INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Public Disclosure Copy Report No.: ISDSC935 Date ISDS Prepared/Updated: 07-Feb-2013 Date ISDS Approved/Disclosed: 07-Feb-2013 I. BASIC INFORMATION A. Basic Project Data Country: Guinea Project ID: P128443 Project Name: Guinea - Business Environment and MSME Support Project (P128443) Task Team Jean Michel Noel Marchat Leader: Estimated 12-Mar-2013 Estimated 28-May-2013 Appraisal Date: Board Date: Managing Unit: AFTFW Lending Specific Investment Loan Instrument: Sector: General industry and trade sector (50%), Agro-industry, marketing, and trade (20%), SME Finance (15%), Central government administra tion (15%) Theme: Micro, Small and Medium Enterprise support (25%), Regulation and competition policy (25%), Other Private Sector Development (25%), E xport development and competitiveness (15%), Legal institutions for a market economy (10%) Public Disclosure Copy Financing (In USD Million) Financing Source Amount BORROWER/RECIPIENT 0.00 International Development Association (IDA) 20.00 Total 20.00 Environmental C - Not Required Category: Is this a No Repeater project? B. Project Objectives The Project Development Objective (PDO) is to improve selected aspects of Guinea's business environment and supporting the development of key value-chains. C. Project Description Component 1: Improving selected elements of the investment climate (US$ 9, 000,000) The objective of this component would be to provide technical assistance, goods and services to: i) improve the legal business environment through the implementation of targeted reforms; and ii) help develop backbone tools and institutions (public credit bureau, institutional strengthening of Agency Public Disclosure Copy for Investment promotion (APIP, Agence de Promotion des Investissements Privés) and the Customs Agency) necessary for the Guinean private sector to productively participate, grow and develop linkages across all sectors of the economy. Sub-component 1.1: Targeted business environment reform program (US$ 4, 000,000) This sub-component would focus on a few doing business indicators where progress is required and where immediate action can deliver quick wins. These would include: a) starting a business; and b) trading across borders. The first indicator has been selected because it affects market entry and the competitive status of markets and it can allow quick wins as some initial work has already been started by IFC. The second indicator has been selected because of its critical and binding role in improving country’s competitiveness, and its ability to expand the revenue base. Furthermore, there is a need to reverse the deterioration of the situation in terms of trade logistics to help the country grow in the medium term. This subcomponent would finance: • Enabling firm entry to markets: The newly created Guichet unique is in need of reinforcement (automation of tasks and equipment, among others). Hence, the Project, in partnership with IFC’s Investment Climate and Doing Business units, would help develop and advance the reform program by reinforcing the “Guichet Unique�. The project would finance: i) a business process analysis; ii) the development/adaptation of an appropriate simple/user-friendly software for the automation of the business registry and RCCM; iii) the purchase of relevant IT equipment (computers, generators…); iv) the related TA/training activities; and v) an awareness campaign. • Trade logistics. The proposed project would provide technical assistance and equipment to improve trade facilitation. It could specifically support: a) the introduction and adoption of improved custom’s software; b) provide technical assistance to further reform customs procedures; c) technical Public Disclosure Copy assistance to improve communication between border posts and systematic follow-up of the application of preferential agreements; and d) finance feasibility studies to reduce congestion at the port through PPP. Sub-component 1.2: Technical assistance to develop a public credit information system (US$ 2,000,000) The financial sector is of a small size in Guinea. Commercial banks tend to favor short-term lending at high interest rates, as there is high potential for default. Lending technology is mostly of a relationship lending type. As a result, it is not surprising to see that by 2006-07, 58.3 percent of the firms identified access to finance as a major constraint and that 94.1 percent of firm’s investments was financed internally against an SSA average of 79 percent. Inter alia, a key element which is missing now to foster SME lending is a proper information infrastructure, i.e. a registry. Improving credit information would help break the reliance on relationship lending and provide banks with better information to start using later-on more up-to-date methodologies such as scoring methods to approve loans. This sub-component would provide technical assistance and equipment to establish public credit information systems (PCIS) that will be the foundation for a public credit bureau (PCB) under the aegis of the central bank. The project would finance i) the development/adaptation of the related software; ii) the purchase of relevant IT equipment, back-up and generators; iii) the related TA/ training activities (for central bank and private banks staff) and iv) an awareness campaign towards local banks and other financial institutions. Public Disclosure Copy Sub-component 1.3: Strengthening API (US$ 2,500,000) The APIP has been created in late 2011 to implement GoG policy in favor of private investment, either public or foreign. The newly created APIP is in need of support to root itself as the focal point for investors in Guinea. The proposed project would support this institution in several areas: • For all departments, the project would support skills and institutional capacity development by financing: i) development of an institutional business plan and mid-to-long term operational and financial strategy; b) training and outside expertise for human resources development; c) operational costs, including staff costs; and d) development of promotional materials. • For all departments, the project would ensure smooth business processes by financing: i) a business process analysis, ii) the development/adaptation of appropriate simple/user-friendly software(s); iii) the purchase of relevant IT equipment (computers, generators…); and iv) the related TA/training activities. • For the Research and Statistics department, the project would finance: i) capacity building activities (training in investment promotion, economic analysis, basic statistics…); ii) a study on strategic and spatial planning for private sector growth (consultancy fees, training of department staff/technology transfer so as they can update and undertake such a work in the future and dissemination). Sub-component 1.4: Supporting public-private dialogue (US$500,000) The project would establish a new technical platform for public-private dialogue. The proposed Public Disclosure Copy project would provide financing for: i) the development of a roadmap for this office; ii) the training of staff; iii) some equipment; iv) studies and policy memos to systematically and productively inform private sector development discussions; v) meetings among policy makers and private sector representatives; and vi) reach-out activities (seminars, workshops and alike). Component 2: Support for SME cluster development and regional growth (US$ 8, 500,000) The objective of this component is to promote private sector growth and diversification with emphasis on two value chains along two corridors that have significant potential for growth in terms of income and employment generation. Sub-Component 2.1 Regionalization of APIP along two Growth Corridors (US$3,000,000) This component will support regionalization of APIP, through which knowledge base and investment promotion and generation capacity in two specific value chains along two corridors will be developed. The selection of the two sectors for targeted support and the specific regions where these will take place will be finalized during project preparation following more in-depth studies and value-chain analyses. The project will finance: i) institutional and capacity building for APIP along the two corridors that will be identified during project preparation; ii) value-chain analyses and base-line surveys; iii) sub- regional investment climate assessments; iv) product development and competitiveness analyses along the two corridors; iv) market and investor research; and v) promotion of investments in these Public Disclosure Copy value-chains. Sub-Component 2.2 Establishment of Sector Support and Technology Centers for business development (SSTCs) (US$5,500,000) The Project will also support the establishment of technical centers in the regional A PIP offices which will provide firms with sector/value-chain specific business development services (BDS). While the technical support provided by these will be designed to cater to the specific needs and constraints present in the value-chains that will be determined during project preparation, more generic support and resources offered for SME development in these centers will also be available for those busin esses that operate in sectors outside these value-chains to maximize development outcomes and enable and improve linkages. The component will finance, among others: i) the technical and financial feasibility of such SSTCs in Guinea with a detailed plan of implementation; ii) the selection and training of staff; iii) the development and disbursement of market intelligence; iv) the training activities including travel and consultancy services; v) equipment; and vi) small infrastructure and other capital investments to adapt existing buildings and provide critical services. The subcomponent could also finance the salary of the manager and key personnel. During implementation, the project would develop linkages with highly recognized regional or international centers. Component 3: Project Implementation (US$ 2, 500,000) This component would be established in Conakry and reinforce the project management capacity of the Project Implementation Unit (PIU), as well as the Executing Agencies, by financing operational and staff costs and providing assistance in the areas of: i) Training in procurement and financial Public Disclosure Copy management; ii) Training and consulting services (to enable the PIU to effectively perform its functions); and iii) computer and office equipment. D. Project location and salient physical characteristics relevant to the safeguard analysis (if known) The project activities would be located in Conakry and in the four main regions of Guinea (Lower Guinea, Fouta Djallon, Upper Guinea and Forest Guinea). Implementation Arrangements The project would be implemented over aperiod of five years. The implementing institution responsible for the project would be the Ministry of Industry and SMEs. Project completion is expected on June 30, 2018. A mid-term review would be carried out by December 2015. Given the multi-Ministry and agency nature of the project, high level support is required to ensure consistency of interventions and ensure the removal of occasional blockages. This implies: i) setting- up a Steering Committee (SC) to oversee overall project progress; and ii) reinforcing the Project Implementation Unit (PIU). Specifically, the overall responsibility for project execution would be delegated to a PIU to be set up within the Ministry of Industry and SME’s premises under the direct supervision of a designated project coordinator. The PIU would be in charge of implementing the project in accordance with the Project Implementation Plan. The PIU would be headed by an experienced project coordinator Public Disclosure Copy designated by the Ministry of Industry and SMEs and have administrative structures, processes, and staffing allowing an efficient administration of the project. The parties directly involved in the project would be individually responsible for decisions that affect their own respective components. E. Borrowers Institutional Capacity for Safeguard Policies The borrower capacity for safeguards is limited. Institutions in charge of environment (Ministry of Energy and Environment) and social affairs (Ministry of Social Affairs and of Women and Children Promotion)) are few, often understaffed and with little equipment. As of now, they cannot be considered as fully familiar with the Bank and Bank-funded projects procedures. To counteract this, safeguards specialists are included in the Bank team and will provide guidance to the PCMU and the TTL as project evolves. The planned civil works are minor and localized, and will be undertaken according to national and local laws and regulations. This project does not require any inputs from natural assets (land, natural resources, etc.) and is not likely to induce negative externalities on natural and human environments of the implementing sites or cause adverse impacts on human populations. The project will not require any land acquisition nor will it cause any restrictions of access to resources. Therefore it has been classified category C project with no further safeguard work. F. Environmental and Social Safeguards Specialists on the Team Maman-Sani Issa (AFTN2) Paivi Koskinen-Lewis (AFTCS) II. SAFEGUARD POLICIES THAT MIGHT APPLY Public Disclosure Copy Safeguard Policies Triggered? Explanation (Optional) Environmental Assessment OP/ No Any civil works for this project are minor and BP 4.01 localized. They will be carried out according to national and local laws and regulations. Natural Habitats OP/BP 4.04 No Forests OP/BP 4.36 No Pest Management OP 4.09 No Physical Cultural Resources OP/ No BP 4.11 Indigenous Peoples OP/BP 4.10 No Involuntary Resettlement OP/BP No The project does not require the acquisition of 4.12 land leading to involuntary resettlement and/or restrictions of access to resources and livelihoods. Safety of Dams OP/BP 4.37 No Projects on International No Waterways OP/BP 7.50 Public Disclosure Copy Projects in Disputed Areas OP/BP No 7.60 III. SAFEGUARD PREPARATION PLAN A. Tentative target date for preparing the PAD Stage ISDS: 31-Dec-2012 B. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing1 should be specified in the PAD-stage ISDS: C-Not required N/A IV. APPROVALS Task Team Leader: Name: Jean Michel Noel Marchat Approved By: Regional Safeguards Name: Alexandra C. Bezeredi (RSA) Date: 07-Feb-2013 Coordinator: Sector Manager: Name: Paul Noumba Um (SM) Date: 06-Feb-2013 Public Disclosure Copy 1 Reminder: The Bank's Disclosure Policy requires that safeguard-related documents be disclosed before appraisal (i) at the InfoShop and (ii) in country, at publicly accessible locations and in a form and language that are accessible to potentially affected persons.