: Economic and Social Indicators for Kosovo, 2012 – 2015 Annex Table 12: List of IFC Investments in Kosovo Annex Table 13: List of IFC Advisory Services in Kosovo Annex Table 14: IFC net commitment activity in Kosovo, FY12 - FY16 Annex Table 15: List of MIGA Activities in Kosovo, 2012-2016 Annexes CLR Review 19 Independent Evaluation Group Annex Table 1: Summary of Achievements of CPS Objectives – Kosovo CPS FY12-FY16 – Focus Area 1: Accelerating Broad-Based Actual Results IEG Comments Growth and Employment Generation Objective 1: Strengthening infrastructure, with a focus on energy Outcome (i): Preparations The Energy Sector Cleanup and Land completed for replacement of Reclamation Project (P096181, FY06) the 50-year old, highly inefficient and its additional financing operations and pollutant Kosovo A power P105870 (FY07) and P131539 (FY13) plant with a private sector- supported progress for this outcome: financed replacement power (i) IFC has been the transaction advisor to plant, in line with relevant the Government of Kosovo, with the Directives of the EU’s preferred bidder, through transaction environmental acquis support (project 29107, FY13, IEG communautaire. PCR:S). The bidding for the power plant was completed in December 2014; the Indicator: The tender for the preferred bidder was announced in Kosova e Re power plant November 2015, subject to the provision concluded successfully, with (i) a of the bid bond but negotiations are still winning bidder announced; ongoing due to lack of a compromise on (ii) successful negotiations commercial and financial conditions of the between the winning bidder and transaction. the Government, allowing the (ii) According to the CLR, pre-negotiations commercial and financial close and between the Government and the winning the tender for the engineering, bidder have been on-going since procurement, and construction February 2015 and there have been Major (EPC) and operations and some delays in the presentation of the Outcome maintenance (O&M) contracts; and financing plan. Measures (iii) the preparation of required (iii) the ESIA prepared for the Kosova e documentation for the proposed Re Power Plant was inserted in the 2nd PRG for Board consideration, Additional Financing (P131539, FY13) of based on the ESIA and PSIA. project P096181. It is not final; as reported in the CLR, the Government and Target: the tender for the Kosova e the private investor are discussing Re power plant has been changes to the configuration of the successfully concluded proposed project, which will require the (commercial and financial close, draft ESIA to be revised and updated. with the tendering on the EPC and Partially Achieved. O&M contracts being prepared) and a winning bidder has been announced. On the basis of the ESIA and PSIA, the proposed PRG has been negotiated with Government and the winning bidder. The project has been prepared for Board consideration. Outcome (ii): Improved quality IFC supported the unbundling and of service, with secure supply to privatization of the Kosovo Electricity all paying customers; Distribution Company (KEDS) - elimination of the need for transaction support in project 29107, subsidies from Government and FY13, IEG PCR:S: donors to pay for electricity (i) KEDs was successfully privatized in May 2013. Annexes CLR Review 20 Independent Evaluation Group CPS FY12-FY16 – Focus Area 1: Accelerating Broad-Based Actual Results IEG Comments Growth and Employment Generation purchases and investment in the (ii) As reported in the CLR, the technical Distribution Company. and commercial losses were reduced Indicators: (i) Electricity distribution from 38.2 percent in 2011 to 33.5 percent has been privatized and in 2014 and 33.2 percent in 2015 – a total (ii) technical and non-technical reduction of 6 percentage point between losses have been reduced by 3–5 2011 and 2015 as per data from the 2015 percent. Kosovo Energy Regulatory Office (ERO) Annual reports. Target: The public electricity The CLR also reports that: distribution company has been - load shedding (i.e., energy not privatized, with (i) technical and supplied) has been reduced from 155 non-technical losses having been MWh in 2012 to 67 MWh in 2015, as reduced by 5 percent during 2011– per data from the 2015 Kosovo ERO 15; (ii) negotiated import prices Annual reports reduced by 21.8 percent during - the private investor implemented an 2012–13; and (iii) the reliance of investment plan, with EUR 20.5 million the energy sector on government of capital costs executed in 2015 as subsidies ended. per data from the 2015 Kosovo ERO Annual reports - Government and donor subsidies to the sector have been eliminated in 2013, after the KEDS privatization - the privatized system generated EUR 148 million positive fiscal impact through reduction of commercial and technical losses (EUR 65 million), lower price of electricity imports (EUR 42 million), increase of collection rate (EUR 29 million) and bad debt collection (EUR 12 million) - the private operator has invested over EUR55 million in metering enhancements and network reinforcements since the date of privatization Achieved. Outcome (iii): Improvement in An Energy Efficiency Agency has been energy efficiency in the building established in Kosovo and supported by sector; institutional the Kosovo Energy Efficiency and strengthening of a to-be created Renewable Energy Project (P143055, Energy Efficiency Agency to FY14). But the Agency still needs support promote energy efficiency. for institutional strengthening in part due to long implementation delays and low Indicators: (i) At least 15–20 public project effectiveness: buildings (schools, hospitals, (i) the last ISR: MU (October 2016) community buildings) have been reports that the Bank prepared a report retrofitted; “Options for Financing Energy Efficiency (ii) revised building codes have in Public Buildings”, presenting been established, and opportunities and challenges for public building renovations; but no progress was Annexes CLR Review 21 Independent Evaluation Group CPS FY12-FY16 – Focus Area 1: Accelerating Broad-Based Actual Results IEG Comments Growth and Employment Generation (iii) households have access to made on actual renovation works and that finance to retrofit their houses. the works may not be able to start before Mach 2017. The CLR reports that Target: at least 20–25 public contracts for energy efficiency buildings (schools, hospitals, renovations in 14 public buildings are community buildings) have been being finalized/tendered and are on track retrofitted; revised building codes to begin in 2017. have been established, and (ii) the CLR reports that the revised households have access to finance building codes are in the process of being to retrofit their houses. An Energy established; the last ISR: MU does not Efficiency Agency has been report progress for development of created and its capacity has been building codes. developed. (iii) the IFC Sustainable Energy Finance project (562749) helped two commercial banks, the NLB Banka and BPB, build internal capacity to roll out energy efficiency credit lines for the residential and industrial sectors. As of December 2016 168 Renewable Energy and Energy Efficiency (REEE) loans (for a total amount of US$ 1.4 million) and 3 SMEs loans had been granted. As a result of these energy efficiency loans, it is estimated that 1,400 MGh of energy were saved (629,759 kg of Co2 reduced). Partially Achieved. Outcome (iv): Increased use of (i) The last ISR: MU of the Kosovo Energy renewable resources for Efficiency and Renewable Energy Project electricity generation. (P143055, FY14) does not provide information either on the number of Indicators: (i) At least 3 bankable projects prepared for private sector projects have been prepared for investment in renewable resources or on private sector investment in a number of final authorizations issued by renewable resources the ERO and solar companies having (ii) a financing mechanism for received authorization from the ERO. private sector renewable energy Additional information provided by the projects is in place country team (and supported by the Kosovo Energy Regulator’s website) Target: at least 25 bankable indicates that, as of April 2017, more than projects have been prepared for 25 bankable projects were prepared for private sector investment in private investment, out of which 8 hydro, renewable resources; and a solar and wind projects have become financing mechanism for private operational and 21 that received final sector renewable energy projects authorizations for construction. is in place. (ii) IFC supported this outcome objective with a regional Balkan Renewable Energy Program (BREP) which included Kosovo in 2012. The BREP Expansion project contributed to the development and Annexes CLR Review 22 Independent Evaluation Group CPS FY12-FY16 – Focus Area 1: Accelerating Broad-Based Actual Results IEG Comments Growth and Employment Generation adoption of the renewable energy legislation as well as a distribution connection agreement, transmission connection agreement, and a standardized power purchasing agreement (PPA). Per additional information provided by the team, the new financing mechanism remains unavailable as the PPA is still not fully bankable as required by IFC standards. IFC keeps working on a new PPA draft. Mostly Achieved. Objective 2: Promote private sector development and financial strengthening Outcome (i): Simplified Progress was supported by the Business processes for doing business Environment TA Project (P088045, FY05, introduced IEG:M); by the First and Second (Baseline: In the 2008 BEEPS, 38 Sustainable Employment DPOs percent of firms said licenses (P112227, FY11 and P129327, FY12, and permits were a problem. IEG:MS) and by IFC’s Investment Climate Overall ranking in the 2012 project (597287) with the reduction of Doing Business survey: 117, administrative compliance cost and the with subcategories starting a development of e-registry for businesses. business, registering property, Management: MS for project P088045 and enforcing contracts being, reports improvement in the business respectively, 168, 73, and 157.) registration process and simplification of certain administrative procedures for Indicator: Reduction in percentage licenses and permits and the last of firms indicating problems with available supervision report (FY16-Q4) of business licensing and regulation the IFC project reported that the output from 38 percent in 2008 to 28 was 80% achieved and the outcome percent in 2015. related to the reduction of administrative compliance was 50% achieved. Target: Less than 28 percent of The CLR also reports that 28 one-stop firms indicate problems with shops were established issuing a single business licensing and registration. document with registration, fiscal and The number of days to start a VAT numbers; however, Doing Business business has been reduced to 11, 2017 reports that 26 such shops have and the cost of starting a business been established. has been reduced to 1.2 percent of Improvement is observable in the income per capita. simplification of processes, as reported in Doing Business 2017: Kosovo ranked 60th in the overall ranking; 13th in relation to starting a business; 33rd for registering property and 44th for enforcing contracts. The 2016 DB report informs that the average cost for starting a business declined to 14.5 percent of income per capita. Kosovo also records steady Annexes CLR Review 23 Independent Evaluation Group CPS FY12-FY16 – Focus Area 1: Accelerating Broad-Based Actual Results IEG Comments Growth and Employment Generation improvement in the Distance to Frontier indicator with overall 68.79 % points in the 2016 Doing Business (1.64 % point improvement compared to the previous year). The CLR reports that in the 2013 BEEPS, 31% of firms said that licenses and permits were a problem and that “it was not possible to verify whether by 2015 the target of 28% was fully achieved”. Mostly Achieved. Outcome (ii): Property and The Business Environment TA (P088045, Indicator (ii) also mentioned cadastral services have FY05, IEG:M) and the Real Estate the number of registered improved as indicated by Cadaster and Registration projects real estate transactions, but increase in registered real estate (P101214, FY10) supported the re- there was no target for it. transactions and decrease in the establishment of a functional cadastral average days to register a system and a simplified property standard sale or purchase of a registration. The last ISR: S of project residential property. P101214 reports: Indicator: (i) Average number of (i) the average number of days to register days to register a standard a standard transaction of residential transaction of residential property property decreased from 20 days in 2008 decreased from 30 days in 2012 to to 9.7 days in 2016, for both rural and 20 days in 2013; urban locations. Security of property rights may also have improved as evidenced by the increased number of registered real estate transactions, estimated at 33,620 (as of September 2016) compared to 27,500 in 2008. (ii) 11 out of 23 Municipal (ii) 23 MCRO facilities were reengineered. Cadastral Offices (MCO) facilities Achieved. are reengineered. Target: (i) average number of days to register a standard transaction of residential property decreased from 30 days in 2012 to 10 days in 2013; (ii) 22 out of 23 MCO facilities are re-engineered. Outcome (iii): Creation and The Kosovo Social Inclusion and Local strengthening of new small and Development (P119145, FY11) supported micro enterprises. progress for this outcome. The Final Project Evaluation Report Indicator: 300 small and micro indicates that 256 SME applicants enterprises created. received seed funds for SME creation. Annexes CLR Review 24 Independent Evaluation Group CPS FY12-FY16 – Focus Area 1: Accelerating Broad-Based Actual Results IEG Comments Growth and Employment Generation Target: At least 300 small and micro enterprises have been Mostly Achieved. created. Outcome (iv): Increase entry of The CLR reports that the Business formalized SMEs. Environment TA Project (P088045, FY05, IEG:M, closed in FY13) supported the Indicator: Increase by at least 15 creation of 22 one-stop shops to facilitate percent, relative to 2011, number businesses registration across the of new, registered companies. country - Doing Business 2017 reports Baseline (I): 7879 new enterprises that 26 such shops have been registered in 2011. established by 2016. Baseline (II): At end-2014, 15.6 The CLR also reports that the IFC’s percent of all enterprises were Investment Climate project (597287) female-owned. contributed to the increased number of companies registered through a reduction Targets: (i) Increase by at least 15 of regulatory burdens, although the percent, relative to 2011, number project did not track the number of of new, registered companies. created SMEs. (ii) Increase the share of female- owned businesses by at least one While an increase in SME registration is percentage point. quite likely due to the streamlined registration processes, no WBG project’s document reports the number of newly registered enterprises that can be attributed to the Bank’ support. As per data from the Kosovo Business Registration Agency, the actual number of newly registered SMEs reached 10,549 in 2016 (34% increase against the baseline). Of which about 21% SMEs were female-owned, a substantial increase relative to the baseline. Achieved. Outcome (v): Stronger financial The IFC/Bank Balkan Financial system through support of the Infrastructure program supported this regulatory and institutional outcome through work with the regulator reform of Kosovo's financial and financial intermediaries on credit system. reporting, secured transactions and financial literacy and with the CBK on the Indicators: (i) Reform of the diagnostic review of the Credit Registry payment system, and and provided a set of recommendations implementation of Real Time with regards to improving its supervisory Gross Settlement; function, which are being implemented. (ii) harmonization of existing As reported in the CLR, two ROSCs were regulations and procedures with conducted in FY12 (P126350) and in Kosovo’s new Banking Law, and FY13 (P128808, FY13) on Accounting (iii) assurance of conformity with and Auditing (see final report). The EU practices, particularly in the reports were followed by a TA provided by the WB Center for Financial Reporting Annexes CLR Review 25 Independent Evaluation Group CPS FY12-FY16 – Focus Area 1: Accelerating Broad-Based Actual Results IEG Comments Growth and Employment Generation area of financial reporting and Reform and by the Kosovo FSAP project auditing. (P131520, FY13). The Financial Sector Strengthening and Target: Reform of the payment Market Infrastructure Project (P108080, system, and implementation of FY08) also provided support to the CBK, Real Time Gross Settlement; the Banker’s Association and the harmonization of existing Microfinance Association. The last ISR: S regulations and procedures with reports that reforms on the legal and Kosovo’s new Banking Law, and supervisory framework for banks and assurance of conformity with EU non-bank financial institutions (NBFIs) practices, particularly in the area of and capacity building in the financial financial reporting and auditing. sector have been successfully achieved: (i) the automated Transfer System which incorporates a Real Time Gross Settlement System and an Automated Clearing House was launched in July 2016 and is fully operational, (ii) the project P108080 provided support in the drafting of around 70 regulations, laws and directives (Insurance Rules: 16, Pension Rules: 26, Banking Rules: 28) (iii) the CBK has developed a SWIFT and IBAN systems Achieved. Outcome (vi): The sustainability The CBK has benefited from WBG of the CBK and its capacity to support to strengthen its capacity to supervise banks and non-bank supervise financial institutions through the financial institutions have been Financial Sector Strengthening and strengthened. Market Infrastructure Project (P108080, FY08); a TA service (P118455, FY14) to Indicator: CBK has developed support CBK capacity-building for plans to ensure access to long- regulation and supervision and through term resources and supervises the IFC/Bank Balkan Financial Kosovo’s main banks and pension Infrastructure program (see indicator v). funds on a regular schedule. The last ISR: S for project P108080 reports on the successful implementation Target: The CBK has developed of key reforms such as the full operation plans to ensure access to long- of the Deposit Insurance Fund of Kosovo term resources and supervises and the launch, in November 2016, of a Kosovo's main banks and pension business continuity center, supporting the funds on a regular basis, while stability of the financial sector. Likewise, increasing the preparedness for CBK’s strategies for 2010-2014 and for potential crisis situations. 2015-2019 have incorporated strategic actions to ensure access to long-term resources. Achieved. Objective 3: Strengthening agricultural development Outcome (i): Promote The Agriculture and Rural Development competitiveness and growth in Project (P112526, FY11), supported the livestock and horticulture progress for this outcome. The last ISR: S sub-sectors through for project P112526 reports that: Annexes CLR Review 26 Independent Evaluation Group CPS FY12-FY16 – Focus Area 1: Accelerating Broad-Based Actual Results IEG Comments Growth and Employment Generation implementation of selected measures of agricultural strategy and institutional development. Indicator 1: At least 80 agricultural Indicator 1: 647 farmers and enterprises enterprises have adopted have adopted improved products and/ or improved products and/or production techniques, as of November processes. 2016. Indicator 2: At least 20 new Indicator 2: The Ministry of Agriculture’s agricultural micro and small Green Book 2016 reports in Table 7 that enterprises have been established. the number of active businesses in the food industry and agribusiness increased Target: 420 agricultural enterprises by 388 between 2011-2015 (1,742 active have adopted improved products businesses in 2011 and 2130 in 2015). and/or processes; 1,400 new Data from the Kosovo Agency of agricultural micro and small Statistics indicates that between 2014 enterprises have been established and 2016 (first 6 months) 2,103 new during 2014–15. MSME in the agriculture, forestry and fishing sectors were registered in Kosovo. The CLR reports on additional achievements (outside the selected indicators) thanks to the Bank’s intervention: 2,012 new jobs were created, EUR 1,158,117 in extra yearly production was achieved, and 320 additional hectares of orchards were planted. Evidence from the final Project Impact Evaluation Report prepared in May 2016 indicates that the project contributed positively to the development of these sub-sectors by improving productivity of project beneficiaries. Specifically, agricultural yields of several horticultural crops such as tomato (+51%) or apples (+43%) have substantially increased, while livestock production increased by about 8% between 2014 and 2015. For the period between 2012-2015, labor productivity among project beneficiaries increased by 13%. Per the data provided by the country team, overall agricultural exports increased by 15.1% in 2012-15 indicating an improvement in sector competitiveness. Achieved. Annexes CLR Review 27 Independent Evaluation Group CPS FY12-FY16 – Focus Area 1: Accelerating Broad-Based Actual Results IEG Comments Growth and Employment Generation Outcome (ii): Women farmers The Agriculture and Rural Development targeted through the awareness Project (P112526, FY11), supported this campaign. More women farmers outcome and promoted access to engaged in agriculture and agricultural development grants for agribusiness in Kosovo. women. Strengthen capacity of the Ministry of Agriculture to include support to women farmers. Indicator 1: Percentage of women Indicator 1: the CLR reports that by farmers awarded grants is December 2015 14.3% of grants went to doubled. (Baseline: 4.4 percent in female farmers, while the last ISR: S of 2011). project P112526 reports that 12.2% of the direct project beneficiaries were women. Indicator 2: At least one quarter of Indicator 2: the CLR reports that the all participants trained in grant participation of women in trainings went preparation are women. (Baseline: up from 6.32% in 2014 to 19.5% in 2015. 0). The last ISR: S of project P112526 reports that the number of females trained Target: at least 10 percent of grant reached 280 in November 2016, beneficiaries and at least 25 exceeding the target of 250. percent of training participants are female farmers. Mostly achieved Objective 4: Investing in education and skills Outcome (i): The central and The Institutional Development for local capacities to monitor Education Project – IDEP (P102174, financial and quality trends and FY08) supported the strengthening of the plan and carry out investment is capacity of the Ministry of Education, strengthened, as indicated by (i) Science and Technology (MEST). More the transfer of budgetary recently, the Education Systems autonomy to municipalities; (ii) Improvement Project was approved in FY the adoption of a per-capita 2016 (P149005); since the Project was funding formula that directs declared effective in May 2016, at the resources to areas of need; (iii) very end of the CAS period, the last ISR: the monitoring and publication S (December 2016) does not report any of annual current expenditures progress for the indicators. of key parameters. As reported in IEG: MS for project P102174: Indicator 1: Financial Indicator 1: financial decentralization took decentralization and transfer of place in 31 municipalities that allocated autonomy to schools. (Baseline: 13 recurrent budget to schools, due to the municipalities in 2011) non-participation of Northern Kosovo municipalities in the reform process. Indicator 2: Percentage of Indicator 2: 80% of municipalities were municipalities that use EMIS data able to report dropout and retention data to report on the status of dropouts disaggregated by gender and community and retention disaggregated by using EMIS data. Annexes CLR Review 28 Independent Evaluation Group CPS FY12-FY16 – Focus Area 1: Accelerating Broad-Based Actual Results IEG Comments Growth and Employment Generation gender and community (Baseline: 0 percent in 2011; 60 percent in Mostly achieved. 2013). Target: financial decentralization and transfer of autonomy to schools have taken place in 35 (out of 38) municipalities. 85 percent of municipalities use EMIS data to report on the status of dropouts and retention, disaggregated by gender and community. Outcome (ii): Improved The First (P112227, FY11) and Second opportunities for relevant (P129327, FY12) Sustainable training and life-long learning as Employment DPOs supported progress indicated by the establishment for this outcome. Management: MS of a National Qualifications reports that the program focused on Framework (NQF) and continued strengthening quality assurance accreditation of vocational mechanisms through the introduction of training institutions. the NQF, as well as accreditation reviews for higher education institutions and Indicator: NQF document and vocational training providers. IEG:MS administrative instruction of reports that 11 vocational training accreditation criteria developed institutions have been accredited as of and approved. Decisions about the October 2012 and that all private tertiary accreditation of training providers education facilities have introduced made publicly available. internal quality assurance mechanisms. The CLR also reports that the decisions Target: NQF document and about the accreditation of training administrative instruction of providers were made publicly available accreditation criteria developed and that, as of 2016, 29 providers were and approved. Decisions about the accredited by the NQA (see information accreditation of training providers from the National Qualifications made publicly available. Authority). Finally, the CLR reports that in 2016, the Government has finalized the referencing of the NQF with the European Qualification Framework that provides the basis for co-operation and mutual recognition between NQF and EQF. Mostly Achieved. Objective 5: Promoting sustainable employment and social inclusion Outcome (i): Labor programs The First (P112227, FY11) and Second strengthened and employment (P129327, FY12) Sustainable opportunities enhanced Employment DPOs supported progress for this outcome. IEG: MS reports that prior actions under the second phase of the DPO series included the development Annexes CLR Review 29 Independent Evaluation Group CPS FY12-FY16 – Focus Area 1: Accelerating Broad-Based Actual Results IEG Comments Growth and Employment Generation of a targeted public works program (PWP) with the target that at least 33% of participants being beneficiaries of social assistance programs. Such a targeted PWP was implemented in both 2011 and 2012. The target for the share of social assistance beneficiaries among the program participants was exceeded in 2012. Indicator 1: Pilots of labor market Indicator 1: Management: MS reports that programs with increased the targeted PWP was launched in the participation of regional and local second half of 2011 and attracted employment offices carried out. considerable interest from municipalities; overall, 96 applications for program participation were received, 44 of which, representing 29 Kosovo municipalities, were selected for financing. Indicator 2: Public works program Indicator 2: Management: MS that six expanded additional PWPs were appraised in 2011, which led to the creation of about 1,800 jobs, and that in 2012 the Government continued to finance the PWPs, enabling the employment of 3169 people. More recent data from the CLR (based on Annuals Reports of the Ministry of Labor and Social Welfare) indicates that the Government continued to finance the PWPs in the following years and the following employment outcomes were achieved: in 2013 - 1,558 participants were employed, in 2014 – 2,330, and in 2015 – 1,865. Thus, while the implementation of PWPs was sustained, there is no evidence of their expansion in 2013-15 relative to the earlier period of 2011-12. Mostly Achieved. Outcome (ii): The capacity for The First (P112227, FY11) and Second monitoring strengthened, as (P129327, FY12) Sustainable indicated by improved statistical Employment DPOs supported progress data collection and analysis. for this outcome. Management: MS reports that the reliable national labor Indicator: The development of a market information system was being Labor Market Information System developed, with the software being tested has been initiated. (as of October 2012). National information from the software development company indicates that the Labor Market Information System is now functional, Annexes CLR Review 30 Independent Evaluation Group CPS FY12-FY16 – Focus Area 1: Accelerating Broad-Based Actual Results IEG Comments Growth and Employment Generation Target: The development of a supporting the transition from paper Labor Market Information System records to a digitalized registry of has been completed. unemployed people and searches for job seekers. Achieved. Outcome (iii): The health The Bank provided TA to the Ministry of insurance law passed as Health through a Swiss Development necessary condition to improve Cooperation supported Externally access to health care. Financed Operation. The Health Insurance Law was passed in April 2014. Indicator: Health insurance law and provides a legal basis for a passed. mandatory health insurance scheme funded through general tax contributions Target: The health insurance law and mandatory insurance premiums. The has been passed and is being CLR reports that preparation for implemented. implementation is underway with the aim of starting premium collection by July 2017. The WB continues to support the health sector through the Kosovo Health Project (P147402, FY14). One of the expected outcomes of the WB support is improved financial protection and access to health services among the poor via enrollment in mandatory health insurance. Partially Achieved. Outcome (iv): Support social The Kosovo Social Inclusion and Local cohesion through the Development Project - SILED (P119145, rehabilitation of small-scale FY11) and the Second Kosovo Youth social and economic Development Project (P120021, FY11) infrastructure in the poorest and its additional financing (P150079, villages and in mixed/minority FY14) supported progress for this communities as well as outcome. promoting MSMEs in a socially inclusive manner; and through youth centers, promoting inter- ethnic collaboration among youth, especially from marginalized and vulnerable groups. Indicator 1: (i) At least 20 basic Indicator 1: the Final Evaluation Report community infrastructure objects for the SILED indicates that 31 have been rehabilitated or built community infrastructure facilities were through a socially inclusive rehabilitated and that 256 SME applicants approach and received seed funds for SME creation. (ii) at least 300 small and micro The report also indicates that 64% of the enterprises have been created or total grant recipients belonged to the expanded with a socially inclusive marginalized groups (women, minorities, The CLR reports that approach. and youth). project P120021 was instrumental in supporting Annexes CLR Review 31 Independent Evaluation Group CPS FY12-FY16 – Focus Area 1: Accelerating Broad-Based Actual Results IEG Comments Growth and Employment Generation Indicator 2: At least 16 Youth Indicator 2: The PAD for the Second 1,291 youth beneficiaries, Centers have fully developed Kosovo Youth Development Project and that an impact sustainable strategies additional financing (P150079, FY14) evaluation of the project Target: (i) 31 basic community reports that “Youth centers were showed evidence that infrastructure objects have been successfully supported with a Youth Centers contributed rehabilitated or built through a sustainability strategy developed and to increasing social socially inclusive approach and (ii) implemented during the KYDP2 project.” cohesion. IEG could not 300 small and micro enterprises The April 2015 Project Monitoring Report verify this information. have been created or expanded mentions that 16 youth centers were with a socially inclusive approach; established, trained and equipped, and 18 Youth Centers have fully that about 800 young people become developed sustainable strategies. beneficiaries of the services provided by the centers. But the reports states that sustainability of most centers remains fragile, as they continue to rely largely on donor funding. Partially Achieved. Objective 6: Strengthening public financial management, procurement and anti-corruption efforts Outcome (i): Long-term focus on The Public Sector Modernization Project According to the PEFA public financial management (P101614, FY10) supported progress for assessment, a B score with strengthened internal this outcome. The ISR: MS of the end of indicates that “Aggregate controls and audit, strengthened the CAS period reports improvement in expenditure outturn was external audit, as measured by the quality of budget formulation and between 90% and 110% of improved performance in the execution, measured by the actual the approved aggregate PEFA indicators. expenditure deviated from budget that budgeted expenditure in at was reduced from 15% (2009) - a score C least two of the last three Indicator: In no more than one out - to a score B (January 2016) – as years. of last 3 years has the actual reported in the 2016 PEFA assessment. expenditure deviated from Available data from the 2016 PEFA report Indicator (i) also mentioned budgeted expenditure by more for Kosovo indicates that actual strengthening of audit, but than 10 percent of budgeted expenditure deviated from budgeted there was no target for it. expenditure (PEFA indicator PI-1). expenditure by – 6.6%, - 9.9% and - 10.3% in 2012, 2013 and 2014 Target: in no more than one out of respectively, compared to larger last 3 years has the actual deviations during 2006-08: 10.2%, 10,8 % expenditure deviated from and 16,7%, respectively. budgeted expenditure by more Partially Achieved. than 10 percent of budgeted expenditure (PEFA indicator PI-1). Outcome (ii): Increased bidder A Country Fiduciary Assessment participation in public (P123440, FY12) was prepared in 2012 procurement tenders and cost (see final report). The First and Second savings achieved through Quick Sustainable Employment DPO (P112227, Gains actions and e FY11 and P129327, FY12) also procurement modules. supported reform in the procurement system. However, according to IEG: MS” Indicator: Bidder participation in “The aim to apply consolidated public procurement tenders procurement by the 2013 budget year Annexes CLR Review 32 Independent Evaluation Group CPS FY12-FY16 – Focus Area 1: Accelerating Broad-Based Actual Results IEG Comments Growth and Employment Generation increases by 15 percent (Baseline: was only partly achieved. While the public 8,270 bidders). procurement law and secondary legislation were passed (SEDPO-2 prior Target: Bidder participation in action), and the rules for a central public procurement tenders, procurement agency were adopted, no relative to the baseline, has actual implementation, that is, increased by 15 percent. consolidated procurement through the central agency, occurred”. The Public Sector Modernization Project (P101614, FY10) supported progress for this outcome. The last ISR: MS reports that the target related to the increase in bidder participation in public procurement tenders was partially met (as of June 2016), given some delays in the e- procurement component – the last ISR does not report the 10 percent increase mentioned in the CLR, given the recent start of piloting the e-procurement system. Partially Achieved. Outcome (iii): Transparent and The Public Sector Modernization Project coherent pay and grading (P101614, FY10) supported progress for structure introduced in the core this outcome. The last ISR: MS reports civil service. that this outcome has been partially met: a grading system was introduced and set Indicator: Grading system is fully for about 95% of permanent civil introduced and there is an equal servants. The ISR also reports that since base pay for posts of equal grade the new grading salary structure related and salary step across civil service to job classification is not implemented bodies. yet, there is no equal salary for same title/position. The CLR states that Target: Grading system is fully equal-base-pay for posts of equal grade introduced and there is an equal and salary across civil services bodies base pay for posts of equal grade functions for new hires only. Partially and salary step across civil service Achieved. bodies. CPS FY12-FY16 –Focus Area 2: Improving Environmental Actual Results IEG Comments Management Objective 7: Reduce the environmental footprint of development activities, reducing environmental hazards to human welfare, and moving towards harmonization with EU environmental standards Outcome (i): Broader Through the Energy Sector Cleanup and appreciation of environmental Land Reclamation Project (P096181, issues and of strategies for FY06) and its additional financing addressing them throughout operations P105870 (FY07) and P131539 Government and among (FY13), the WBG supported the stakeholders. preparation of a Country Environmental Annexes CLR Review 33 Independent Evaluation Group CPS FY12-FY16 –Focus Area 2: Improving Environmental Actual Results IEG Comments Management Indicator: Completion of Analysis (CEA) for Kosovo, published in Government’s Kosovo January 2013, Environmental Action Plan (2011 The CEA mentions that the Kosovo’s draft) and the State of the Environmental Action Plan was updated, Environment Report. for the 2011-2015 period and that it defined environmental objectives in order Target: The Government’s Kosovo to be able to meet the EU requirements. Environmental Action Plan and the Achieved. State of the Environment Report have been completed. Most of the legislation has been harmonized with the EU's environmental acquis communautaire. Outcome (ii): Pollution in mining The Energy Sector Cleanup and Land operations has been reduced Reclamation Project (P096181, FY06) and and environmentally sound its additional financing operations mining operations have been P105870 (FY07) and P131539 (FY13) strengthened though the contributed to this Outcome. elimination of dumping on open Management: S reports that the target land of ash from the Kosovo A was met, with 100% of ash disposal power plant. complying with environmental good Baseline: particulate matter (PM10) practice, being redirected from open in central Pristina in 2010 is 74.7 dumping on the Kosovo A Dump to the μg/m3; NO2 20.8 μg/m3, and SO2 Mirash Mine and that a new hydraulic ash 11.2 μg/m3 handling system was brought into operation in November 2013 and was Indicator: Mirash open pit mine has inaugurated in March 2014. been prepared for Kosovo A ash The CLR reports a decrease in the level of management, and the wet ash dust around the ash dump and handling system has been improvement in the level of particulate installed. matter (PM10) in central Pristina in January 2015: 51.7 μg/m3; for the other Target: Mirash open pit mine has two indicators it reports levels of 27.7 been prepared for Kosovo A ash μg/m3 for NO2 (above the baseline), and management, and the wet ash of 5.9 μg/m3 for SO2 (below the baseline). handling system has been In addition, the following results have installed. been obtained: Air pollution indicators for PM10, - For PM10: The Kosovo Environmental NO2, and SO2 fall below the Protection Agency reports that the January 2015 values. permitted value of 50 µg per cubic meter for Pristina was exceeded in 73 days during 2015, 53 days in 2016, and 46 days during the period November 2016-January 2017; above the permitted limit. The highest value registered was 255 µg/m3 on January 29th. Regulations allow 35 days per year during which the limits can be exceeded. [Source: Air Quality Report for the Time Period of November – Annexes CLR Review 34 Independent Evaluation Group CPS FY12-FY16 –Focus Area 2: Improving Environmental Actual Results IEG Comments Management December 2016 and January 2017, Table 1, available in http://www.ammk- rks.net/?page=2,7,429] [Not achieved - NO2 and SO2 levels less than the January 2015 level. The concentration of SO2 and NO2 did not exceed the limit values, but compared to other months of the year 2016 there was increase in the average value during the period November 2016-January 2017 (Source Ibid.) Finally, the CLR reports that KEK has established a full time reclamation department for its mining departments for continued reclamation activities as part of environmentally sound mining practices and has installed Electrostatic Precipitators (ESP) on the three operational stacks of Kosovo A. Mostly Achieved. Outcome (iii): Initiate and enable The Energy Sector Cleanup and Land KEK to achieve land reclamation Reclamation Project (P096181, FY06) and for natural habitats, agriculture, its additional financing operations resettlement or other land use P105870 (FY07) and P131539 (FY13) purposes. contributed to this Outcome. Management: S reports that 156 hectares Indicator: At least 55 percent of the of contaminated land has been managed total overburden area has been under the Project; 653 hectares of land in reclaimed. the KEK’s overburden areas have been reclaimed for other land use purposes. Target: 80 percent of the total Finally, the ICR reports that 68% of the overburden area has been land was reclaimed for natural habitats, reclaimed. agriculture, or other land purposes in KEK, overburden areas, exceeding the target. Mostly Achieved Outcome (iv): Removal of The Energy Sector Cleanup and Land highest priority hazardous Reclamation Project (P096181, FY06) and substances from storage tanks its additional financing operations at the gasification site. P105870 (FY07) and P131539 (FY13) contributed to this Outcome. Indicator: 4,300 tons of tars, Management: S reports that 22,116 tons benzene, phenols, methanol, and of hazardous substances (tars, benzene, oily compounds have been phenols, methanol, and oily components) removed. have been removed as of August 2016. Achieved. Target: Approximately 6,000 tons of high organic content materials (tars, benzene, phenols, methanol, and oily compounds) have been Annexes CLR Review 35 Independent Evaluation Group CPS FY12-FY16 –Focus Area 2: Improving Environmental Actual Results IEG Comments Management removed and 15,000 tons of low level organic content materials have been treated locally. Outcome (v): The KRPP program The Energy Sector Cleanup and Land adheres to good environmental Reclamation Project (P096181, FY06) and practices and options for its additional financing operations deriving energy from renewable P105870 (FY07) and P131539 (FY13) sources. contributed to this Outcome. Indicator: (i) Regular environmental Management: S reports that: monitoring of air, soil, and (i) three automatic and continuous air groundwater in the KRPP area is quality monitoring stations and soil and established. water monitoring programs were prepared (ii) A low-carbon growth strategy and provide baseline data for for Kosovo is prepared. environmental and social impact assessment in the KRPPP area Target: Regular environmental (ii) that a low-carbon strategy has been monitoring of air is established and prepared. of soil and groundwater in the Achieved. KRPP area has begun. A low- carbon growth strategy for Kosovo is prepared. Annexes CLR Review 36 Independent Evaluation Group Annex Table 2: Kosovo Planned and Actual Lending, FY12-FY16 Approved Proposed Approval Closing Proposed Proposed Outcome Project ID Project name IDA FY FY FY Amount Amount Rating Amount Project Planned Under CPS/PLR 2012-2015 CPS CPSPLR Energy Efficiency and P143055 FY13 2014 2021 32.5 31.0 31.0 LIR: MU Renewable Energy AF - Clean-up & Land P131539 FY13 2013 3.2 4.2 4.2 Reclamation Project Education System P149005 FY14 2016 2020 10.0 11.0 11.0 LIR: S Improvement Project Forwarded PRG for KRPP and Kosovo B FY14 14.5 20.0 to FY18 Water Security and Canal P133829 FY15 2017 2022 18.0 17.0 24.5 LIR: MS Protection Total Planned 78.2 83.2 70.7 Unplanned Projects during the CPS and PLR Period P147402 Kosovo Health Project 2014 2020 25.5 LIR: MU Total Unplanned 25.5 Approval Closing Approved On-going Projects during the CPS and PLR Period FY FY Amount P088045 XK Business Env TA 2005 2012 7.0 IEG: MS P096181 CLEAN UP & LAND RECLAM 2006 2017 5.5 LIR: S P097635 LIGNITE POWER TA 2007 2012 8.5 IEG: MS P101214 REAL ESTATE CADASTRE 2010 2017 12.3 LIR: S P101614 PUBLIC SECTOR MOD 2010 2017 8.0 LIR: MS P102174 Inst. Devt. for Education 2008 2014 10.0 IEG: S XK Fin. Sect. Strengthen & P108080 2008 2017 2.0 LIR: S Market Infrast P112227 SEDPO 2011 2012 6.3 IEG: S P112526 AG & RURAL DEVT 2011 2018 20.2 LIR: S Total On-going 79.7 Source: Kosovo CPS and PLR, WB Business Intelligence Table 2b.1, 2a.4 and 2a.7 as of 02/03/17 *LIR: Latest internal rating. MU: Moderately Unsatisfactory. MS: Moderately Satisfactory. S: Satisfactory. HS: Highly Satisfactory. Annexes CLR Review 37 Independent Evaluation Group Annex Table 3: Analytical and Advisory Work for Kosovo, FY12-FY16 Proj ID Economic and Sector Work Fiscal year Output Type P118285 ENVIRONMENT POLICY NOTE FY12 Not assigned P123440 CFA FY12 Integrative Fiduciary Assessment (IFA) P126350 Kosovo - ICR ROSC FY12 Insolvency Assessment (ROSC) P128808 Accounting and Auditing ROSC FY13 Accounting and Auditing Assessment (ROSC) Debt management Performance DeMPA Kosovo P131397 FY14 Assessment(DeMPA) P131520 Kosovo FSAP FY13 Financial Sector Assessment Program (FSAP) P133100 Kosovo Public Finance Review FY14 Public Expenditure Review (PER) P150843 Diversifying Kosovo's Export and Product FY16 Sector or Thematic Study/Note P154735 Electricity affordability study FY15 Sector or Thematic Study/Note P155223 Employment impact study FY15 Sector or Thematic Study/Note P156926 Kosovo Jobs Diagnostic FY17 Sector or Thematic Study/Note P143132 Feasibility Study on EE in Public Blgds FY17 Sector or Thematic Study/Note Proj ID Technical Assistance Fiscal year Output Type P118455 FIRST XK #8077 TA Service to Cen Bank FY14 Not assigned P127642 Statistical and Analytical Capacity (EFO FY14 Not assigned P129027 Kosovo HRBF FY14 Not assigned P132962 Kosovo LFS Support FY14 Not assigned P143130 Feasib. Study for Protect. of Iber Canal FY16 Not assigned P143131 Strengthening Waste Management FY16 Not assigned P143147 Health PSIA - Kosovo FY14 Not assigned P147168 Kosovo Health TA FY15 Not assigned P151347 Efficient Infras. Sharing for Kosovo FY16 Not assigned P156007 Digital Economy Skills for Jobs FY16 Not assigned P149380 Kosovo Electricity Tariff Reform FY17 Not assigned P151939 Innovative and Green Growth FY17 Not assigned Source: WB Business Intelligence 10/19/16 Annexes CLR Review 38 Independent Evaluation Group Annex Table 4: Kosovo Grants and Trust Funds Active in FY12-16 Project Approval Closing Approved Outcome Project name TF ID ID FY FY Amount Rating Kosovo Youth Development Project Additional P150079 TF 17534 2014 2017 1,800,000 Financing P112526 Agriculture and Rural Development TF 16235 2014 2017 8,536,856 LIR: S Enhancing the Implementation of Public P131030 TF 13655 2013 2016 493,000 Procurement in Kosovo IDF Grant Strengthening the Capacity of the Health P128699 TF 13554 2013 2016 560,000 Financing Agency Energy Sector Cleanup and Land Reclamation P096181 TF 13509 2006 2015 1,119,039 Project Second Sustainable Employment Development TF 12066 2012 2012 1,876,667 Policy Operation Second Sustainable Employment Development P129327 TF 12065 2012 2012 15,432,808 IEG: MS Policy Operation Second Sustainable Employment Development TF 12064 2012 2012 29,123,878 Policy Operation P120021 2nd YOUTH DEVELOPMENT PROJECT TF 54916 2011 2013 898,748 P120021 2nd YOUTH DEVELOPMENT PROJECT TF 98547 2011 2014 2,000,000 First Sustainable Employment Development TF 97613 2011 2012 11,352,660 Policy Operation First Sustainable Employment Development P112227 TF 97648 2011 2012 15,029,376 IEG: MS Policy Operation First Sustainable Employment Development TF 97759 2011 2012 938,333 Policy Operation SOCIAL INCLUSION & LOCAL ECON P119145 TF 98559 2011 2014 4,902,762 DEVPT Total 94,064,126 Source: Client Connection as of 10/19/16 ** IEG Validates RETF that are 5M and above Annex Table 5: IEG Project Ratings for Kosovo, FY12-16 Exit Total Proj ID Project name IEG Outcome IEG Risk to DO FY Evaluated ($M) 2012 P088045 XK Business Env TA 7.2 MODERATELY SATISFACTORY MODERATE 2012 P097635 LIGNITE POWER TA 8.9 MODERATELY UNSATISFACTORY HIGH 2012 P112227 SEDPO 6.6 MODERATELY SATISFACTORY SIGNIFICANT 2012 P129327 SEDPO 2 0.0 MODERATELY SATISFACTORY SIGNIFICANT 2014 P102174 Inst. Devt. for Education 9.6 MODERATELY SATISFACTORY MODERATE Total 32.3 Source: AO Key IEG Ratings as of 2/7/17 Annexes CLR Review 39 Independent Evaluation Group Annex Table 6: IEG Project Ratings for Kosovo and Comparators, FY12-16 Total Total RDO % RDO % Outcome Outcome Region Evaluated Evaluated Moderate or Lower Moderate or Lower % Sat ($) % Sat (No) ($M) (No) Sat ($) Sat (No) Kosovo 32.3 5 72.3 80.0 51.9 40.0 ECA 16,802.0 183 91.4 77.6 68.7 61.2 World 94,992.0 1,108 83.4 71.4 60.7 47.0 Source: WB AO as of 10/19/16 * With IEG new methodology for evaluating projects, institutional development impact and sustainability are no longer rated separately. Annex Table 7: Portfolio Status for Kosovo and Comparators, FY12-16 Fiscal year 2012 2013 2014 2015 2016 Ave FY12-16 Kosovo # Proj 8 8 8 8 9 8 # Proj At Risk 3 1 1 1 2 2 % Proj At Risk 37.5 12.5 12.5 12.5 22.2 19.5 Net Comm Amt 77.6 81.8 132.1 121.6 132.6 109 Comm At Risk 39.0 8.0 14.7 8.9 56.5 25 % Commit at Risk 50.3 9.8 11.1 7.3 42.6 23.3 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 15.8 Net Comm Amt 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 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 20.4 Source: WB BI as of 2/7/17 Annexes CLR Review 40 Independent Evaluation Group Annex Table 8: Disbursement Ratio for the Kosovo, FY12-16 Fiscal Year 2012 2013 2014 2015 2016 Overall Result Kosovo Disbursement Ratio (%) 13.7 26.2 26.9 11.7 11.6 16.7 Inv Disb in FY 9.1 14.3 12.2 9.6 8.4 53.6 Inv Tot Undisb Begin FY 66.3 54.6 45.4 82.0 72.1 320.4 ECA Disbursement Ratio (%) 22.8 19.6 19.9 20.5 19.6 20.5 Inv Disb in FY 3,975.1 3,232.8 3,539.6 3,670.3 3,797.6 18,215.3 Inv Tot Undisb Begin FY 17,421.6 16,461.7 17,830.8 17,923.6 19,399.7 89,037.4 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 10/19/16 Annex Table 9: Net Disbursement and Charges for Kosovo, FY12-16 Period Disb. Amt. Repay Amt. Net Amt. Charges Fees Net Transfer FY12 15,681,622.1 16,057,614.0 (375,991.9) 11,432,418.8 14,632.2 (11,823,042.9) FY13 14,507,961.7 14,827,195.5 (319,233.8) 10,974,699.4 66,203.3 (11,360,136.4) FY14 12,232,543.1 15,405,953.2 (3,173,410.1) 11,814,185.2 116,394.4 (15,103,989.7) FY15 9,616,908.2 13,323,899.1 (3,706,990.9) 9,679,703.1 156,805.2 (13,543,499.3) FY16 8,382,085.5 12,691,573.7 (4,309,488.2) 8,696,617.2 224,175.2 (13,230,280.7) Report Total 44,739,498.5 56,248,621.5 (11,509,123.1) 41,165,204.9 563,578.1 (53,237,906.1) World Bank Client Connection 10/19/16 Annexes CLR Review 41 Independent Evaluation Group Annex Table 10: Total Net Disbursements of Official Development Assistance and Official Aid for Kosovo Development Partners 2012 2013 2014 2015 Austria 11.28 12.54 13.28 .. Belgium 0.1 .. .. .. Canada -0.01 0.23 0.19 .. Czech Republic 2.26 1.32 2.16 1.66 Denmark 4.99 7 5.67 .. Finland 3.61 9.96 1.47 .. France 0.69 7.69 4.33 .. Germany 28.38 31.99 48.77 .. Greece 0.31 0.24 0.24 .. Italy 0.46 0.44 0.88 .. Japan 7.92 3.86 1.73 .. Luxembourg 14.54 9.03 9.14 .. Netherlands 4.55 2.29 0.93 0.23 Norway 14.73 10.88 9.09 .. Poland .. 0.93 0.96 .. Portugal 0.18 0.08 0.22 .. Slovak Republic 0.1 0.4 0.46 .. Slovenia 1.19 1.35 1.04 1.07 Spain 0.45 .. 0.04 .. Sweden 22.81 24.6 19.58 13.6 Switzerland 64.4 68.13 70.99 .. United Kingdom 16.31 9.27 9.61 .. United States 98.61 75.64 65.44 .. DAC Countries, Total 297.86 277.87 266.22 16.56 EU Institutions [EU] 200.96 231.38 255.35 .. Food and Agriculture Organisation [FAO] .. 0.06 .. .. Global Fund 2.35 0.92 2.74 1.26 International Development Association [IDA] 13.98 10.31 13.15 .. OSCE 24.54 23.41 22 .. UNDP 0.68 0.83 0.42 0.17 UNFPA .. 0.27 0.26 0.25 UNHCR 4.41 5.01 .. 3.18 UNICEF 1.59 1.99 1.19 0.92 World Health Organisation [WHO] .. 0 0.18 0.31 Multilateral, Total 248.51 274.18 295.29 6.09 Bulgaria .. 0.02 0.04 .. Estonia 0.11 0.18 0.13 .. Annexes CLR Review 42 Independent Evaluation Group Development Partners 2012 2013 2014 2015 Hungary 0.22 0.05 0.01 .. Latvia 0.02 .. 0.01 .. Lithuania 0.01 0.01 0 0.03 Turkey 20 15.26 17.73 .. United Arab Emirates .. 0.96 0.05 .. Non-DAC Countries, Total 20.36 16.48 17.97 0.03 Development Partners Total 566.73 568.53 579.48 22.68 Source: OECD Stat, [DAC2a] as of 10/19/16 Annex Table 11: Economic and Social Indicators for Kosovo, 2012 – 2015 KSV ECA World Series Name 2012 2013 2014 2015 Average 2012-2015 Growth and Inflation GDP growth (annual %) 2.8 3.4 1.2 3.6 2.8 0.9 2.5 GDP per capita growth (annual %) 2.0 2.7 1.5 4.5 2.7 0.5 1.3 GNI per capita, PPP (current international $) 8,800.0 9,120.0 9,390.0 9,840.0 9,287.5 28,765.1 14,729.9 GNI per capita, Atlas method (current US$) (Millions) 3,780.0 3,960.0 4,010.0 3,950.0 3,925.0 25,089.0 10,595.9 Inflation, consumer prices (annual %) .. .. .. .. 1.4 2.7 Composition of GDP (%) Agriculture, value added (% of GDP) 14.8 14.4 14.3 13.7 14.3 2.2 3.9 Industry, value added (% of GDP) 19.9 20.3 19.4 19.3 19.7 25.6 28.0 Services, etc., value added (% of GDP) 65.3 65.3 66.3 66.9 65.9 72.2 68.1 Gross fixed capital formation (% of GDP) 26.0 24.8 23.1 26.1 25.0 19.9 23.3 Gross domestic savings (% of GDP) (5.2) (4.0) (5.2) (1.9) -4.1 22.9 24.5 External Accounts Exports of goods and services (% of GDP) 18.3 17.3 19.6 19.1 18.6 41.7 30.2 Imports of goods and services (% of GDP) 52.4 48.9 50.6 49.8 50.4 38.8 29.6 Current account balance (% of GDP) (7.5) (6.4) (7.6) (9.1) -7.6 External debt stocks (% of GNI) 29.9 30.7 30.2 .. 30.3 Total debt service (% of GNI) 1.9 2.0 2.0 .. 2.0 Total reserves in months of imports 3.8 3.7 2.8 3.4 3.4 6.8 13.3 Annexes CLR Review 43 Independent Evaluation Group Fiscal Accounts /1 General government revenue (% of GDP) General government total expenditure (% of GDP) General government net lending/borrowing (% of GDP) General government gross debt (% of GDP) Health Life expectancy at birth, total (years) 70.5 70.8 71.1 .. 70.8 76.7 71.2 Immunization, DPT (% of children ages 12-23 months) .. .. .. .. 94.6 85.3 Improved sanitation facilities (% of population with access) .. .. .. .. 93.0 66.7 Improved water source (% of population with access) .. .. .. .. 95.6 83.4 Mortality rate, infant (per 1,000 live births) .. .. .. .. 10.3 33.2 Education School enrollment, preprimary (% gross) .. .. .. .. 76.2 53.5 School enrollment, primary (% gross) .. .. .. .. 102.2 108.2 School enrollment, secondary (% gross) .. .. .. .. 102.4 74.6 Population Population, total (Millions) 1,805,200 1,818,117 1,812,771 1,797,151 1,808,310 901,961,345 7,218,239,265 Population growth (annual %) 0.8 0.7 (0.3) (0.9) 0.1 0.4 1.2 Urban population (% of total) .. .. .. .. 70.6 53.2 Source: DDP as of 10/14/16 *International Monetary Fund, World Economic Outlook Database, April 2016 ** Data available only up to FY15 Annexes CLR Review 44 Independent Evaluation Group Annex Table 12: List of IFC Investments in Kosovo Investments Committed in FY12-FY16 Project Cmt Project Primary Greenfield Project Original Original Original Loan Equity Net Net Net ID FY Status Sector Name Code Size Loan Equity CMT Cancel Cancel Loan Equity Comm Finance & 36941 2016 Active G 1,647 1,647 - 1,647 - - 1,647 - 1,647 Insurance Finance & 33510 2013 Active E 5,885 5,846 - 5,846 - - 5,846 - 5,846 Insurance Sub-Total 7,532 7,493 - 7,493 - - 7,493 - 7,493 Investments Committed pre-FY12 but active during FY12-16 Project CMT Project Primary Greenfield Project Original Original Original Loan Equity Net Net Net ID FY Status Sector Name Code Size Loan Equity CMT Cancel Cancel Loan Equity Comm Industrial & 27038 2010 Active Consumer E 12,075 6,454 - 6,454 - - 6,454 - 6,454 Products Finance & 28877 2010 Active E - 1,368 - 1,368 - - 1,368 - 1,368 Insurance Sub-Total 12,075 7,821 - 7,821 - - 7,821 - 7,821 TOTAL 19,607 15,314 - 15,314 - - 15,314 - 15,314 Source: IFC-MIS Extract as of end July 31, 2016 Annexes CLR Review 45 Independent Evaluation Group Annex Table 13: List of IFC Advisory Services in Kosovo Advisory Services Approved in FY12-16 Project Impl Impl Project Primary Project Name Total Funds, US$ ID Start FY End FY Status Business Line 601638 Kosovo Investment Climate II 2017 2021 ACTIVE TAC 3,000,000 599672 Kosovo General & Administration 2014 2018 ACTIVE CAS 6,230 599771 KEDS post privatization support 2014 2017 ACTIVE CAS 572,679 600274 Kosovo Power Generation 2014 2018 ACTIVE CAS 3,445,265 597287 Kosovo Investment Climate 2013 2017 ACTIVE TAC 2,605,181 Sub-Total 9,629,355 Advisory Services Approved pre-FY12 but active during FY12-16 Project Impl Impl Project Primary Project Name Total Funds, US$ ID Start FY End FY Status Business Line 578927 ISTR Kosovo 2011 2012 CLOSED SBA 186,537 29107 Kosovo KEK 2010 2014 CLOSED PPP 3,222,211 29108 Kosova Solid Waste 2010 2014 CLOSED PPP 673,270 576547 CorpGovKosovo 2010 2012 CLOSED SBA 176,449 Sub-Total 4,258,467 TOTAL 13,887,822 Source: IFC AS Data as of 7-31-16 Regional Advisory Services active during FY12 – 16 Project Impl Impl Project Primary Project Name Total Funds, US$ ID Start FY End FY Status Business Line Balkans Renewable Energy 595728 2013 2016 ACTIVE CAS 3,440,000 Program Expansion Trade Logistics South East 572687 2012 2016 CLOSED TAC 2,731,924 Europe ECA Corporate Governance 586209 2012 2016 ACTIVE ESG 4,801,126 Program 595887 WBC Agribusiness study 2012 2013 CLOSED SBA 139,848 South East Europe Sub-national 557247 2007 2012 CLOSED IC 870,884 Doing Business Report TOTAL 11,983,782 Annexes CLR Review 46 Independent Evaluation Group Annex Table 14: IFC net commitment activity in Kosovo, FY12 - FY16 2012 2013 2014 2015 2016 Total Financial Markets - 5,846,400 - - 1,667,040 7,513,440 Trade Finance (TF) 334,921 258,450 626,466 147,687 - 1,367,524 Total 334,921 6,104,850 626,466 147,687 1,667,040 8,880,964 Source: IFC MIS as of 2/7/17 Annex Table 15: List of MIGA Activities in Kosovo, 2012-2016 Project Max Gross ID Contract Enterprise FY Sector Investor Status Issuance RBI Central Bank Mandatory Reserves 12894 2015 Active Banking Austria 47 Coverage ProCredit Group Central Bank 9194 2011 Active Banking Germany 50 Mandatory Reserves Coverage Total 97 Source: MIGA 2-7-17