The World Bank Implementation Status & Results Report LB Supporting Innovation in SMEs Project (P127306) LB Supporting Innovation in SMEs Project (P127306) MIDDLE EAST AND NORTH AFRICA | Lebanon | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2013 | Seq No: 13 | ARCHIVED on 26-Feb-2020 | ISR40420 | Implementing Agencies: Lebanese Republic, Kafalat Key Dates Key Project Dates Bank Approval Date: 31-Oct-2012 Effectiveness Date: 03-Feb-2015 Planned Mid Term Review Date: 20-Feb-2017 Actual Mid-Term Review Date: 20-Mar-2017 Original Closing Date: 30-Jun-2018 Revised Closing Date: 30-Jun-2020 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The project’s development objective is to encourage the equity investment market to increase the supply of early stage investment finance for financially viable, new, and existing innovative firms. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Innovation in SMEs (iSMEs) Funding Program:(Cost $27.50 M) Project Management:(Cost $2.50 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions The iSME project is a USD 30 million investment lending project that develops the Lebanese equity investment market and increases the supply of early stage investment financing for innovative firms. The project finances a USD 25 million early stage equity fund that makes co-investments alongside institutional investors. It also provides concept development grants to improve products and processes of seed stage firms. The project is on track to meet or exceed the strong majority of its results indicators and has exceeded planned results with regards to job creation, employment of women, and total equity mobilized as a result of concept development grants provided under the project. To date, iSME’s co-investment fund has invested $12.4M across 27 investments representing 50% of the co-equity facility. Investments were made directly in 18 companies ($11.1M) and 9 investments through 3 angel funds ($1.33M) at an overall average investment ticket of $590k. As for the Grant component ($2.5M), 175 grantees were selected and awarded a total sum of $2.5M, representing 100% of the Grant facility. In total, the iSME program in both its instruments (grants and equity co-investments) has managed to leverage $51.7 million from other sources, thereby indicating a leverage ratio of 3.46, demonstrating the fund’s ability to crowd in private sector financing in line with maximizing finance for development principles. Overall, the project supports the 2/26/2020 Page 1 of 6 The World Bank Implementation Status & Results Report LB Supporting Innovation in SMEs Project (P127306) Government of Lebanon in taking a leadership position on entrepreneurship in the Middle East and North Africa region. Those interested in applying for capital funding can contact Kafalat through the information provided on their website. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- Substantial Substantial Macroeconomic -- Substantial Substantial Sector Strategies and Policies -- Moderate Moderate Technical Design of Project or Program -- Substantial Substantial Institutional Capacity for Implementation and -- Moderate Moderate Sustainability Fiduciary -- Moderate Moderate Environment and Social -- Moderate Moderate Stakeholders -- Low Low Other -- -- -- Overall -- Substantial Substantial Results PDO Indicators by Objectives / Outcomes Encourage the equity investment market to increase the supply of early stage investment finance IN00798988 ►a) Total number of firms receiving equity financing leveraging investors and the iSME funding program (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 22.00 85.00 110.00 Date 04-Feb-2015 06-Aug-2019 31-Dec-2019 30-Jun-2020 IN00798989 No. of beneficiary firms, women owned (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 8.00 8.00 10.00 Date 04-Feb-2015 06-Aug-2019 31-Dec-2019 30-Jun-2020 2/26/2020 Page 2 of 6 The World Bank Implementation Status & Results Report LB Supporting Innovation in SMEs Project (P127306) IN00798990 ►b) Total amount of equity financing received (leveraged) through the project, leveraging investors and the iSME funding program (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 35,703,500.00 38,776,000.00 50,000,000.00 Date 04-Feb-2015 06-Aug-2019 31-Dec-2019 30-Jun-2020 IN00799031 ►c) Total number of firms receiving equity financing leveraging investors only (as a result of a Grant) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 41.00 63.00 30.00 Date 04-Feb-2015 02-Aug-2019 31-Dec-2019 30-Jun-2020 Figures will be updated during the 2019 jobs assessment exercise. Comments: IN00799032 ►a) Number of new/ improved products/processes offered (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 100.00 100.00 166.00 Date 04-Feb-2015 30-Apr-2018 30-Apr-2018 30-Jun-2020 IN00799033 ►b) Number of new start-ups created under the project (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 61.00 65.00 70.00 Date 04-Feb-2015 30-Apr-2018 31-Dec-2019 30-Jun-2020 IN00799034 ►b) No. of new jobs created in beneficiary SMEs (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 100.00 265.00 180.00 Date 04-Feb-2015 30-Apr-2018 31-Dec-2019 30-Jun-2020 IN00799035 No. of new jobs created, of which % are filled by women (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 42.00 47.38 10.00 Date 04-Feb-2015 30-Apr-2018 30-Apr-2018 30-Jun-2020 Overall Comments PDO 2/26/2020 Page 3 of 6 The World Bank Implementation Status & Results Report LB Supporting Innovation in SMEs Project (P127306) All indicators are continued to progress positively. NB. The indicator "Total number of firms receiving equity financing leveraging investors and the iSME funding program" includes all iSME beneficiaries receiving equity financing though direct co-investments, indirect co-investments, follow-on equity financing of grantees. No firm is counted more than once, e.g. for firm benefiting for more than one iSME schemes. Intermediate Results Indicators by Components Innovation in SMEs (iSMEs) Funding Program IN00799036 ►Intermediate Result Indicator 1: No. of firms applying for Phase 1 proof of concept grants (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 298.00 298.00 400.00 Date 04-Feb-2015 02-Aug-2019 31-Dec-2019 30-Jun-2020 IN00799037 ►Intermediate Result Indicator 2: No. of firms receiving proof of concept grants (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 175.00 175.00 200.00 Date 04-Feb-2015 02-Aug-2019 31-Dec-2019 30-Jun-2020 IN00799038 ►Intermediate Result Indicator 3: Vol. of proof of concept grants (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 2,477,800.00 2,477,800.00 2,500,000.00 Date 04-Feb-2015 06-Aug-2019 31-Dec-2019 30-Jun-2020 IN00799039 ►Intermediate Result Indicator 4: No. of firms applying for equity (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 44.00 46.00 170.00 Date 04-Feb-2015 06-Aug-2019 31-Dec-2019 30-Jun-2020 IN00799040 ►Intermediate Result Indicator 5: No. of firms successfully receiving equity (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 22.00 85.00 150.00 Date 04-Feb-2015 06-Aug-2019 31-Dec-2019 30-Jun-2018 IN00799041 2/26/2020 Page 4 of 6 The World Bank Implementation Status & Results Report LB Supporting Innovation in SMEs Project (P127306) ►Intermediate Result Indicator 6: Total vol. of Phase equity investments (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 10,231,000.00 12,400,000.00 25,000,000.00 Date 04-Feb-2015 06-Aug-2019 31-Dec-2019 30-Jun-2020 Overall Comments IR All indicators are continued to progress positively. NB. The intermediate result indicator 5 includes all iSME beneficiaries receiving equity financing though direct co-investments, indirect co- investments, follow-on equity financing of grantees. No firm is counted more than once, e.g. for firm benefiting for more than one iSME schemes. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P127306 IBRD-82020 Effective USD 30.00 30.00 0.00 18.88 11.12 63% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P127306 IBRD-82020 Effective 31-Oct-2012 13-Feb-2013 03-Feb-2015 30-Jun-2018 30-Jun-2020 Cumulative Disbursements 2/26/2020 Page 5 of 6 The World Bank Implementation Status & Results Report LB Supporting Innovation in SMEs Project (P127306) Restructuring History Level 2 Approved on 02-May-2018 Related Project(s) P171910-Lebanon Supporting Innovation in SMEs Project Additional Financing 2/26/2020 Page 6 of 6