The World Bank Burkina Faso - Bagre Growth Pole Project (P119662) REPORT NO.: RES35151 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF BURKINA FASO - BAGRE GROWTH POLE PROJECT APPROVED ON JUNE 21, 2011 TO MINISTRY OF ECONOMY, FINANCE AND DEVELOPMENT FINANCE, COMPETITIVENESS AND INNOVATION AFRICA Regional Vice President: Hafez M. H. Ghanem Country Director: Pierre Frank Laporte Senior Global Practice Director: Alfonso Garcia Mora Practice Manager/Manager: Consolate K. Rusagara Task Team Leader: Mohamadou S Hayatou, Aguiratou Savadogo-Tinto, Michael Weber The World Bank Burkina Faso - Bagre Growth Pole Project (P119662) I. BASIC DATA Product Information Project ID Financing Instrument P119662 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 21-Jun-2011 30-Nov-2020 Organizations Borrower Responsible Agency Ministry of Economy, Finance and Development BagrePole,Maison d'Entreprise du Burkina Faso Project Development Objective (PDO) Original PDO The Project Development Objective (PDO) is to contribute to increased economic activity in the Project Area, resulting in an increase in private investment, employment generation, and agricultural production. Current PDO To increase private investment, employment generation and agricultural production in the Project Area. The assumption is that increased economic activity will be a result of both improved infrastructure for irrigation contributing to more successful agriculture (financed mainly under the original project) and increased private investments in the Bagré region incentivized by rehabilitated feeder roads, access to electricity and water supply, and increased opportunities for SMEs and targeted investment promotion activities. All of the above are covered by project activities. A further assumption is that increased economic activity in the Bagré region will lead to increased job creation in the area and that the labor intensity of the supported agribusiness activities is relatively high. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-61840 29-Mar-2018 11-May-2018 04-Oct-2018 30-Nov-2020 50.00 2.57 44.47 The World Bank Burkina Faso - Bagre Growth Pole Project (P119662) IDA-Q9350 10-Oct-2014 10-Oct-2014 10-Oct-2014 30-Nov-2015 0 0 0 IDA-H7270 21-Jun-2011 04-Jul-2011 01-Nov-2011 30-Nov-2018 115.00 98.44 2.98 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The Burkina Faso - Bagré Growth Pole Project (P119662) was approved on June 21, 2011, as an Investment Project Financing (IPF) in the amount of US$115 million,and Government contribution of US$18.7 million; and it became effective on November 01, 2011. The initial closing date was November 30, 2015. The project underwent two level 2 restructurings. The first, approved on May 31, 2016, was required to make changes to the result framework and PDO, reallocate cost to achieve development objectives, and extend original closing date of September 30, 2017 to November 30, 2018. The second level 2 restructuring approved on January 18, 2018 was designed to ensure compliance with legal covenants related to land rights review and dam safety were met, reallocate resources to account for cost overrun on the irrigation infrastructure, and make related changes to both the result framework and the PDO. The Development Objective of the project is to “contribute to increased economic activity in the Project Area, resulting in an increase in private investment, employment generation, and agricultural production”. The project was conceived as a comprehensive assistance to the Government of Burkina Faso (GoBF), integrating infrastructure, services, and a strong value chain, for attracting the private sector to the depressed southern region of the country, and enabling the success of agribusiness. The project sought to strategically extend existing infrastructure—a dam and two canals of approximately 20 km each that had been built by the GoBF in part with donor funds—to increase the impact on job creation and private investment in the project’s geographical area. In recognition that the region had great potential as an agricultural area but that it had little to offer the private sector in the way of irrigated land, electric power, access and internal roads, and services, the project sought to create the basic conditions, not only for private producers, but also for companies interested in transforming basic agricultural products. The project had three components including: - Component 1: Improvement of Institutional Capacity for Better Zone Management and Investment Climate in the Project Area (US$27.65 equivalent) – The rating for this Component is Satisfactory (Implementation Status and Results Report [ISR] of January 16, 2019). - Component 2: Development of Critical Infrastructure (US$114.50 million equivalent) - Moderately Satisfactory (ISR of January 15, 2019). - Component 3: Development of Critical Services and Direct Support to Smallholders and small and medium enterprises (US$19.35 12.5 million equivalent) -Satisfactory (ISR of January 16, 2019). At the time of the last ISR filed on January 15, 2019, the project disbursement rate was 97 percent. The World Bank Burkina Faso - Bagre Growth Pole Project (P119662) At the time of the project closing date of November 30, 2018, it had achieved its PDO outcomes to increase agricultural production, create jobs, and increase private investment. Both Implementation Progress (IP) and Development Objective (DO) ratings were upgraded to ‘Moderately Satisfactory’ with the ISR of July 2016 and have been maintained at that level to the present. The project attracted US$24.85 million of new investments because of project assistance to companies for completing: (a) business plans; (b) forms requesting credit from financial institutions; and (c) negotiating with banks. It has likewise been responsible for creating more than 25,000 new jobs and fostering the establishment of more than 167 new enterprises in the project area for the agricultural value chain. The matching grants component has benefitted more than 900 small and medium enterprises (SMEs) and because of project activities, the number of new private service providers now totals 97. The grants have been successful in building relationships between business development services and firms in the project area. A project AF the Burkina Faso – Bagre growth Pole Project AF (P161234) in the amount of US$60 million equivalent, of which US$10 million is Government co-financing, was approved on March 29, 2018 and became effective on October 4, 2018. The AF builds on and expands the original project achievements, particularly attracting private investment to develop value chains and support local small and medium enterprise (SME) development and growth in line with the Government of Burkina Faso (GoBF) development objective of increasing private sector participation in the economy, and World Bank Group (WBG) corporate objective of Maximizing Finance for Development. Critical ongoing activities from the original project related to SMEs development, the implementation of improved safeguards activities related to the irrigation works, and population resettlement action plans are carrying over into the AF. These activities have been programmed to use the balance of US$2.98 million remaining from the original US$115 million financing to be completed and that process requires an extension of the original project closing date for these resources to be released and made available. The delay with the timely extension of the closing date for the above referenced project was because the Government request letter for the extension was only received two days before the closing date of the project, on November 28, 2018, and hence did not allow enough time to process the extension by the closing date of the project. The proposed extension of the project closing date to November 30, 2020 will be the second extension of the closing date, and with this extension, the project will be nine (9) years and five months old at the time of the proposed new closing date. Since the cumulative extensions of closing dates will be 60 months and retroactive, this request requires RVP decision. The proposed extension of the closing date will be made consistent with the closing date of the additional financing (AF). II. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications The World Bank Burkina Faso - Bagre Growth Pole Project (P119662) IDA-61840 Effective 30-Nov-2020 30-Nov-2020 30-Mar-2021 IDA-H7270 Closed 30-Sep-2017 30-Nov-2018 30-Nov-2020 30-Mar-2021 30-Nov-2015, 30-Jun- IDA-Q9350 Closed 30-Apr-2015 2016