The World Bank Commercial Agriculture Project (P159979) REPORT NO.: RES45791 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF COMMERCIAL AGRICULTURE PROJECT APPROVED ON JULY 13, 2017 TO REPUBLIC OF CONGO AGRICULTURE AND FOOD AFRICA WEST Regional Vice President: Ousmane Diagana Country Director: Abdoulaye Seck Regional Director: Simeon Kacou Ehui Practice Manager/Manager: Chakib Jenane Task Team Leader(s): Juvenal Nzambimana The World Bank Commercial Agriculture Project (P159979) ABBREVIATIONS AND ACRONYMS CERC Contingency Emergency Response Component MSME Micro, Small and Medium Enterprises PDAC Project de Développent de l’Agriculture Commerciale au Congo (Commercial Agriculture Project in Congo) PDO Project Development Indicators The World Bank Commercial Agriculture Project (P159979) BASIC DATA Product Information Project ID Financing Instrument P159979 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 13-Jul-2017 31-Jul-2022 Organizations Borrower Responsible Agency Republic of Congo Ministry of Agriculture, Fisheries and Livestock Project Development Objective (PDO) Original PDO The Project Development Objective (PDO) is to improve productivity of farmers and market access for producer groups and micro, small and medium agribusiness enterprises, in selected zones of the territory of the Recipient, and provide immediate and effective response in the event of an Eligible Crisis or Emergency. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-61110 13-Jul-2017 20-Sep-2017 30-Apr-2018 31-Jul-2022 100.00 59.96 42.97 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Commercial Agriculture Project (P159979) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. Background: The Project was approved in July 2017 and became effective in April 2018. It had three main components: (i) Direct support to producer groups and agribusiness micro, small and medium enterprises (MSMEs); (ii) Improving public infrastructure and the business climate for commercial agriculture; and (iii) Strengthening institutional capacity to support the development of commercial agriculture in the Republic of Congo. 2. Current Status: Overall, the Project Development Objective remains relevant and the structure of the Project components is still adequate and the PDO is still achievable within the project implementation timeframe. The project implementation is progressing well with strong performance in FY21 despite the Covid pandemic. Disbursement ratio was 39.8% in FY2021 by far the highest since the start of project implementation. The project total disbursement is US$58 million, out of which US$29 million was disbursed in FY21 (50% of the total disbursement). Both the DO and IP are rated moderately satisfactory. 3. The project helped to keep food supply chains working during the Covid-19 pandemic by providing financial resources to farmer’s organizations and small businesses, building infrastructure for connectivity to link farmers to market. Project implementation made strong strides in the last 6 months with 261.000 direct beneficiaries reached compared to 188.000 from the last reporting period. Farmer’s productivity increased with more farmers connected to the markets thanks to the improved rural road network (1041 km of roads were rehabilitated). As a result, average yield on cassava, maize, aquaculture and poultry have exceeded end of the project targets. Percentage increase in volume of raw and processed products sold by producer groups and MSMEs in national or export markets has also exceeded the end of the project target. Key among the successes of this project has been the use of the matching grant financing mechanism. The matching grant sub component had generated a lot interests from producer groups and agribusiness MSMEs across the country and the funds allocated to the category associated with the matching grant have been fully utilized. There is therefore a need to reallocate funds among categories. 4. Rationale for the proposed restructuring: The government is therefore requesting to reallocate more funds to Category 2 to respond to the strong demand of the farmers and agri-business MSMEs. In addition, the government request for this restructuring included the request to activate the CERC to deal with the aftermath of COVID 19 pandemic. Government requested a CERC of up to US$14m. However, the request included either activities that were health related and already funded under other IDA projects or activities that did not meet the emergency criteria and that could therefore be accommodated under the normal project activities. In lieu of activating the CERC, it was agreed to increase funding under Category 2 to finance resilience and agricultural recovery by extending the eligibility for matching grants to the most vulnerable groups such as youth and women. The purpose of this restructuring is therefore to reallocate about US$23 million from category 1 to category 2, revise the component cost, revised the result framework to increase the end of project target for Component 1and recalibrate the SORT to actual project risk. The World Bank Commercial Agriculture Project (P159979) II. DESCRIPTION OF PROPOSED CHANGES The proposed changes are: (i) Reallocate proceeds from Category 1 to Category 2 to strengthen the direct support to producer groups and agribusiness micro, small and medium enterprises (MSMEs) for the marching grant for business plans and the support to the most vulnerable groups such as youth and women affected by Covid 19. (ii) Revised the Results Framework to account for the change in increase financing for matching grants (iii) Recalibrate the Systematic Operating Risk-Rating Tool (SORT) to reflect the current risk rating of the project. Changes in PDO Indicator “Direct Beneficiaries”: The end-of project target was increased from 500.000 to 501.400 beneficiaries to take into account the expected increase in beneficiaries of matching grant schemes. The World Bank Commercial Agriculture Project (P159979) III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Reallocation between Disbursement Categories ✔ Overall Risk Rating ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ PBCs ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) The World Bank Commercial Agriculture Project (P159979) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Component 1: Direct support to Component 1: Direct support producer groups and to producer groups and 25.00 Revised 41.00 agribusiness micro, small and agribusiness micro, small and medium enterprises (MSMEs) medium enterprises (MSMEs) Component 2: Improving public Component 2: Improving infrastructure and the business public infrastructure and the 45.00 Revised 34.00 climate for commercial business climate for agriculture commercial agriculture Component 3: Strengthening Component 3: Strengthening institutional capacity to support institutional capacity to 30.00 Revised 25.00 the development of commercial support the development of agriculture commercial agriculture Component 4: Contingency Component 4: Contingency 0.00 No Change 0.00 emergency response emergency response TOTAL 100.00 100.00 OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-61110-001 | Currency: XDR iLap Category Sequence No: 1 Current Expenditure Category: GD, WK, NCS, CS, TR, OC EXCL P.1&4 53,200,000.00 16,747,477.61 37,219,000.00 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: GD, WK, NCS, CS SUBPROJ PART 1 18,300,000.00 21,044,908.37 35,300,277.32 100.00 100.00 iLap Category Sequence No: 3 Current Expenditure Category: PPF REFINANCING 1,500,000.00 480,722.68 480,722.68 The World Bank Commercial Agriculture Project (P159979) iLap Category Sequence No: 4 Current Expenditure Category: CERC PART UNDER PART 4 0.00 0.00 100.00 100.00 Total 73,000,000.00 38,273,108.66 73,000,000.00 OPS_DETAILEDCHANGES_SORT_TABLE SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Rating at Approval Current Rating Political and Governance  Substantial  Moderate Macroeconomic  Substantial  Substantial Sector Strategies and Policies  Moderate  Moderate Technical Design of Project or Program  Substantial  Moderate Institutional Capacity for Implementation and  High  Moderate Sustainability Fiduciary  Substantial  Substantial Environment and Social  Moderate  Moderate Stakeholders  Moderate  Moderate Other Overall  Substantial  Substantial . The World Bank Commercial Agriculture Project (P159979) . Results framework COUNTRY: Congo, Republic of Commercial Agriculture Project Project Development Objectives(s) The Project Development Objective (PDO) is to improve productivity of farmers and market access for producer groups and micro, small agribusiness enterprises, in selected zones of the territory of the Recipient, and provide immediate and effective response in the event o or Emergency. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets 1 2 3 4 5 Improve productivity of farmers and market access for producer groups and agribusiness enterprises Direct project beneficiaries 0.00 25,000.00 100,000.00 250,000.00 450,000.00 501,400.00 (Number) Action: This indicator has been Revised Female beneficiaries 0.00 50.00 50.00 50.00 50.00 50.00 (Percentage) Percentage increase in volume of raw and processed products sold by producer groups and 0.00 2.00 5.00 12.00 18.00 20.00 MSMEs in national or export markets (Percentage) Average seasonal yield per standard area of specific 0.00 crops among targeted farmers (Metric ton) Maize (Metric ton) 0.50 0.50 0.80 1.00 1.20 1.50 Cassava (Metric ton) 7.00 7.00 10.00 12.00 15.00 15.00 Aquaculture (Metric ton) 0.00 0.00 3.00 3.00 4.00 4.00 Livestock (Egg production per chicken) 0.00 0.00 100.00 150.00 200.00 250.00 (Number) PDO Table SPACE The World Bank Commercial Agriculture Project (P159979) Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets 1 2 3 4 5 Component 1: Direct support to producer groups and agribusiness micro, small and medium enterprises (MSMEs) Number of business plans that are supported by the project (for producer 0.00 25.00 150.00 350.00 500.00 700.00 groups, disaggregated by sex) (Number) Number of business plans that are supported 0.00 5.00 10.00 20.00 35.00 50.00 by the project (for MSMEs) (Number) Value of matching grants given to producer groups 0.00 0.50 4.00 10.00 15.00 20.00 and MSMES (disaggregated by sex) (Amount(USD)) Farmers adopting improved agricultural technology (CRI, 0.00 100.00 2,000.00 4,000.00 6,500.00 7,000.00 Number) Farmers adopting improved agricultural 0.00 50.00 1,000.00 2,000.00 3,000.00 3,500.00 technology - Female (CRI, Number) Number of students who received support from the project for practical 0.00 50.00 150.00 300.00 450.00 500.00 internships or master's degrees (disaggregated by sex) (Number) Component 2: Improving public infrastructure and the business climate for commercial agriculture Roads rehabilitated, Rural 0.00 0.00 550.00 750.00 900.00 1,000.00 (Kilometers) Number of laboratories for agriculture research and development and/or for food safety control 0.00 0.00 0.00 1.00 2.00 3.00 rehabilitated and brought up to international standards (test, control, The World Bank Commercial Agriculture Project (P159979) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets 1 2 3 4 5 analysis of soils, genetic mater (Number) Availability of agricultural scientific data and statistics 0.00 0.00 0.00 1.00 1.00 1.00 from a centralized source (Number) Component 3: Strengthening institutional capacity to support the development of commercial agriculture Number of multi- stakeholder platforms for public-private dialogue on 0.00 1.00 2.00 4.00 4.00 4.00 commercial agriculture (Number) Number of policy reforms (e.g. laws and regulations) 0.00 0.00 1.00 2.00 3.00 3.00 drafted by the project (Number) Quantity of improved seeds certified annually (Metric 0.00 0.00 10.00 50.00 80.00 100.00 ton) Percentage of producers and MSMEs satisfied with supporting services provided along agricultural 0.00 5.00 25.00 45.00 60.00 60.00 value chains in the areas of intervention of the project (services) (Percentage) IO Table SPACE