The World Bank Ghana Commercial Agriculture Project (P114264) REPORT NO.: RES44126 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF GHANA COMMERCIAL AGRICULTURE PROJECT APPROVED ON MARCH 22, 2012 TO REPUBLIC OF GHANA AGRICULTURE AND FOOD GLOBAL PRACTICE WESTERN AND CENTRAL AFRICA REGION Regional Vice President: Ousmane Diagana Country Director: Pierre Frank Laporte Regional Director: Simeon Kacou Ehui Practice Manager: Chakib Jenane Task Team Leader: Sheu Salau The World Bank Ghana Commercial Agriculture Project (P114264) ABBREVIATIONS AND ACRONYMS GCAP Ghana Commercial Agriculture Project GHS Ghana Cedi IDA International Development Association PDO Project Development Objective PIU Project Implementation Unit SADA Savannah Accelerated Development Authority TF Trust Fund The World Bank Ghana Commercial Agriculture Project (P114264) BASIC DATA Product Information Project ID Financing Instrument P114264 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 22-Mar-2012 31-Dec-2020 Organizations Borrower Responsible Agency Ghana Irrigation Development Authority,Lands Republic of Ghana Commission,Irrigation Company of the Upper Region,Ministry of Food and Agriculture Project Development Objective (PDO) Original PDO The project development objective (PDO) is: increased access to land, private sector finance, input- and output- marketsbysmallholder farms from private-public partnerships in commercial agriculture in Accra Plains and SADA zone. Current PDO The objective of the Project is to improve agricultural productivity and production of both smallholder and nucleus farms in selected project intervention areas of the Recipient s territory. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-62540 31-May-2018 10-Oct-2018 04-Dec-2018 31-Dec-2020 50.00 23.51 24.92 IDA-50770 22-Mar-2012 25-Sep-2012 08-Apr-2013 31-Dec-2020 100.00 89.84 2.46 The World Bank Ghana Commercial Agriculture Project (P114264) TF-A9432 05-Dec-2018 11-Jan-2019 11-Jan-2019 31-Jan-2019 10.97 10.97 0 TF-14170 13-Mar-2013 13-Mar-2013 08-Apr-2013 31-Jan-2019 5.98 5.98 0 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. The Ghana Commercial Agriculture Project (GCAP, P114264) was approved by the Board of Executive Directors on March 22, 2012 in the amount of US100 million and became effective on April 8, 2013. The project performance is rated Moderately Satisfactory for progress towards achievement of the Project Development Objectives (PDO) and Satisfactory for overall Implementation Progress (IP) as recorded in the most recent Implementation Status and Results Report (ISR, July 28, 2020). The project has met and surpassed the target for yield of maize, and rice (under rainfed conditions), and soya in the Savannah Accelerated Development Authority (SADA) Zone (hereafter referred to as Northern Development Authority Plus (NDA+) Zone). The estimated maize and rice yield were 2.8 mt/ha and 2.62 mt/ha compared to the target of 2.74 mt/ha and 2.14 mt/ha, respectively. The current yield for soya (3.7 mt/ha) has more than doubled the previous harvest session figure of 1.6 mt/ha. In the Accra Plains, the estimated rice yield (under irrigated conditions) which has increased from 2.75 mt/ha in 2018 to 2.9 5mt in 2019 was still at 95 percent of target. Persistent bird attacks are responsible for lower than expected yield in the Accra plains. The team is exploring technologies to combat the birds attack. The yield of vegetables is also lower than the end of project target (7.11 mt/ha compared to 10.23 mt/ha). The gross margins for maize (GHC 2,785.28/ha), rice (GHC 1,892.27/ha) and soya (GHC 5,446/ha) in the SADA zone, respectively, are ahead of the end of project target while gross margin for rice in 2019 (GHC 1,786.40/ha) in the Accra Plains is at 95 percent of the end of project target. Area under formal commercial arrangements in the SADA zone (including out grower) is currently 5,945.80 ha, which is higher than the end of project of 5,500-hectare The total area provided with improved irrigation and drainage services increased from3,571 hectares as of June 30, 2020 to 4457.8 ha as of November 10, 2020 and comprised 1,017.38 and 3440 new and rehabilitated hectares, respectively. Total number of project beneficiaries to-date stand at 12,950 (representing about 93 percent of the target of 14,000) of which 4407 are female (representing 105 percent of target of 4200). 2. The disbursement rate for the IDA credit shows that as of November 10, 2020, US$113.35 million has been disbursed, representing 80.56 percent of the total credit (US$150 million). There is no overdue audit. With respect to safeguard performance, the project is rated Moderately Satisfactory. The project has made substantial progress in addressing notable safeguards challenges and demonstrated commitment to ensuring safeguards due diligence as reflected in progress of implementation of safeguard actions. Also, the Project Implementation Unit (PIU) has put in place some measures to ensure compliance with national COVID-19 protocols. The World Bank Ghana Commercial Agriculture (P114264) 3. The rationale for the extension of the project closing date to December 31, 2021 is to compensate for the significant delay caused by COVID-19 pandemic and related lockdowns and restriction to offshore manufacturing schedule of critical automation equipment and its shipment, and deployment of consultant and contractors from abroad, and daily schedule for civil works II. DESCRIPTION OF PROPOSED CHANGES 4. The project closing date has been extended two times. The first extension of closing date was done during a level- one restructuring that was approved in November 2015. This restructuring extended the closing date for two years; from September 30, 2017 to September 30, 2019. The project was restructured because of poor performance (project performance was rated Unsatisfactory for IP and Unsatisfactory for PDO) which was mainly due to overambitious project design, lack of clarity regarding specific activities to be financed, lack of private sector interest in major investments in the construction of irrigation and drainage infrastructure in the Accra Plains, and weak project management. The second extension of the original closing date was processed as part of the Additional Credit for the project in the amount of US$50 million for fifteen (15) months from September 30, 2019 to December 31, 2020. The rationale for the additional financing was to meet a cost overrun on the three irrigation schemes rehabilitation. The financing gap/cost overrun resulted from: (i) the reduction in the trust funds (TF) resources; (ii) higher costs for irrigation schemes rehabilitation (based on current technical designs and bidding documents) compared to the appraisal estimates; and (iii) an exchange loss variation of about 7.7 percent of the original project. 5. The current request for restructuring is to extend the closing date for another one (1) year from December 31, 2020 to December 31, 2021. The total cumulative extension for the project would be four (4) years three (3) months which will bring the age of the project to eight (8) years from the date of approval. The proposed restructuring is for the extension of the additional financing that was approved in May 2018 since out of the US$100 million from the original credit, there remain an undisbursed balance of only US$2.44 million. Out of the US$50 million of the AF, 49 percent of the credit is not yet disbursed but all the resources are committed, contracting has been completed and execution of the contracts are underway. The extension will allow adequate time for the completion of all ongoing project activities and additional works associated with the reinstatement of damaged Tono spillway. 6. The team confirms that: (i) the PDOs of the project remain achievable; (ii) the performance of the Borrower remains satisfactory; and (iii) the World Bank and the Borrower agree on actions that will be undertaken by the Borrower to complete the Project. The detailed work plan has been submitted to the World Bank. III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ The World Bank Ghana Commercial Agriculture (P114264) Loan Closing Date(s) ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ PBCs ✔ Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ 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) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE The World Bank Ghana Commercial Agriculture (P114264) LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications 30-Sep-2019, 31- IDA-50770 Effective 30-Sep-2017 31-Dec-2021 30-Apr-2022 Dec-2020 IDA-62540 Effective 31-Dec-2020 31-Dec-2021 30-Apr-2022 30-Mar-2018, 31- TF-14170 Closed 30-Sep-2017 May-2018, 31-Jan- 2019, 29-Jul-2019 TF-A9432 Closed 31-Jan-2019 13-Aug-2019 . The World Bank Ghana Commercial Agriculture (P114264) . Results framework COUNTRY: Ghana Ghana Commercial Agriculture Project Development Objectives(s) The objective of the Project is to improve agricultural productivity and production of both smallholder and nucleus farms in selected project intervention areas of the Recipient s territory. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 Improve productivity of smallholder and nucleus farmers (Action: This Objective has been Revised) Yield per hectare - maize in SADA zone disaggregated 1.96 20.00 40.00 70.00 100.00 2.74 by gender (Metric ton) Action: This indicator has been Revised Yield per ha - rice in SADA zone 1.53 2.14 disaggregated by gender (Metric ton) Action: This indicator has been Revised Yield per ha - soya SADA zone disaggregated by 1.26 1.76 gender (Metric ton) The World Bank Ghana Commercial Agriculture (P114264) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 Action: This indicator has been Revised Yield per ha - rice in Accra Plains 2.47 3.09 disaggregated by gender (Metric ton) Action: This indicator has been Revised Yield per ha - vegetables in Accra Plains 8.18 10.23 disaggregated by gender (Metric ton) Action: This indicator has been Revised Increase in area under formal commercial arrangements (disaggregated by nucleus 0.00 1,000.00 1,000.00 1,050.00 1,850.00 2,500.00 5,500.00 farms, outgrower farms and gender), SADA zone (Hectare(Ha)) Action: This indicator has been Revised Increase in area under formal commercial 0.00 1,000.00 arrangements - on nucleus farms The World Bank Ghana Commercial Agriculture (P114264) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 disaggregated by gender (Hectare(Ha)) Action: This indicator has been Revised Increase in area under formal commercial arrangements - on 0.00 4,000.00 outgrower farms disaggregated by gender (Hectare(Ha)) Action: This indicator has been Revised Direct project beneficiaries 0.00 5,000.00 10,000.00 20,000.00 30,000.00 50,000.00 14,000.00 (Number) Action: This indicator has been Revised Female project 0.00 4,200.00 beneficiaries (Number) Action: This indicator has been Revised Gross margins of selected crops - maize in SADA zone 582.00 100.00 815.00 disaggregated by gender (Amount(USD)) Action: This indicator has been Revised The World Bank Ghana Commercial Agriculture (P114264) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 Gross margins of selected crops - rice in SADA zone 1,026.00 1,436.00 disaggregated by gender (Amount(USD)) Action: This indicator has been Revised Gross margins of selected crops - soya in SADA zone 2,784.00 3,201.60 disaggregated by gender (Amount(USD)) Action: This indicator has been Revised Gross margins of selected crops - rice in Accra Plains 1,499.00 1,874.00 disaggregated by gender (Amount(USD)) Action: This indicator has been Revised Area provided with improved irrigation and drainage services 0.00 7,690.00 (disaggregated by new & existing) (Hectare(Ha)) Action: This indicator has been Revised The World Bank Ghana Commercial Agriculture (P114264) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 Area provided with improved irrigation and 0.00 2,000.00 drainage services - new (Hectare(Ha)) Action: This indicator has been Revised Area provided with improved irrigation and 0.00 8,000.00 drainage services - existing (Hectare(Ha)) Action: This indicator has been Revised PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 Component 1: Facilitating Investment Promotion in Commercial Agriculture Number of staff trained for 0.00 100.00 GIDA and ICOUR (Number) Action: This indicator has been Revised Percentage of projects and/or sub-projects 4.00 97.00 complying with The World Bank Ghana Commercial Agriculture (P114264) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 environmental and social safeguards (Percentage) Action: This indicator has been Revised Protocol/framework for dealing with investors at No No Yes Yes Yes Yes Yes agricultural sector level established (Yes/No) Action: This indicator has been Revised Land information database established and made part of the GIDA Digital Library, No Yes Lands Commission and Town and Country Planning Department (Yes/No) Action: This indicator has been Revised Private Investment 0.00 15,000,000.00 Mobilized (Amount(USD)) Action: This indicator has been Revised Percentage of warehouse capacity being utilized 0.00 50.00 (Percentage) Action: This indicator has been Revised The World Bank Ghana Commercial Agriculture (P114264) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 Framework for out-grower No No Yes Yes Yes Yes Yes scheme developed (Yes/No) Action: This indicator has been Revised Formal jobs directly created in inland valley (Nasia- 0.00 500.00 1,000.00 2,000.00 4,000.00 8,000.00 600.00 Nabogo) (Number) Action: This indicator has been Revised Farmers in GCAP intervention areas who have applied improved technologies or 0.00 20.00 40.00 60.00 80.00 80.00 75.00 management practices (disaggregated by technology) (Percentage) Action: This indicator has been Revised Model lease agreement No No Yes Yes Yes Yes Yes developed (Yes/No) Action: This indicator has been Revised Increase in storage capacity resulting from GCAP 0.00 77,000.00 85,000.00 100,000.00 120,000.00 135,000.00 23,000.00 interventions (Metric ton) Action: This indicator has been Revised The World Bank Ghana Commercial Agriculture (P114264) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 Value of incremental sales (collected at farm-level) attributed to GCAP 0.00 20.00 implementation (in million GHc) (Amount(USD)) Action: This indicator has been Revised Length of canals rehabilitated (in km) 0.00 340.00 (Kilometers) Action: This indicator has been Revised Investor Tracking System installed and operational No Yes (Yes/No) Action: This indicator has been Revised GIDA reform completed No Yes (Yes/No) Action: This indicator has been Revised Number of person days of training sponsored for staff 0.00 3,000.00 of GIDA (Number) Action: This indicator has been Revised The World Bank Ghana Commercial Agriculture (P114264) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 Number of person days of training sponsored for staff 0.00 750.00 of ICOUR (Number) Action: This indicator has been Revised ICOUR reform completed No Yes (Yes/No) Action: This indicator has been Revised Proportion of irrigation services charges that is actually collected - as a 20.00 75.00 percentage of total ISC expected (disaggregated by schemes) (Percentage) Action: This indicator has been Revised Operational WUAs established and functional 0.00 48.00 at Branch Canal level, and at Scheme level (Number) Action: This indicator has been Revised Number of Irrigation Schemes that have private 0.00 4.00 scheme management entities (Number) The World Bank Ghana Commercial Agriculture (P114264) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 Action: This indicator has been Revised Length of canals newly 0.00 150.00 constructed (Kilometers) Action: This indicator has been Revised IO Table SPACE The World Bank Ghana Commercial Agriculture (P114264)