Document of The World Bank FOR OFFICIAL USE ONLY Report No. 106731-RW INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL FINANCE CORPORATION MULTILATERAL INVESTMENT GUARANTEE AGENCY PERFORMANCE AND LEARNING REVIEW OF THE COUNTRY PARTNERSHIP STRATEGY FOR THE REPUBLIC OF RWANDA FOR THE PERIOD OF FY14-FY18 March 20, 2017 Rwanda Country Management Unit, AFMRW Africa Region International Finance Corporation Africa Region Multilateral Investment Guarantee Agency This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank Group authorization. The date of the last Country Partnership Strategy was June 5, 2014 FISCAL YEAR July 1 – June 30 CURRENCY EQUIVALENTS Currency unit = Rwandan Franc (RWF) US$1.00 = 838 RWF (February, 2017) ABBREVIATIONS AND ACRONYMS ASA Advisory Services and Analytics AfDB African Development Bank BNR National Bank of Rwanda CAS Country Assistance Strategy CEM Country Economic Memorandum CPF Country Partnership Framework CPI Consumer Price Index CPIA Country Policy and Institutional Assessment CPS Country Partnership Strategy DFID United Kingdom Department for International Development DHS Demographic and Health Survey DIME Development Impact Evaluation Initiative DLI Disbursement Linked Indicator DoL Division of Labor DP Development Partners DPCG Development Partners’ Consultative Group DPO Development Policy Operation DRC Democratic Republic of Congo DSA Debt Sustainability Assessment EAC East African Community EDPRS Economic Development and Poverty Reduction Strategy EICV Integrated Household Living Condition Survey FARG Genocide Survivors Support Fund FDLR Democratic Forces for the Liberation of Rwanda (Forces Démocratiques de Libération du Rwanda) FIRST Financial Sector Reform and Strengthening Initiative FONERWA National Climate and Environment Fund FSC Financial Stability Committee FSD Financial Sector Development FSDP Financial Sector Development Plan GAFSP Global Agriculture and Food Security Program GDP Gross Domestic Product GEF Global Environment Facility GNI Gross National Income GoR Government of Rwanda GPSA Global Partnership for Social Accountability i ICT Information and Communications Technology IDA International Development Association IE Impact Evaluation IFC International Finance Corporation IMF International Monetary Fund INDC Intended Nationally Determined Contribution INT Institutional Integrity JRLO Justice Reconciliation Law and Order KWh Kilowatt hour LAFREC Landscape Approach to Forest Restoration and Conservation LWH Land Husbandry, Water Harvesting and Hillside Irrigation MDG Millennium Development Goal MFI Micro Finance Institutions MIGA Multilateral Investment Guarantee Agency MINAGRI Ministry of Agriculture and Animal Resources MINECOFIN Ministry of Finance and Economic Planning MINICOM Ministry of Commerce and Industry MININFRA Ministry of Infrastructure MoU Memorandum of understanding MSME Micro, Small and Medium Enterprise MTEF Medium Term Expenditure Framework MW Megawatt NCD Non-Communicable Diseases NDC Nationally Determined Contribution NISR National Institute of Statistics of Rwanda NPL Non-Performing Loan NURC National Unity and Reconciliation Commission ODA Official Development Assistance PDO Project Development Objective PEFA Public Expenditure and Financial Accountability PFM Public Financial Management PforR Program for Results PLR Performance and Learning Review PPP Public Private Partnership PRGFs Poverty Reduction and Growth Facilities PSCF Peace, Security and Cooperation Framework PSD&YE Private Sector Development and Young Enterprises PSI Policy Support Instrument RDB Rwanda Development Board RHA Rwanda Housing Authority RI Regional Integration RRA Rwanda Revenue Authority RURA Rwanda Utility Regulatory Authority RWF Rwanda Francs SACCOs Savings Credit and Co-operatives SCD Systematic Country Diagnostic SCF Standby Credit Facility SDG Sustainable Development Goals SDR Special Drawing Right SGBV Sexual and Gender-based Violence ii SME Small and Medium-size Enterprise SNEL National Electricity Company (Société Nationale d'Electricité) SPP Standard Power Purchasing SUF Scale Up Facility SWG Sector Working Group TA Technical Assistance TF Trust Fund TVET Technical and Vocational Education and Training UN United Nations UNODC United Nations Office on Drugs and Crime VAT Value Added Tax VUP Vision 2020 Umurenge Program WATSAN Water and Sanitation WBG World Bank Group WDI World Development Indicators WGI World Governance Indicator IBRD IFC MIGA Regional Vice President: Makhtar Diop Dimitris Tsitsiragos Keiko Honda Director: Diarietou Gaye Cheikh Oumar Seydi Merli Baroudi Task Team Leader: Yasser El-Gammal Ignace Bacyaha/ Stephan Dreyhaupt Manuel Moses iii TABLE OF CONTENTS I. INTRODUCTION ....................................................................................................................... 1 II. MAIN CHANGES IN COUNTRY CONTEXT ........................................................................ 2 A. Changes in key macroeconomic and debt developments........................................................... 2 B. Changes in poverty reduction and shared prosperity ................................................................. 3 C. Political developments ............................................................................................................... 4 D. Emerging priorities and Government agenda ............................................................................ 6 III. SUMMARY OF PROGRAM IMPLEMENTATION .............................................................. 6 A. Program and portfolio performance ........................................................................................... 6 B. Evolution of partnerships and leveraging................................................................................... 7 C. Overview of progress towards achieving CPS objectives .......................................................... 8 IV. EMERGING LESSONS ......................................................................................................... 10 V. ADJUSTMENTS TO THE COUNTRY PARTNERSHIP STRATEGY ................................ 12 VI. RISKS TO THE CPS PROGRAM ......................................................................................... 15 Annex 1: Revised Results Matrix (including additional indicators for FY17-FY20) .................. 17 Annex 2. Matrix of Key Changes to Original CPS Results Matrix .............................................. 25 Annex 3. Matrix summarizing progress toward FY14-18 CPS Objectives ................................. 27 Annex 4: New IFC commitments and Advisory Services in the CPS period ............................... 38 Annex 5: Rwanda CAS Lending Operations and ASA FY14-16 (US$ millions) ........................ 39 Annex 6: EDPRS-2 Mid-Term Review Completion of Policy Actions ....................................... 42 Annex 7: Impact Evaluation ......................................................................................................... 43 Annex 8: Progress towards achievement of CPS outcomes (detail) ............................................. 44 Annex 9: Adjustments to the CPS (detail) .................................................................................... 50 TABLES, FIGURES AND BOXES Table 1: Key Macroeconomic Indicators ........................................................................................ 3 Table 2: Approved Projects under IDA17 ...................................................................................... 7 Table 3: Indicative IDA18 ............................................................................................................ 14 Table 4: Revised Systematic Operations Risk-Rating Tool (SORT)............................................ 16 Figure 1: Summary of progress against outcomes ........................................................................ 10 Box 1: Refugees in Rwanda ............................................................................................................ 4 Box 2: Regional Projects ................................................................................................................ 5 iv THE REPUBLIC OF RWANDA PERFORMANCE AND LEARNING REVIEW OF THE FY14-18 COUNTRY PARTNERSHIP STRATEGY (CPS) I. INTRODUCTION 1. This Performance and Learning Review (PLR) reviews and updates the FY14-18 Country Partnership Strategy (CPS) (Report number 88941) which was discussed by the Board of Executive Directors on June 05, 2014. The CPS supports the Government of Rwanda’s (GoR) second Economic Development and Poverty Reduction Strategy (EDPRS2), the country’s National Development Plan. The Plan covers the period 2013-2018 and aims to accelerate private sector-led economic growth and further reduce poverty, including extreme poverty. 2. There has been excellent progress towards CPS across the majority of the outcomes reflecting, in part, outstanding International Development Association (IDA) and International Finance Corporation (IFC) portfolio performance. Most CPS outcomes are on track or partially on track. Progress in meeting development objectives and implementation has been satisfactory or moderately satisfactory in all active projects for which results are available. A focused and targeted program of analytical work, including a large program of impact evaluations (IE), supports the World Bank’s engagement across the sectors. The quality of the portfolio is among the best of any country at such a low income level. The delivery of IDA17 has been heavily front- loaded—84 percent of the total was committed in the first two fiscal years (FY15 and FY16). With the approval of a development policy operation (DPO) in October 2016, the remaining IDA allocation, including extra funding made available, is committed for Board delivery by April 2017. Rwanda is also benefiting from the Scale-Up Facility (SUF) for a transport project scheduled for Board presentation in May 2017. Over the period, International Finance Corporation (IFC) investment portfolio grew by 122 percent and also saw further sector diversification, while the advisory program deepened to include more firm-level engagements. 3. The PLR proposes a two year extension of the on-going CPS to the end of FY20. This will allow time to fully anchor the new Country Partnership Framework (CPF) in the EDPRS3, which will be published in January 2019. It will also enable the Systematic Country Diagnostic (SCD) to be informed by the results of the 2018 Fifth Integrated Household Living Conditions Survey, and the 2019 Demographic and Health Survey. The World Bank will be one of the key development partners providing inputs to the EDPRS-3 including existing analytical work, an on- going Country Economic Memorandum (CEM) and emerging lessons from the SCD work which is due to start in late FY18. This extension will also allow the CPS to be developed using reasonable estimates of the country’s allocation under IDA19. The IDA18 indicative allocations have been shared with the authorities and an indicative program has been agreed.1 The GoR plans to make full use of the new windows under IDA 18 including the private sector, refugees, and enlarged regional integration ones. 4. This PLR maintains the three themes of the CPS, but proposes some adjustments in 1 Actual Performance Based Allocation allocations will depend on: (i) the total IDA resources available; (ii) the country’s performance rating, per capita Gross National Income, and population; (iii) the performance and other allocation parameters for other IDA borrowers; and (iv) number of IDA-eligible countries 1 the World Bank’s engagement approach. Accelerating economic growth that is private-sector driven and job-creating, improving the productivity and incomes of the poor through rural development and social protection, and supporting accountable governance through public-financial management and decentralization remain valid and relevant priorities for Rwanda. The World Bank’s engagement approach, however, does require some adjustment to address a number of second generation issues emerging in Rwanda. The proposed change in engagement approach will focus more on the “how” of supporting Rwanda rather than the “what”. It will adopt new and innovative solutions. It will also focus more on enhancing private sector participation in a range of sectors, which has seen limited progress despite impressive achievements enhancing the investment climate. Strong coordination and continued consolidation of World Bank Group (WBG) engagement across IDA, IFC and Multilateral Investment Guarantee Agency (MIGA) will continue to be a central feature of the PLR as it has been under the CPS to date. II. MAIN CHANGES IN COUNTRY CONTEXT A. Changes in key macroeconomic and debt developments 5. Growth in 2015 was 6.9 percent, largely in-line with the average growth of previous five years but accompanied by a widening current account deficit driven by increased public investments (Table 1). The growth slow-down that began in mid-2016 is driven by a number of factors: a) negative change in the external environment due to lower commodity prices, lower external inflows and regional tensions; b) supply shocks triggered by climate events that affected food production and food security; and c) the policy adjustment program that the Government embarked on with the support of the International Monetary Fund (IMF) to cope with growing external vulnerability. In light of the recent growth slow-down and as part of an ongoing revision of its development strategy, the authorities have prioritized the development of a comprehensive program of policy responses to address the impediments for sustainable and private sector-led growth. 6. Public and publicly guaranteed debt increased substantially in 2015-2016 reaching an estimated 45 percent of gross domestic product GDP. This was largely driven by the depreciation of the national currency and the guarantees issued to publicly owned companies. The authorities see this as a one-off increase, and it is expected that the ratio will gradually return to a more comfortable level after peaking at around 50 percent in 2018. The 2016 Debt Sustainability Analysis (DSA) maintained Rwanda’s status of low risk of debt distress. Under the baseline scenario, all debt burden indicators are projected to remain below the policy-dependent thresholds. Under a stress test of export and depreciation shocks, a temporary breach of the debt service-to-revenue ratio and the debt service-to exports ratio thresholds may occur in 2023 with maturing of Eurobonds. Despite these breaches the overall assessment remains mostly positive because of the temporary nature of these breaches, expected refinancing of maturing Eurobonds and strengthening indicators of repayment capacity on the back of expected further expansion of exports and tax revenues. Rwanda’s ext ernal vulnerability, however, remains high. 7. The GoR has been proactive in dealing with the changing economic environment that led to the recent balance of payments vulnerability. The authorities have agreed with the IMF to obtain access to financing and thus support economic performance in the face of a deteriorating macroeconomic outlook. On June 8, 2016, the Executive Board of the IMF completed the fifth review of Rwanda’s economic performance under the program supported by the first Policy Support Instrument (PSI1) and approved an 18-month arrangement under the Standby Credit Facility (SCF) 2 for SDR 144.18 million (about US$204 million or 90 percent of Rwanda’s quota). The program disbursed US$102 million in June 2016, with the remaining to be disbursed end of 2017. Program performance is strong, and implementation of actions agreed by the authorities and IMF for fiscal consolidation and a greater exchange rate flexibility is on track. Table 1: Key Macroeconomic Indicators 2012 2013 2014 2015 2016 2017 2018 (Est.) (Pro.) (Pro.) Real economy Annual percentage change, unless otherwise indicated Real GDP 8.8 4.7 7.0 6.9 6.0 6.0 6.6 Per Capita GDP (US$) 667 679 697 697 701 722 751 Fiscal Accounts Percent of GDP, unless otherwise indicated Revenues 23.5 25.9 24.5 25.2 24.1 23.0 23.0 Expenditures 26.5 29.9 30.7 30.3 28.0 27.2 27.1 General Government Balance (w grant) -3.0 -4.0 -4.9 -5.1 -3.9 -4.1 -4.1 General Government Balance (w/o grant) -10.7 -13.4 -14.0 -11.5 -9.0 -9.0 -9.0 Public and Publicly Guaranteed Debt 21.7 28.4 29.3 35.4 45.0 48.4 50.8 Balance of Payments Percent of GDP, unless otherwise indicated Current Account Balance -10.2 -7.4 -12.0 -13.7 -16.9 -11.7 -10.5 Excluding Official Transfers -16.4 -14.9 -17.0 -18.1 -20.7 -16.3 -14.6 Foreign Direct Investment 3.5 3.4 3.4 3.9 3.9 3.9 4.2 Gross Reserves (in billions US$, eop) 850 1,070 951 922 926 967 1089 In months of imports 5.3 4.2 4.8 3.4 3.7 3.9 4.0 External Public Debt 16.2 21.4 23.6 28.5 38.0 42.0 45.1 Source: World Bank, IMF and GoR, (January 2017) 8. Downside risks to the macroeconomic outlook have increased. There are three main risks. First, key public spending programs could come under pressure as a result of declining grants and an overall tighter fiscal space. Second, regional instability could affect tourism receipts, Rwanda’s largest source of foreign exchange. Third, abnormal rain and floods could affect agriculture and the food manufacturing and trade sectors. Public financial management reforms, increased agricultural productivity and other structural measures are critical to mitigating these risks. On the other hand, the banking sector is well capitalized. The capital adequacy ratio stood at 22.5 percent in December 2015, down from 24.0 percent in December 2014, but higher than the 15 percent minimum requirement. Rwanda’s external debt also remains sustainable. B. Changes in poverty reduction and shared prosperity 9. Official poverty estimates suggest a decrease in poverty between 2010/2011 and 2013/2014. The 2013/2014 Integrated Household Living Conditions Survey (EICV4), published in August 2015, showed that 39.1 percent of the population lives below the national poverty line. This is a reduction compared to the poverty rate of 44.9 percent measured in the previous survey (EICV3, implemented in 2010/2011). While the two rates are based on slightly different methodologies, robustness tests performed by the National Institute of Statistics of Rwanda suggest that a statistically significant declining trend is also obtained when using a common poverty line (in real 3 terms) across the two surveys.2 The next national survey, EICV5, will measure poverty during 2016/2017 and is scheduled to be published in 2018. The declining poverty trend is primarily driven by the increased agriculture productivity and the expansion of the social protection system across the country targeting the most vulnerable. 10. The extent to which prosperity is shared has increased according to official estimates. Consumption inequality as measured by the Gini coefficient dropped from 0.49 in 2010/2011 to 0.45 in 2013/14 according to official statistics. The reduction in inequality has accounted for more than 40 percent of the recent reduction in poverty according to government estimates. The inclusiveness of the recent economic growth is corroborated by the fact that (i) rural areas outpaced urban areas in income growth and poverty reduction and (ii) most of the new jobs and establishments created in recent years are in the informal sector. A key challenge for ensuring that growth continues to be inclusive is to continue to accelerate the rate of job creation in order to keep pace with the massive inflow of youth into the labor market. This, in turn, increases the importance of strengthening the operating environment for micro, small and medium enterprises. 11. Rwanda has continued to make progress in a wide range of nonmonetary indicators of wellbeing. The 2014/2015 Demographic and Health Survey showed a decline, relative to 2010, in a number of important health indicators: infant mortality fell from 50 deaths per 1000 births to 32, under-5 mortality fell from 76 per 1000 births to 50; the share of children under 5 that are short for their age fell from 44 percent to 38 percent. Furthermore, access to improved water sources, sanitation, and electricity as well as housing conditions all improved significantly between 2005/2006 and 2013/2014 according to latest EICV data. C. Political developments 12. Rwanda will hold presidential Box 1: Refugees in Rwanda elections in August 2017. In December 2015, President Kagame announced his • 1.43 percent of Rwanda’s population are refugees intention to run for a third term in office in • 73,198 Congolese refugees in Rwanda are in protracted 2017. The announcement was made situations meaning >5 years and with no prospect of a solution following a country–wide referendum in which 98 percent of Rwandans voted in favor of a revision of the constitution enabling the President to extend his tenure. Opposition groups in exile and some members of the international community expressed their concerns about the decision. 13. Preparation for the elections is taking place in the context of existing and potential tensions in the Great Lakes region. The instability which Burundi has been experiencing since 2015 Source: UNHCR 2 National Institute of Statistics of Rwanda. 2016. Poverty Trend Analysis Report 2010/2011 – 2013/2014. Available at http://www.statistics.gov.rw/publication/poverty-trend-analysis-report-201011-201314 4 had a number of direct and indirect effects in Rwanda. A significant number of refugees fled Burundi and sought safety in Rwanda (Box 1). This entailed significant financial costs for the GoR. The events in Burundi also heightened tension between the two countries. In the Democratic Republic of Congo, elections that were to take place in November 2016 have been postponed Box 2: Regional Projects to before the end of 2017. In this context the World Bank has actively engaged in Rwanda participates in six Regional Projects with total strengthening regional cohesion, financing of US$849 million of which Rwanda’s share amounts to US$204 million. These projects focus on: including in Rwanda, through six regional I. Reducing gender-based violence (Great lakes projects and continues to contribute to Emergency Sexual and Gender-Based Violence and enhanced security in Rwanda through its Women’s Health Project, FY16) support for the Enhanced Support to the II. Trade Facilitation (Great Lakes Trade Facilitation Rwanda Second Emergency Project, FY16) III. Energy (Regional Rusumo Falls Hydroelectric Demobilization project (summarized in project, FY14) Box 2 and further detailed in Annex 5). IV. Education (Eastern and Southern Africa Higher Education Centers of Excellence, FY16) 14. Rwanda has further V. Health (East AFRICA Public Health and Laboratory strengthened its reputation for effective Networking Project, FY10) overall management of the public VI. And Natural Resources Management (Lake Victoria sector. Control of corruption tightened Environmental Management Project, FY11) further between 2011 and 2014 as measured by the World Governance Indicator (WGI) rankings. Rule of law and regulatory quality also both improved to place Rwanda around the 60th percentile relative to world peers. Rwanda’s Foreign Direct Investment regulatory framework is ranked 6th out of 140 countries in the World Economic Forum’s Global Competitiveness Index. While Rwanda has an efficient public sector, it is a lean one and sometime stretched given the ambitious development agenda of the country. Weak capacity also tends to be an issue below the second tier of staff in central government structures and at district levels. 15. Rwanda highly values and sees the benefit of regional integration (RI) and working closely with its neighbors, especially members of the East African Community (EAC). Areas of integration have ranged from harmonizing telecommunication services, banking and finance to developing regional infrastructure projects, in particular in the power sector. The World Bank has been supporting this agenda through a number of regionally financed projects focusing on areas where there are clear gains for all countries engaged. The Great Lakes initiative, launched by the WBG President and the United Nations Secretary General (UN SG) provides a framework for regional engagement in Rwanda. Going forward, and with the enlarged RI envelope under IDA18, there is more potential for Rwanda to use IDA resources to finance regional programs/projects. Potential sectors include, among others, infrastructure, education, environment, transport, and Information and Communication technology (ICT). 16. There has been excellent progress decentralizing policy making and service delivery. Rwanda has systematically adopted a decentralized approach to development planning and delivery of services across the sectors. The World Bank has been a key partner in supporting this process through its support for public financial management and capacity building throughout the portfolio. Under the rural roads program, for example, bidding documents are prepared at the district level and the World Bank provides intensive hand-holding to technical officers. 5 17. Rwanda has also been in the vanguard of countries taking action to adapt to climate change. In November 2015, Rwanda submitted its revised Intended Nationally Determined Contribution (INDC) to UNFCCC ahead of the Conference of the Parties - COP21 meeting in Paris. The INDC, which has since been confirmed as the Nationally Determined Contribution (NDC), is built on five enabling pillars: Institutional Arrangements; Finance; Capacity Building and Knowledge Management; Technology, Innovation and Infrastructure; and Integrated Planning and Data Management. The World Bank, alongside African Development Bank (AfDB), is supporting the GoR in identifying and planning investments for climate adaptation and REDD through grants of US$1.5 million and US$0.25 million from the Pilot Program for Climate Resilience and the Forest Investment Program, respectively. It is hoped that this may lead to mobilization of investment finance from the Climate Investment Funds and the Green Climate Fund, improved coordination with development partners, and strengthened climate resilience within the Multilateral Development Bank’s portfolios. 18. Voice and accountability remain highly constrained in Rwanda. Rwanda’s WGI percentile ranking for voice and accountability improved slightly from 2010 to 2015 (Rwanda was at 12th percentile in 2010 and improved to 17th in 2015) but remains under the Sub-Saharan region average (33rd) and neighboring countries (Uganda at 29th and Kenya at 42nd). A number of World Bank operations support the enhancement of accountability systems including the Governance Program for results (PforR) and the Social Protection DPO’s series. D. Emerging priorities and Government agenda 19. The EDPRS2 (2013-2018) continues to be the GoR’s main framework for implementing its development agenda. The strategy has sector level targets that underpin investment and performance reviews. The World Bank’s and other development partners (DP) engagements are well anchored in the strategy with the World Bank focusing on six main sectors; agriculture, energy, skills, social protection, transport and rural roads, and urban development/secondary cities. Monitoring of sectoral targets are part of the mandate of Sector Working Groups (SWG). These SWGs cover the main sectors and are chaired by the Permanent Secretary of the associated ministry with a co-chair from one of the leading DPs active in that sector. This architecture has proven to be a good model for coordinating DP support. 20. A mid-term self-assessment conducted in mid-2016 by the GoR shows good progress on achieving targets with some emerging challenges. Out of 30 core indicators, 27 were evaluated against mid-term targets. Thirteen were achieved, three are on-track, five are on watch and six are off-track. The main emerging challenges identified include: a) declining exports; b) the high cost of energy and low access to electricity for households; c) difficulty in tracking indicators for graduation from poverty; d) the need for clear and measurable indicators for tracking the progress of skills development; and e) limited progress developing service delivery indicators. The GoR’s forward plan focuses on closely monitoring and supporting the implementation of unfinished policy actions, strengthening collaboration with the private sector and conducting an external evaluation of EDPRS2 whose findings will feed into the development of EDPRS3. III. SUMMARY OF PROGRAM IMPLEMENTATION A. Program and portfolio performance 21. The overall quality of the World Bank’s program and portfolio performance are 6 among the best of any low income country portfolio in the World Bank. Development objective and implementation progress are either satisfactory or moderately satisfactory for all eleven projects for which results are available. This 100 percent record compares favorably with an average for the Africa Region of 89 percent. Table 2: Approved Projects under IDA17 Theme 1: Accelerating economic Theme 2: Improving the productivity Theme 3: Supporting growth that is private-sector driven and incomes of the poor through rural accountable governance through and job-creating development and social protection public-financial management and decentralization FY15: US$270 million (IDA) Transformation of Agriculture Sector Public Sector Governance Program Phase 3 PforR: US$100 million PforR: US$100 million Social Protection (DPO):US$70 million FY16: US$331 million (IDA) Rwanda Electricity Sector Second Social Protection System (DPO): Strengthening Project: US$95 US$95 million million Urban Development Project: Great Lakes Trade Facilitation Project: US$95 million US$26 million Eastern and Southern Africa Higher Education Centers of Excellence project: US$20 million FY17: US$141 million (IDA) AF PforR (Agriculture): US$46 million Third Social Protection System (FY17) Support DPO: US$95 million 22. Lending during the CPS has been significantly front-loaded. Total commitments during FY15 and FY16 amounted to US$574 million, i.e. 84 percent of the three-year lending envelope for Rwanda. With the approval of a DPO in October 2016, the remaining IDA allocation, including extra funding made available, is committed for Board delivery in April 2017. Total net commitments outstanding on June 30, 2016 amounted to US$305.3 million of which 31 percent will be disbursed over the immediate term. Table 2 presents approved projects under IDA17. 23. Advisory Services and Analytics (ASA) has been an effective and successful tool of engagement, providing a solid foundation for new lending and evaluating the impact of projects (Annex 5). The World Bank has supported a wide range of ASA. World Bank- administered trust funds have also played a significant role in financing activities in Rwanda. The Rwanda ASA portfolio currently comprises 14 activities of which five are IEs (Annex 7). B. Evolution of partnerships and leveraging 24. The CPS emphasizes the importance of working closely with other development partners. Rwanda continues to be a strong example of effective Donor Harmonization and Aid Effectiveness. At the global level, the World Bank is an active participant in the Development Partners’ Consultative Group (DPCG). The group is chaired by the Permanent Secretary of the Ministry of Finance and co-chaired by one of the larger DPs (elected by the group members) and the One-UN Resident Coordinator. The World Bank took on the role of co-chair in October 2016. The DPCG meets quarterly and discusses high level policy issues of relevance to the development agenda. Every year, an expanded two-day retreat takes place which involves all Permanent Secretaries of Ministries along with the Minister of Finance, chair, co-chair and Development Partner heads. 7 25. At the sectoral level, the World Bank has established constructive relationships with other development partners. SWGs exist for a number of sectors with similar chairing arrangements. The World Bank is active in a number of these SWGs and maintains close working relationships in the urban, energy, agriculture, social protection and roads sectors among others. C. Overview of progress towards achieving CPS objectives 26. The CPS aimed to support the Government’s vision of accelerating private sector-led economic growth and further reducing poverty. The CPS was built around three strategic themes: accelerating economic growth that is private sector-driven and job creating; improving the productivity and incomes of the poor through rural and agriculture development and social protection; supporting accountable governance through public financial management and decentralization. There were also cross-cutting themes of capacity building, gender, ICT and the environment. 27. Progress towards the twelve outcomes has been broadly positive. Seven out of 12 outcomes have been achieved or are on track or mostly on track. (Outcomes and their underlying indicators are deemed to be on track when progress is broadly in line with prior expectations e.g. as set out in associated World Bank projects.) One outcome in the area of rural connectivity is partially on track. This Review proposes restructuring four outcomes (outcomes 6, 9, 11 and 12) i.e. either changing the outcome title itself or a substantial number of associated indicators. This is intended to ensure better alignment with World Bank activity, available data or to ensure they are specific and measurable. Progress against each indicator is set out in Annex 3 and summarized below with further detail available in Annex 8. 28. CPS Outcome 1: ‘Increased generation and access to electricity’ is on track. Three indicators are on track. One indicator is partially on track. Rwanda’s installed capacity increased from 150MW at the end of 2014 to 185 MW at the end of March, 2016. Grid access has increased from about 110,000 (9 percent) households in 2009 to 400,000 (17 percent) in 2013 to 560,000 (22 percent) households by the end of 2015. Coverage for health centers and administrative centers is on track (84 percent and 90 percent respectively), but the coverage of primary and secondary schools is behind, with 46 percent access rate. 29. CPS Outcome 2: ‘Development plans for secondary cities developed’ is on track. One indicator; urban planning and management guidelines for secondary cities, has been achieved (guidelines developed and adopted in 2015). The second indicator, developing funding mechanisms for affordable housing), is on track. 30. CPS Outcome 3: ‘Improved environment for private sector investments’ is on track. All five indicators are on track (on line construction permitting, improvements in competition policy performance indicators, establishing an enabling environment for public private partnerships (PPPs), local currency issuance and raising IFC financial market commitments to US$80 million). Despite indicators being on track, cases of renegotiation of pre-agreed PPP tender arrangements may impact the effective implementation of a conducive PPP environment and can send the wrong signal to private sector. The WBG will seek to work with the Government to ensure consistent signals for private investment. 31. CPS Outcome 4: ‘Increased integration into the EAC regional markets’ is mostly on track. One indicator has been achieved (development of one IFC tax administration project), one 8 indicator is on track (development of a dispute resolution framework by IFC), one indicator is partially on track (development of an online business portal), and one indicator is not validated and will be restructured because the indicator refers to tourists while target number is for all visitors. The main change here has been to support the GoR’s focus on trade integration with the broader region and especially the Democratic Republic of Congo (DRC), recognizing the strong impacts of cross-border trade on poverty reduction in border communities. 32. CPS Outcome 5: ‘Improved agriculture productivity and sustainability’ is mostly on track. There has been good progress in the development of irrigation in marshlands and hillsides and the treatment of hillsides for sustainable agriculture production. Two indicators (marshland and hillside area under irrigation and IFC financing) are on track. One indicator (area of land with bench, progressive or radical terracing) is partially on track. Agricultural productivity, however, has plateaued in recent years following sharp improvements during 2005 to 2012. 33. CPS Outcome 6: ‘Improved access of rural /small farmers to inputs, financing, and markets’ is partially on track and will be restructured. One indicator is on track. There is a steady increase in banking loans being made to the agriculture sector. GoR targets for an increase in the percentage of loans to farmers and agricultural business have been achieved. Ensuring inclusive access to finance remains a key challenge. Information on access to insurance and farms meeting market standards is not available and the indicators need to be revised. 34. CPS Outcome 7: ‘Improved agriculture value chains’, is mostly on track. Investments in technical services, irrigation and terracing are contributing to the continued gains in productivity. Implementing inputs policy reforms will further enhance productivity. Two indicators (production of priority food crops and increased value addition for tea and coffee) are on track. Exports of both tea and coffee continue to grow. In general, the quality of tea from Rwanda is higher than regional competitors. One indicator (number of horticulture cooperatives with links to global firms) is off track - since 2014 the volume of horticulture exports have declined by 9 percent. 35. CPS Outcome 8: ‘Improved rural roads condition and connectivity to market centers’ is partially on track. Both indicators, number of roads in fair or good condition as a share of all roads and share of rural population with access to all season roads, are partially on track. Implementation of the project was initially slow. However, works and supervision contracts have now been awarded in two districts and procurement processes have commenced in the remaining two districts. Attainment of the outcomes remains on track. 36. CPS Outcome 9: ‘Enhanced local government tax generation and administration’ is partially on track. In 2015/16, 33.8 billion RWF of local tax revenue was collected compared with 13.9 billion in 2012/13 reflecting an increase from 0.3 percent of GDP to 0.9 percent of GDP. This equals a threefold increase and a material achievement. The GoR has also introduced significant tax administration reforms. Among these, the centralization of collection of local government taxes is seen as having contributed significantly to the achievement of the indicator. It should be noted that the increase has fallen short of original expectations as enumerated in the Reviews under the IMF Policy Support Instrument. These short-falls stem principally from delays in implementation of value added tax (VAT) reforms and changes to the property and land tax regimes. The current indicator is being replaced with a more global measure of local tax effort, which is easily measurable. This will align the CPS target more closely with targets in the Rwanda Revenue Authority’s strategic plan. It will be supported by World Bank support for improved 9 District-level management of local government revenue and other measures. 37. CPS Outcome 10: ‘Enhanced effectiveness and expanded coverage of social protection system’ is on track. Two indicators (Vision 2020 Umurenge Program (VUP) direct coverage and public works) are achieved. One indicator (recruitment of social protection staff in MINALOC) is on track. The basic elements of a social protection system are in place. The system, which is developing fast, is reaching a growing number of poor and vulnerable families. 38. CPS outcome 11: ‘Improved delivery of decentralized services’ will be restructured. Available evidence shows that the share of citizens satisfied with the timeliness and quality of service delivery at the local level, an EDPRS2 target, had reached 71.1 percent in 2014/2015, up from 70.4 percent in 2012. This share was lower, however, than the targeted value of 73.5 percent and considerably behind schedule with respect to the 2018 target of 85 percent. Nevertheless, the World Bank is only able indirectly to influence the current indicators which is being replaced with more appropriate indicator; improved national and subnational transparency, efficiency, value for money and accountability in the use of public funds. Figure 1: Summary of progress against outcomes CPS Theme 1: Accelerating economic growth that CPS Theme 2: Improving the productivity and incomes CPS Theme 3: Supporting accountable is private-sector driven and job-creating of the poor through rural development and social governance through public-financial protection management and decentralization Outcome 1: Increased generation and Outcome 5: Improved agriculture Outcome 11: Improved delivery access to electricity productivity and sustainability of decentralized services Outcome 2: Development plans for Outcome 6: Improved access of rural / small Outcome 12: Strengthened secondary cities developed farmers to inputs, financing, and markets accountability Outcome 3: Improved environment Outcome 7: Improved agriculture for private sector Investments value chains Outcome 4: Increased integration Outcome 8: Improved rural roads into EAC regional markets condition and connectivity to market centers Outcome 9: Enhanced local government = achieved, on track, mostly on track tax generation and administration = partially on track (watch) Outcome 10: Enhanced effectiveness and expanded coverage of social protection system = re-structure 39. CPS Outcome 12: ‘Strengthened accountability’ will be restructured to better reflect World Bank support. Eighty-one percent of citizens felt in 2014/2015 that local administration is transparent, accountable and citizen-oriented as against a target of 48 percent. On the other hand, the share of citizens satisfied with decentralization and participation in 2013/2014 fell to 75.36 percent down from 76 percent in 2012 and short of the target of 80 percent. The World Bank, however, is only able indirectly to influence the current indicators which will, therefore, be replaced with more appropriate indicators. IV. EMERGING LESSONS 40. CPS implementation thus far has yielded a number of important lessons. Some of these are country level ones and others are directly related to the CPS implementation.  Adjustments are needed in the country’s current growth model, which has been public investment-based, to deliver sustained and private sector-led economic growth. The recent 10 slow-down in economic growth and emerging macroeconomic imbalances highlight the importance of encouraging private investment and reducing the country’s reliance on public investment as an engine of growth.  WBG has shown it can play a lead role in attracting investors. IFC’s issuance of a bond in Local Currency, for example, has set a benchmark in terms of maturity and yield curve and enhanced global and regional institutional investor perceptions of Rwanda as a good and reliable investment destination. The issuance brings diversification benefits (first foreign entity and supranational to issue local currency bond in Rwanda) and liquidity advantages (the paper qualifies as eligible collateral for repurchase transactions with the National Bank of Rwanda and accounts for zero risk weighting for capital adequacy purposes).  The Government will need to provide consistency and predictability in its dealings with the private sector. Renegotiation of committed PPP transactions late in the process, for example, could discourage private sector from investing in Rwanda. While the Government does have the right to retreat from a pre-committed deal, this should be done in limited cases and for strong reasons. In those cases, the Government should provide for a fair compensation to the private sector involved. These measures would ensure that such cases do not spoil the positive image the country wants to build as an investment destination.  Scarcity of foreign currency resulting from balance of payments deficits is posing challenges on initiating PPP arrangements in infrastructure. Private Sector Investments in Infrastructure take time to materialize and require hard currency with long term maturity generally between 18 to 30 years. Recent developments in Rwanda led the Government to stop granting indemnity currency under sovereign guarantee. The WBG stands ready to support government infrastructure development projects in water, energy, health and education. However, the long term nature of financing of such projects combined with the lack of guarantees make this challenging for IFC.  Strong leadership and effective coordination of multiple stakeholders have been central to the successful implementation of reforms in Rwanda. Of the 54 Investment Climate Programs in place across Sub-Saharan Africa, Rwanda, together with Mauritius, has demonstrated particularly good progress since 2009. Key success factors include: (1) strong commitment to reforms at the highest level; (2) effective government coordination of teams involved; (3) an ability to understand changes in methodology, to own these and to put forward a solid work-plan; and (4) an ability to learn from the World Bank’s global and regional Doing Business teams and to take a lead role in the engagement.  A systematic approach to development planning at the government level helps anchor DPs support. The EDPRS2 has proved to be a powerful development framework, facilitating the division of labor among DPs and identifying common goals for the Government and each DP. The robust monitoring system used by the DPCG and SWGs ensures that adjustments are made proactively during implementation.  Performance management within government helps create accountability and focus priorities. The GoR’s unique “UMUHIGO”3 performance contracts system specifies sector specific targets based on the EDPRS2 and establishes a cascading system of performance indicators at different levels of government. Contracts are established at both the central and regional levels and are enforced by the Head of State. The newly introduced joint performance contracts for multi-sectoral areas of intervention are also showing early signs of success. 3 Kinyarwanda for ‘commitment’ or ‘vow to deliver’ 11  At times institutional problems at various levels of government affected performance, but proactive involvement by Ministry of Finance and Economic Planning (MINECOFIN) helped resolve problems. At the level of central government the involvement of multiple line ministries (e.g. in the Great Lakes Emergency Sexual and Gender-based Violence Women’s Health Project, FY14), the existence of multiple small and overlapping government programs and funding lines (the FY15 Social Protection System Support project), and restructuring of ministries (e.g. Transformation of Agriculture Sector Program Phase 3 PforR, FY15) have all contributed in some instances to some delays in implementation. Project Implementation Units have also on occasion exhibited some weakness whether in terms of insufficient experience or delays in recruiting staff. In such cases proactive engagement of MINICOFIN, however, has helped resolve blockages and re-establish momentum.  Strong collaboration across the WBG has delivered impressive outcomes in several sectors. The WBG tackles issues from different angles in a number of sectors in Rwanda. For example, in the area of private sector development, the World Bank has provided technical assistance while IFC’s Rwanda Investment Climate and Rwanda Entrepreneurship, Leasing and Bulk Water Projects have been instrumental in improving the business environment. Similarly, in agriculture the World Bank has supported productivity improvements and opportunities to market outputs while early engagement by IFC through its Advisory Services Programs has helped unlock private investment. MIGA has also taken action proactively (‘pre- claim intervention’) to help resolve disputes between the GoR and private investors in the renewables sector that goes beyond its direct political risk coverage role.  A programmatic DPO can be a powerful instrument for establishing an efficient, integrated and flexible safety net mechanism. Several factors facilitated the success of the programmatic DPO in Rwanda: • The sectoral policy reforms were central to the World Bank’s CPS, complementary to, and well-coordinated with, other World Bank-financed operations and non-lending services, and accompanied by critical technical assistance (TA) needs. • Effective development partner coordination, through policy support to the Government, implementation support, technical support, and external consultants, provided mostly by the donor partners, was achieved under the framework of the Sector Working Group; • The programmatic nature of the DPO allowed for a continuous process of implementing, monitoring, evaluating where possible, and adjustment based on lessons learned.  Appropriate design and engagement of sectoral ministries and MINECOFIN throughout preparation are key to successful PforRs. The two on-going PforRs provide valuable lessons in terms of what contributes to high likelihood of smooth implementation. Anchoring PforR designs well into the government program and identifying the boundaries of the PforR, as well as, engaging MINECOFIN besides the line ministry early on during preparation prove to be vital for smooth implementation. Minimizing ministries/institutions who are accountable for disbursement linked indicators (DLIs) delivery also makes DLIs’ implementation and verification easier. V. ADJUSTMENTS TO THE COUNTRY PARTNERSHIP STRATEGY 41. The PLR proposes a two-year extension of the on-going CPS to end FY20 and targeted adjustments to reflect lessons learned and emerging government priorities. An extension would allow sufficient time to incorporate lessons learned from EDPRS2 in the CPF and 12 reflect EDPRS3, which will be published in January 2019. It would enable the SCD to be informed by the results of the Fifth Integrated Household Living Conditions Survey, which will be published in 2018, and the next Demographic and Health Survey likely to be published in 2019. It would also allow the CPS to be developed with a reasonable estimate of the country’s allocation under IDA19. Should there be a major change in the GoR’s overall strategy, a further PLR could be prepared to reflect the WBG’s response as appropriate. Meanwhile, the structure and thrust of the current CPS remains broadly fit for purpose. The main themes and sectors of engagement remain the same, although the way the World Bank engages in those sectors will adjust. 42. The proposed WBG focus for the rest of the CPS period is well aligned with the GoR’s forward plans. Based on lessons learned to date, and reflecting emerging macroeconomic realities in the country, there will be a greater focus on private sector participation and leveraging external resources, in particular using the new IDA18 features. The WBG will also do more to address structural reforms in the energy sector and support the development of a new agricultural sector policy (see further below). There will be focus on promoting export growth in relevant sectors. The mix of instruments proposed continue to include all instruments available across the WBG. The specific choice of instruments will depend on the maturity of sector engagement and nature of the operation. The positive experience with programmatic DPOs to date is likely to influence the further deployment of this instrument in priority sectors such as energy. Some specific changes are proposed below (summarized in Annex 2 with further detail in Annex 9). All changes are primarily to ensure CPS’ outcomes are measurable and directly related to the program. 43. The program is aligned with the Sustainable Development Goals (SDGs) approved by the UN General Assembly in September 2015. Theme 1 aligns particularly with Goal 7 which concerns access to sustainable energy for all, Goal 8 (promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all), and Goal 11 (make cities and human settlements inclusive, safe, resilient and sustainable). Theme 2 corresponds well with Goal 2 (end hunger, achieve food security and improved nutrition and promote sustainable agriculture). The GoR, in collaboration with One UN and other DPs, is developing a plan to translate the SDGs into its national development strategies. Under this plan, gaps between targets in the SDGs and the EDPRS2 will be identified and acted upon in EDPRS3. These revisions would, in turn, be reflected in the next CPF. 44. The WBG will support implementation of Rwanda’s Nationally Determined Contribution. The GoR vision is for the country to be a developed, climate-resilient, low carbon economy by 2050. Achieving this will require the country to adapt to the challenges of climate change, including rises in temperature and increased precipitation, and to develop the potential of renewable energy. The WBG will support these efforts. MIGA is considering a request for political risk coverage from a minority investor in the Ruzizi 3 project, a large, high priority hydropower project involving three countries (DRC, Rwanda, and Burundi) that will also be supported by IDA and IFC. In addition, the current majority investor is looking to sell its interest to another company that is already a MIGA client. The World Bank’s support for sustainable rural and urban development likewise contributes to building resilience among communities by improving livelihoods and investing in infrastructure. 45. Planning is underway on the basis of an indicative IDA18 allocations for Rwanda. The World Bank and the GoR have agreed plans on the basis of estimates that the indicative IDA18 allocations will be in the range of US$700-800 million. The distribution of the indicative pipeline across the pillars of the CPS are shown in Table 3. Projects in the pipeline for FY17 amount to 13 US$93 million including regional projects. This brings the total planned portfolio for FY15-FY17 to just over the IDA allocation for the period (104 percent) providing some margin for slippage in approval schedules. An additional US$82.5 million is planned for the Lake Victoria Transport Program before the end of FY17 to be financed through the IDA Scale-Up Facility and US$7.65m million grant for the Rwanda Improved Cook stoves, a carbon offset project. Table 3: Indicative IDA18 Theme I: Accelerating economic Theme II: Improving the Theme III: Supporting growth that is private-sector driven productivity and incomes of the poor accountable governance and job-creating through rural development and social through public-financial protection management and decentralization FY18: US$325 million Rwanda Priority Skills for Growth Social Protection: US$80 million PforR: US$120 million Energy DPO: US$125 million FY19: US$142 million Energy DPO: US$125 million PFM: US$17 million FY20: US$225 million Energy DPO: US$125 million Urbanization phase II: US$90 million Centers of Excellence: US$10 million 46. The World Bank will undertake core diagnostic work to help lay the ground for the forthcoming SCD and Country Partnership Framework. A public expenditure review has recently been completed for the agriculture sector, the results of which will complement work on public expenditure carried out by the IMF. A country economic memorandum is already underway. This will provide an in-depth analysis of Rwanda’s growth model, including the relative role of the public and private sectors going forward, and make recommendations on achieving sustained and inclusive high growth in the long term. The World Bank will work with the National Institute of Statistics Rwanda (NISR) to deepen understanding of the determinants and evolution of poverty reduction in Rwanda and its relation to economic growth. The World Bank will produce policy notes on poverty trends, employment, and social protection to inform design and implementation of strategic operations and policy dialogue. Other ASA will include work on energy to underpin potential lending in this area as well as feeding into preparation of EDPRS3. Cross-cutting theme: gender equity 47. Rwanda has established a strong policy, legal and institutional framework to promote gender equality and address and prevent violence against women and children. In 2013, the GoR developed the National Scaling-up Strategy for One Stop Centers in Rwanda. It strives to ensure the best possible prevention and response for survivors of gender based violence and child abuse, including refugees. A main gender-specific objective of World Bank activity in Rwanda is to expand the provision of services to mitigate the short and medium term impact of sexual and gender-based violence (SGBV). The World Bank is supporting the Government’s lead in this area through a regional initiative that targets some of the most vulnerable groups in DRC, Burundi, and Rwanda. The project, the Great Lakes Emergency Sexual and Gender-based Violence Women’s Health Project (FY14), supports the regional policy agenda on SGBV endorsed by the Great Lakes Region Heads of State (2011 Kampala Declaration). 14 VI. RISKS TO THE CPS PROGRAM 48. The overall risk rating for Rwanda is moderate (Table 4 4). Some risks, however, notably risks identified in the CPS as external risks, i.e. political and macroeconomic risks, have increased as discussed below.  Political and social risk. Three factors are contributing to a heightened level of political and social risk in Rwanda. Presidential elections are scheduled for August 2017. Political issues in Burundi and tense relations with Rwanda may have some implications on trade between the two countries. In the Democratic Republic of Congo, postponed elections could lead to a deteriorating security situation in the country which could spill over into Rwanda.  Macroeconomic risk. There are three main sources of macroeconomic risk facing Rwanda: a) external economic risks as a result of a slowdown in the global economy (via lower commodity prices and reduced external inflows) and regional tensions; b) supply shocks such as climate events that may affect food production and food security; and c) the nature and composition of policy adjustments required to cope with external shocks and ensure sustainability. Recent vulnerability in the balance of payments and the managed slowdown in growth under the IMF program are manifestations of these risks. Managing these risks has implications for fiscal and trade policies. Given the prudent and proactive approach that the GoR has been adopting to date, the most likely scenario is that of continued ability to minimize and mitigate these risks.  The risk posed by weak institutional capacity at sub-national level is linked to that of technical design and implementation of projects and programs; it is a reflection of the GoR’s ambitious targets and high level of coordination needed to ensure delivery. This risk will be mitigated in the WBG’s work program by: a) incorporating capacity building components in projects and programs; and b) working closely with DPs to align their technical assistance (TA) and capacity building activities with the WBG program. This will be particularly important in energy where a new DPO series is being proposed. Such an approach was followed successfully in the social protection DPO series. Projects and programs will also be designed to reflect varying levels of capacity in each sector.  Environmental and climate risk. Hilly topography in Rwanda means that increased precipitation is expected to lead to higher frequencies of flooding and storms in some areas resulting in landslides, crop losses, increased health risks and damage to infrastructure. Temperature rise may increase the spread of vector-borne diseases, air-borne and water-borne diseases, impacting on animal and human health. They could also negatively affect crop yields, and hence food security and export earnings. Warming in highland areas could lead to an expansion of crop pests, such as the coffee berry borer, into cold limited areas used for coffee growing. The negative impact of climate change in Rwanda is increased by low social and economic indicators. Sensitivity to climate change is also heightened by anthropogenic land use change driven in part by subsistence agriculture and fuelwood harvesting. The GoR’s strategy for adapting to these challenges, as set out in its Nationally Determined Contribution, and the WBG’s support for these measures is noted above. 15 Table 4: Revised Systematic Operations Risk-Rating Tool (SORT) Risk Rating Rating (H, S, M, L) 1 Political & governance S 2 Macro-economic M 3 Sector strategies and policies L 4 Technical design of project/program M S Institutional capacity for implementation and sustainability S 6 Fiduciary L 7 Environmental & social M 8 Stakeholders L 9 Other - Overall M 16 Annex 1: Revised Results Matrix (including additional indicators for FY17-FY20) CPS Indicators (FY14–FY20) Milestones WBG Engagement CPS Theme 1: Accelerating economic growth that is private-sector driven and job-creating CPS Outcome 1: Increased generation and access to electricity Country goals: EDPRS2 Elements: (i) Access to adequate and reliable electricity services is key to Rwanda’s economic growth by increasing enterprises’ productivity and competitiveness and job creation; (ii) Increased electricity generation capacity to 563 MW, with private sector investment; (iii) accelerated access to electricity, water, roads, and land to priority sectors of the economy and/or large investors. Development challenges: Lack of sufficient electricity supply is handicapping business and reducing growth. Continued investments in power generation facilities will increase the reliability and lower the cost of electricity, thus contributing to the achievement of the country’s economic development goa ls. Improving the quality of supply of electricity will lower costs and improve the profitability of business enterprises. At the same time, the ability of public institutions, e.g. hospitals and schools, to deliver quality services will be enhanced. Indicator 1.1 Installed generation capacity Milestone 1.1 Completed (MW) i. Developers/contractors for the construction of power MIGA Baseline (FY13): 110 MW plants selected (Rusumo-Nov.2016)  Lake Kivu Methane Generation Project (MIGA Target (end FY20): 300 MW ii. Power plants’ construction progress (Feb.2017 - Guarantees,) Sept.2019) Ongoing iii. Generation capacity (MW) commissioned IDA (Sept.2019)  Regional Rusumo Falls Hydroelectric Project (FY14)  Rwanda Electricity Access Scale-up and Sector Wide Indicator 1.2: National access to electricity Milestone 1.2 Approach (SWAp) Development Project (FY10) (percent) i. National Electrification Plan prepared (Dec.2017)  Rwanda Electricity Sector Strengthening Project (FY16) Baseline (2013):18 percent ii. Annual work plans (prepared and updated annually) IFC Target (end FY20): 50 percent (of which 40 iii. Annual cumulative connections on- and off-grid  At least one IPP committed or PPP mandate signed. percent on grid and 10 percent off grid). (reported annually)  IFC IC: Support to RDB, RURA, and MININFRA to iv. National Electrification Plan updated (Dec.2018) strengthen capacity to deal with renewable AAA/ESW Indicator 1.3 (IFC and IDA) Increased hydro  Energy Sector Performance Review (Public Sector power generation capacity. Expenditure Review) Baseline: 0;  Increased Electricity Access Impact Evaluation Target (end FY20): 49 MW from Ruzizi III Pipeline  Energy DPO ( FY 18, FY19 & FY 20) Outcome 2: Development plans for secondary cities developed Country goals: Physical development planning and economic development combined and coordination of all development sectors strengthened. A network of cities and urban centers created that provide services and attract economic activities countrywide. Development challenges: Addressing the challenge of urban planning and providing municipal services to those that move from rural areas in response to economic growth and improved incomes. 17 CPS Indicators (FY14–FY20) Milestones WBG Engagement Indicator 2.1: Urban planning and Ongoing management guidelines for Kigali and IDA secondary cities developed and adopted  Urban Development Project (FY16) IFC Indicator 2.2: Increase in supply of Milestone 2.2: District infrastructure management  IT-based activities to cities across the country as part of affordable housing units. Baseline: 0 system for road and drainage assets operational (no its investment climate work Target: 2750 units (FY20) standard system in place at baseline).  Financing and advice for mortgage system and housing developers Indicator 2.3: Number of people in urban Milestone 2.3: Districts use GIS as a key planning tool in  C3P advise Kigali Water project areas provided with access to all season strategic investment planning and annual planning in 4 roads within a 500m range districts. Pipeline Baseline (FY15): 36,000  Urbanization Phase 2 Target (FY20): 106,000 Indicator 2.4: Increase in share of Milestone 2.4: First year of the O&M plan implemented maintenance expenditures of district budget in at least 3 districts. Baseline (FY15): 6.5 percent Target (FY20): 9.5 percent Outcome 3: Improved environment for private sector investments Country goals: Increased private sector investment and financing. Accelerated structural changes in the financial sector, in particular to increase long term savings and access to international finance. Strengthened business environment through regulatory reform to spur medium and large investors in priority and emerging sectors of the economy. Development challenges: Small and nascent private sector, constrained by a number of factors: limited access to finance, low skills, etc. Indicator 3.1 (IFC): Number of secondary Completed cities that have online construction Financing permitting  Governance for Competitiveness TA Project (FY12) Baseline (FY13): 1 city AAA/ESW Target (end FY18): 7 cities  NLTA on Competition Policy  Rwanda Economic Update (REU) 7 (Managing Indicator 3.2: Reduced inspection costs and Milestone 3.2.1: Rwanda Inspectorate and Competition Uncertainty for Growth and Poverty Reduction) increased market share for private sector in Authority established.  Rwanda Economic Update (REU) 8 (Financing telecoms, beverage and construction sectors. Development) Baseline (FY15): 0 Milestone 3.2.2: Sub-Sectors assessed for competition  Rwanda Economic Update (REU) 9 (Rwanda at Work) Target (FY20): 10 percent (decrease in features and offered recommendations to improve their inspection cost and increase in market competitive profile (Telecoms, Beverage and Ongoing share). Constructions) AAA/ESW  NLTA on PPP legal and institutional framework and Indicator 3.3: Enhanced Public Private Milestone 3.3: capacity building Partnership environment. i. PPP Law enacted (FY18)  Strengthening Financial Stability (FY14)  Financial Inclusion Support Program (FY14) 18 CPS Indicators (FY14–FY20) Milestones WBG Engagement Dimensions of PPP environment on which ii. Establishment of Dispute Resolution Tribunal to  Vendor Supply diagnostic businesses provide e-feedback. improve efficiency of dealing with disputes  Secondary Cities Program (FY15) Baseline (FY13): 0 iii. Number of best practice measures adopted in public Target (FY20): 6 (business registry, work procurement processes IFC Advisory Services permits, environment, impact assessment, iv. Improved feedback from private sector.  IFC Investment Services, ICA construction services, inspections)  IFC IC  Use of IT solutions to improve predictability and cost of Indicator 3.4: Increased number of government services to business automated licenses to improve Government  Targeted support for investment promotion in services delivery agribusiness (tea and horticulture) and tourism Baseline 2013:1 Target (FY20): 7 Indicator 3.5: Policy reforms to improve GoR service delivery and hence improve business environment for private sector Baseline (2013): 0 Target (FY20): 20 reforms Indicator 3.6: Increased long term funding to financial institutions Baseline 2013: US$17m Targets by 2018: US$80m Indicator 3.7: Strengthened financial sector Milestone 3.7: Deposit insurance scheme established legal framework – number of new/ updated (FY18) laws enacted Baseline (FY16): 2 Target (December 2018): 7 (BNR Law, Banking Law, Insurance Law, Pensions Law, Deposit Insurance Law, Microfinance Law, Consumer Protection Law) Outcome 4: Increased integration into the EAC regional markets Country goals: Transformed logistics system with a strategic focus on exports. Development challenges: Rwanda’s internal trade and competitiveness of exports are constrained by high transport costs and an insufficient logistics system. Indicator 4.1: Number of visitors from EAC Completed markets. Financing Baseline (FY12): 362,433  Governance for Competitiveness TA Project (FY12) Target (end FY18): 521,904  Regional Communications Infrastructure Program (FY09) 19 CPS Indicators (FY14–FY20) Milestones WBG Engagement Indicator 4.2: Value of goods traded through Ongoing Rwanda/DRC border crossings: a) Petite  East Africa Public Health Laboratory Networking Barriere; b) Rusizi 1. Project (FY10) Baseline (FY15): a) US$35 million; b)  Great Lakes Trade Facilitation Project (FY16) US$27 million. ESW/AAA Target (end FY20): a) US$44.5 million; b)  Strengthening Financial Stability (FY14) US$34.5 million.  Financial Inclusion Support Program (FY15)  FIRST, and Advisory Services Planned/Proposed:  IFC: Advisory Services, ICA Pipeline  Eastern and Southern Africa Higher Education Centers of Excellence project ( FY20) CPS Theme 2: Improving the productivity and incomes of the poor through rural development and social protection Outcome 5: Improved agriculture productivity and sustainability Country goals: Increased productivity and sustainability of agriculture. Development challenges: Agricultural smallholders dominate the scarce land available; and the smaller the land holding, the poorer the land holder is more likely to be. 36 percent of households own 6 percent of farm land, with an average of only 0.11 ha per household. Indicator 5.1 Marshland and Hillside area Milestone 5.1: Annual increases of irrigated area (ha) Completed under irrigation Financing Baseline (FY13): 25,490 ha  Governance for Competitiveness TA Project (FY12) Target (end FY20): 45,000 ha Ongoing Indicator 5.2: Area of land developed with Milestone 5.2: Annual increases in terraced land area Financing progressive, bench or radical terraces (ha)  Third Rural Sector Support Project (FY12) Baseline (FY13): 848,538 ha  Land Husbandry, Water Harvesting and Hillside Target (end FY18): 1,050,000 ha Irrigation (FY10)  Lake Victoria Environmental Management Project Indicator 5.3 (IFC): Increased long-term (FY12) funding to the agriculture sector  Landscape Approach to Forest Restoration and Baseline (FY13): 0 Conservation (FY15) Target (end FY20): US$70-75 million  Transformation of Agriculture Sector PforR (FY15) IFC  Direct IFC financing for aggregators, and commercial farms. Indirect support for small farms  Advice to financial institutions, public sector, PPPs  Support enhanced public private dialogue to support investment and growth in export sectors  IFC Advisory Services 20 CPS Indicators (FY14–FY20) Milestones WBG Engagement AAA/ESW  Agriculture Policy Note, Rwanda Land Sector Study  Impact of Land Husbandry (DIME)  User Feedback for Extension  Irrigation (DIME)  Financial Sector Strengthening and Inclusion Pipeline  AF Agriculture PforR (FY17)  Agriculture PforR (FY19) Outcome 6: Improved access of rural /small farmers to inputs, financing, and markets Development challenges: Smallholder farmers face numerous challenges along the entire agriculture production chain: limited market information, skills, financing, etc. Indicator 6.1: Annual lending to agriculture Milestone 6.1: Annual percent increase in agriculture Ongoing sector as a percent of total bank lending sector loans. Financing Baseline (FY16): 6 percent  Third Rural Sector Support Project AF (FY12) Target (FY20): 9 percent  Land Husbandry, Water Harvesting and Hillside Irrigation (FY10) Indicator 6.2: Improvements in seed  Lake Victoria Environmental Management Project registration score (FY12) Baseline (FY16): 12.5  Transformation of Agriculture Sector PforR (FY15) Target (FY20): 16.3 IFC  Financing and advice to financial institutions Indicator 6.3: Improvements in micro  Investment in horticulture (tea) finance score AAA/ESW Baseline (FY16): 59.1  Agriculture Policy Note Target (FY20): 76.8  Economic Geography and Urbanization  Rwanda Rural Finance (DIME) Indicator 6.4: Improvement in plant protection score  Enabling the Business of Agriculture Report, MINAGRI Baseline (FY16): 12.5  Financial Inclusion Support Program (FY15) Target (FY20): 16.3 Pipeline  AF Agriculture PforR (FY17)  Agriculture PforR (FY19) Outcome 7: Improved agriculture value chains Country goals: Better linkages between large firms and small firms Indicator 7.1: Production of priority food Milestone 7.1: Annual increase in production of food Ongoing crops increased. crops. Financing Baselines [2013]:  Third Rural Sector Support Project AF (FY12) Maize 573,038 MT 21 CPS Indicators (FY14–FY20) Milestones WBG Engagement Wheat 75,913 MT  Land Husbandry, Water Harvesting and Hillside Rice 84,079 MT Irrigation (FY10) Beans 452,828MT  Transformation of Agriculture Sector PforR (FY15) Irish potatoes 2,172,421MT  Feeder Roads Development I Cassava 2,716,421 MT  IFCI investment/Advisory Services IFC: Targets [end of FY20]:  Financing for aggregators and Commercial farms Maize 2,096,239 MT Advice for branding, traceability., certification for Wheat 347,760MT horticulture Rice 377,520,760 MT ASA: Beans 868,002MT  Feeder Roads (DIME evaluation) Irish potatoes 4,772,745MT IFC: Cassava 4,270,878MT  Financing for aggregators and Commercial farms Advice for branding, traceability, certification for Indicator 7.2: Increase of value addition Milestone 7.2.1: Annual increase in percentage of fully horticulture captured within country for coffee and tea washed coffee. Pipeline export crops.  AF Agriculture PforR (FY17) Baseline (FY13): Coffee – 35 percent, tea – Milestone 7.2.2: Annual increase in percentage of tea  Agriculture PforR (FY19) 25 percent direct sales versus the Mombasa Auction. Target (end FY20): Coffee – 60 percent, tea – 45 percent Indicator 7.3: Number of horticulture cooperatives with linkages to global firms Baseline (FY13): 1 Target (end FY20): 15 Outcome 8: Improved rural roads condition and connectivity to market centers Country goals: Quality road network and rural feeder roads extended and in good condition Development challenges: Addresses access and connectivity of rural areas, in the selected districts, and enhances the development impacts of investments in agriculture. Indicator 8.1: Roads in good and fair Milestone 8.1 Annual increase of 5.6 percent per annum Ongoing condition as a share of total classified road of roads in good and fair condition Financing network IDA Baseline (FY13): 15 percent  Rwanda Feeder Roads Development Project (FY14) Target (end FY20): 43 percent Pipeline  AF Rwanda Feeder Roads Development Project (FY17- Indicator 8.2: Share of rural population with Milestone 8.2: Annual increase of 6.4 percent per annum TF) all-season access of rural population with all-season access to all-season Baseline (FY13): 15 percent roads Target (FY20): 47 percent 22 CPS Indicators (FY14–FY20) Milestones WBG Engagement Outcome 9: Enhanced effectiveness and expanded coverage of social protection system Country goals: Expand social protection coverage of the poor Harmonized social protection interventions to enhance effectiveness and promote graduation from poverty. Development challenges: Limited coverage of the poor by social protection, notably the flagship Vision Umurenge Program (VUP). Fragmented social assistance programs. Weak but growing management and implementation capacity across the main social protection programs. Indicator 9.1: VUP Direct Support (DS) Completed coverage: (a) Financing Number of Sectors; (b) Number beneficiary  Rwanda Third Support to the Social Protection System households (of which, female headed (FY14) households).  Social Protection DPO (FY15) (a) Baseline (FY12): 120 Sectors Ongoing Target (end FY18): 300 Sectors Financing Already achieved (416 sectors i.e. full  Rwanda Third Support to the Social protection System national coverage). (FY14) (b) Baseline (FY12): 19,583 households (60  Social Protection DPO (FY16) percent AAA/ESW female headed)  Developing a Child Sensitive SP System Target (end FY20): 96,000 households (63  Early Childhood Development Evaluation percent Pipeline female headed)  Social protection Project (FY18) Indicator 9.2: VUP Public Works coverage: Milestone 9.2: 300 sectors and 145,000 households in (a) Number FY18/19. of sectors. (b) Number of beneficiary households (of which female headed households) (a) Baseline (FY12): 120 Sectors Target (end FY20): 330 Sectors (b) Baseline (FY12): 66,856 households Target (end FY20): 160,000 households CPS Theme 3: Supporting accountable governance through public-financial management and decentralization Outcome 10: Enhanced local government tax generation and administration. Country goals: Widen the local government tax base and increase efficiency in the collection of these taxes. Development challenges: In order to widen the tax base at local levels the Rwanda Revenue Authority will have to ensure improved compliance, taxpayer recruitment and better handling of tax complaints. Indicator 10.1: Percentage increase in local Milestone 10.1: Financing government taxes collected FY 15/16: 1.4 percent Completed Baseline (FY13): FY16/17: 5 percent  Governance 4 Competitiveness Target (end FY20): 20 percent FY17/18: 15 percent  Quality of Decentralized Service Delivery Support DPO FY18/19: 20 percent (FY13) 23 CPS Indicators (FY14–FY20) Milestones WBG Engagement Ongoing Financing  Public Sector Governance Program for Results (FY15) Pipeline PFM operation (FY2019) IFC IC Improving local government tax administration to support RRA in collecting and redistribute district taxes. Outcome 11: Improved national and subnational transparency, efficiency, value for money and accountability in the use of public funds Country goals: Enhance accountable governance by promoting citizen participation and mobilization for delivery of development, strengthening public accountability and improving service delivery Development challenges: The EDPRS 2 rightly identifies, pre-requisite, challenges and strategic direction to achieve the EDPRS 2 goals on Accountable Governance. In Rwanda, as a result of decentralization commenced in 2000, subnational governments are in charge for provision of public services. Nevertheless, both quality and quantity of service delivery need to improve further through strengthening effectiveness and efficiency of decentralization (including policy framework such as clarification of roles and responsibilities, capacity development of local governments, improvement of government accountability and transparency, and enhancement of fiduciary accountability of local governments). Furthermore, limited citizen participation and ownership of development process have resulted in weak public accountability (including one for service delivery). Indicator 11.1: Publication of audited Financing financial statements for budget entities nine Completed months after the fiscal year when these are  Quality of Decentralized Service Delivery Support DPO due by law. (FY13) Baseline (FY16): 0 Ongoing Target (end FY19): 50 percent  Public Sector Governance Program for Results (FY15) Pipeline Indicator 11.2: Number of ministries, Milestone 11.2: PFM operation (FY2019) departments and agencies receiving FY16/17: 52 percent unqualified audit opinion on the financial FY17/18: 57 percent statements Baseline (FY12): 32 percent Target (end FY20): 57 percent Outcome 12: Improved use of public data for decision-making Indicator 12.1: Share of ministries, Milestone 12.1: Financing departments and agencies using official FY14/15: 42 percent Completed statistics for short-term decision making and FY 16/17: 48 percent  Quality of Decentralized Service Delivery Support DPO longer- term policy formulation (FY13) Baseline (FY12/13): 39 percent Ongoing Target (end FY18-19): 50 percent  Public Sector Governance Program for Results (FY15) Pipeline  PFM operation (FY2019) 24 Annex 2. Matrix of Key Changes to Original CPS Results Matrix Original CPS Updated CPS Results Matrix Comments Results Matrix Indicator 1.1 New FY20 target and milestones. Change to reflect extension of CPS to FY20. Indicator 1.2 New FY20 target and milestones. Change to reflect extension of CPS to FY20. Indicator 1.3 Deleted. Previous target poorly specified. Indicator 1.4 New indicator 1.3. Target now limited to hydro power and revised down. Indicator 2.1 Indicator now mentions Kigali Target previously only referred to secondary cities. Indicator 2.2 Redrafted. Target now specifies units of affordable housing. Milestone added. Indicator 2.3 introduced. New milestone added. Reflects access to all season roads in urban areas. Indicator 2.4 introduced. New milestone added. Reflects share of O&M expenditure on road maintenance. Indicator 3.1 Drafting of indicator tightened. Now specifies that indicator refers to cities. Indicator 3.2 Indicator redrafted. New milestone. New drafting highlights the inspection and private sector share dimensions. Indicator 3.3 Indicator redrafted. New measure comprising business e-feedback on PPP environment. Indicator 3.4 Moved to 3.6 and drafting tightened. New indicator 3.4: increased number of automated licenses. Indicator 3.5 Removed because only captured WBG financial New indictor 3.5: other policy reforms to improve GoR services and hence business inputs rather than an outcome. environment. New indicator 3.7 New indicator relates to improved legal framework for financial sector. New milestone comprising former indicator 4.3. Indicator 4.1 Indicator redrafted Wording now refers to visitors (including for business) rather than just tourists Indicator 4.2 Indicator deleted. Indicator was pitched at level of an input (project delivered) rather than an outcome. New indicator 4.2 Measure of intra-regional trade in goods. Indicator 4.3 Indicator moved to new milestone 3.7. See above Indicator 4.4 Indicator moved to new 3.4 and recast. New indicator 3.4 (see above) broadened to refer to # of automated licenses. Indicator 5.1 New FY20 target and milestones. Change to reflect extension of CPS to FY20. Indicator 5.3 Indicator broadened to include non-IFC funding. New indicator is set at a higher (outcome) level. Milestones updated. Outcome 6 Name retained but indicators restructured. New indicators redrafted with baselines and targets and/or clearer wording. Indicator 6.1 Indicator redrafted to include baseline and target. Previous target not capable of validation. New milestone. Indicator 6.2 Dropped. Previous target not capable of validation. New indicator 6.2 with baseline and target. Reflects current MINAGRI priorities. Indicator 6.3 Dropped. Previous target not capable of validation. New indicator 6.3 with baseline and target. Reflects current MINAGRI priorities. New indicator 6.4 with baseline and target. Reflects current MINAGRI priorities. Indicator 7.1 New FY20 target. Change to reflect extension of CPS to FY20. Indicator 7.2 New FY20 target. Change to reflect extension of CPS to FY20. Indicator 7.3 New FY20 target. Change to reflect extension of CPS to FY20. Indicator 8.1 Target date extended and milestone updated. Change to reflect extension of CPS to FY20. Indicator 8.2 Target date extended and milestone updated. Change to reflect extension of CPS to FY20. 25 Original CPS Updated CPS Results Matrix Comments Results Matrix Outcome 9 Now outcome 10. Outcome moved to third CPS theme on governance and public financial management through decentralization. Indicator 9.1 Renumbered as 10.1 and amended to enable Previous indicator not easily capable of validation. measurement. New milestones added. Outcome 10 Renumbered as Outcome 9. Included now under second CPS theme relating to social protection. Indicator 10.1 Dropped. Not capable of validation. Indicator 10.2 Renumbered as 9.1 and updated. Change to reflect extension of CPS to FY20. Indicator 10.3 Renumbered as 9.2 and updated. Change to reflect extension of CPS to FY20. Outcome 11: Renamed as Improved national and subnational Change to outcome and indicators reflects greater focus on areas in which bank is Improved delivery transparency, efficiency, value for money and active and has an influence. of decentralized accountability in the use of public funds services Indicator 11.1 Dropped. Replaced by new indicator relating to World Bank activities were not influencing previous indicator. publication of financial results for public bodies. New indicator 11.2. New indicator relating to percentage of public bodies receiving unqualified audits. Outcome 12: Renamed as: Improved use of public data for Change to outcome and indicators reflects greater focus on areas in which bank is Strengthened decision-making. active and has an influence. accountability Indicator 12.1 Dropped. Replaced by indicator relating to World Bank activities were not influencing previous indicator. ministries, departments and agencies (MDAs) using data for decision making. Indicator 12.2 Dropped. World Bank activities were not influencing previous indicator. 26 Annex 3. Matrix summarizing progress toward FY14-18 CPS Objectives Outcomes and indicators Progress WBG Program Status CPS Theme 1: Accelerating economic growth that is private-sector driven and job-creating Outcome 1: Increased Outcome 1: Completed generation and access to Progress: mostly on track. Three indicators (installed generation capacity, supporting MIGA electricity: new generation and increasing hydro and solar power) are on track. One indicator  Lake Kivu Methane Generation (national access to electricity) is partially on track. Project (MIGA Guarantees,) Ongoing Indicator 1.1 Installed Generation Indicator 1: IDA Capacity (MW) Progress: on track  Regional Rusumo Falls Hydroelectric Baseline [2013]: 110 MW Rwanda’s installed capacity increased from 150MW at the end 2014 to 185 MW at Project (FY14) Target [end of FY18]: 250 MW the end of March, 2016. Rwanda expects to add additional 25 MW installed capacity  Rwanda Electricity Access Scale-up in 2016-2017; GoR signed a power purchase agreement with the Government of and Sector Wide Approach (SWAp) Kenya for supply of up to 50 MW starting in 2016. Development Project (FY10)  Rwanda Electricity Sector Milestones for Indicator 1: Strengthening Project (FY16) i. Contract awarded under Rusumo project for both tenders (Civil Works and IFC Electromechanical Works) in November, 2016, with the commencement of the  At least one IPP committed or PPP works expected in January, 2017. mandate signed. ii. Finance close attained/public funding secured: US$340 million IDA financing  IFC IC: Support to RDB, RURA, and has been secured for Rusumo and the credits and grants declared effective July MININFRA to strengthen capacity to 11, 2014. deal with renewable iii. Power plants’ construction progress. Regional Rusumo Falls Hydroelectric AAA/ESW Project (FY14) is expected to be completed in December 2018.  Energy Sector Performance Review iv. Generation capacity (MW) commissioned: commissioning of the 1st generating (Public Sector Expenditure Review) unit for the regional Rusumo Falls Hydroelectric Project (FY14) is scheduled for Increased Electricity Access Impact March, 2019; and commissioning of the 3rd unit -- for August, 2019 Evaluation Indicator 1.2: National Access to Indicator 2: Electricity (percent) Progress: partially on track Baseline [2013]:18 percent Grid access has increased from about 110,000 (9 percent) households in 2009 to Target [end of FY18]: 35 percent 400,000 (17 percent) in 2013 to 560,000 (22 percent) households by the end of 2015. Coverage for health centers and administrative centers is on track (84 percent and 90 percent respectively), but the coverage of primary and secondary schools is behind, with 46 percent access rate. 27 Outcomes and indicators Progress WBG Program Status Milestones for Indicator 1.2: 1.2.1: National Electrification Plan prepared: EARP Detailed Access plan is available and updated regularly 1.2.2: Funding secured: at end 2015, grid access rate was 22 percent. With available funds, the grid would reach 31-35 percent of households by the end of 2018. 1.2.3: Annual work plans: Annual work plans are prepared based on available budgets; for most of the time the plans are met. 1.2.4: Annual cumulative connections: June 30, 2013: 364,409 (15 percent) households June 30, 2014: 438,112 (17 percent) households June 30, 2015: 520,704 (20 percent) households December, 2015: 562,942 (22 percent) households Indicator 1.3: on track Indicator 1.3 (IFC): Support new 15 MW Hydro on Nyabarungo under PPP was dropped by the Government of generation capacity of 100 Rwanda MW 9MW Micro-hydro initially thought to be developed as PPP was dropped by the Government – of 21 sites to develop, IFC ended up with 3 sites making it impossible to develop a viable PPP. Indicator 1.4: on track Indicator 1.4 (IFC): MW 10 MW expected from Goldsol Project, dropped. generated through hydro and solar Baseline [2013]: Hydro: 110 MW, Solar: 0 Target [end of FY18]:210 MW Outcome 2: Development plans Outcome 2: Ongoing for secondary cities developed Progress: on track. One indicator (developing planning guidelines for secondary IDA: cities) is achieved and the other (funding mechanisms for affordable housing) is on  Urban Development Project (FY16) track. IFC  IT-based activities to cities across the Indicator 2.1 Urban planning and Indicator 2.1: country as part of its investment management guidelines for Progress: achieved. Urban planning and management guidelines for secondary cities climate work secondary cities developed and have been developed and adopted (in 2015).  Financing and advice for mortgage adopted system and housing developers  C3P advise Kigali Water project Indicator 2.2 (IFC): 28 Outcomes and indicators Progress WBG Program Status Indicator 2.2 (IFC): Funding Progress: on track: IFC with CITTIC has put in place a facility to support housing AAA/ESW mechanisms for affordable development in Sub-Saharan Africa. Even though CITTIC was not the preferred housing developed. bidder for the Rugarama Project, IFC is exploring support to the Project’s special purpose vehicle (SPV) led by BRD and Shelter Afrique. With its City Engagement Program, IFC is working with the City and Ministry of Infrastructure on a portfolio of projects in both housing, solid waste and electricity generation. Outcome 3: Improved Outcome 3: Completed environment for private sector Progress: on track. All five indicators are on track. Financing investments  Governance for Competitiveness TA Project (FY12) Indicator 3.1 On-line construction Indicator 3.1: AAA/ESW permitting at secondary cities Progress: on track. IFC is supporting the extension of on-line construction permitting  NLTA on Competition Policy Baseline [2013]: 0 (currently available only in Kigali) to the six secondary cities in Rwanda to reduce  Rwanda Economic Update (REU) 7 Target [end of FY18]: 3 the number of days and cost to obtain permits by at least 10 percent. Training of one (Managing Uncertainty for Growth stop shops has been completed. Extension of on-line permitting to Rubavu and and Poverty Reduction) Musanze started in July 2015 and was launched in December 2015.  Rwanda Economic Update (REU) 8 (Financing Development) Indicator 3.2: Improvement in Indicator 3.2:  Rwanda Economic Update (REU) 9 competition policy Progress: On track (Rwanda at Work) performance indicators IFC is supporting the GoR to develop an effective inspectorate that will reduce the Ongoing Baseline [2013]: 0 time (average and variance) for both domestic and import/export inspection AAA/ESW Target [end of FY18]: 3 processes. Competition work is underway, but Rwanda Inspectorate and Competition  NLTA on PPP legal and institutional Authority statutes have not yet been adopted by parliament. Indicator framework and capacity building  Strengthening Financial Stability Indicator 3.3 (IFC): Enabling 3.3: Progress: on track. (FY14) environment for PPPs established On Track- e-PPD Feedback mechanism designed on 6 dimensions including  Financial Inclusion Support Program Business Registry, Work-Permit, Environment and Impact Assessment (FY14) Construction Services and Inspections; Expected to improve decision making on  Vendor Supply diagnostic better services and give a voice to Private Sector; A PPP Law was enacted and adopted by the two chambers  Secondary Cities Program (FY15) Indicator 3.4 (IFC): Raise Through its Investment Climate 3A project, IFC has progressed in five areas: a) IFC Advisory Services Financial Market commitment extending automated application processes for up to five most requested business  IFC Investment Services, ICA volumes to US$80 million licenses and has achieved automation of ten of these licenses; b) extending on-line  IFC IC through 2017 construction permitting system to two secondary cities; c) developing a mechanism  Use of IT solutions to improve to enable private sector feedback on government to business services; d) advising on predictability and cost of government charter and statutes for the Rwanda Inspectorate and Competition Authority; e) services to business building capacity of the Competition Authority. 29 Outcomes and indicators Progress WBG Program Status  Targeted support for investment Indicator 3.4: promotion in agribusiness (tea and Progress: partially on track. horticulture) and tourism In FY15 IFC committed a total of US$26 million to support trade finance and farmer financing. Indicator 3.5: Indicator 3.5 (IFC): Local Progress: on track. currency issuance In May 2014 IFC contributed to the development of Rwanda’s domestic Capital Markets through Issuance of its 5-year RWF 15 billion “Umuganda Bond” (US$22 million equivalent). It was the first issuance by a non-resident issuer in the market and also helped extend the yield curve from the 3-year to the 5-year point. IFC also issued an off-shore bond of US$5 million. This demonstrated that an investor (based in New York in this case) can channel money to Rwanda in local currency and make a return, while contributing to the country’s development. Milestones for outcome 3: A PPP Law was enacted and adopted by the two chambers; financial markets commitments were exceeded by 30 percent; there were two local currency issuances; IFC supported a nine-month Capacity Building Program in partnership with Milken Institute. The GoR sent four candidates (out of 22 from across Africa). Outcome 4: Increased Outcome 4: Completed integration into the EAC Progress: mostly on track. One indicator has been achieved (development of one IFC Financing regional markets. tax administration project), one indicator is on track (development of a dispute  Governance for Competitiveness TA resolution framework by IFC), one indicator is partially on track (development of an Project (FY12) online business portal), and one indicator is to be restructured because of a lack of  Regional Communications data (tourist arrivals from EAC). Infrastructure Program (FY09) Ongoing Indicator 4.1: Number of tourist Indicator 4.1:  East Africa Public Health Laboratory arrivals from EAC markets. Progress: indicator to be restructured because indicator refers to tourists while target Networking Project (FY10) Baseline[2012]: 362,433 numbers are for all visitors including business travelers. However, in 2014 the East  Eastern and Southern Africa Higher Target [end of FY18]: 521,904 African Tourist Visa was created, allowing tourists to travel between Rwanda, Education Centers of Excellence Uganda and Kenya with a Single Tourist Visa. Rwanda issued nearly 3000 East project African Tourist Visas between January 2014 and March 2015. ESW/AAA  Strengthening Financial Stability Indicator 4.2 (IFC): One tax Indicator 4.2 (IFC): (FY14) administration project 30 Outcomes and indicators Progress WBG Program Status Progress: achieved. IFC supported development of a comprehensive tax  Financial Inclusion Support Program administration and policy reform program. (FY15) Indicator 4.3 (IFC): Dispute  FIRST, and Advisory Services resolution framework Indicator 4.3 (IFC): Planned/Proposed: Progress: on track. IFC supported the creation of a dispute resolution framework and IFC: Advisory Services, ICA drafting of legislation creating the tax appeals tribunal. Indicator 4.4 (IFC): Launch Indicator 4.4 (IFC): business licensing portal Progress: partially on track. 10 of 89 licenses can now be processed online. CPS Theme 2: Improving the productivity and incomes of the poor through rural development and social protection Outcome 5: Improved Outcome 5: Completed agriculture productivity and Progress: mostly on track. Two indicators (marshland and hillside area under Financing Sustainability irrigation and IFC financing) are on track. One indicator (area of land with bench,  Governance for Competitiveness TA progressive or radical terracing) is partially on track. Project (FY12) Ongoing Indicator 5.1 Marshland and Indicator 5.1: Financing hillside area under irrigation Progress: on track – there has been good progress in the development of irrigation in  IFC Advisory Services Baseline [2013]: 25,490 ha marshlands and hillsides including through the support of ongoing IDA operations  Third Rural Sector Support Project Target [end of FY18]: 40,000 ha namely the Third Rural Sector Support Project (FY12), Land Husbandry, Water (FY12) Harvesting and Hillside Irrigation (FY10).  Land Husbandry, Water Harvesting and Hillside Irrigation (FY10) Milestone for indicator 5.1:  Lake Victoria Environmental 941 ha of hillside irrigation has been completed through Land Husbandry, Water Management Project (FY12) Harvesting and Hillside Irrigation (FY10), out of a project target of 2,368 ha, and a  Landscape Approach to Forest further 2,588 ha of marshland and hillside are under irrigation through the Third Restoration and Conservation (FY15) Rural Sector Support Project (FY12) out of a target of 7,000 ha. Both projects are on IDA track to meet their end of project targets. Other government and donor supported  Transformation of Agriculture Sector projects are also supporting the expansion of irrigated area, which should ensure the PforR Program (FY15) achievement of this indicator. IFC  Direct IFC financing for aggregators, Indicator 5.2: Area of land Indicator 5.2: and commercial farms. Indirect developed with progressive, Progress: partially on track - there has been good progress in the treatment of hillsides support for small farms bench or radical terraces for sustainable agricultural production, including over 30,000 ha through the ongoing  Advice to financial institutions, Baseline [2013]: 848,538 ha IDA operations, Third Rural Sector Support Project (FY14) and the Land Husbandry, public sector, PPPs Target [end of FY18]: 1,050,000 Water Harvesting and Hillside Irrigation (FY10) project. However, these projects ha will not cover the entire area under this target.  Support enhanced public private dialogue to support investment and growth in export sectors 31 Outcomes and indicators Progress WBG Program Status Milestone for indicator 5.2: AAA/ESW More than 17,672 ha of land have been treated with land husbandry technologies  Agriculture Policy Note, Rwanda under Land Husbandry, Water Harvesting and Hillside Irrigation (FY10) and a Land Sector Study further 13,000 ha of hillsides have been developed under the Third Rural Sector  Impact of Land Husbandry (DIME) Support Project Additional Financing (FY12). Both projects are on track to meet their  User Feedback for Extension project targets, totaling over 37,000 ha. However, the full achievement of this  Irrigation (DIME) indicator will depend on expansion through government and other donor programs.  Financial Sector Strengthening and Inclusion Indicator 5.3 (IFC): $15 million- Indicator 5.3 $20 million in financing Progress: on track. Through two investments and two advisory programs in development, IFC is making progress in supporting the agriculture sector. Through its IC program, IFC has also facilitated US$10.7 million in horticulture (of which US$9 million was in the tea sub-sector). Outcome 6: Improved access of Outcome 6: Ongoing rural /small farmers to inputs, Progress: partially on track. One indicator is on track (increase in loans made to Financing financing, and markets agriculture sector). Two indicators lack baseline/target and/or no information is  Third Rural Sector Support Project available (access to insurance and number of farms meeting market standards). These (FY12) will be restructured.  Land Husbandry, Water Harvesting Indicator 6.1: Provide $15 and Hillside Irrigation (FY10) million-$20 million in Indicator 6.1:  Lake Victoria Environmental agriculture sector loans/financing Progress: On track. Management Project (FY12)  Transformation of Agriculture Sector Milestone for indicator 6.1: PforR (FY15) There is a steady increase in banking loans being made to the agriculture sector. GoR  Great Lakes Trade Facilitation targets for an increase in the percentage of loans to farmers and agricultural business Project (FY16) have been achieved. Ensuring inclusive access to finance remains a key challenge. IFC  Direct IFC financing for aggregators, Indicator 6.2: Access to crop and Indicator 6.2: No baseline or target provided and hence not validated. and commercial farms. Indirect livestock insurance (of which, to Progress: indicator to be restructured as no baseline or target. Agricultural insurance support for small farms women). instruments are available and are being purchased. However, no information of the  Advice to financial institutions, Gender disaggregation of uptake public sector, PPPs  Support enhanced public private Milestone for indicator 6.2: dialogue to support investment and Agricultural insurance instruments are available and are being purchased. However, growth in export sectors no information of the Gender disaggregation of uptake.  IFC Advisory Services Indicator 6.3: No baseline or target provided and hence not validated. AAA/ESW 32 Outcomes and indicators Progress WBG Program Status Indicator 6.3: Number of Progress: indicator to be restructured as no baseline or target. Systems for collecting  Agriculture Policy Note, Rwanda smallholder farms that meet new data on indicator are limited. Land Sector Study market standards for selected  Impact of Land Husbandry (DIME) products (of which, # women)  User Feedback for Extension  Irrigation (DIME)  Financial Sector Strengthening and Inclusion Pipeline  AF Agriculture PforR (FY17)  Agriculture PforR (FY19) Outcome 7: Improved Outcome 7: Completed agriculture value chains Progress: mostly on track. Two indicators (production of priority food crops and Financing increased value addition for tea and coffee) are on track. One indicator (number of  Governance 4 Competitiveness horticulture cooperative with links to global firms) is off track. Ongoing Financing Indicator 7.1: Production of Indicator 7.1:  Third Rural Sector Support Project priority food crops increased. Progress: on track. Investments in technical services, irrigation and terracing are AF (FY12) Baselines [2013]: contributing to the continued gains in productivity. Implementing inputs supply  Land Husbandry, Water Harvesting Maize 573,038 MT policy reforms will further enhance productivity. and Hillside Irrigation (FY10) Wheat 75,913 MT  Transformation of Agriculture Sector Rice 84,079 MT Milestone for indicator 7.1: PforR (FY15) Beans 452,828MT Investments in technical services, irrigation and terracing are contributing to the  Feeder Roads Development I Irish potatoes 2,172,421MT continued gains in productivity. Implementing inputs supply policy reforms will  IFCI investment/Advisory Services Cassava 2,716,421 MT further enhance productivity. IFC:  Financing for aggregators and Targets [end of FY18]: Commercial farms Advice for Maize 1,696,239 MT branding, traceability., certification Wheat 287,760MT for horticulture Rice 188,760 MT ASA: Beans 749,381MT  Feeder Roads (DIME evaluation) Irish potatoes 4,001,225MT IFC: Cassava 3,826,748MT  Financing for aggregators and Commercial farms Advice for Indicator 7.2: Increase of value Indicator 7.2: branding, traceability, certification addition captured within country Progress: on track. Exports of both Tea and Coffee continue to grow. In general the for horticulture for coffee and tea export crops. quality of Rwanda tea is higher than regional competitors. In the National Pipeline  AF Agriculture PforR (FY17) 33 Outcomes and indicators Progress WBG Program Status Baseline [2013]: Coffee – 35 Agricultural Export Board reports that in 2015 of 65 percent of exported coffee beans  Agriculture PforR (FY19) percent, tea – 25 percent were washed. Target [end of FY18]: Coffee – 55 percent, tea – 40 percent Milestone for indicator 7.2: In general, the quality of Rwanda tea is higher than regional competitors. In the National Agricultural Export Board reports that in 2015 of 65 percent of exported coffee beans were washed. Indicator 7.3: Number of horticulture cooperatives with Indicator 7.3: linkages to global firms Increase Progress: off track. Since 2014 the volume horticulture exports has declined by 9 of value addition. percent and revenues have also been reduced by 15 percent. However the Baseline [2013]: 1 Government remains committed the sub-sector and is prioritizing the sub-sector by Target [end of FY18]: 15 the creation a stronger enabling environment focused on horticultural exports. Outcome 8: Improved rural Outcome 8: Ongoing roads condition and Progress: partially on track. Both indicators are partially on track. Financing connectivity to market centers IDA  Rwanda Feeder Roads Development Indicator 8.1: # roads in good and Indicator 8.1: Project (FY14) fair condition as a share of total Progress: partially on track. Under the ongoing Bank Rwanda Feeder Roads Pipeline classified road network development Project (FY14) construction activity was delayed but has now started.  AF Rwanda Feeder Roads Baseline [2013]: 15 percent Development Project (FY17-TF) Target [end of FY18]: 43 percent Indicator 8.2: share of rural Indicator 8.2: population with all-season access Progress: partially on track. Under the ongoing Bank Rwanda Feeder Roads Baseline [2013]: 15 percent development Project (FY14) construction activity was delayed but has now started Target [end of FY18]: 47 percent Outcome 9: Enhanced local Outcome 9: Financing government tax generation and Progress: indicator below to be restructured to enable more comprehensive measure Completed administration. of tax effort.  Quality of Decentralized Service Delivery Support DPO (FY13) Indicator 9.1: Amount of district Indicator 9.1: Ongoing revenues from 3 taxes. Progress: indicator to be restructured. In 2015/16, 33.8 billion RWF of local tax  Public Sector Governance Program revenue was collected compared with 13.9 billion in 2012/13 reflecting an increase for Results (FY15) Target [end of FY18]: 47 percent from 0.3 percent of GDP to 0.9 percent of GDP. This equals a threefold increase and Pipeline a material achievement. The GoR has also introduced significant tax administration PFM operation (FY2019) reforms. Among these, the centralization of collection of local government taxes is IFC IC seen as having contributed significantly to the achievement of the indicator. It should 34 Outcomes and indicators Progress WBG Program Status be noted that the increase has fallen short of original expectations as enumerated in Improving local government tax the Reviews under the IMF Policy Support Instrument. These short-falls stem administration to support RRA in principally from delays in implementation of VAT reforms and changes to the collecting and redistribute district property and land tax regimes. taxes Outcome 10: Enhanced Outcome 10: Completed effectiveness and expanded Progress: on track. Two indicators (VUP direct coverage and public works) are Financing coverage of social protection achieved. One indicator (recruitment of social protection staff in MINALOC) is on  Second Social Protection DPO system track.  Rwanda Third Support to the Social protection System (FY14) Indicator 10.1: SP staff within Indicator 10.1:  Social Protection DPO (FY15) MINALOC recruited as a Progress: on track. The LODA was staffed at the leadership level with a Board of percent of total SP staff needed Directors appointed by the Cabinet, and 57 staff of a total of 60 (95 percent) have Ongoing to implement the National been hired, of which 29 are committed to SP implementation. Learning, training Financing social Protection Strategy (NSPS) and mentoring have been incorporated as part of the performance contract  Social Protection DPO (FY16) as stipulated by law (of which management processes for all SP staff that includes biannual reviews based on AAA/ESW women) targets and performance assessments. (Note: No disaggregated data by gender  Developing a Child Sensitive SP Baseline [2012]: 95 percent (30 available) System percent women)  Early Childhood Development Target [end of FY18]: 97 percent Evaluation (32 percent women) Pipeline  Social protection Project (FY18) Indicator 10.2: VUP Direct Indicator 10.2: Support (DS) coverage: (a) Progress: achieved. The VUP’s direct support component have increased coverage Number of Sectors; (b) Number from 120 Sectors in 2011/12 to 416 (full coverage). The beneficiary coverage moved beneficiary households (of which, from 19,583 households in 2012 to 84,354 households by 2014/15 hence exceeding female headed households). the set target of 30,000 households by FY 18. The share of female households in (a) Baseline [2012]: 120 Sectors VUP Direct Support is 65 percent. Target[ end of FY18]: 300 Sectors (b) Baseline [2012]: 19,583 households (60 percent female headed) Target[ end of FY18]:>30,000 households (63 percent female headed) 35 Outcomes and indicators Progress WBG Program Status Indicator 10.3: VUP Public Indicator 10.3 Works coverage: (a) Number of Progress: achieved. The VUP’s Public Works component have increased coverage Sectors. (b) Number of from 120 Sectors in 2011/12 to 210 sectors by 2014/15, meeting the CPS targets beneficiary households (of which ahead of schedule. The beneficiary coverage moved from 66,856 households in 2012 female headed households) to 111,923 households by 2014/15 hence exceeding the target of 85,000 households (a) Baseline [2012]: 120 Sectors by FY 18. The current share of female headed households in Public Works is 47 Target[ end of FY18]: 210 percent. Sectors (b) Baseline [2012]: 66856 households Target [end of FY18]: 85,000 households CPS Theme 3: Supporting accountable governance through public-financial management and decentralization Outcome 11: Improved Outcome 11: Completed delivery of decentralized Progress: indicator to be restructured as not influenced by Bank. See reasons below. Financing services  Quality of Decentralized Service Delivery Support DPO (FY13) Indicator 11.1: Citizens satisfied Indicator 11.1: IDA: with timeliness and quality of Progress: indicator to be restructured as not influenced by Bank. The share of citizens  Public Sector Governance PforR service delivery at the local level satisfied with the timeliness and quality of service delivery at the local level was (FY15) (EDPRS2 goal) about stable at 71.1 percent in 2014/15, compared to 70.4 percent in 2012. The AAA/ESW Baseline [2012]: 70.4 percent change in the level of satisfaction is not statistically significant. The level of  Programmatic AAA on Making Target [end of FY18]: 85 percent satisfaction is well below the interim target of 73.5 percent and achievement of the Decentralization Work for end target of 85 percent will require significant additional effort by government. It Improved Service Delivery should be noted that the Public Sector Governance PforR is focused on core PFM back office functions at national and local level and that the Program itself is unlike to contribute to a level change in user satisfaction with services. Milestone for indicator 11.1: 79.2 percent of staff positions filled in revised organizational structures (FY13/14); there has been an improvement from D to C in the availability of information on resources received by service delivery units according to the latest (draft) PEFA report. All 30 Districts have new Standard Service Charters, approved by their councils. The same applies to all 416 sectors and the cells. The Service Charters have been reviewed by MINALOC. World Bank operations make no direct contribution to this. GIZ is the lead DP in support of this activity. 36 Outcomes and indicators Progress WBG Program Status Outcome 12: Strengthened Outcome 12: Financing accountability Target to be restructured as not influenced by Bank. See reasons below. Completed  Quality of Decentralized Service Indicator 12.1: Citizens satisfied Indicator 12.1: Delivery Support DPO (FY13) with decentralization and Progress: indicator to be restructured as not influenced by Bank. The share of citizens Ongoing participation (EDPRS 2 Goal) satisfied with decentralization and participation in 2013/14 was about stable at 75  Public Sector Governance Program Baseline [2012]: 77 percent percent down from 76 percent in 2012 and short of the target of 80 percent. for Results (FY15) Target [end of FY18]: 90 percent Pipeline PFM operation (FY2019) Indicator 12.2: Citizens satisfied Indicator 12.2: with access of public Progress: indicator to be restructured as not influenced by Bank. 81 percent of information (EDPRS 2 Goal) citizens felt in 2014/15 that local administration is transparent, accountable and Baseline [2012]: 57 percent citizen-oriented as against an interim target of 48 percent. Target [end of FY18]: 80 percent Milestones for outcome 12: 29 percent of citizen participated in the district budgetary process according to the latest data (for budget year 2013/14); the consolidated budget execution report for July to December 2015 was available on the MINECOFIN website within three months, but the previous year reports were not available. The share of tenders awarded through open competitive biddings” increased to 67.86 percent in 2014/2015 from 58.6 percent in budget year 2013-2014. 38 percent of MDAs received an unqualified audit opinion (FY14/15), an increase of 5 percent compare to the FY13/14 (32 percent). 37 Annex 4: New IFC commitments and Advisory Services in the CPS period a) New IFC commitments Value Project Project Short CPS (US$ FY Term1 ID Name IFC Sector Name pillar millions) 2014 STF 25558 GTFP BCR Commercial Banking - Trade I 0.3 RWANDA 2014 STF 29177 GTFP ECOBANK Commercial Banking - Trade I 12.0 Rwa 2015 STF 29177 GTFP ECOBANK Commercial Banking - Trade I 23.2 Rwa 2016 STF 29177 GTFP ECOBANK Commercial Banking - Trade I 38.1 Rwa 2014 LTF 29680 Commercial Banking - I 3.1 AB Bank Rwanda Microfinance 2015 LTF 34454 IHS Rwanda Engineering Services I 25.0 2015 LTF 35378 Commercial Banking - Rural II 5.5 AIFL Farmer Fin Finance 2016 LTF 34396 AIFL Rwanda Other Food II 18.0 2016 LTF 35078 Heineken Rwanda Breweries II 25.0 2016 LTF 37265 Microfinance and Small 0.1 ABR FMO ROFO Business 2016 LTF 37921 Commercial Banking - I 0.4 ABR RI 2015 Microfinance Grand total 150.6 1/ STF = short term finance; LTF = long term finance b) IFC Advisory Projects Value2 Project Project CPS (US$ FY1 ID Project Name Status pillar millions) 2013 599796 MicroEnsure ACTIVE I 0.70 MFS - Urwego Opportunity MFI Bank I 2013 599222 Rwanda ACTIVE 0.71 2014 577628 AB Rwanda TA ACTIVE I 0.98 Rwanda Investment Climate Reform Program 2015 599540 III - Transforming Local Economies ACTIVE I 8.09 2015 600783 Rwanda IC Improving G2B services ACTIVE I 4.22 2015 600786 RICRP 3 Sector competitiveness ACTIVE I 3.04 Heineken Rwanda Maize Supply Chain II 2015 600837 Development ACTIVE 0.70 2016 601443 WFP Rwanda ACTIVE II 0.50 2016 601564 WASAC Support ACTIVE I 0.28 Africa Improved Foods (Rwanda) Supply 2016 600717 Chain Development ACTIVE I 0.74 Grand total 19.96 1/ Advisory Service Implementation Plan Approval 2/ Funds managed by IFC 38 Annex 5: Rwanda CAS Lending Operations and ASA FY14-16 (US$ millions) Theme 1: Accelerating economic US$ Theme II: Improving the productivity and US$ Theme III: Supporting US$ growth that is private-sector driven and million incomes of the poor through rural development million accountable governance through million job-creating and social protection public-financial management and decentralization FY 14 – after June 5, 2014 (all trust fund) Financial Inclusion Support Framework 0.59 (FISP) Country Support Program (CSP) M&E FISF CSP Financial Literacy 0.655 FISF CSP Payments and FI 0.361 FISF CSP MSME 0.575 FISF CSP Consumer Protection 0.407 FISF CSP Coordination 0.13 Sub-total 2.7 FY 15 IDA Energy sector investment plan preparation 0.198 Transformation of Agriculture Sector Program, 100.0 Rwanda Public Sector Governance 100.0 I (CSCFIA grant) Phase 3 PforR Program for Results Energy sector investment plan preparation 0.26 Social Protection System Support 70.0 II (CSCFIA grant) Sub-total 0.46 170 100 Trust Funds Secondary Cities Program (Korean Green 0.65 Early Childhood Development (Strategic Impact 0.26 Growth Trust Fund) Evaluation Fund) Feeder Roads Development I (FS-GTI) 0.295 Feeder Roads (DIME) 0.225 Impact of Land Husbandry (DIME) 0.15 User Feedback for Extension 0.1 Irrigation (DIME) 0.025 Enhanced Support to the Rwanda Second 0.5 Emergency Demobilization Basic Education Impact Evaluation (SIEF) 0.609 Rwanda Rural Finance (DIME) 0.22 Landscape Approach to Forest Restoration and 4.045 Conservation (LDCIA) 39 Theme 1: Accelerating economic US$ Theme II: Improving the productivity and US$ Theme III: Supporting US$ growth that is private-sector driven and million incomes of the poor through rural development million accountable governance through million job-creating and social protection public-financial management and decentralization Landscape Approach to Forest Restoration and 5.487 Conservation (GEFIA) Agriculture Transformation PforR MDTF 1.288 Child Sensitive Social Protection (Early Learning 0.15 Partnership) Feeder Roads Development II (FS-GTI) 1.8 Pay for Performance for Teacher Retention and 0.196 Recruitment (REACH) Building Resilience to Flood Hazards 0.5 Scaling up Tree Based Ecosystem Approaches 0.05 Sub-total: 0.65 15.9 0.0 Other ASA Rwanda Country Economic Memorandum Poverty and Labor analysis TA Rwanda Report on the Observance of Standards and Codes (ROSC) A&A 2015 Economic Geography and Urbanization Rwanda Poverty Assessment Rwanda Economic Update (REU) 7- Managing Uncertainty for Growth and Poverty Reduction REU8-Financing Development TOTAL 1.11 185.9 100.0 FY16 IDA Rwanda Electricity Sector Strengthening 95.0 Project Rwanda Urban Development Project 95.0 Second Social Protection System DPO 95.0 Sub-total: 285.0 Regional Great Lakes Trade Facilitation Initiative 26.0 (regional) 40 Theme 1: Accelerating economic US$ Theme II: Improving the productivity and US$ Theme III: Supporting US$ growth that is private-sector driven and million incomes of the poor through rural development million accountable governance through million job-creating and social protection public-financial management and decentralization Eastern and Southern Africa Higher 20.0 Education Centers of Excellence Regional sub-total: 46.0 TOTAL: 331 0.0 0.0 GRAND TOTAL: 334.8 185.9 100.0 41 Annex 6: EDPRS-2 Mid-Term Review Completion of Policy Actions Policy Actions 2013/14 & 2014/15 Total Policy Not S/N Sector Actions Achieved Achieved 6 4 2 1 Energy 100% 67% 33% 25 11 14 2 PSD&YE 100% 44% 56% 4 2 2 3 Urbanization 100% 50% 50% 6 5 1 4 FSD 100% 83% 17% 4 3 1 5 Transport 100% 75% 25% 6 4 2 6 Agriculture 100% 67% 33% Social 3 3 0 7 Protection 100% 100% 0% 7 3 4 8 WATSAN 100% 43% 57% 9 6 3 9 Education 100% 67% 33% 6 4 2 10 Health 100% 67% 33% 5 5 0 11 JRLO 100% 100% 0% Governance & 8 8 0 12 Decentralizati on 100% 100% 0% Total 89 58 31 % 65% 35% 100 42 Annex 7: Impact Evaluation Rwanda has six ongoing Impact evaluations under following GPs:  FINANCE &MARKETS: an impact evaluation of the Financial Education through savings credit and co-operatives (SACCOs) program. An end line survey will be implemented in April 2017 to determine longer-term impacts of the program. Will also assess outcomes on the financial behaviors of SACCO members. The complete results of the impact evaluation will be available in the summer of 2017.  EDUCATION: the impact evaluation examines a new performance-based award system in Rwandan primary schools. The objective is to find out whether incentives (based on both teachers’ effort levels and student performance) either raise student outcomes, or affect the composition of those who choose to take teaching jobs. Key measures from the study will be gathered by the end of 2017.  SOCIAL, URBAN, RURAL AND RESILIENCE: An impact evaluation under the Great Lakes Sexual Gender Based Violence will focus on the impact of behavioral change activities on Sexual Gender Based Violence prevention.  AGRICULTURE & TRANSPORT AND ICT: DIME has taken a lead in designing IEs aimed at answering questions related to the delivery, sustainable maintenance and use, and overall impact of two flagship programs: - In the case of the Land Husbandry, Water Harvesting and Hillside Irrigation (LWH) project, the evaluation aims to document the impact of the intervention in project sites. - In the Rural Feeder Road program, the impact evaluation will use an event study design, using high frequency pre-post comparisons of outcomes at the road segment level1.  Social protection: an impact evaluation is being conducted to assess the results of home visiting model that aims to encourage parents’ investments in their young children, reduce harsh punishment and improve overall child development outcomes IFC  The PricewaterhouseCoppers (PWC) Independent Evaluation of the REDP (2015) found that the program strengthened the capacity of more than 5000 small and medium enterprises (SMEs). overall the program facilitated investment to SMEs amounting to US$22,374,000, catalyzed IFC financing amounting to US$6,600, 000 and report creation of 1,978 jobs; SMEs in the tourism linkages reports increased of revenues amounting to US$4.79 m.  The Independent Evaluation Group (IEG) Evaluation of the Bakhresa Project (2015)) found that after IFC's investment, Bakhresa Rwanda expanded its operations beyond simple distribution to agro-processing and created around 250 new jobs, contributed to social impact in reducing the price of a highly demanded commodity while developing skills for both its employees and SMEs in its distribution chain; local SMEs development is evidenced by multiplier effects in terms of increased number of jobs as well as increased revenues. Bakhresa Rwanda accounts amongst the biggest tax-payers in Rwanda.  Tea Pricing Impact Evaluation: In late 2016, WBG collected data on the impact of green leaf tea pricing reform supported under the Third Rwanda Investment Climate Reform Program (RICRP3). The pricing reform ensures tea farmers in Rwanda receive 40 percent of the market value of the tea they produce. The impact evaluation is currently being finalized, but initial results indicate that the reform led to sharp increases in household income of tea farmers.  Annual Evaluation of the RICRP3: in November 2016, United Kingdom Department for International Development (DFID), the project funder, completed its second annual independent evaluation of RICRP3. The evaluation gave the project a rating, indicating that the program met expectations. The review commended the programs accelerated progress against most outputs and towards outcomes, and noted that it has shown an ability to respond flexibly, adapt to some challenges, and effectively circumnavigate others. 43 Annex 8: Progress towards achievement of CPS outcomes (detail) Outcome 1: Increased generation and access to electricity 1. The World Bank is assisting the GoR in increasing installed generation capacity by financing construction of the regional 80 MW Rusumo hydropower plant, of which Rwanda will receive 27 MW. It is also involved in the regional Ruzizi hydropower plant project. The World Bank has also been the leading funder of EARP. World Bank support has comprised the Access Scale-up and Sector Wide Approach (SWAp) Development Project (FY10) as well as the recently approved Rwanda Electricity Sector Strengthening Project (FY16), which is supporting grid extension. The World Bank also assisted the Government with development of a medium-term generation & financial sustainability plan for the power sector that was prepared as a part of the Rwanda Electricity Access Scale-up and Sector Wide Approach (SWAp) Development Project. The World Bank is actively supporting GoR with the development and implementation of an off-grid strategy. It has also assisted the Government in developing an SREP Investment Plan, phase 1 a key focus of which is on financing off-grid access projects through a Renewable Energy Fund. The World Bank will be appraising the SREP-financed project in March, 2017. 2. IFC is supporting GoR in the renewable energy sector. Through its Investment Climate (IC) work, IFC has also built capacity in the Rwanda Development Board (RDB), the Rwanda Utilities Regulatory Agency (RURA), and the Ministry of Infrastructure (MININFRA) to deal with renewable energy proposals; improve the Feed-in-Tariff (FIT) in hydro, solar and small scale biomass, and develop regulations for third party (open) access to private and/or captive power. IFC’s support for the renewable energy sector has now been taken on by DFID. Outcome 2: Development plans for secondary cities developed 3. The GoR has taken a number steps towards achieving this objective. A draft policy note for the Urban Development Fund, primarily designed to finance basic infrastructure such as roads, electricity and water, has been prepared. This is designed to lower the cost of housing. In addition, the Government has adopted: a Ministerial Order determining urban planning and building regulations, together with an Urban Planning Code and Building Code; six implementation orders relating to the Law Governing Urban Planning and Building; a National Housing Policy, together with an implementation strategy. The Government is training district staff in the implementation of master plans. It is also training staff with respect to urban planning and building-related laws and orders, the national housing policy, the urban planning code and the building code. The World Bank, through the Rwanda Urban Development Project (FY16), is providing access to basic infrastructure and enhancing urban management in six cities together with an additional district in Kigali. IFC is working with the City and Ministry of Infrastructure on a portfolio of projects in both housing, solid waste and electricity generation. Expected increase of housing beyond horizon of 2020, additional 4800 affordable houses and mortgages for the uptake committed by local banks with the support of IFC. As part of its engagement in the Bulk Water Project IFC structured the Transaction and brought the Private Sector in. Owing to government decision not to grant local currency indemnity to 4. Lenders under the Government Guarantee scheme IFC management did not feel comfortable to move ahead; however other lenders pursued the project until September 2016 at the financial close and were told that the GoR was not willing to pursue the PPP because the tariff was perceived to be higher even though pre-negotiated as part of the bid and selection process. Outcome 3: Improved environment for private sector investments 5. IFC has actively supported the Government in strengthening the overall business environment. IFC’s Rwanda Entrepreneurship Development Program has supported the growth and competitiveness of the small and medium enterprise (SME) sector and enhanced local 44 entrepreneurship in Rwanda. IFC’s Investment Climate Program is supporting the deployment of on-line construction permitting systems in secondary cities including upgrading the system in the City of Kigali. The new systems were launched in Rubavu and Musanze in September 2016 and should be operational by December 2016. Automated systems are expected to be launched in a further four cities by mid-December 2017. The Investment Climate Program is also employing IT solutions, including investing in mobile telecommunications, to improve government service delivery to businesses throughout the country. It is also supporting institutional strengthening to improve trade inspection processes for businesses as a means of improving service delivery as well as technical capacity of the Competition Authority to improve market competition and increase consumer welfare. 6. IFC is also building technical capacity of the Competition Authority to improve market competition and increase consumer savings. It does this through adoption of regulations and guidelines and recommendations that will enhance the competition at least in three market subsectors. As the Program awaits for government move on the RICA, a number of subsectors were studied and generated a profile of strengths and weaknesses while offering recommendations for improvement of which 75 percent are implemented to-date; With regard to improving subsector’s competitivity in Agri inputs and pesticides and Tourism sector the Program made significant progress with below results:  Tea pricing reform yield significantly increased net income of 60,000 farmers active in the tea sector (increases of between 10 and 50 percent).  Assessment of Agri inputs and pesticides completed and offered recommendations to attract private sector investments that are being implemented; it is expected that private sector market share will increase at least by 10 percent as a result of guidelines and regulations supporting gradual exit by the GoR from this sector  Tourism market assessment completed and recommendations being implemented; it is expected that by 2020, at least 5 sites would have been developed and proposed to private sector investors in the Kivu Belt Corridor 7. IFC has supported the development of financial markets at a range of different levels. It supported investments worth over US$120 million in financial markets through its activities in the bond market, supporting local currency financing, trade finance and funding financial institutions. IFC contributed to the development of Rwanda’s domestic capital markets through the issuance in May 2014 of its 5-year RWF 15 billion (US$22 million equivalent) “Umuganda Bond”. This was the first issuance by a non-resident issuer in the market. It was further complemented in February 2015 by an off-shore bond of US$5 million and helped extend the maximum period available for borrowing and lending in domestic currency capital markets from three to five years. It This demonstrated that an investor (based in New York in this case) can channel money to Rwanda in local currency and make a return, while contributing to the country’s development. In addition, IFC’s Trade Finance Facility was instrumental in enabling local banks to support imports by the private sector of key goods and machinery needed for a number of transformational projects. IFC support to Financial Institutions spanned provision of micro and SME (MSME) financing through the Business Partners International Rwanda SME Fund, a credit line to KCBR to support housing finance, support for the creation and development of Access Bank Rwanda Ltd., a Greenfield microfinance institution providing credit and savings products to micro, small and medium enterprises in Rwanda, and strategic advisory services and grant funding to Urwego Opportunity Bank of Rwanda (UOB) to develop a new mobile banking channel. 8. The World Bank is also supporting financial sector strengthening and deepening through two technical assistance programs. The first program, funded by the trust fund FIRST, has resulted in updated laws and regulations for the banking and insurance sectors and a newly 45 adopted legal and regulatory framework for pensions. The program also supported the introduction of deposit insurance, the establishment of an Emergency Liquidity Facility, and new crisis preparedness mechanisms. It also provided significant capacity building and training for Central Bank staff in the areas mentioned above. The second program, a Financial Inclusion Support Framework, has resulted in an improved legal and regulatory framework for microfinance and SACCOs, improved credit enhancement and guarantee schemes provided by the Business Development Fund, a new high-level consumer protection framework, the implementation of a newly developed financial education curriculum in 130 SACCOs, and a strengthened oversight framework for credit reporting. 9. The environment for private sector investments improved as did the overall ease of doing business in Rwanda. An important and long awaited PPP Law (Law No. 14 of 2016) was passed in February 2016. The new PPP Law is expected to work alongside the existing procurement law and will help accelerate PPP. Rwanda now ranks 56 in Doing Business 2017, up from 62 in the previous year’s report. On the distance to frontier metric, Rwanda’s score increased from 68.63 in Doing Business 2016 to 69.81 in Doing Business 2017. Substantive improvements in the local regulatory framework included: starting a business (by improving the online registration one-stop shop and streamlining post-registration procedures), property registration (by introducing effective time limits and increasing the transparency of the land administration system), trading across borders easier (by removing the mandatory pre-shipment inspection for imported products), and enforcing contracts (by introducing an electronic case management system for judges and lawyers). Outcome 4: Increased integration into the EAC regional market 10. The ease of cross border trade and travel within the East Africa Community (EAC) of states, of which Rwanda is a member, continues to improve. IFC is also providing technical assistance to the tourism sector through its Rwanda Investment Climate Reform Program III (RICP3). Key improvements in the cross border trade and travel during the CAS include the following. First, the number and hours of operation of One Stop Border Posts on borders between Rwanda and Uganda, Tanzania and Burundi have been extended. Second, Rwandan nationals are now able to travel using ID or student cards rather than passports. Between January 2014 and June 2015, 1,3 million Rwandans used ID/students cards to travel to Kenya and Uganda. Over 250,000 citizens from EAC partner states travelled to Rwanda using the same arrangement. Removal of visa and work permit fees has also facilitated the movement of people, labor and businesses within EAC. Third, tourists are able to travel within EAC more easily. In 2014 the East African Tourist Visa was created, allowing tourists to travel between Rwanda, Uganda and Kenya with a Single Tourist Visa. Rwanda issued nearly 3000 East African Tourist Visas between January 2014 and March 2015. Fourth, an Electronic Single Window System (ESWS) has been introduced that allows for standardized trade and travel information and documents to be lodged at a single place and time. This has reduced the time needed to clear goods from two days 10 hours to 1 Day 10 hours. In addition, the World Bank has supported the GoR’s desire to facilitate trade with the wider region, and especially the DRC. Cross-border trade and travel between Rwanda and the DRC is being enhanced through the Great Lakes Trade Facilitation Project (FY16). This project focuses on increasing the capacity for commerce and reducing the costs faced by traders, especially small-scale and women traders, at key border crossings. Also Trade and Competitiveness developed the Score Card Balance, a tool that allows the monitoring of promises made against implementation. This tool was appreciated by member countries and supports an efficient management of committed milestones/operations. 11. Rwanda is also a member of the Common Market for Eastern and Southern Africa (COMESA). In December 2014 COMESA Ministers of Trade endorsed new Regulations on Minimum Standards for Treatment of Small Scale Cross-Border Traders. These regulations enshrine the Charter for Cross-Border Traders that the World Bank has developed, the implementation of 46 which will be supported by the World Bank’s Great Lakes Trade Facilitation Project (FY16). COMESA has also been implementing the Trading for Peace Program as part of the overall African Union Peace and Security program. Outcome 5: Improved agriculture productivity and sustainability 12. To further boost productivity increases the World Bank is supporting increased productivity and commercialization of hillside agriculture in target areas in the country through the Land Husbandry, Water Harvesting and Hillside Irrigation (FY10) program. The Third Rural Sector Support Project (FY12) is supporting increased agricultural productivity through farmers’ organizations in the marshlands and hillsides of sub-watersheds targeted for development in an environmentally sustainable manner. It is also strengthening the participation of women and men beneficiaries in market-based value chains. The Agriculture Program-For-Results (FY15) directly supports the GoR’s Strategic Plan for the Transformation of Agriculture Phase III. Under the latter, coffee and cassava yields per hectare and milk yield per cow, among others, have all increased significantly between 2013 and 2015. 13. IFC has also invested in agro-processing and the food and beverages sectors with potential to benefit 10,000 small holder suppliers. For example, in July 2015 IFC approved a package of equity, loan and syndication of US$26 m to invest in Africa Improved Food expected to reduce malnutrition among infants and pregnant women. It also approved a package of support for 20 cooperatives to enable them to supply 44,000 tons of maize and 12,000 tons of soya, while increasing productivity from 2.2 to 4.4 tons. This support following approval of a US$25 million loan in April 2015 to Bralirwa (Heineken Group). Bralirwa is among the largest private sector employers in the country providing direct in-country employment for over 700 people and indirect in-country employment for a further 25,000 people. Outcome 6: Improved access of rural /small farmers to inputs, financing, and markets 14. Rates of financial inclusion are increasing. 89 percent of Rwandan adults currently have or use financial products or mechanisms compared to 72 percent in 2012. Reforms to the Access to Rural Finance Policy are underway and the World Bank is working with relevant Ministries and relevant agencies to support the development of the new policy. The World Bank’s programmatic Agriculture Program-For-Results (FY15), and investment leading comprising Land Husbandry, Water Harvesting and Hillside Irrigation (FY10) and the Third Rural Sector Support Project (FY12), support the Ministry of Agriculture’s Transformation of Agriculture Sector Program (PSTA 3) have enabled key sectoral targets to be achieved. The World Bank has also supported the process of policy reform regarding the supply of key inputs such as seeds and fertilizer. Outcome 7: Improved agriculture value chains 15. Agricultural value chains in Rwanda continue to develop. Nationally only 21 percent of total production is currently marketed. This share increases significantly in World Bank project areas, but will need to be scaled up. To address this challenge, the World Bank, alongside other donor partners, have agreed to undertake a strategic review, Strategic Plan for the Transformation of Agriculture (PSTA 3), to assess how best to increase the volume of agricultural produce traded in national value chains. IFC and the World Bank have also supported investment aimed at improving capacity across the network of cooperatives. Outcome 8: Improved rural roads condition and connectivity to market centers 16. Rwanda has a well-established road network comprising about 30,000 km of classified and unclassified roads. It is estimated that 31 percent of total classified roads were in good or fair condition in 2014/2015. Many farmers, however, are still not well connected to input or output 47 markets. About half of national roads are paved and most of them are well maintained. But unpaved rural and feeder roads are in poor condition. For example, it is estimated that about 64 percent of District Class 2 Roads are in poor condition. The unclassified roads network, which is estimated to be about 15,000 km, also consists primarily of earth roads of a low engineering standard and more than 70 percent are in a dismal state. The Rural Access Index in 2015 was estimated at 51.4 percent, hardly better than the estimate for 2006. To address this, the GoR has been investing significant resources in the road sector with World Bank support provided through the Feeder Roads Development Project (FY14). 17. Regional connectivity is another important challenge. Rwanda is an importing country and 1,400 km away from Dar-es-Salaam and Mombasa, two major regional seaports. About 60 percent of firms rely on imports for their inputs and supplies, but they have to wait 15 days for imports to clear at customs. It takes up to 31 days to import goods at a cost of US$4,990 per 20- foot container. By contrast imports in Tanzania, a regional gateway country, take 26 days at a cost of US$1,615 per 20-foot container. Outcome 9: Enhanced local government tax generation and administration 18. Local tax revenue collected has increased sharply in recent years. In 2015/16, 33.8 billion RWF of local tax revenue was collected (equivalent to 0.9 percent of GDP) compared with 13.9 billion in 2012/13 (equivalent to 0.3 percent of GDP). The main reason for this increase in revenue collected was a Government decision in 2014/15 to move to central administration of District taxes and fees. A program to establish automated revenue administration systems in each district was discontinued. Instead, a web-based nation-wide revenue administration system for District taxes and fees was rolled out. Two modules (registration and declaration) are operational. Three modules (audit, enforcement and reconciliation) have been developed, but are yet to move to testing stage. The legal framework for this new approach to District revenue administration has yet to be approved by Cabinet and Parliament and the centralized revenue collection is done based on the 2011 Law on Decentralized taxes and Memoranda of Understanding with the Districts. 170 new staff have been hired by the Rwanda revenue Authority (RRA) and have been deployed to 167 RRA Collection Centers spread across the 30 Districts and Kigali. 19. In addition, a major tax payment awareness raising campaign was launched during 2014/2015 to 2015/2016. Key elements included: a sector by sector tax campaign in all districts of Kigali and other districts across the country; training of 830 RRA stakeholders and partners (journalists, land bill officers, service providers, notaries, district and sector officers) on decentralized taxes; TV and radio announcements; sector specific leaflets and brochures; local government tax announcements every last Saturday of the month during communal work sessions (Umuganda). Outcome 10: Enhanced effectiveness and expanded coverage of social protection system 20. IDA’s support during the current CPS period has focused on consolidating past progress while introducing and scaling up measures that are fundamental to further strengthening of Rwanda’s social protection system. 21. World Bank support during the CPS has comprised a series of three social protection Development Policy Operations (DPOs). The first DPO, the Third support to the Social Protection system (SSPS-3, FY14), concluded a series which helped Rwanda build the foundations of a harmonized social protection system, notably by establishing a set of sub-systems to support the effective delivery of services, including: geographical and household poverty targeting, a nascent appeals and complaints mechanism, the design of a management information system for monitoring implementation, and links with disaster response. More recent support, the first Social Protection System DPO (SPS-1, FY15) and SPS-2 (FY16), have focused on reaching Rwanda’s goal of national 48 social protection coverage and deepening social protection reforms through three areas of focus: improving efficiency; strengthening accountability and transparency; and expanding coverage among poor and vulnerable populations. Outcome 11: Improved delivery of decentralized services 22. World Bank support during this period comprised a grant in the form of a Development Policy Operation, Quality of Decentralized Service Delivery Support (FY13). This aimed to support the Government in clarifying institutional roles and responsibilities for decentralized service delivery and to enhance public transparency, fiduciary accountability, and local government capacity for improved access to quality services. The project was rated highly satisfactory. The World Bank has continued to support the decentralization agenda through the Public Sector Governance Program for Results (FY15). This project, approved in October 2014, supports the Government in the areas of public finance management, decentralization and statistics. Outcome 12: Strengthened accountability 23. Changes in the methodology for calculating the latest results, however, make comparisons with the target difficult. Measures to reinforce accountability have included: participatory and citizen-centered planning and bottom-up preparation of public sector commitments (Imihigo). A specific month was earmarked on two occasions during which the public was widely engaged in discussions of the concept of ‘governance’. As noted above the World Bank has supported the decentralization agenda through the Public Sector Governance Program for Results (FY15). 49 Annex 9: Adjustments to the CPS (detail) CPS Theme 1: Accelerating economic growth that is private-sector driven and job-creating 1. Rwanda aims to provide access to electricity to 70 percent of its population by 2018. The World Bank will maintain its support for the energy sector under the economic growth pillar. With existing funding, the GoR will be able to provide on-grid access to electricity to up to 35 percent of the population by 2018. In order to achieve its 2018 targets, the GoR has recently approved a Rural Electrification Strategy to incentivize private sector participation in the sector and make up for the projected short-fall in in-grid access. The World Bank will continue working with the GoR on increasing access, both on- and off-grid, as well as improve reliability of energy supply in the country. The World Bank will continue advising the Government on power sector reforms, including promoting efficient commercial operations. This move to supporting sector reforms has triggered including a series of budget support operations in the sector under IDA 18. The World Bank will remain actively engaged in off-grid dialogue, including supporting implementation of the Rural Electrification Strategy. 2. During FY17 the World Bank team will engage with MINECOFIN’s request for high level strategic guidance in the sphere of urban development. Key aspects of urban development that could be considered include: (a) how to ensure secondary cities are able to create competitive environments for job creation; (b) how to enable the emergency of a dynamic housing market, especially for low cost housing; and (c) how to support the effective expansion of Kigali. The World Bank will support MINECOFIN to establish an “Advisory Panel of Experts on Urbanization” to guide key decision-makers. Such high level engagement together with the completed ASA could also help contribute to the formulation of EDPRS 3. The World Bank team will consider a new lending operation in FY19, drawing on the ASA, policy engagement and lessons learned from implementation of the Rwanda Urban Development Project (RUDP). 3. The World Bank will contribute to the efficient and safe movement of goods and people. In particular, the World Bank will strengthen transit along the regional corridor from the border crossing at Rusumo to the border crossing at Nemba with a new US$180 million project. This will also improve asset management and road safety in Rwanda. This 130km long road project is in the pipeline for delivery in late FY17 or early FY18 pending confirmation of an appropriate financing mechanism. 4. IFC will scale up its support for private sector-driven growth and job creation both in terms of investment and advisory services. It will increase the volume of its investment across industries to US$160 million over the period FY17-20 (i.e. an annual average of US$40 million). The focus will shift towards agribusiness (35 percent); infrastructure (45 percent) and financial markets (20 percent). IFC will also consider expanding its advisory services through a wider Entrepreneurship and Private Sector Development Program. 5. IFC will explore further opportunities to support urban development. It is exploring support for the Rugarama Project through a special purpose vehicle (SPV) led by the Development Bank of Rwanda and Shelter Afrique to develop nearly 2750 housing units. Through its City Engagement Program, IFC is also working with the City and Ministry of Infrastructure on a portfolio of projects in both housing, solid waste and electricity generation. Building on its role structuring the transaction and introducing the private sector. IFC is providing further support for secondary cities through the Rwanda Investment Climate Phase III program. This will include IT-based activities and reforms aimed at improving transparency, predictability and certainty for investors. It will support improved government-to-business service delivery throughout the country, while improving the legal framework for private participation in key sectors. 50 CPS Theme 2: Improving the productivity and incomes of the poor through rural development and social protection 6. The Ministry of Agriculture, MINAGRI, has requested further project financing to enable or accelerate innovation and transformation (e.g. regional trade and increasing access to finance and information). Additional financing for the current phase of the World Bank’s PforR program, and a second and scaled up PforR program, could be appropriate. In addition, MINAGRI has indicated its interest in additional financing for the Land Husbandry, Water Harvesting and Hillside Irrigation (FY10) project and a successor project (to LWH and RSSP3), which would cover both marshland and hillside and include a stronger focus on value chain and agribusiness development. The current sector strategy is being reviewed, a Sectoral Public Expenditure Review is underway and IFPRI will embark on a process of economic modelling in August. These activities will both assess the relevance of the current strategy and inform the design of the future strategy for the sector. In addition, the Prime Minister’s Office has requested MINAGRI to update the national agricultural policy. The World Bank team will provide financial and/or technical inputs into all these processes. 7. The World Bank will continue to support rural connectivity through additional financing for the existing Rwanda Feeder Roads development Project (FY14). Feasibility studies for the five districts that are earmarked to receive additional financing are expected to be completed by end of July 2016. These comprise: (a) Gatsibo (b) Nyagatare (c) Nyabihu, (d) Rutsiro and (e) Nyaruguru. In addition, DIME is partnering with the GoR and development partners to analyze the impact of the project on market functioning and household welfare. USAID have also provided funds to support scale-up of selected feeder roads rehabilitation and maintenance in the additional districts. The original Project Development Objective of the project and components will remain unchanged. 8. IFC and MIGA will also seek to support private investment in Rwanda. The Rwanda Investment Climate Reform Program (RICRP3) has supported MINAGRI in developing a pesticide and seed policy. The Program is further recruiting an expert to develop a mechanization policy. MIGA will use its core product line of Political Risk Insurance, which includes guarantees against the risk of expropriation, transfer restriction, war and civil disturbance, and breach of contract, to support cross-border investments into the country. It will focus its engagement around infrastructure projects as well as projects in the agribusiness, manufacturing, renewable energy and service sectors. CPS Theme 3: Supporting accountable governance through public-financial management and decentralization. Strengthening national and sub-national transparency and accountability 9. As noted above it is proposed that the third pillar, while still focusing on governance, should now include the previous outcome 9 (enhanced local government tax generation and administration). In addition, it is proposed that the previous outcomes 11 and 12 be redesigned and renamed to more explicitly reflect existing and planned World Bank activity. The proposed new formulation of outcome 11 is: ‘Increased national and subnational transparency and accountability in the use of public funds’. The new title of outcome 12 is: ‘strengthened statistical capacity to better inform decision-making’. These new outcomes more directly express how World Bank support is helping to improve national and subnational transparency and accountability in the use of public funds by supporting key PFM functions and strengthening statistical capacity to better inform decision- making. Strategic objectives of World Bank support under these outcomes include: 1) contributing to improved policy analysis and planning/budgeting; and 2) creating good-quality and timely statistics to inform policy and strategy formulation and evaluation. 51