The World Bank Afghan Women's Economic Empowerment (P159291) REPORT NO.: RES37974 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF AFGHAN WOMEN'S ECONOMIC EMPOWERMENT APPROVED ON MARCH 8, 2017 TO AGA KHAN FOUNDATION SOCIAL PROTECTION & JOBS GLOBAL PRACTICE SOUTH ASIA REGION Regional Vice President: Hartwig Schafer Country Director: Henry G. R. Kerali Regional Director: Lynne Sherburne-Benz Practice Manager: Stefano Paternostro Task Team Leaders: Shubha Chakravarty, Sarah Elizabeth Haddock The World Bank Afghan Women's Economic Empowerment (P159291) ABBREVIATIONS AND ACRONYMS AKF-Afg Aga Khan Foundation Afghanistan BSDP Business Development Service Providers CBSG Community-based Savings Groups CDC Community Development Councils ESMF Environmental and Social Management Framework GoIRA Government of Islamic Republic of Afghanistan GRM Grievance Redress Mechanism IE Impact Evaluation ISM Implementation Support Mission JSDF Japanese Social Development Fund MIS Management Information System MOLSA Ministry of Labor and Social Affairs ORCD Organization for Research and Community Development RLF Revolving Loan Fund RMA Rapid Market Assessment SAR GIL South Asia Region Gender Innovation Lab SWEEP Strengthening Women’s Economic Empowerment Project USD United States Dollar WB World Bank WfW Women for Women The World Bank Afghan Women's Economic Empowerment (P159291) BASIC DATA Product Information Project ID Financing Instrument P159291 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 08-Mar-2017 01-Apr-2020 Organizations Borrower Responsible Agency Aga Khan Foundation Aga Khan Foundation Financing (in USD Million) FIN_SUMM_PUB_TBL SUMMARY Total Project Cost 0 Total Financing 0 Financing Gap 0 DETAILS -NewFin3 The World Bank Afghan Women's Economic Empowerment (P159291) Project Development Objective (PDO) Original PDO The project development objective is to increase and enhance the participation of women, who are organized in community-based savings groups, in business support services and income-generating activities in pilot areas of Afghanistan. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-A4866 08-Mar-2017 07-Aug-2017 22-Jan-2018 01-Apr-2020 2.74 1.49 1.25 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. PROJECT STATUS 1. The project development objective (PDO) is to increase and enhance the participation of women, who are organized into community-based savings groups, in business support services and income-generating activities in pilot areas of Afghanistan. The project is designed around four components to improve women’s access to economic opportunities, inputs, and support services; increase their income through skills enhancement and business development support; and create an enabling environment at the community level through increased community support for women’s engagement in the economy. The pilot is funded by the Japanese Social Development Fund (JSDF), a World Bank administered trust fund, and implemented by Agha Khan Foundation Afghanistan (AKF-Afg) in close coordination with the Ministry of Labor and Social Affairs (MoLSA). 2. During last ISR (June 2019), the project ratings on progress towards achievement of PDO and overall implementation progress were updated to satisfactory to reflect the significant progress the project has made, including an increase in disbursements from 15% to 36%. There are no outstanding audit reports. 3. Component 1: Formation of Cluster platforms. (a) Cluster formation has been completed in four out of the five covered provinces. AKF-Afg has been providing technical support to clusters for: organization of meetings, selection of leaders/office bearers, capacity enhancement, sub-committee formation, and awareness raising on Grievance Redress Mechanism (GRM) and Environmental and Social Management Framework (ESMF). Thus far, several The World Bank Afghan Women's Economic Empowerment (P159291) cluster meetings, cluster training and regional staff workshops have been held and sub-committees at each cluster have been formed. Next efforts include ongoing technical and training support to CBSG Clusters, including cluster meetings, accounting, strengthening of sub-committees, Revolving Loan Funds (RLF) process and cluster plans. (b) In December 2018, AKF-Afg competitively procured Organization for Research and Community Development (ORCD), an NGO that will implement project activities in Nangarhar province. AKF-Afg provided ORCD with capacity building trainings on CBSG manual, accounting, membership and leadership, and will support the subsequent cluster formation. ORCD conducted a “Participatory Vulnerability Assessment” of 3,650 households and formed 23 CBSGs comprised of 380 women from ultra-poor households. CBSGs are currently being trained on accounting and leadership. AKF-Afg and ORCD are to conduct a rapid market assessment to identify profitable value chains in which CBSGs can invest in Jalalabad. ORCD will also work with male members to attempt to shift behaviors at the community level. 4. Component 2: Training, business development services and increase access to market. (a) AKF-Afg conducted three Rapid Market Assessments (RMAs) in Badakhshan, Bamyan and Takhar to identify the main value chains, activities and products that CBSG members are (or could potentially be) involved in. AKF-Afg is currently linking producers to Business Development Service Providers (BDSPs), individuals who are already involved in business activities and can mentor project beneficiaries. Next steps include developing the capacity of BDSPs and contributing to creating market linkages. (b) After a comprehensive curriculum desk-review, Women for Women’s (WfW) training curriculum was selected to be delivered under SWEEP. This curriculum is the only one that combines business and soft skills, has already been delivered in Afghanistan and is tailored to women with low literacy. Procurement for adaptation of curriculum and training of trainers is in process. Beneficiaries will be trained early 2020. 5. Component 3: Increasing access to finance. (a) AKF-Afg developed an RLF manual, as required by the project’s Grant Agreement, which has been cleared by the Bank’s task team. AKF-Afg is currently providing support to clusters on loan application planning and opening of bank accounts for seed grant disbursement. (b) Despite AKF-Afg best efforts to roll-out this component, it was recently recognized that some of the requirements in the Grant agreement regarding the seed grants disbursement to clusters are not necessary nor feasible under this project. These issues were discussed during the July 2019 mission and the need for a grant agreement amendment was highlighted. 6. Component 4: Project management, monitoring and evaluation, knowledge dissemination. (a) A baseline survey for the project’s impact evaluation was carried out end of 2018. A baseline report depicting results from the survey has been completed and is currently under internal review. (b) A successful proposal for additional financing was submitted to the South Asia Gender Innovation Lab (SAR GIL) in May 2019. The grant was awarded in August 2019. The project plans to undertake (i) a qualitative data collection to better understand the gender barriers and program perceptions, and (ii) an endline survey once project interventions are rolled-out for a sensitive period of time. (c) A firm was contracted in July 2019 to develop, test and support the project’s management information system (MIS). Administrative data collected through MIS will also be used for monitoring and evaluation purposes. The World Bank Afghan Women's Economic Empowerment (P159291) B. RATIONALE FOR RESTRUCTURING 7. The recipient submitted a request for the project restructuring to the Country Management Unit on October 29, 2019. The rationale for the project restructuring is twofold: (a) The July 2019 implementation support mission (ISM) for SWEEP acknowledged the project’s progress. However, the project is yet to implement the ‘Increasing access to finance’ component, to address women’s liquidity constraints to productive income-generating activities by: (i) enabling Clusters to access seed grants for productive purposes; and (ii) providing capacity-building to Clusters to develop a level of maturity required to access and effectively manage revolving loan funds. In preparation of this component, it was noticed that the terms and conditions of Seed-Grants require a simplification to match the capacity of the Clusters. (b) Additionally, the project suffered some early delays, and needs further time to complete component 3, as well as the other project activities. The ongoing security and development situation in Afghanistan warrant the project’s continued commitment to women’s empowerment, and SWEEP has significant potential to deliver impact and develop best practices for the Government and development partners. II. DESCRIPTION OF PROPOSED CHANGES 8. The proposed changes in this restructuring are: (i) to simplify the seed grant requirements; (ii) extend closing date by 12 months, and (iii) revise the results framework to incorporate the new closing date. 9. The main remaining activity is the disbursement of seed grants (or Sub-Grants as per original Grant Agreement) to community level clusters. The safeguards and fiduciary requirements set in terms of seed grants need to be simplified to match its Cluster/community-based nature. The proposed changes to the project’s implementation arrangements will accommodate the implementation of component 3 and completion of all other tasks. 10. For simplification, the clusters will be responsible for all fiduciary and safeguards requirements. The rationale for this is twofold: (i) the activities to be financed out of the proceeds of the Seed Grants will be used for household consumption and social safety net purposes as well as for enterprise related productive purposes, and (ii) the Seed Grants will be small in nature. The revised implementation arrangements include the following changes: (a) Revision of some of the project terms (e.g. Sub-Grant and Sub-Project for Seed Grant and Income Generating Activities respectively). (b) Simplification of fiduciary requirements. (c) Extension of project’s closing date. 11. The three-year project was approved in March 2017, and due to some considerable delays with the Operations Manual drafting and clearance, only became effective in January 2018. Other delays in project implementation include the extensive baseline data collection timeline, parliamentarian and presidential elections, as well as the ongoing security challenge in Afghanistan that often lead to restriction and/or suspension of field movement. The project is currently set to close in April 2020. The World Bank Afghan Women's Economic Empowerment (P159291) 12. Despite these early delays, the project made excellent progress with satisfactory ratings. As per its design, the project engaged over 4,000 beneficiaries in community-based clusters that are supporting financial inclusion, training, and income generation for poor women in rural communities. The project is yet to (1) provide ongoing technical support to CBSG clusters, (2) bring on board a firm to develop and deliver a business and soft skills training, (3) disburse the RLF to clusters for productive purposes and help clusters manage those funds, (4) form clusters in Nangarhar province, and (5) conduct a qualitative and an endline survey under the project’s impact evaluation. 13. To effectively accomplish these pending activities that are critical to the success of the project, a no-cost extension of 12 months is requested. 14. The remaining activities will be finalized within the requested extension period to achieve the intended project development objectives. No additional funds are required. Below is the revised action plan and revised disbursement schedule: Action Due Date Procurement of a firm to adapt business and soft skills curriculum and December 2019 deliver training of trainers Delivery of business and soft skills training to beneficiaries April 2020 Disbursement of RLF January 2020 Ongoing Cluster support March 31 2021 Formation of clusters in Nangarhar June 2021 Qualitative survey March 2020 Endline survey September-October 2020 Dissemination of IE results March 2021 Disbursement schedule Amount (US$) April 2020 300,000 July 2020 400,000 October 2020 300,000 January 2021 249,370 III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Loan Closing Date(s) ✔ Disbursement Estimates ✔ The World Bank Afghan Women's Economic Empowerment (P159291) Legal Covenants ✔ Institutional Arrangements ✔ Implementation Schedule ✔ Implementing Agency ✔ Project's Development Objectives ✔ Components and Cost ✔ Cancellations Proposed ✔ Additional Financing Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Change in Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Financial Management ✔ Procurement ✔ Other Change(s) ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_RESULTS_TABLE RESULTS FRAMEWORK Project Development Objective Indicators PDO_IND_TABLE Increase in share of direct beneficiaries participating in income-generating activities (percentage point). Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 9.00 Revised Date 24-May-2018 16-Dec-2019 30-Dec-2020 Male Unit of Measure: Percentage Indicator Type: Custom Breakdown The World Bank Afghan Women's Economic Empowerment (P159291) Baseline Actual (Current) End Target Action Value 0.00 0.00 5.00 Revised Date 24-May-2018 16-Dec-2019 30-Dec-2020 Female Unit of Measure: Percentage Indicator Type: Custom Breakdown Baseline Actual (Current) End Target Action Value 0.00 0.00 10.00 Revised Date 24-May-2018 16-Dec-2019 30-Dec-2020 Increase in average annual earnings among direct beneficiaries (percentage). Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 50.00 Revised Date 24-May-2018 16-Dec-2019 30-Dec-2020 Male Unit of Measure: Percentage Indicator Type: Custom Breakdown Baseline Actual (Current) End Target Action Value 0.00 0.00 35.00 Revised Date 24-May-2018 16-Dec-2019 30-Dec-2020 Female Unit of Measure: Percentage Indicator Type: Custom Breakdown Baseline Actual (Current) End Target Action Value 0.00 0.00 70.00 Revised Date 24-May-2018 16-Dec-2019 30-Dec-2020 Increase in average annual earnings among direct beneficiaries Unit of Measure: Percentage Indicator Type: Custom The World Bank Afghan Women's Economic Empowerment (P159291) Baseline Actual (Current) End Target Action Value 0.00 0.00 70.00 Revised Date 24-May-2018 16-Dec-2019 30-Dec-2020 Intermediate Indicators IO_IND_TABLE Clusters that have produced development plans and are operational. (number) Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 45.00 42.00 Revised Date 24-May-2018 16-Dec-2019 30-Dec-2020 Number of beneficiaries directly participating in business support services and/or training through the project. (number) Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 4200.00 Revised Date 24-May-2018 16-Dec-2019 30-Dec-2020 Cluster members receive a loan from the RLF. (percentage) Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 600.00 Revised Date 24-May-2018 16-Dec-2019 30-Dec-2020 Cluster funds are preserved. (percentage) Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 90.00 Revised Date 24-May-2018 16-Dec-2019 30-Dec-2020 Share of project beneficiaries that feel the project is responsive to their needs. (percentage) The World Bank Afghan Women's Economic Empowerment (P159291) Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 80.00 Revised Date 24-May-2018 16-Dec-2019 30-Dec-2020 Increase in median number of days women leave their compound/dwelling (number) Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 6.00 Revised Date 24-May-2018 16-Dec-2019 30-Dec-2020 OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline TF Status Closing Closing(s) Closing for Withdrawal Applications TF-A4866 Effective 01-Apr-2020 31-Mar-2021 31-Jul-2021 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2017 38,957.32 0.00 2018 535,884.82 0.00 2019 945,762.92 915,787.86 2020 1,219,394.94 1,000,000.00 2021 0.00 249,370.00 2022 0.00 0.00 OPS_DETAILEDCHANGES_LEGCOV_TABLE The World Bank Afghan Women's Economic Empowerment (P159291) LEGAL COVENANTS TF Description Status Action Amendment of grant agreement sections 2.03 (b) and TF-A4866 Complied with New (c)