St. Lucia - Poverty Reduction Fund (PRF)

 ICRR 12027 Report Number : ICRR12027 ICR Review Operations Evaluation Department 1. Project Data: Date Posted : 03/22/2005 PROJ ID : P054939 Appraisal Actual Project Name : Lc- Poverty Reduction Project Costs 6.5 9.4 Fund (PRF) US$M ) (US$M) Country : St. Lucia Loan/ Loan US$M ) 3.0 /Credit (US$M) 3.0 Sector (s): Board: SP - Other social Cofinancing 3.5 6.4 services (50%), General US$M ) (US$M) public administration sector (20%), Health (10%), General water sanitation and flood protection sec (10%), Roads and highways (10%) L/C Number : C3277; L4508 Board Approval 0 FY ) (FY) Partners involved : EU Closing Date 12/31/2002 06/30/2004 Prepared by : Reviewed by : Group Manager : Group : Elliott Hurwitz Soniya Carvalho Kyle Peters OEDCR 2. Project Objectives and Components a. Objectives The Poverty Reduction Fund (PRF) project was designed to (1) develop the institutional and operational framework for a social fund model that would be appropriate for St . Lucia, and pilot the model's ability to increase access to and quality of basic social and economic infrastructure and services among the poor and vulnerable, in accordance with their demands; (2) contribute to sustainability of such infrastructure and services; and (3) foster and build capacity for community-led development initiatives. The PRF was a LIL. b. Components 1. Institutional strengthening for poverty reduction (6% of actual total project cost) ; 2. Subproject financing (64% of actual total project cost); 3. Project management (30% of actual total project cost ). c. Comments on Project Cost, Financing and Dates The PAD envisioned a total project cost of US$ 6.5 million, with contributions of US$1.5 million by the Bank, US$1.5 million by IDA, US$1.2 million by the Borrower, and US$2.3 million by the EU. However, by closing, total project cost amounted to US$9.41 million. The Bank/IDA contribution was US$3 million, the Borrower's was US$1.2 million, and EU's US$5.23 million. The ICR explains that the increased EU financing resulted from a larger than expected number of subproject proposals. Actual expenditure on Component 3, Project Management, was US$2.84 million, or 30% of total project cost, and 281% of the envisioned expenditure on this component . The original closing date was December 31, 2002, but the project was extended twice and eventually closed on June 30, 2004. This delay was caused by friction between the Board of Directors and the PRF Executive Director during the first year of effectiveness, as well as the fact that the developmental phase, including of a project Operational Manual, required 18 months vs. an expected 6 months. 3. Achievement of Relevant Objectives: (1) Develop the institutional and operational framework for a social fund model that would be appropriate for St . Lucia, and pilot the model's ability to increase access to and quality of basic social and economic infrastructure and services among the poor and vulnerable, in accordance with their demands ; Satisfactory : The operational framework for a social fund was developed and implemented, and many subprojects implemented successfully . The PRF received requests from communities and validated their need for the subprojects . The PRF helped communities to form Community Project Committees (CPCs) to coordinate with PRF and assume ongoing responsibility for the subprojects. Among the projects implemented in the areas of social and economic infrastructure, households experienced a significant increase in the proportion with drinking water on their property, and roads and footpaths reduced travel times and increased the number of trips made (according to a survey done as part of the impact evaluation). Beneficiaries were generally satisfied with the quality and benefits received from subprojects . Progress was less clear in the areas of reforestation and education, mainly because insufficient time had elapsed to realize the full benefits. 53 subprojects were funded by the Bank (of a total of 160 in the PRF): 32% for roads and footpaths, 23% for water and sanitation, 19% for social assistance, 15% for education, and 11% other. (2) Contribute to sustainability of such infrastructure and services . Unsatisfactory : There is insufficient evidence to substantiate a rating of satisfactory . The ICR and Impact Evaluation present a mixed picture of sustainability; while water and sanitation and IT projects seemed likely to be sustained, in other cases the prospects were less clear . The Impact Evaluation describes low knowledge among households about who was responsible for maintenance, lack of active community participation in maintenance, no maintenance plans prepared in any of the communities surveyed, no formal organization for this purpose etc . Also, monitoring indicator 4, evidence of a satisfactory level of O&M among the subprojects, calls for a financial analysis of the sustainability of subprojects, which was evidently not performed. (3) Foster and build capacity for community -led initiatives. The project presents a mixed picture in this area, but was overall moderately satisfactory. Comparisons of communities in which an intervention took place (n=1,052) with a control group (n=288) found that in many cases the extent and intensity of associational links and activities was greater where projects had been executed . However, perceptions of reciprocity, support, and trust were largely unaffected. The project was more successful in building capacity where the broader community was involved in implementation than where, e.g., contractors did the work; in the latter cases, little capacity was built . Also, the organizational capacity fostered by the project was somewhat tenuous, as many groups formed to implement projects dissolved after the projects were completed . 4. Significant Outcomes/Impacts: The PRF provided training to CPCs in the management, maintenance, and operation of subprojects, and also built local capacity in the identification of its main needs (within the purview of PRF). PRF investments were well-targeted to the poor: 28% of PRF funds went to the poorest 20% of the population, while just 10% of the funds went to the richest 30% of communities. (Source: Community and household level analysis of the Impact Evaluation survey of 1,152 households) PRF investments generally reflected the priorities of the targeted beneficiaries . The impact evaluation reflected community satisfaction with the quality of the results achieved . 5. Significant Shortcomings (including non-compliance with safeguard policies): The high administrative costs of the PRF (30%) reduced efficiency. While appraisal of subprojects was to have included environmental impact assessment and the PRF staff received training in this area, some subprojects may not have been assessed --a potential safeguard violation . (It should be noted that these subprojects are small -scale, and any environmental impact is likely to be modest ) At project closing, the project MIS was still not fully utilized by PRF staff, and the validity of the data produced by the system was questionable . 6. Ratings : ICR OED Review Reason for Disagreement /Comments Outcome : Satisfactory Moderately Satisfactory The project achieved most of its relevant objectives, but with low efficiency (section 5). Institutional Dev .: Modest Modest Sustainability : Likely Non-evaluable As noted in sec. 3.2, evidence on sustainability is mixed, and there is insufficient information to make a judgment. Bank Performance : Satisfactory Satisfactory While Bank Performance was overall satisfactory, there were several deficiencies: Readiness for implementation was deficient, which left insufficient time for actually piloting and refining the delivery mechanism (QAG finding). The Bank did not take sufficient care to assure that environmental reviews of subprojects were consistently completed (a possible safeguard violation). Borrower Perf .: Satisfactory Satisfactory During the first year, project implementation was seriously delayed by friction between the Board of Directors and the PRF Executive Director.  Delays in counterpart funding negatively affected project implementation. Quality of ICR : Satisfactory NOTE: NOTE ICR rating values flagged with ' * ' don't comply with OP/BP 13.55, but are listed for completeness. 7. Lessons of Broad Applicability: Members of the PRF Board of Directors were appointed, de facto, as representatives of government institutions . It would have been more effective if individuals with the greatest knowledge of this area and commitment to the PRF had been selected. Communities can manage many aspects of the subproject cycle, and this can be beneficial in building local capacity. Involvement of the broader community, however, is critical to capacity building . Selection of PRF subprojects might have given too much weight to communities that had "voice" rather than those that were determined to be poor based on a more rigorous assessment . 8. Assessment Recommended? Yes No Why? A PPAR would be useful to make a more rigorous effort to validate the project ratings . 9. Comments on Quality of ICR: The ICR is satisfactory; it is candid, and raises important issues (e.g., the role of a fund that potentially parallels the PRF). However, it has some deficiencies : When describing achievement of objective 2--contributing to sustainability of the infrastructure and services developed, the ICR could have been strengthened by including more details from the Impact Evaluation, even in an Annex (if report length was an issue). The ICR states that "most subprojects had only minor, if any, potential [environmental] impacts." However, there is little evidence for this assertion, as documentation of environmental reviews was largely absent (as the ICR notes). Further, while the ICR mentions the "excellent training" that PRF staff received in environmental assessment, this overlooks the statement in the 5/30/2003 PSR that "PRF technical staff seem to have forgotten the agreed environmental guidelines and training ." This was accompanied by an unsatisfactory PSR rating for environmental assessment.