Document of The World Bank

FOR OFFICE USE ONLY

Report No: ICR0000798

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-3390, 3393A)

ON AN

ADAPTABLE PROGRAM LOAN

IN THE AMOUNT OF SDR 86.7 MILLION (US$115.1 MILLION EQUIVALENT)

TO THE

REPUBLIC OF MALI

FOR A

NATIONAL RURAL INFRASTRUCTURE PROJECT IN SUPPORT OF THE FIRST PHASE OF THE NATIONAL RURAL INFRASTRUCTURE PROGRAM

June 30, 2008

Agriculture and Rural Development Unit Country Department AFCF2 Africa Region

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 authorization.

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CURRENCY EQUIVALENTS

Currency Unit = CFAF

Exchange Rate

2001 US$1 = CFAF 713 2007 US$1 = CFAF 478

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS AGETIER Agence d'Execution des Travaux d'Infrastructures et d'Equipements Ruraux

(Rural Infrastructure Works and Equipment Executing Agency) AMM Association des Municipalités du Mali (Malian Association of Municipalities) APCAM Assemblée Permanente des Chambres d’Agriculture du Mali (Permanent

Assembly of Malian Chambers of Agriculture) APL Adaptable Program Loan CAS Country Assistance Strategy CFAF Franc of the African Financial Community CMU Country Management Unit CNRA Comité National de la Recherche Agricole (National Committee for Agricultural

Research) DCA Development Credit Agreement DNACPN Direction Nationale de l’Assainissement et du Contrôle des Pollutions et des

Nuisances (National Directorate for Sanitation and Pollution and Nuisance Control)

DNAER Direction Nationale de l'Aménagement et de l'Equipement Rural (National Directorate for Rural Works and Equipment)

DNCL Direction Nationale des Collectivités Territoriales (National Directorate for the Local Collectivities)

DNCN Direction Nationale de la Conservation de la Nature (National Directorate for Environment Protection)

DNGR Direction Nationale du Génie Rurale (National Directorate for Rural Works) DNH Direction Nationale de l’Hydraulique (National Directorate for Water) DNP Direction Nationale de la Planification (National Directorate for Planning) DNR Direction Nationale des Routes (National Directorate for Roads) DNSP Direction Nationale de la Santé Publique (National Directorate for Public

Health) DNTP Direction Nationale des Travaux Publics (National Directorate for Public

Works) DPL Development Policy Loan ERR Economic Rate of Return GoM Government of Mali ICR Implementation Completion and Results Report IDA International Development Association IP Implementation Profile ISR Implementation Status Report LMC Local Management Committee M&E Monitoring and Evaluation MA MCA

Ministère de l'Agriculture (Ministry of Agriculture) Millenium Challenge Account

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MCT Ministère du Commerce et du Transport (Ministry of Commerce and Transport)

MDR Ministère du Développement Rural (Ministry of Rural Development) MDRE Ministère du Développement Rural et de l'Environnement (Ministry of Rural

Development and Environment) ME Ministère de l'Environnement (Ministry of Environment) MEA Ministere de l’Environnement et de l’Assainissement (Ministry of Environment

and Sanitation) MET Ministère de l'Équipement et des Transports (Ministry of Equipment and

Transport) MF Ministère des Finances (Ministry of Finance) MMEE Ministère des Mines, de l'Energie et de l'Eau (Ministry of Mining, Energy, and

Water ) MS Ministère de la Santé (Ministry of Health) MTP Ministère des Travaux Publics (Ministry of Public Works) NGO Nongovernmental Organization OERT Organisation de Reseaux d’Eau Tertiaires Zonal Irrigation Infrastructure

Management Committee ON Office du Niger (Niger River Management Office) PAD Project Appraisal Document PCC Project Coordination Committee PCU Project Coordination Unit PDO PIP

Project Development Objective Portfolio Improvement Program

PNIR Projet National des Infrastructures Rurales (National Rural Infrastructure Project)

PPIV Petits Périmètres Irrigués Villageois (Small-Scale Village Irrigation Perimeter) PRSC Poverty Reduction Support Credit PRSP Poverty Reduction Strategy Paper PST Projet Sectoriel des Transports (Transport Sector Project) RA Road Authority (Autorité Routière) SDR Stratégie de Développement Rural (Rural Development Strategy) TTL Task Team Leader US$ United States dollar

Vice President: Obiageli K. Ezekwesili Acting Country Director: Antonella Bassani

Sector Manager: Karen M. Brooks Project Team Leader: Abdoulaye Touré

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MALI NATIONAL RURAL INFRASTRUCTURE PROJECT

CONTENTS

Project Data A. Basic Information........................................................................................................ ii B. Key Dates .................................................................................................................... ii C. Ratings Summary ........................................................................................................ ii D. Sector and Theme Codes............................................................................................. ii E. Bank Staff.................................................................................................................... ii F. Results Framework Analysis ....................................................................................... ii G. Ratings of Project Performance in Implementation Status Reports (ISRs) ................ ii H. Restructuring (if any) .................................................................................................. ii I. Disbursement Profile ................................................................................................... ii 1. Project Context, Development Objectives, and Design.............................................. 2 2. Key Factors Affecting Implementation and Outcomes .............................................. 2 3. Assessment of Outcomes ............................................................................................ 2 4. Assessment of Risk to Development Outcome........................................................... 2 5. Assessment of Bank and Borrower Performance ....................................................... 2 6. Lessons Learned.......................................................................................................... 2 7. Comments on issues raised by the Borrower/ Implementing Agencies/ Partners ...... 2 Annex 1. Project Costs and Financing............................................................................. 2 Annex 2. Outputs by component ..................................................................................... 2 Annex 3. Economic and Financial Analysis .................................................................... 2 Annex 4. Bank Lending and Implementation Support/Supervision Process................... 2 Annex 5. Beneficiary Survey Results .............................................................................. 2 Annex 6. Stakeholder Workshop Report and Results...................................................... 2 Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR ....................... 2 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders .......................... 2 Annex 9. List of Supporting Documents ......................................................................... 2 Annex 10. Summary of Borrower’s Completion Report (in French) .............................. 2 MAP – IBRD 33443 ........................................................................................................ 2

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A. Basic Information Country: Mali Project Name:

National Rural Infrastructure Project

Project ID: P041723 L/C/TF Number(s): IDA-33930, IDA-3393A

ICR Date: 06/30/2008 ICR Type: Core ICR

Lending Instrument: APL Borrower: GOVERNMENT OF MALI

Original Total Commitment:

XDR 86.7M Disbursed Amount: XDR 86.7M

Environmental Category: B Implementing Agencies: Ministry of Agriculture;Ministry of Transport and Equipment; Ministry of Mines, Energy and Water; Ministry of Environment Cofinanciers and Other External Partners: B. Key Dates

Process Date Process Original Date Revised / Actual Date(s) Concept Review: 10/21/1998 Effectiveness: 06/27/2001 06/27/2001 Appraisal: 02/07/2000 Restructuring(s): Approval: 06/27/2000 Mid-term Review: 03/31/2003 11/15/2003 Closing: 12/31/2005 12/31/2007 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Modest Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Moderately Unsatisfactory

Quality of Supervision: Satisfactory

Implementing Agency/Agencies: Satisfactory

Overall Bank Performance:

Moderately Satisfactory

Overall Borrower Performance:

Moderately Satisfactory

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C.3 Quality at Entry and Implementation Performance Indicators Implementation

Performance Indicators QAG Assessments

(if any) Rating

Potential Problem Project at Any Time (Yes/No):

No Quality at Entry (QEA):

Moderately Unsatisfactory

Problem Project at Any Time (Yes/No):

Yes Quality of Supervision (QSA):

None

DO rating before Closing/Inactive Status:

Satisfactory

D. Sector and Theme Codes

Original Actual Sector Code (as % of total Bank financing) General public administration sector 10 5 General transportation sector 20 26 General water, sanitation, and flood protection sector 24 22 Irrigation and drainage 46 47

Theme Code (Primary/Secondary) Infrastructure services for private sector development Secondary Secondary Land administration and management Secondary Secondary Participation and civic engagement Secondary Secondary Rural services and infrastructure Primary Primary Water resource management Secondary Secondary E. Bank Staff

Positions At ICR At Approval Vice President: Obiageli Katryn Ezekwesili Callisto E. Madavo Country Director: Antonella Bassani Hasan A. Tuluy Sector Manager: Karen McConnell Brooks Jean-Paul Chausse Project Team Leader: Abdoulaye Toure Eustacius N. Betubiza ICR Team Leader: Yeyande Kasse Sangho ICR Primary Author: Stanislaw Manikowski

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F. Results Framework Analysis Project Development Objectives (from Development Credit Agreement)1 The Project Development Objective (PDO) is to reduce poverty and improve the living conditions of the rural population in the territory of the Borrower through provision, and enhanced financial and environmental sustainability of basic rural infrastructure, including: (a) irrigation infrastructure; (b) rural transport infrastructure; (c) safe drinking water supply; and (d) sanitation facilities. To achieve this PDO, the National Rural Infrastructure Project had two specific objectives. The project’s institutional objective was to assist the Government of Mali in establishing a new institutional framework for the provision and management of rural infrastructure by:

• Redefining the roles played by central government, local governments, local communities, and the private sector in providing and managing rural infrastructure;

• Setting up effective mechanisms to plan, finance, and manage infrastructure;

• Improving the capacities of stakeholders at all levels to carry out these responsibilities.

Activities to support the institutional objective included:

• Piloting irrigation development financing mechanisms based on enhanced investment cost collection from beneficiaries;

• Testing and refining the demand-driven, decentralized approach to delivering rural water supply and sanitation programs and local transport infrastructure;

• Establishing a second-generation road maintenance financing mechanism (the Road Authority);

• Promoting the emergence of a vibrant local entrepreneurial sector for decentralized service/investment delivery to rural clients.

The project’s investment objective was to support priority/pilot investments in irrigation development (9,300 hectares), feeder road rehabilitation (472 kilometers), water supply development (1,300 water facilities), and sanitation programs. 1 This differs from the description in the PAD, which states that the overall program (APL) purpose is to reduce poverty and improve the livelihood of the rural population by accelerating the provision, and enhancing the sustainability, of basic rural infrastructure. The specific objectives of the PNIR are reproduced here as listed in the main text of the PAD. The program purpose in the PAD Annex 1 is: “Well being of the population improved through adequate rural infrastructure (irrigation, transport, sanitation and transport, irrigation and potable water potable water) sustainably developed and managed”. The purpose for Phase 1 (the PNIR) is stated as: “Institutional mechanisms and strategies established / strengthened and refined through infrastructure investments in specific geographic areas”. The ICR evaluates both the overall PDO from the PAD main text, which corresponds to the DCA PDO, and the specific objectives listed in the PAD main text.

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Revised Project Development Objectives (as approved by original approving authority) The project development objectives were not revised. (a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Institutional mechanism and strategies are established/strengthened and refined through infrastructure investments in specific geographic areas.

Value quantitative or qualitative)

No strategy for the targeted sectors

Irrigation strategy, rural transport strategy, water/sanitation strategy are fully applied.

Irrigation, water, and sanitation strategies have been adopted and applied. Private Irrigation Funding Mechanism and National Rural Transport Strategy have been prepared, validated by stakeholders, tested on a pilot basis, and under adoption by the Government of Mali.

Date achieved 06/02/2000 12/31/2005 12/31/2007 Comments (incl. % achievement)

The indicator is achieved at 75 percent, because the rural transport strategy and the irrigation private funding mechanism are still under adoption.

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Annual paddy production increases by at least 26,000 tons (national paddy production is 532,000 tons) by the end of 2005, after satisfactory completion of a development program on 9,300 hectares.

Value (quantitative or qualitative)

506,000 tons

532,000 tons 9,300 hectares of new land developed

601,607 tons of paddy by 2005; 9,630 hectares of irrigated land developed as of June 30, 2007

Date achieved 06/02/2000 12/31/2005 12/31/2007 Comments (incl. % achievement)

The indicator is fully met.

Indicator 2 : A high proportion of local management committees (LMCs) for small-scale irrigation make full provisions for replacing pumping and other depreciable

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equipment. Value (quantitative or qualitative)

50 percent LMCs 90 percent LMCs 80 percent LMCs

Date achieved 06/02/2000 12/31/2005 12/31/2007

Comments (incl. % achievement)

The indicator is 89 percent achieved (80 percent achieved compared to 90 percent target). The remaining 11 percent of LMCs have set up the recovery system mechanism and should start collecting maintenance fees at the next harvest.

Indicator 3 : An additional 300,000 rural inhabitants have access to clean drinking water. Value (quantitative or qualitative)

2.8 million people 3.1 million people 3.34 million people

Date achieved 06/02/2000 12/31/2005 12/31/2007 Comments (incl. % achievement)

The indicator has surpassed its target by 8 percent. About 540,000 additional people now have access to potable water.

Indicator 4 : A high proportion of water pumps provided under the project remain operational at any time following their installation.

Value (quantitative or qualitative)

< 50 percent 98 percent - 800 new water pumps provided/rehabilitated

100 percent: 1,115 water pumps provided and 209 rehabilitated

Date achieved 06/02/2000 12/31/2005 12/31/2007 Comments (incl. % achievement)

The indicator is fully met. Communities have set up water pump management committees that operate well.

Indicator 5 : Road Authority generates sufficient resources and concludes and adequately supervises contracts for routine maintenance of a significant portion of the road network.

Value (quantitative or qualitative)

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G. Ratings of Project Performance in Implementation Status Reports (ISRs)

No. Date ISR Archived DO IP Actual

Disbursements (US$ millions)

1 11/21/2000 Satisfactory Satisfactory 0.00 2 06/27/2001 Satisfactory Satisfactory 0.00 3 12/18/2001 Satisfactory Satisfactory 1.46 4 05/08/2002 Satisfactory Unsatisfactory 2.82 5 11/07/2002 Satisfactory Satisfactory 6.56 6 05/09/2003 Satisfactory Satisfactory 15.33 7 11/10/2003 Satisfactory Satisfactory 28.58 8 12/10/2003 Satisfactory Satisfactory 30.60 9 05/25/2004 Satisfactory Satisfactory 46.01 10 08/16/2004 Satisfactory Satisfactory 53.83 11 06/16/2005 Satisfactory Satisfactory 69.40 12 09/15/2005 Satisfactory Satisfactory 76.50 13 05/12/2006 Satisfactory Satisfactory 84.98 14 11/09/2006 Satisfactory Satisfactory 92.42 15 08/17/2007 Satisfactory Moderately Satisfactory 110.81 16 01/24/2008 Satisfactory Satisfactory 125.74

H. Restructuring (if any) Not Applicable

I. Disbursement Profile

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1. Project Context, Development Objectives, and Design 1.1 Context at Appraisal Mali’s transition from an authoritarian to a democratic political system, starting in 1991, and its devaluation of the CFAF in 1994 have provided strong incentives for rural development. The government’s comprehensive Rural Development Strategy (Stratégie de Développement Rural, SDR), adopted in 1992, included nine strategic axes for rural development, each of which was translated into long-term programs aimed at reducing rural poverty. The second of these, the National Rural Infrastructure Program (Projet National des Infrastructures Rurales, PNIR), was intended to improve the delivery of key rural services such as irrigation, water, sanitation, and rural roads. When the program was initiated, those services were provided by the Ministry of Rural Development and Water (MDRE), but the institutional landscape changed following project appraisal in 2001. With the creation of a Ministry of Agriculture (MA) in 2002, responsibility for rural roads was transferred to the Ministry of Equipment and Transport (MET), water and sanitation became the responsibility of the Ministry of Mining, Energy, and Water (MMEE), and environmental issues came under the purview of the newly created Ministry of Environment (ME). In contrast, large-scale irrigation remained the responsibility of the Niger River Management Office (the Office du Niger, or ON), which was initiated by French colonial authorities in 1932 and had the potential to provide irrigation on as much as one million hectares. The Niger River Management Office received strong support over ten years (1988–97) from the World Bank and other donors through the ON Consolidation Project, which implemented successful reforms. The main outcomes by 1998 included a doubling of paddy yields (1996) following rice trade and price liberalization, increased efficiency in irrigation infrastructure management, and improved security of land tenure. In 1997, the Government of Mali adopted a Poverty Reduction Strategy that was based on improved macroeconomic management and job creation. The World Bank Country Assistance Strategy (CAS) for Mali, approved in 1998, supported the Poverty Reduction Strategy by focusing on sustainable human development and sustained economic growth. In the rural sector, the Country Assistance Strategy sought to foster competitive, broad-based growth by promoting increased agricultural production, improving links between crop-producing and crop-consuming centers, and strengthening capacity in the public and private sector to plan and implement the local development strategy. The development objectives of the PNIR were in harmony with the priorities expressed in the government’s Rural Development Strategy, the Poverty Reduction Strategy, and the Country Assistance Strategy, because the PNIR aimed at improving rural infrastructure and reinforcing institutional capacity in a decentralized political environment.

1.2 Original Project Development Objectives (PDOs) and Key Indicators The PNIR focused on two Project Development Objectives (PDOs):

i. Institutional objective: Assist the Government of Mali in establishing a new institutional framework for providing and managing rural infrastructure, which would include: (a) redefining the roles of the central government, local governments, local communities, and the private sector; (b) implementing

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effective mechanisms to plan, finance, and manage infrastructure; and (c) improving the capacities of stakeholders at all levels to carry out these responsibilities;

ii. Investment objective: Support priority/pilot investments in irrigation development (9,300 hectares), feeder road rehabilitation (472 kilometers), water supply development (1,300 water facilities), and sanitation programs.

1.3 Revised PDOs and Key Indicators and Justification of Same The PDO and Indicators were not revised. 1.4 Main Beneficiaries (original and revised) The ultimate beneficiaries of the project were projected to be:

• Rural communities (74 percent of the rural Malian population is poor) from the poorest regions of Mopti, Gao, Tombouctou, Kidal, Segou, Sikasso, and Kayes. These communities would experience an increase in agricultural production, employment, and access to potable water;

• Producers in the Niger River Management Office zone would gain greater access to land and improved irrigation infrastructure and learn how to manage their water system in a sustainable manner;

• Women in the targeted regions would benefit from irrigated land set aside for them and from additional training and equipment;

• Private investors in irrigated crop production would gain access to land and land titles through the pilot irrigated perimeters in Koumouna.

Additional beneficiaries could include:

• The Niger River Management Office, whose managerial and technical performance would improve as a result of the project;

• The Road Authority, which would benefit from the improved financing of road maintenance, and road users, who would benefit from improved road maintenance;

• The Rural Infrastructure Works and Equipment Executing Agency (AGETIER), which would be established and operating in a sustainable manner;

• Ministries in charge of Agriculture, Rural Roads, Water and Sanitation, and Environment would improve their capacity and ability to plan and execute development activities;

• Indirect beneficiaries, such as input suppliers, a range of service providers, and traders, would benefit from the development of the local economy.

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1.5 Original Components The PNIR had six components. Component I: Irrigation (US$66.6 million) would: (a) pilot the new capital cost collection mechanisms and promote private irrigation investments; (b) improve irrigation infrastructure management through beneficiary training; (c) promote irrigation development cost reduction; (d) rehabilitate damaged irrigation perimeters and develop small-scale perimeters in poor areas; and (e) strengthen environmental monitoring. Activities under component I were grouped into two subcomponents:

• Subcomponent IA: Large-Scale Irrigation Development at the Niger River Management Office would test the viability of an autonomous, self-financing, and privately managed irrigation development agency; test the capacity of the private sector to invest in irrigation development; rehabilitate and develop new irrigation perimeters; finance capacity building for the Niger River Management Office; and finance engineering and research studies. The Niger River Management Office implemented this subcomponent. The related research was conducted under the aegis of the National Committee for Agricultural Research (CNRA).

• Subcomponent IB: Small-Scale Irrigation, would finance (a) capacity building and

strengthening of farmers’ associations; (b) rehabilitation or construction of new small-scale irrigation perimeters; (c) pilot studies of using groundwater for irrigated agriculture in the Kidal region; (d) agricultural intensification; and (e) studies on ways of reducing investment costs. The National Directorate for Rural Works (DNGR) implemented this subcomponent.

Component II: Rural Transport Infrastructure (US$26.0 million) would help to set up the Road Authority and complete the National Rural Transport Strategy; it would also support rehabilitation of 472.3 kilometers of feeder roads. The National Directorate for Roads (DNR) implemented this component. Component III: Rural Water Supply and Sanitation (US$25.5 million) would entail a full-scale demonstration of the new strategy for rural water supply and sanitation, the objectives of which were to (a) maximize the impact and sustained use of safe water supply and sanitation facilities in rural areas; (b) increase participation of the local private sector in the provision of goods and services; (c) increase the community’s contribution to investment costs; and (d) ensure that communities accepted full responsibility for operating and maintaining water and sanitation facilities. The National Directorate for Water (DNH) was the implementing agency. Component IV: Environmental and Social Protection Measures (US$6.9 million) would implement the action plan aimed at mitigating any negative environmental and social impacts arising from the project. The project would finance investments, legal and regulatory measures, studies, technical assistance, and capacity building designed to contribute to the sustained use of land and water resources, provide support to vulnerable social groups, improve the voluntary relocation of villagers near the irrigated zones, and

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enhance women’s participation in economic development and local management of infrastructure. The National Directorate for Sanitation and Pollution and Nuisance Control (DNACPN) implemented this component. Component V: AGETIER (US$1.1 million) would finance equipment for setting up the agency and training its personnel. This component was implemented by AGETIER in conjunction with the Project Coordination Unit (PCU). Component VI: Program Coordination and Monitoring (US$11.9 million) would finance the salaries of the project coordinator, deputy coordinator, accountant, and support staff of the PCU, as well as the equipment (vehicles, computers, and furniture), staff training, and operating costs of the central unit, the component’s coordination units, and the regional units (including the implementation costs for the Niger River Management Office project). This component was implemented by the PCU under the supervision of a Project Coordination Committee (PCC). 1.6 Revised Components The components were not revised. 1.7 Other significant changes There were no other significant changes. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design, and Quality at Entry Concept. The PNIR was an ambitious project involving multiple implementing entities. It encompassed six components, four of which could have been stand-alone projects. The level of difficulty increased just after appraisal, when the MDRE transferred responsibility for rural roads, water and sanitation, and environment to other ministries. These conditions made it more difficult to start and manage the project and slowed the pace of implementation. It was also an innovative project promoting participatory approaches which posed another challenge. The approach called for contracting with nongovernmental organizations (NGOs) to assist communities with a participatory diagnostic and planning process, and ultimately it was more than two years before the investment program could begin. The process of preparing the National Rural Transport Strategy in a highly participatory way, testing it through the implementation of a pilot rural road program, updating it to reflect lessons learned, and validating the new strategy document with all stakeholders before sending it to the government for adoption, proved very long and difficult to execute during the project’s life. Finally, the project was to prepare, test and have adopted important strategic reforms of a ten-year ambitious rural infrastructure development program (APL). These reforms were designed as institutional innovations that were to be tested by pilot operations which had to serve as a satisfactory basis for a long-term investment program that would be environmentally, socially and financially sound.

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Quality at entry/execution. A quality-at-entry assessment of the PNIR was done in April 2001 and in July 2001. The QAG panel rated the Quality at Entry Marginally Satisfactory. But the QAG rating recorded in Section C.3 of this ICR is MU, which is incorrect (please see QAG report of July 13, 2001 where the rating is given MS under Section A). The conclusions of the panel remain relevant. First, the project concept was flawed by the absence of clear synergies among components. Second, the financial and economic evaluation of benefits contained many assumptions, some of which were inadequately justified (such as the benefits to be derived from roads and small-scale irrigation). Third, the method of monitoring poverty alleviation and environmental and social improvements was not clearly spelled out, and the participation of prospective beneficiaries was not considered in monitoring poverty reduction. The project team sought to address the weak quality at entry and other challenges posed by the ambitious and innovative nature of the project by: (i) taking a set of corrective measures during implementation; and (ii) extending the project to achieve its development objectives more successfully. Some of the corrective measures taken during implementation in response to the QEA recommendations include: (i) the revision of the the roads standards for the second group of PPIV, which permitted to reduce the cost by 50 percent; (ii) the implementation of the Irrigation Private Financing Mechanism and pilot projects to give 130 farmers access to credit; (iii) the carring out of three impact assessments to improve project performance; and (iv) the use of FAO-CP funds to increase supervision budget. The PNIR was extended twice. The first extension (of 18 months) on September 29, 2005 helped the project complete the physical investments. The second extension (of 6 months) on November 9, 2007, helped complete the pilot tests of the Irrigation, Water and Sanitation, and Rural Transport Infrastructure components of the project necessary for the Government to endorse the reforms. Lessons from other projects. Although novel, the project’s concept was based on several lessons from similar World Bank projects in Mali and elsewhere in sub-Saharan Africa: beneficiaries should be involved in project identification and execution, and they should contribute to the investment; autonomous road maintenance mechanisms with predictable revenues prove effective in ensuring adequate road maintenance; private, nonprofit executing agencies are effective in developing the capacities of local enterprises; training of irrigation and water user management committees is essential to the sustainability of the investment; and farmers can effectively manage revolving funds to purchase inputs. Rationale for World Bank involvement. Before the PNIR, the World Bank had implemented more than 30 rural infrastructure management projects in West Africa, many in geographical and climatic conditions similar to those in Mali. The Bank also financed projects aimed at increasing private sector participation in irrigation. The PNIR was a continuation of longstanding World Bank support to rural development and was in line with Pillar Two of the 1998 Country Assistance Strategy related to sustained economic growth.

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Government commitment. The Government of Mali considers the project and the entire program a priority. As mentioned, the project was part of the second program within the Rural Development Strategy and addressed urgent development issues in remote areas. The President of Mali visited project sites several times. Parliament closely followed the project’s implementation and appointed a representative to participate in project supervision missions. 2.2 Implementation Factors beyond government and executing agency control Between 2000 and 2007, the project was disrupted by two serious events. First, civil strife in Kidal interrupted the pilot test of groundwater irrigation. Second, the eruption of civil strife in Côte d’Ivoire in 2002 hindered imports of irrigation material and fuel from Abidjan, which increased the cost of investing in small-scale village irrigation perimeters (PPIVs). Factors dependent on the Government The Government of Mali fulfilled its obligation as stated in the Credit Agreement but underperformed in its two main areas of accountability under the PNIR, the release of funds and the adoption of reforms. As required in the Project Appraisal Document (PAD), the Government of Mali rapidly mobilized the PCC and the PCU teams that managed the project, but it could not release counterpart funding and proceed with reforms in a timely way. Counterpart funds were generally adequately budgeted, but their disbursement was delayed from year to year, so that when the project terminated, US$3.4 million in counterpart funds remained to be paid. The government was also committed to implementing several key reforms at the same time, a process that was seriously affected by the two election years that occurred during the project and by the tradition of making decisions by national consensus. For example, it took almost four years to adopt the decree for the pilot land tenure program in Koumouna perimeter that would permit land titles to be awarded (and in turn, fulfill the conditions for settling private investors). Additional delays have been seen with the National Rural Transport Strategy and the Private Irrigation Financing Mechanism, which have been prepared and validated by key stakeholders but have not been conclusively adopted by the government at the time of this Implementation Completion and Results Report (ICR).2 Factors dependent on the executing agency The project executing agency was very efficient in managing such an ambitious effort involving four ministries, central and decentralized entities, and key institutions such as the Niger River Management Office and AGETIER. Before the mid-term review, the PCU faced serious procurement delays owing to the poor quality of procurement documents and lengthy national procedures. The delays in procurement caused the project to be termed “at risk” in 2002 by the Portfolio Improvement Program. To address this issue, procurement specialists were trained and the follow-up of procurement processes were improved. The PCU adopted procurement monitoring tables, which were shared with the Task Team Leader every month. The quality of documentation improved, 2 See sections on large-scale irrigation and transport in 3.2.

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and approval processes in the Ministries and World Bank moved more rapidly. The procurement and disbursement components attained satisfactory ratings in 2003 as a result. 2.3 Monitoring and Evaluation (M&E), Design, Implementation, and Utilization A Monitoring and Evaluation (M&E) steering committee was set up under the leadership of the Planning Unit of the Ministry of Agriculture to coordinate the M&E system. The M&E system involved the PCU, the coordination units for the project components, AGETIER, and the Niger River Management Office. An M&E specialist was appointed at the PCU, and an M&E focal point was identified for each project component. The system did not become fully operational for three years. Owing to delays in acquiring M&E software, the system monitored only project activities and outputs until the time of the mid-term review. In 2005, the system was improved and started to be more result-oriented. Since then, the PCU has systematically and satisfactorily monitored progress toward project input and outcome indicators. The M&E focal points, who were responsible for collecting and transmitting data, had difficulty in collecting data and updating the project database on time. In particular, the Water and Sanitation component experienced long delays in updating the National Directorate for Water database (SIGMA) for water infrastructure, but by the end of the project, the data were being successfully updated on a bi-annual basis. Ultimately, however, the M&E system succeeded in producing bi-annual progress reports and disseminating information about the project’s progress, coordinating and optimizing the work plans of the project components, preparing annual project work plans, planning and tracking project spending, participating in the drafting of aide-mémoires, and monitoring implementation of the resulting action plans. The M&E section also conducted three impact evaluations during the project life that were used to improve project performance and prepare the current ICR. 2.4 Safeguards and Fiduciary Compliance The project triggered OP7.50 on International Waterways. The project was cleared by the Niger Basin Authority. Financial management. The financial management capacity of the PCU and the component coordinating units were maintained at a satisfactory level. Quarterly financial reports and annual audit reports were prepared and submitted to the World Bank on time. The project experienced some delays in tracking expenditures because financial data were transmitted slowly from the decentralized project components, but this deficiency was corrected rapidly and did not seriously affect financial management. Procurement. The procurement procedures were in compliance with World Bank requirements. Procurement plans were produced annually and revised as necessary. Lengthy procurement processing, due to delays, both at the Bank and Government levels, seriously affected project implementation. Before 2005, the procurement of works took from eight months to one year to complete. In 2002, the Unsatisfactory rating of the IP is

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due to the long procurement delay of the perimeter of Sokolo for which the work supervision bid took one year to be awarded. Starting in 2005, after adequate measures were taken by Government and the Bank (PPIV and Water/Sanitation procurement transferred to AGETIER and World Bank Conakry office took over PNIR procurement files), the processing time was reduced to three-five months. Environmental assessment. The project was rated Category B and triggered OP4.01 on Environmental Assessment. It executed 59 (of 63) activities concerning environmental protection and social impact (Annex 12 of the PAD). All works contracts incorporated environmental management clauses, and they were respected in all cases, due to follow-up by the Ministry of Environment, backed up by Bank safeguards specialists. OP4.12 on Involuntary Resettlement was also triggered, and a resettlement framework policy was prepared prior to appraisal. Environmental and social safeguards were satisfactorily applied. For example, two villages constructed for voluntarily displaced populations in the Niger River Management Office area were provided with social services (drinking water pumps, a school, a medical clinic), and farmers were also provided with free access to 281 hectares of irrigated land. 2.5 Post-completion Operation/Next Phase The PNIR was designed as the first phase of a two-phase, ten-year program. However, preparation of the new Country Assistance Strategy for fiscal year 2008–11 led to the conclusion that the World Bank’s agricultural portfolio in Mali should be further consolidated and realigned3 to speed progress towards the development of a sectoral investment program. Three major programs were retained as part of a renewed World Bank Agricultural and Rural Development Strategy in Mali that would address: (i) grassroots socioeconomic development, through the Rural Community Development Project; (ii) supply chain development, through the Agricultural Competitiveness and Diversification Project; and (iii) agricultural productivity, by merging the PNIR approach on irrigation with the experience of the Agricultural Services and Producer Organizations Program (PASAOP)4 in delivering agricultural services. This decision is consistent with the conclusions and recommendations of the last Country Economic Memorandum. The new agricultural program will thus build on the achievements and lessons from PNIR in expanding large-scale irrigation within the Niger River Management Office and small-scale irrigation perimeters along the Niger River Valley. In collaboration with other donors, the new program will consolidate the institutional reforms initiated and supported by PNIR to modernize governance of the Niger River Management Office, rationalize the use of water, and strengthen private investment in irrigation through the Private Irrigation Financing Mechanism. The main donors involved in Mali’s agricultural sector5 maintained a continuous, strong dialogue with the government during the PNIR project, and continue to do so after the project’s closure. The Water Supply and Rural Road components of the project are now being addressed within the Ministry of Mining, Energy, and Water and Ministry of Equipment and

3 The Mali Portfolio had 14 active projects, with 5 in Agriculture and Rural Development. 4 PASAOP was designed as a 3-phase, 15-year program. 5 The World Bank, the French Development Agency, the Dutch Embassy, United States Agency for International Development, and the African Development Bank.

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Transport. Further investments in feeder roads will be financed under the recently initiated second Transport Sector Program, supported by the World Bank. As the new Country Assistance Strategy aims at refocusing Bank interventions with stronger selectivity, the Bank will support the water sector through the PRSC series. On a smaller scale, the continuing community-based rural development project funded by the Bank may respond to requests for water supply infrastructure through its collective investment funds. Large-scale investments are financed by other donors through a water sector program. 3. Assessment of Outcomes

3.1 Relevance of Objectives, Design, and Implementation Relevance of objectives. Poverty reduction and improved livelihoods among the rural population are still priorities, as expressed in the second Poverty Reduction Strategy Paper for 2007–11. The strategy aims to foster rapid, private sector-led growth and strong public sector performance through: (i) the development of infrastructure and economic sectors to enhance productivity by improving the business environment; (ii) the continuation and consolidation of public sector structural reforms to increase public sector efficiency, particularly through decentralization; and (iii) the strengthening of social sectors to improve delivery of basic social services. The project objectives also remain relevant to the World Bank Country Assistance Strategy for 2008–11, which focuses on promoting rapid and broad-based growth and strengthening public sector management. As a result, Mali should improve the availability of its factors of production, develop the indigenous private sector, and improve the links between the budget and sector strategies. The recent increase in crop prices has heightened the focus on agricultural output and food security and is reflected in a higher than expected ERR for the irrigation component, increasing the economic justification for, and relevance of, the project (see Section 3.3 Efficiency for details). Project Design. The project was too ambitious. Drafting or updating sector development strategies and running pilot projects to test them undoubtedly remain the appropriate means of identifying which strategies work, so that a pragmatic development program can be prepared. Each component of the PNIR operated in isolation, however.6 Nor did the components cover the same provinces, depriving the project of the benefits from combined impacts. In targeting so many strategic reforms, the project preparation did not take into account Mali’s political economy7 of decision-making. The agenda was a real challenge, consuming much time and energy. Finally, the various sectors were at different levels of institutional organization, which accounts for the varying results achieved among the components. Project Implementation. The project’s institutional objectives were implemented more slowly by the national administration than anticipated in the PAD. The reforms promoted by the project, which took ten years to be adopted, were ambitious both in terms of number, timeframe, and method envisaged (strategies to be endorsed by Government 6The components represented four sectors, managed by four ministries (Agriculture; Mines, Energy, and Water; Equipment and Transport; and Environment). 7 It took 10 years to implement reforms of the Niger River Management Office, which were decreed in 1994.

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after having been tested), and in terms of an optimistic assessment of the country’s political economy. As a comparison, dialogue on the cotton sector reforms started in 1999 and institutional reforms envisaged in 2003 under the PASAOP are yet to be achieved. Completion of the investment objective depended on the project itself, whereas the institutional objective could not be achieved without decisions from ministries or Parliament. The dependence on numerous institutions, all with their own agendas,8 inevitably influenced project implementation, along with the large number of reforms and the need to ratify each one through several rounds of negotiation.9 3.2 Achievement of the Project Development Objectives (PDOs) In terms of its overall development objective of reducing poverty and improving livelihoods among rural people, the project increased incomes and improved livelihoods for a great number of people, as described in greater details later. The project reached its major specific objectives with no major shortcomings. For these reasons the outcome is rated Satisfactory. Increase in irrigation-dependent household income The achievement of this indicator is rated Moderately Satisfactory. The investments made in irrigation and cultivation of new perimeters resulted in: (i) the development of 20,771 additional cultivated hectares in the Niger River Management Office and PPIV zones; (ii) an increase in rice production of about 100,000 tons; (iii) the generation of 25–96 new seasonal jobs per hectare, representing from 520,000 to 2 million new seasonal jobs in total. The income from family labor ranges from CFAF 2,200 to 12,800 per person per day compared to the minimum daily wage of CFAF 750 for unskilled labor in urban areas. At appraisal, the project projected that it could raise income from CFAF 2,000 to CFAF 3,800 per day, and this projection has been surpassed. The additional income has vastly reduced poverty among the affected families and increased the choices available to them. As documented in the most recent impact study, increased income has reduced migration from both the Niger River Management Office and PPIV zones. Reduction in transportation costs as a result of better infrastructure The achievement of this indicator is rated Satisfactory. The most recent impact study found that transport costs were 20 to 40 percent lower along the new roads. In addition, the new roads facilitate better distribution of rice and other agricultural products inside the Niger River Management Office zone and towards Mauritania. Consequently the supply of rice to poor, non-rice-producing regions such as Koulikoro and Banamba has improved. Increased number of rural inhabitants who have access to and use drinking water The achievement of this indicator is rated Satisfactory. Drinking water facilities (1,121, equipped with 1,115 manual pumps) and water systems for 24 small localities have

8 Two presidential and legislative elections over the course of the project delayed strategic decisions. 9 Difficulties encountered in the Ministry of Agriculture’s adoption of reforms for the Niger River Management Office caused the reform agenda to be transferred to the Poverty Reduction Support Credit (PRSC) matrix.

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provided access to drinking water for about 540,000 persons against the 300,000 initially targeted by the project. Apart from generally improving the beneficiaries’ quality of life, these facilities have reduced the time women spend in fetching water, freeing time for economic and social activities. In the longer term, access to water will improve beneficiaries’ health. Component I: Irrigation The Component is rated Moderately Satisfactory. Subcomponent IA: Large-scale Irrigation Development at the Niger River Management Office This Subcomponent is rated Moderately Satisfactory. The institutional reform program of this subcomponent was partially achieved; the investment target was fully achieved. (i) An irrigation funding mechanism based on partial cost recovery is functional, and the recovery rate is at least 90 percent. This indicator has been partially met. The subcomponent conducted important activities aiming at setting up an irrigation funding mechanism and promoting private/public partnerships for financing irrigation at the Niger River Management Office. More specifically, it piloted efforts to deliver land titles to private investors to encourage the settlement and subsequent development of 1,149 hectares in Koumouna. This subcomponent facilitated the selection of 130 small-scale producers and supported their dialogue with a local bank, which loaned the producers CFAF 200 million to build irrigation canals and procure inputs. (The corresponding selection of large-scale producers was finalized only at project completion, however.) This subcomponent also managed a participatory effort to draft a proposal for a Private Irrigation Funding Mechanism,10 which had been approved by all stakeholders but not the government at the time of this ICR. The mechanism consists of a cost-sharing system that allows the Malian banking system and private investors to finance about 64 percent of land development and the government to finance 36 percent. Although the mechanism was assessed successfully through the Niger River Management Office pilot in Koumouna and has been more widely adopted by donors intervening in the Management Office, such as the Millenium Challenge Account (MCA) and the West African Economic and Monetary Union11, the delays in settling producers prevented the effort from attaining its cost recovery goals by the time of this ICR. (ii) Management of the Niger River Management Office was modernized. This indicator is partially achieved. Management Office reforms were consolidated through the development and implementation of two tri-annual Contract Plans, reflecting consensus among the Management Office, producers, and government on the work program and budget of the Management Office. This subcomponent also financed the Management Office’s institutional and organizational audit and corresponding action plan, which

10 This study took the lessons from the Koumouna pilot into consideration, particularly the fact that the credit must cover the tertiary and not only the primary and the secondary canals, and reduced the reimbursement to producers to 50 percent of the secondary and all of the tertiary canals. 11 MCA: 13,000 hectares, WAEMU: 11,000 hectares.

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provides a road map for implementing additional management reforms. The plan could serve as the basis for further support to the Management Office. During the project life, a dynamic donors committee of the Niger River Management Office has assured a close monitoring of the main activities.12 (iii) About 8,000 hectares of land have been developed. The target for this indicator was exceeded: 9,077 hectares have been developed, with prospects for developing more than 20,000 additional hectares. The investments met national standards at a lower cost than estimated in the PAD. Subcomponent IB: Small-Scale Irrigation This subcomponent is rated Moderately Satisfactory. The subcomponent met institutional reforms and investment targets but the cost of developing the first 550 hectares of land was much higher than expected. (i) The subcomponent fully achieved its institutional objectives. The project had no specific indicator for this assistance. In accordance with the PAD, the subcomponent financed extensive training of the directorate’s administrative staff, field agents, and members of farmers’ associations. The new, participatory strategy, available from the beginning of the project, was fully applied,13 and this component was the first to integrate women into the implementation and management of PPIVs. About 100 of nearly 771 hectares were allocated to women’s groups, which received small grants to develop microprojects. (ii) The private sector rehabilitated and/or constructed at least 500 hectares of irrigated land. The investment objective was more than fully attained, as 770.87 hectares were rehabilitated or constructed, but as noted earlier, the investment cost of the first 550 hectares was 60 percent higher than expected. The project quickly revised the technical specifications, which made it possible to reduce the cost of the last 200 hectares by 50 percent and thus match the PAD projections. Under cofinancing from the Netherlands, the project later demonstrated that the cost of developing irrigated land could be reduced even more by adopting a labor-intensive process with qualified supervision.14 Component II: Rural Transport Infrastructure This component is rated Satisfactory. The reforms consist of the transfer of management responsibility for the country’s road maintenance fund to an autonomous institution (the Road Authority) and the finalization of a comprehensive national strategy of rural transport. The Road Authority was successfully established and the planned investment program was delivered.

12 This committee followed up on the preparation of the main reform: irrigation, private funding mechanism, organizational audit of ON, and contract plans. 13 Local NGOs were used. 14 The cost was divided by three.

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(i) The Road Authority is operational and has financed the maintenance of at least 10,000 kilometers over a 12-month period. This indicator is fully achieved. Support to the Road Authority helped the agency train its personnel, equip the office, and prepare the operational and procurement manuals. The Road Authority became an independent, efficient institution. It maintained 9,000 kilometers in 2006 and 2007, corresponding to 78 percent of the rural road maintenance program, against a planned 40 percent. Privatization of road maintenance has become a reality and has helped create small and medium enterprises in the transport sector. (ii) The Borrower adopted a classification of roads commensurate with its decentralization strategy. This indicator is fully met. A road classification manual was issued. (iii) A rural transport strategy and corresponding regulatory framework have been adopted. This indicator is partially achieved. The Rural Transport Strategy was designed through a highly participatory process which started in 2004 and was then tested and validated in 2007 with pilot projects covering 200 kilometers of roads. Even though the Rural Rransport Strategy is not yet adopted by the Government at the time of this ICR, its recommendations have helped the Bank and the Government, under the Transport Sector Program II, develop river transport which represents not only a source of income for the rural population but also an important means of transport for people and marchandises. The approaches developed for rural road maintenance, based on the service level and local community involvement, are being experimented under the PCDA in which, out of 1,111 km of rural roads to be rehabilitated, 504 km have just been rehabilitated. The Transport Sectoral Program II will pursue and consolidate this experience through its rural road component. (iv) Four hundred and seventy-two kilometers of regional rural roads have been rehabilitated. The target for this indicator was exceeded. The component rehabilitated 513 kilometers of roads connecting the Niger River Management Office zone to Koulikoro, Banamba, and Djenne in Mali as well as to Mauritanian markets. The roads have benefitted people in these poor regions and have made it possible to serve 10 rural communities that were formerly inaccessible because of flooding in the rainy season. Component III: Rural Water Supply and Sanitation This component is rated Satisfactory The component successfully delivered the targeted institutional reforms and investment program, making it highly likely Mali will meet the Millennium Development Goals for rural water supply and sanitation. As a result, this effort currently benefits from support by several donors. These positive results encouraged the Government and donors to engage in a program approach, and to set up a common fund to finance studies for rural water supply and sanitation15.

15 First Medium-Term Expenditure Framework (MTEF) of the Ministry of Water (2007-2010) and Sector Expenditure Review.

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(i) The Rural Water and Sanitation Strategy has been fully applied. This indicator is fully met. The demand-driven rural water supply strategy was updated in 2007 to reflect the lessons learned as the project was implemented. Training provided through this component helped the local population use a participatory approach to plan and conduct water supply projects as well as to maintain pumps. (ii) At least 1,300 facilities providing safe drinking water have been constructed or rehabilitated and at least 800 hand-operated pumps have been repaired. This indicator has been surpassed. The project drilled 1,334 wells, of which 1,121 were productive and equipped with 1,151 new water pumps. It provided 209 rehabilitated water pumps as well as water supply systems for 24 small localities (out of 25 planned). (iii) At least 95 percent of the facilities are operational and have adequate cost recovery. This indicator is mainly met. About 90 percent of pumps are operational at any time. The maintenance facilities and water fees established by beneficiaries are working, and costs are being recovered. (iv) At least 40 percent of families in villages where test latrines have been built have built their own latrines. This indicator is partially met. Although 150 demonstration latrines were financed and built, data are not available to determine whether the demonstration latrines encouraged the further adoption of latrines in the villages. Component IV: Environmental and Social Protection Measures This Component is rated Satisfactory. The Government of Mali introduced environmental norms and regulations into the process of contracting for rural investments. The component drafted environmental regulations, guides, and manuals for environmental assessment, which have been applied and enforced. For first time, all activities undertaken under a project have complied with environmental and social safeguards. Capacity of staff in the Ministry of Environment was strengthened to monitor the application of safeguards. The component implemented the main activities listed in the PAD; benefits for the poor varied by activity. Component V: AGETIER This component is rated Satisfactory. This component supported the creation of AGETIER, a nonprofit organization, in 1999 to stimulate rural investment, and AGETIER has become an outstanding, sustainable procurement agency, not only in Mali but also in the subregion. The Agency has successfully organized feasibility studies, purchased equipment, and implemented investment projects. The agency fulfilled PAD expectations and in the course of a few years has become the most important contractor for rural investment. Between 2001 and 2006, its yearly budget increased from CFAF 5 billion to CFAF 38 billion. It has implemented most of the activities related to the small-scale irrigation and water supply and sanitation components of PNIR. The Agency has also contracted for the Government of Mali and many donors, including the African Development Bank, Dutch Embassy, European Union, and the West African Economic and Monetary Union. The average

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procurement delay was 75 days, against 6 months–12 months, and the average delay of payment was 24 days. The Agency created 122,000 jobs, distributing CFAF 13 billion in wages. The huge demand for the Agency’s services started to exceed its capacity to satisfy clients. To avoid further difficulties, AGETIER financed an organizational audit in 2007 and started to prepare a management plan for its own development. 3.3 Efficiency The economic rate of return (ERR) was evaluated for a sample of irrigated rice schemes that were rehabilitated or developed by the project and were in their first year of production. As expected, the rice schemes created new jobs for unskilled laborers (representing an additional 25 person-days to 96 person-days per hectare), and they provided substantial returns for family labor, ranging from CFAF 2,200 to CFAF 12,800 per day (compare these returns to the CFAF 750 per day paid to unskilled laborers in urban areas). Even so, at the farmgate price for rice in 2007, the ERRs of the rehabilitated or created plots were lower than the PAD estimates (see table). In Niger River Management Office zone, ERRs were 27 percent in Koumouna and 14 percent in Sokolo,16 compared to ERRs for PPIVs of 3 percent in Mopti and 7 percent in Tombouctou. The low rate of return in the PPIVs is attributed to the high cost of the initial investment, mentioned earlier, and the ERR is expected to improve on the 200 hectares of PPIVs developed at a lower cost. These perimeters will begin to be cultivated in June 2008. Following dramatic increases in the price of rice in the first few months of 2008, the ERR of the rice schemes changed considerably. The market price of rice rose from CFAF 200–250 per kilogram in December 2007 to CFAF 300 or even 400 in April and May 2008. At the prevailing price during this period (CFAF 310 per kilogram of rice at the farmgate, equivalent CFAF 199.5 per kilogram of paddy), the ERR went from 27 percent to 44 percent in Koumouna and from 14 percent to 33 percent in Sokolo. The ERRs for the Mopti and Tombouctou PPIVs improved substantially, rising to 10 percent. Among the newer PPIVs, the ERR is expected to exceed 12 percent. Economic Rates of Return (ERR) for new or rehabilitated irrigated rice schemes in Mali

ERR in percent Economic Rates of Return (ERR) Koumouna Sokolo Mopti Tombouctou PAD estimates 14 16 18 18 Rice at December 2007 price 27 14 3 7 Rice at April-May 2008 price 44 33 10 9

Rice price switching values 111 116 347 362 The PAD estimated that the ERR for the planned rehabilitation of three roads would be between 12 percent and 14.9 percent. The most recent impact study conducted on the transport component did not analyze traffic flow, but a complementary traffic survey will

16 The ERR of the Sokolo and Koumouna schemes was evaluated using the Niger River Management Office estimates of paddy yield at 6 tons per hectare.

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be done to assess the change in traffic, vehicle operating costs, and the actual cost of the roads. This survey will make it possible to calculate the ERR based on actual figures for each variable in the original economic analysis. Based on the decline in transport time and cost that has already been reported, however, it is likely that the variable for increased traffic brought about by road rehabilitation (estimated in the PAD at 4 percent per year) has been surpassed and that the actual ERR will exceed 12 percent. 3.4 Justification of Overall Outcome Rating The project is rated Satisfactory because all components fully achieved or surpassed their investment objectives. In addition, the institutional objectives were fully achieved by three components and by the Road Authority and partially achieved by two components. Overall, the project helped improve the capacity of rural populations to implement and manage sustainable economic infrastructure that will contribute to improving their livelihoods. 3.5 Overarching Themes, Other Outcomes and Impacts The PNIR produced a number of unanticipated positive outcomes and impacts. The most important of these include:

• The small-scale irrigation and environment components of the project were the first in Mali to bring gender disparities to the forefront as a matter of project policy. As a result, 10 percent of irrigated lands were allocated to women’s associations, and women received a substantial amount of additional training and equipment.

• Introduction of the M&E database as a work tool in the implementing directorates helped decision-makers to appreciate the advantages of having good information at hand. The M&E sections and the databases became incorporated into the administrative institutions.

• The project fostered the experience of cooperation among central government institutions. The project created a forum where collaborating institutions could compare results and share experiences across the project’s various components.

• Partnerships were created among government agencies, the private sector, and project beneficiaries. The decentralization of administrative responsibilities and introduction of participatory management to the local development plans bridged the gap between the government and the people. It became obvious to the local administration that its objective was to assist local people and provide services.

• Collaboration with donors was strengthened. All through the project life, a dynamic committee of the Niger River Management Office, led by the Dutch Embassy and including the French Cooperation (AFD), USAID, MCC, AFDB and the German Cooperation, assured a close monitoring of the Niger River Management Office activities.

• New private services appeared. The project created opportunities for the private sector to deliver services that were once exclusive provided by government, such

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as marketing fertilizer, building irrigation infrastructure, and maintaining equipment. Local entrepreneurs had their first experience of bidding in a transparent and competitive market.

3.6 Summary of Findings of the Beneficiary Surveys and Stakeholder

Workshops The project financed two beneficiary surveys (2004 and 2006) and one institutional impact survey (2007). The results show an increase in financial benefits and social wellbeing from the project’s investment. In January 2008, the PNIR held a five-day workshop analyzing the project’s results and impacts with beneficiary representatives, government representatives, executing agencies, the PCC, and donors. The assessment concluded that the project’s objectives remain pertinent in light of Mali’s current development strategy, which is organized around rural development, and that all components achieved the project’s investment objectives, but the implementation of activities supporting institutional objectives took longer than planned.

4. Assessment of Risk to Development Outcome Risk to development outcome: Moderate. At the end of the project, the overall risk to the development outcome remains moderate, although four critical aspects of the approach developed under PNIR require further attention. First, the up-front contribution to investments is a critical concern among beneficiaries, who prefer to make in-kind contributions, and will require refinement based on a sound credit scheme. Second, the provision of advisory services to farmers must be sustained and strengthened to ensure stronger participation of beneficiaries in irrigation development and the optimal use of investments. Third, infrastructure maintenance remains a concern all over the Niger River Management Office area, mainly because of invasive plants and old irrigation canals that require a thorough clean-up. Fourth, despite some progress, management of the water levy is still largely driven by sociopolitical considerations. Risk for the sustainability of PNIR objectives: Negligible (see table). Poverty alleviation remains the core objective of the recently adopted Growth and Poverty Reduction Strategy Framework. Despite the bureaucratic and socio-institutional hurdles, the Government of Mali is committed to moving ahead and moving more rapidly with the reform agenda for the Niger River Management Office. Recently the President decided to connect the Management Office directly to his cabinet as a way to speed reforms, discussions, and subsequent decisions at the highest level of government. Section 2.5 on post-completion and the next section on risk of discontinuation explain how this sustainability will be guaranteed. Risk for the sustainability of PNIR objectives Risk Probability ImportanceRenunciation of the institutional reforms Negligible High PNIR investment program is discontinued Negligible High Poverty reduction is not a priority Negligible High Overall rating Negligible High

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Risk of discontinuation: Negligible (see table). The risk that the program will not continue is very low. A large number of donors are committed to further investments at the Niger River Management Office. Total potential funding is almost 770 million dollars for the next five years. As mentioned in Section 2.5, further investments in feeder road improvement and construction are financed under the recently initiated second Transport Sector Program supported by the World Bank. A water supply program is currently being implemented by the Ministry of Mining, Energy, and Water. The World Bank is not contributing directly to this sector program, but the Bank-funded community-based rural development project will finance small-scale water supply equipment through its demand-driven financing mechanism. Risk of Program discontinuation Risk Probability ImportanceNo donor for immediate financing Negligible Moderate No national funds for immediate financing Moderate Moderate No donor for financing in any time Negligible High No national funds for financing in any time Negligible High Overall rating Negligible High

5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank performance in ensuring quality at entry Rating: Moderately Satisfactory The project was prepared between June 1996 and February 2000 by the Ministry of Rural Development (MDR) and a World Bank team composed of 23 specialists. Negotiations ended in May 2000 and the project became effective in June 2001. The quality at entry assessment flagged five issues: (i) the two-year period of project preparation was too long; (ii) coordination was lacking among the various sectors involved in the project; (iii) preparation of the irrigation component was weak; (iv) too many strategic and sensitive reforms were planned; and (v) the risk section did not raise the possibility that the development objectives for irrigation and environment would not be reached. Despite these issues, the positive contributions of the Task Team include the incorporation of environmental considerations into all parts of the project, as well as the incorporation of lessons from other projects into the design of PNIR (as mentioned, involving beneficiaries in identifying and executing activities; establishing an autonomous road maintenance institution; and training irrigation and water user management committees to ensure the sustainability of the investments).

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(b) Quality of supervision Rating: Satisfactory. The project was supervised by a Task Team Leader (TTL) based at World Bank headquarters in Washington and a co-TTL in Bamako. Despite three rotations of TTLs, having one co-TTL in Bamako ensured continuity of supervision. The project was supervised by 14 joint World Bank and Government of Mali missions, with the participation of key sector specialists. Each mission was followed by preparation of a joint aide-memoire, including detailed action plans to address issues identified. World Bank supervision was highly praised by the PCU and the Ministry, because supervision missions also served as technical support missions. To reduce procurement delays caused by the heavy workload of the procurement officer in Bamako, the supervision team negotiated for procurement support from the Guinea-Conakry office, which had a lighter workload. In addition, the team realized that the project was not a sufficiently strong or suitable vehicle to implement sensitive reforms and negotiated with the Country Management Unit (CMU) and the government to include reform of the Niger River Management Office in the Development Policy Loan (DPL) and Poverty Reduction Support Credit (PRSC) policy and actions matrices. This action spurred implementation of the reforms and accounts for the positive change of the IP rating in the last Implementation Status and Results Report (ISR). (c) Justification of rating for overall Bank performance Rating: Moderately Satisfactory This rating is justified by the fact that the supervision successfully addressed the main issues flagged in the assessment of quality at entry. A 16-month extension of the project closing date helped mitigate effects of the delay in project effectiveness. The multidisciplinary and participatory supervision helped break barriers between sectors. 5.2 Borrower Performance (a) Government performance Rating: Moderately Unsatisfactory The Government of Mali assigned staff and provided equipment to the project as requested by the PAD. The PCC was instrumental in mobilizing government agencies to process documents and release funds more rapidly. The regional directorates involved in the project collaborated efficiently with the PCU. Even so, the project was frequently disrupted by a slow and complex bureaucracy that delayed the disbursement of counterpart funding. The traditional approach of making decisions by consensus and the two presidential and legislative elections that occurred during the project’s life (2002 and 2007) slowed adoption of the main reforms. As explained previously, it took almost four years to adopt the decree for the pilot land tenure program in Koumouna perimeter, and the government’s final adoption of the Rural Transport Strategy and Private Irrigation Financing Mechanism is pending. (Although the Rural Transport Strategy was sent to the

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Conseil des Ministres for adoption in March 2007, it was reviewed by the government nine months later, after elections were held and a new cabinet formed.) (b) Implementing agency’s or agencies’ performance Rating: Satisfactory The PCU provided excellent technical support, training, and collaboration with World Bank staff, which helped PCU staff acquire solid expertise in project management and which, in the second half of the project, speeded implementation. The PCU effectively monitored the action plans developed through the supervision missions by regularly meeting with all components. The strong leadership of the PCU and its efficiency (reflected among other things by the fact that the operating costs of the implementing unit were budgeted much above what was actually spent) made it possible to overcome some of the difficulties inherent in such an ambitious and innovative project. (c) Justification of rating for overall borrower performance Rating: Moderately Satisfactory. Despite the PCU’s admirable performance, overall borrower performance is rated Moderately Satisfactory. The Government of Mali fulfilled its obligations as outlined in the Credit Agreement, and its involvement in project coordination contributed greatly to achievement of the PDOs. However, the government’s sluggish decision-making and irregular payment of contractors delayed achievement of the institutional objective. In addition, the Ministry of Agriculture neither ensured continuity in project follow-up nor provided sufficient support to the PCU.

6. Lessons Learned Lessons of general application Participatory projects covering several sectors are difficult to manage and supervise. To be efficient, these projects should have a multisector coordinating body as a partner. In the absence of such a partner, PNIR had to work with several counterpart institutions, with the result that synergy among the project components was hard to maintain, and crosscutting activities received less attention. Neither Project Coordination Committees nor Steering Committees can replace a dedicated counterpart coordinating body, given that the first two hold meetings only a few times each year. Effective implementation of reforms required a realistic timeline to build capacity, consensus, and government commitment. This process, which often takes more time than expected, requires continuous policy dialogue. Monitoring and evaluation is a strong management tool that should be operational after the first year of project implementation. A system for M&E that is functional from the project’s initiation is critical to understand the impact of project interventions, identify problems, and take corrective action. The M&E system should be set up and software procured under the Project Preparation Fund

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Project-specific lessons The public–private partnership established for the new irrigation financing mechanism is a good method of increasing the area developed for irrigated agriculture. This model should be extended to various actors in a more cohesive manner. PNIR investments should serve as a means of piloting a new agricultural development model, characterized by new modalities of access to land and water that will ultimately make it possible to create an official market for land and permit cofinancing of land settlement by beneficiaries. The pilot undertaken for the project has demonstrated that, to be effective, the package transferred to the private producer must include completely finished plots (that is, plots in which tertiary canals exist) as well as access to credit, inputs, and extension advice. In addition, the study of the irrigation funding mechanism and the pilot in Koumouna showed that the Malian banking system is prepared to finance land development when appropriate procedures are in place and producers have clear title to their land. However, this approach needs to be monitored and its impact assessed with respect to: (i) the feasibility of collecting the property tax on privatized land; and (ii) the risk of land speculation and land ownership by a minority of people, which would contradict the objective of reinforcing direct farming by family businesses. Current procurement procedures at the Niger River Management Office do not correspond to national objectives for irrigation development. Procedures applied to the Niger River Management Office should be simplified, allowed for a less limited threshold (as a comparison, the Mali Cotton Company is allowed to procure for more than CFAF 40 billion whereas the Niger River Management Office is limited to CFAF 50 million), and be subject to stronger external controls in order to reach the assigned development objectives. Small-scale irrigation programs should overcome the difficulties involved in decentralized, participatory implementation and reduce investment costs. The experience of the PNIR shows that to remedy both drawbacks, projects may need to decentralize investment supervisory bodies, create an apex producer organization to synchronize investments and share experiences, employ producers in land development operations on a food-for-work basis (more ownership and less cost), and foster the development of private services for small-scale irrigation. The project may also have to promote creation of regional coordinators of development initiatives that would advise those projects operating in the region and ensure coordination and collaboration with local administrations. Multisector projects require greater financial and technical resources for supervision and closer collaboration among different sectors under one TTL. It was very difficult to supervise all sector specialists at the same time, and supervision had to be split into several missions. In addition, because of the inadequate budget, the TTL had to organize one full supervision mission and a light supervision mission each year. At the country level, the project unit encountered difficulty in encouraging all sector ministries to perform their duties in an efficient and timely manner.

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The new agricultural operation with a sector wide approach will be particularly selective in order to avoid all the weaknesses and lack of linkages between components experienced during the PNIR implementation:

(i) the new agricultural operation will build upon PNIR achievements and lessons in expanding large-scale irrigation at the Niger River Management Office and small-scale irrigation perimeters along the Niger River valley. In collaboration with other donors, it will consolidate institutional reforms initiated and supported by PNIR to help modernize the governance of the Niger River Management Office, rationalize the use of water, and strengthen private investments in irrigation by supporting the implementation of the irrigation private financing mechanism; (ii) the Road component activities are transfered to the Transport sector project. It is applying the rural transport strategy and implementing 2000 km of rural roads; and (iii) for the Water/Sanitation component, the lending instrument changed; the component is tranfered to PRSC series to encourage the Government sustain financing mechanism through the national budget.

7. Comments on issues raised by the Borrower/ Implementing Agencies/ Partners

Comments from the Borrower were received (see annex 7) and relevant issues taken into account.

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Annex 1. Project Costs and Financing

(a) Project Cost by Component (in US$ million equivalent)17

Components

Appraisal Estimate

Total

Appraisal Estimate

IDA

Latest Estimate

IDA

Percentage of

Appraisal Total

Percentage of

Appraisal IDA

Irrigation 66.6 53 53.6 80.48% 101.13% Rural transport infrastructure

26 23.3 29.3 112.69% 125.75%

Rural water supply and sanitation

25.5 21.4 24.7 96.86% 115.42%

Environment 6.9 5.7 1.7 24.64% 29.82% AGETIER 1.1 0.7 0.7 63.64% 100.00% Implementation unit operating costs

11.9 9.7 4.1 34.45%* 42.27%

PPF refinancing 1.3 1.3 0.00% 0.00% Total project costs

139.3 115.1 114.1** 81.91% 99.13%

Total financing required

139.3 115.1

*The operating costs of the implementing unit budgeted much above what was actually spent, reflects the efficiency of the PCU.

**US$ 0.9 million included in this amount must be transferred to the National Budget; the bills were rejected by the World Bank services due to lack of funds.

(b) Financing (in US$ Million equivalent)

Source of Funds

Type of Cofinancing

Appraisal Estimate

Latest Estimate

Percentage of

Appraisal Government of Mali

Counterpart funding

17.1 15.3 89.60%

IDA Credit 115.1 114.1 103.40% Other donors

Parallel financing

Beneficiaries User fees 2.1 0.3* 15.20% Total 4.7 1.13 23.99% * The beneficiaries provided mainly contribution in kind, except for the drinking water works for which they provided 15% of the cost.

17 The US$/CFAF average rate taken is 564.1.

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Annex 2. Outputs by component Component I: Irrigation The component is rated Moderately Satisfactory Subcomponent IA: Large-Scale Irrigation Development at the Niger River Management Office (US$56.8 million) The subcomponent is rated Moderately Satisfactory Subcomponent IA aimed to (i) pilot new capital cost collection mechanisms aimed at accelerating irrigation development; (ii) pilot promotion of private investment in large-scale irrigation schemes such as the Niger River Management Office; (iii) support improved infrastructure management by training beneficiaries, rehabilitating degraded irrigation perimeters, and constructing new ones; and (iv) strengthen environmental monitoring. The subcomponent activities were grouped in six sections: a. Lease-Purchase Irrigation Financing Mechanism (US$5.1 million). An autonomous,

self-financing, privately managed irrigation development agency was created to be responsible for irrigated land and for collecting loan repayments from beneficiaries for further use in irrigation development. For this purpose, the project financed studies and workshops designed to define the private irrigation financing mechanism and the agency’s profile. The project also financed the development of 390 hectares of irrigated perimeters to test the viability of an arrangement whereby private farmers cultivate plots of about three hectares and are responsible for maintaining the tertiary irrigation infrastructure, leveling plots, and paying water fees plus land rent (land rental fees will go toward the farmer’s eventual purchase of the land). The project established 130 farmers on the land and helped them obtain credit f