Senegal - Distance Learning Project (LIL)

Document of The World Bank Report No: 20505-SE PROJECT APPRAISAL DOCUMENT ONA PROPOSED CREDIT IN THE AMOUNT OF SDR 1.6 MILLION (US$2.1 MILLION EQUIVALENT) TO THE REPUBLIC OF SENEGAL FOR A DISTANCE LEARNING PROJECT June 8, 2000 Operational Quality and Knowledge Services (AFTQK) Country Department 14 Africa Region  CURRENCY EQUIVALENTS (Exchange Rate Effective July 10, 1999) Currency Unit = F CFA 1 F CFA = US$ 0.0016 US$ 1 = 630 F CFA FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS AGETIP Agence d 'Execution des Travaux d 'Interets Publiques (Contract Management Agency) CAS Country Assistance Strategy CED Centre d 'Enseignement a Distance (Distance Learning Center) c.i.f. Cost, insurance and freight DLC Distance Learning Center ENAM Ecole Nationale d 'Administration et de Magistraturel (National School of Administration) FY Fiscal Year GDLN Global Distance Learning Network GOS Government of Senegal IDA International Development Association ISG Information Solutions Group LACI Loan Administration Change Initiative LCBS Least Cost Based Selection LIL Learning and Innovation Loan MOF Ministry of Finance NCB National Competitive Bidding NGO(s) Nongovernment Organization(s) NS National Shopping PAR Procurement Assessment Review PMR Project Management Report PPF Project Preparation Facility QCBS Quality and Cost Based Selection SA Special Account SDR Special Drawing Rights SOE(s) Statement of Expenditure VSAT Very Small Aperture Terminal WBI World Bank Institute Vice President: Callisto Madavo Country Director: Cadman Atta Mills (Acting) Sector Manager/Director: John A. Roome Team Leader: Marc Lixi  SENEGAL Distance Learning Center Project - LIL CONTENTS A. Project Development Objective ................................................................2 1. Project development objective .................................................................2 2. Key performance indicators .................................................................2 B. Strategic Context .................................................................2 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project .........2 2. Main sector issues and Govemment strategy ............................................... , . 2 3. Learning and development issues to be addressed by the project ......................... .........3 4. Learning and innovation expectations ..............................................3 C. Project Description Summary ....................................................4 1. Project components ....................................................4 2. Institutional and implementation arrangements .................................. , . 5 3. Monitoring and reporting arrangements .................................7 D. Project Rationale ...............................7 E. Summary Project Analysis .............................7 1. Economic ............................7 2. Financial ...8.........................8 3. Technical ...8.........................8 4. Institutional ............................8 5. Social ...............................8 6. Environmental assessment ...............................8 7. Participatory approach .............................8 F. Sustainability and Risks .............................9 1. Sustainability ............................. . . . . . . . 9 2. Critical Risks ...9.........................9 3. Possible Controversial Aspects ............................ 10 G. Main Loan Conditions ............................ 10 1. Effectiveness Conditions ................. 10 2. Other ... 10  H. Readiness for Implementation ........................ 11 I. Compliance with Bank Policies ........................ 12 Annexes Annex 1. Project Design Summary .................. ....................... 13 Annex 2. Detailed Project Description ......................... ................ 15 Annex 3. Estimated Project Costs ............... .......................... 18 Annex 4. Cost-Effectiveness Analysis Summary ....................................... 20 Annex 5.a Financial Summary ......................................... 22 Annex 5.b Financial Summary for Revenue-Eaming Project Entities ................. 25 Annex 6. Procurement and Disbursement Arrangements .............................. 26 Table A. Project Costs by Procurement Arrangements ............... ............. 26 Table B. Thresholds for Procurement Methods and Prior Review ................ 28 Table C. Allocation of Loan Proceeds ......................................... 29 Annex 7. Project Processing Budget and Schedule ..................................... 31 Annex 8. Financial Management Arrangements ........................................ 32 Annex 9. Documents in Project File ......................................... 35 Annex 10. Statement of Loans and Credits ......................................... 36 Annex 11. Country at a Glance ......................................... 38 Annex 12.a Technical Specifications ......................................... 40 Annex 12.b DLC - List of Technology Equipment ........................................ 42 Annex 12.c TOR for Distance Learning Information Technology Staff ................. 43  Senegal Distance Learning Project - I Project Appraisal Document Africa Region AFTQK Date June 8, 2000 Team Leader: Marc Lixi Country Director: Cadman Atta Mills (Acting) Sector Manager/Director: John A. Roome Project ID: P069198 Sector: EY - Other Education Lending Instrument: Learning and Innovation Loan (LIL) Theme(s): Education; Public Sector Poverty Targeted Intervention: [ ] Yes [x No Project Financing Data [ ] Loan [xl Credit [] Grant [] Guarantee [] Other [Specify] For LoanslCredits/Others: Amount (US$m): $2.1 Proposed terms: [] To be defined [ Multicurrency [ ] Single currency [ ] Standard Variable [X] Standard IDA [] LIBOR-based Grace period (years): 10 Years to maturity: 40 Commitment fee: Standard Service charge: 0.75% Government 0.12 0.00 0.12 IDA 1.17 0.93 2.10 Other PRIVATE COMMERCIAL SOURCES 0.90 0.40 1.30 Total: 2.19 1.33 3.52 Borrower: GOVERNMENT OF SENEGAL Responsible agency: MINISTRY OF PUBLIC SERVICE (Minist6re de la Fonction Publique, du Travail et de l'Ernploi) (project oversight and coordination) .~~~~~~~~~~ . Estimated disbursement 'Bank FY/US$M Annual 0.5 07 0.5 0.2 0.2 Cumulative 0.5 1.2 1.7 1.9 2.1 Project implementation period: 2000-2004 Expected effectiveness date: 10/04/2000 Expected closing date: 04/30/2004 Implementing agency: Distance Learning Center (Centre d'Enseignement a Distance) Contact person: Monsieur Mamadou Diop, D61egue au Management Public / Mor Seck, Manager, CED Address: Primature / Centre d'Enseignement a Distance (ENAM), Blvd. Dial Diop, BP 12997 Dakar-Colobane Tel: (221) 637 65 22 / 631 49 72 Fax: (221) 822 97 64 E-mail: morseck88@hotmail.com  A: Project Development Objective 1. Project development objective: (see Annex 1) The main objective of the project is to increase access to high-quality, up-to-date and cost-effective training for public and private decision-makers and implementers to increase their capacity to design, plan and manage economic and social development policies. A secondary objective is to establish a center of excellence in the region for distance learning and exchange of information and experience. The project will accomplish these objectives by providing access to high-quality training and information on latest advancements through distance learning using state-of-the-art conununications technology. 2. Key performance indicators: (see Annex 1) Performance indicators will measure progress towards achievement of project objectives, including the effectiveness of Distance Learning Center (DLC) management. These indicators, which measure the sustainability and effectiveness of the DLC, and its comparative advantage over other types of training delivery, include: (a) demand for and utilization of DLC services (both local and regional); (b) relevance and quality of courses; and (c) ability to cover operating expenses through fees (100% of operating expenses to be covered by revenue generation by the 4th year of project implementation). Over the long term, the project is expected to improve the capacity of decision-makers to formulate, implement and monitor economic policy and sector strategies, which could be measured by the productivity of senior civil servants, quality of policy formulation and implementation, timeliness of economic and sector strategy implementation and effectiveness of community organizations and private firms. These latter indicators will be measured by an annual survey of trainees and those with whom they work, and through Bank sectoral reviews, including Country Portfolio Performance Reviews (CPPR). B: Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: 17269-SE Date of latest CAS discussion: January 29, 1998 The two main objectives of the current CAS are to ensure continued rapid and sustainable economic growth and to maintain social sustainability of the reform program. The first objective will be achieved by (i) helping to sustain macroeconomic stability, (ii) improving the environment for an efficient working of the private sector, (iii) alleviating infrastructure bottlenecks, and (iv) ensuring long-term sustainable management of the environment. The second objective will be achieved by (i) making the provision of education and health services more widely accessible at a better quality, and (ii) directly focusing on social protection. The Global Distance Learning Center would directly contribute to improving the environment for an efficient working of the private sector by building more effective capacity through in- service training of professionals in the public and the private sectors. It thereby addresses a particular concern that is highlighted in the CAS, which is a lack of good governance and an effective civil service. 2. Main sector issues and Government strategy: Since the start of structural reforms in 1994, the Government of Senegal (GOS) has realized the need to build capacity in the public and private sectors. The GOS has underlined the importance of capacity building by supporting the following efforts: (i) commissioning of a national capacity building assessment and formulating a subsequent strategy and (ii) establishing a national capacity secretariat in the Ministry of Finance. These initiatives were taken after a number of older capacity building initiatives had less than the envisaged impact. In the past, capacity building programs have generally worked very well in the private sector (both for and not for profit). However, in the public sector the lack of adequate stakeholder participation prevented an efficient implementation of the programs. The GOS initiatives are envisaged to address this lack of stakeholder participation by calling for renewed concerted efforts on all sides.  - 3 - 3. Learning and development issues to be addressed by the project: The project will help the Government benefit from the experience of distance learning and develop a broader program to improve the cost-effectiveness of professional and continuing education through the use of modern technologies, as a key element in its capacity-building strategy. The project addresses capacity building in an integrated way by providing access for government officials and private sector and community leaders to the latest training and global knowledge and experience in priority areas of modern economics, finance and management of development. A larger number of managers and staff will be able to be trained through distance learning and will be able to apply what they have learned immediately, increasing the impact of policy reforms on economic growth and social development. The project will also open new opportunities to local managers, civil society and the education community by facilitating access to up-to-date information, as well as interaction with international experts in economic development and market-economy management. The project is designed as a Learning and Innovation Loan (LIL) to test the sustainability of distance learning in the Senegalese context. It will assess the viability of cost-recovery mechanisms in higher education and the willingness of donors to invest training budgets in this new mode of training delivery. It will test the effectiveness of distance learning as a tool to deliver high-quality and cost-effective training and its impact on policy reform and implementation. Finally, the project will help define appropriate arrangements for productive cooperation between the public and private sectors in the training and retraining of professionals. As many parameters cannot be known at the outset (demand, acceptance and effectiveness of distance learning), the LIL approach will allow these variables to be tested and corrections to be made during project implementation. The project fits within and benefits from the World Bank's Global Distance Learning Network (GDLN). The World Bank Institute (WBI) and the Information Solutions Group (ISG) have developed distance learning courses and the technologies by which these courses can be disseminated. The proposed project is one of ten pilots to develop distance learning capacities in Africa and Latin America. As such, it takes advantage of product development, knowledge of technological choices and bulk procurement offered by the GDLN to facilitate project start-up and provide needed support throughout implementation. Due to the time constraints imposed by the bulk procurement for all pilot centers, project preparation was fast- tracked. For this reason, certain project components were implemented during preparation, with financing through a Project Preparation Facility (PPF) advance. The project builds on the following lessons learned from existing professional training systems in Senegal, including the African Virtual University: (a) in-country training is more cost-effective; (b) training technology should be flexible to respond to country context, and supply and demand for training; (c) long-term business plans for training centers should be developed sooner rather than later; (d) sustainability of distance learning centers must be built from the beginning through targeted marketing; (e) a pipeline of relevant course content must be developed well in advance to respond quickly to demand and facilitate marketing. 4. Learning and innovation expectations: [x] Economic [x] Financial [x] Technical [x] Institutional [ ] Social [I Environmental [ I Participation [] Other Economic: The economic viability of distance learning is to be established. The cost-effectiveness analysis undertaken during project preparation showed that distance learning costs per day and per trainee were two to four times lower than the current system (see Annex 4). It is expected that the project will demonstrate an economically viable method of delivering high-quality training to replace either training missions or import of trainers.  -4 - Financial: The appropriate mechanisms to ensure financial viability of distance learning are to be defined. Financial viability hinges on market development and cost recovery. The project will finance a decreasing share of DLC operating costs during the first three years of implementation to allow for gradual market development and changes in training practices and financing. Technical: Distance learning equipment needs to be operated and maintained adequately. The same technology installed in the Bank's Resident Mission in Senegal generally functions well, but with some disruptions in service mainly due to power grid failure. The technology was chosen in part for compatibility with the Bank's GDLN to fully benefit from the expertise and capacity gained through development of this network (technical capacity of ISG and training capacity of WBM). Future equipment upgrading and replacement would, to the extent possible, seek compatibility with domestic and Bank communication systems. Institutional: The Distance Learning Center will be an autonomous entity run on a commercial basis. Arrangements will be sought for close partnership with the public and private sectors, the donor and global education communities, as well as civil society. The DLC is expected to strengthen Senegalese public, private and community organizations by providing wider access to a greater range of training for the leaders and staff of these organizations. If successful, the DLC could become a regional center of excellence for training, providing training to professionals in neighboring countries. C: Project Description Summary 1. Project components: (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown) The project comprises two main components: (i) retrofitting and equipment of the Distance Learning Center; and (ii) support for DLC establishment and operation. Component I consists of building facilities on the site of the National School of Administration (Ecole Nationale d 'Administration et de Magistrature - ENAM) for the establishment of the DLC, to provide a videoconference room with a 30-person capacity, a computer room outfitted for 30 computer stations (hardware, software and Internet hook-up), a technical and administrative center, and installation and/or upgrading of electrical and telephone wiring. It also comprises equipment of the DLC including purchase and installation of a Very Small Aperture Terminal (VSAT) (satellite communication terminal), video, telecommunications and microprocessor equipment, office and classroom furniture, and various other equipment for DLC operation and security. Component 2 aims to assist the DLC begin operation and become financially viable. It includes: (a) financing of DLC operation costs on a decreasing basis over the first three years of operation; (b) purchase of a vehicle to facilitate transport and marketing of DLC services; and (c) technical assistance for the training of Center staff, periodic evaluation of Center operation and management effectiveness, and establishment of financial accounts and their annual audit.  1. DLC Retrofitting and Equipment Telecommunications 1.08 31.5 1.08 51.9 L_L I ee oP& Informatics a. Civil Works 0.36 10.5 0.36 17.3 b. Network access equi Dment 0.20 5.8 0.20 9.6 c. Videoconferencing equipment 0.30 8.8 0.30 14.4 d. Office funiture/other equipment 0.22 6.4 0.22 10.6 2. Support for DLC Establisgment and Institutional 2.34 68o5 1.00 48.1 Operation Development a. Consultant services/training 0.24 7.0 0.24 11.5 b. Operating CoStS 2.10 61.5 0.76 36.6 2. Institutional and implementation arrangements: tIL Implementation Period: 2000-2004 Implementing Agency: The project will be implemented by the Distance Learning Center, estabxshed as an autonomous nonprofit agency, and housed in the National School of Administration (ENAM). It will be considered a "public interest" organization in recognition of its role in promoting advances in policy, culture and technology aconta wide range of actors. The DLC will be govened by a Board, comprising Tepresentatives of govemment ministries, Senegalese academic insutonions, the private sector and civil society, and chaired by an official elected from among the members. Daily management of the Center will be entrusted to a Director selected on the basis of proven experience in enterprise management or management of similar educational entities. The Director will be assisted by a team consisting of a technician (computer specialist with telecommunications knowledge), a facilitator/ trainer, an experienced account and an office assistant. Project Oversight and Coordination: The Ministry of Public Service will be responsible for project coordination and ensuring the participation of the public and private sectors and donor cogm.unity in project monitoring and training development activities (through the DLC Board). TFhe DLC Board will oversee project implementation, through its executive secretariat. The Board is charged with monitoring DLC rnanagement and deciding DLC developmecnt policy, approving the annual business plan and program of activities, assessing the Center's financial statements and providing recommendations to help the Center become financially self-sustaining. Project Implementation: The project will be implemented and managed by the DLC. So that distance learning activities can begin as soon as possible after project effectiveness, project preparation included establishment of the DLC (legal procedures, formation of the DLC Board, recruitment of Director and staff) and preparation and equipment of the site (classrooms, videoconference room, computer room, administrative offices, etc). Project preparation activities were handled by the former Ministry of State Modernization with the assistance of AGETIP, for works, equipment, institutional aspects and studies.  - 6 - Upon taking office, the Director will prepare a business plan based on a survey of training requests from the public and private sectors. The business plan, to be submitted for DLC Board and IDA review and approval, will include: market data, budget and sources of financing, training and other services to be provided (lectures, seminars, other), source and programming of training, rates for different types of training and financial projections in the form of a budget, operating account and marketing strategy. The business plan will be updated and submitted for IDA and DLC Board review and approval on an annual basis. To this effect, the implementing agency will continue to assess demand for training, identify and program appropriate training courses, market the services of the Center and increase its visibility in Senegal and abroad. Project Financing: To facilitate project implementation, a Special Account (SA) will be established by the Borrower in the name of the DLC of Senegal in a commercial bank on terms and conditions satisfactory to IDA. The DLC will operate this SA. The IDA credit will finance DLC retrofitting and equipment and consultant services and training related to DLC start-up. Over the project implementation period, the IDA Credit will also finance, on a decreasing basis, DLC operating expenditures. As the market for its services develops, the DLC is to mobilize an increasing share of financing for its operating expenses, to achieve self-sufficiency within the project implementation period. It is expected that the DLC will cover approximately 20% of operating expenses in the first year, 40% in the second year, 60% in the third year, and be completely self-financing as of the fourth year of project implementation. Financial Management and Reporting (See Annex 8): As the implementing agency for this project, (the DLC) is a new entity, the project will begin disbursement arrangements through a Special Account and SOEs. A Loan Administration Change Initiative (LACI) compliant system will be installed from the beginning of the project. The DLC will produce quarterly activity reports. After one year of project implementation, as the DLC staff will be familiarized with LACI-compliant system tools, the financial management system and reporting system will be reassessed to shift from the SOEs-based disbursement system to a LACI-compliant disbursement system. Accounting: The DLC will have the responsibility of the project's overall financial management. It will have to maintain both the project's accounts and its own set of accounts as an autonomous nonprofit yet revenue-earning entity. The DLC will be equipped with a computerized financial management system appropriate to the scale and nature of the project and capable of recording and reporting the project's operations (by components, sub-components, activities, expenditure categories, regardless of origin of funds), as well as its own operations. The computerized financial management system will be multi- currency and include the following modules which should be integrated: general accounting, cost accounting, budgeting, contract management, fixed assets register, preparation of withdrawal applications, reports generating. A manual of administrative and financial procedures will be developed for the project. Auditing: The financial statements of the project will be audited for each fiscal year by an independent auditor acceptable to IDA in accordance with standards on auditing also acceptable to IDA. Audit reports of reasonable scope and detail will be submitted to IDA within six months of the end of each financial year of the project. The selection of an auditor acceptable to IDA is a condition of effectiveness. Terms of reference for the recruitment of the auditors have been drafted and agreed on with the Government of Senegal. Reporting: Two sets of financial statements will be required: the project's separate financial statements and the DLC's (as an autonomous agency) financial statements. The project's separate financial statements will comprise: (i) a statement of Source and Application of Funds for the project during the current financial year, and cumulatively from the start of the project, and (ii) a balance sheet. These two  - 7 - financial statements will be prepared annually. In addition, the DLC agreed during negotiations to submit a quarterly report using the LACI models including financial statements, procurement/contracts schedule and output monitoring, one month after the end of each quarter. Due its legal status as an association, DLC is required for its own operation to follow the West African Accounting System, commonly called SYSCOA, under which a set of financial statements must be prepared annually. Procurement (See Annex 6): Goods and Works financed by the IDA credit will be procured in accordance with the Bank's Guidelines for Procurement under IBRD Loans and IDA Credits published in January 1995 and revised in January and August 1996, September 1997 and January 1999. Consultant services financed by the IDA credit will be procured in accordance with the Bank's Guidelines for Selection and Employment of Consultants by World Bank Borrowers published in January 1997 and revised in September 1997 and January 1999. Civil works contracts will be procured in accordance by National Competitive Bidding (NCB) using proposed Bank-approved bidding documents. These works are expected to be carried out by local contractors. Equipment contracts for the supply of office furniture and other equipment of the DLC worth more than US$50,000 per contract up to an aggregate of US$200,000 will be procured by AGETIP through National Competitive Bidding using Bank standard bidding documents Procurement of goods for the Network access equipment and goods to equip the videoconference room (including computers of the DLC) will be procured by the Bank (ISG departmnent) (for compatibility reasons with the Global Distance Network) on behalf of the Borrower on a sole source basis (an agreement to this effect has been signed by the Government of Senegal and IDA). Satellite Bandwidth Rent contract will be procured on a sole source basis (one supplier selected under the Bank umbrella). Supply of small quantities of office supply and goods (a car, an electricity generator) for Center operation, estimated at US$50,000 or less per contract, will be procured through national shopping in accordance with Bank procedures up to an aggregate amount of US$30,000. 3. Monitoring and reporting arrangements: The Director will submit an initial business plan for DLC Board and IDA review and approval. An annual business plan will be developed and submitted by November 1 of each subsequent year to the DLC Board for review and approval and to IDA for review. The financial component of the business plan will detail operating expense financing, to specify, among other things, loan fund proceeds and the capital mobilized by the DLC itself. This should accord with the project financing plan specified on page 5. The DLC will submit a quarterly activity report to the DLC Board within 30 days of the end of each quarter. D: Project Rationale: (This section is not to be completed in a LIL PAD) E: Summary Project Analysis: 1. Economic: (supported by Annex 4) [ ] Cost-Benefit Analysis: NPV=US$ million; ERR= % [x] Cost Effectiveness Analysis [ ] Other (specify) The cost-effectiveness analysis consists of comparing the cost of delivering training through the proposed DLC to the current training and course delivery system for the "target market" (high-level govermment officials and private sector and community leaders). The average DLC training delivery cost amounts to US$1 10/student-day as compared to US$296/student-day for the current system for training of at least ten days.  -8 - 2. Financial: (for LIL, enter data if applicable or 'Not Applicable. See also Annex 5) NPV=US$ million; FRR= % The DLC is expected to attain financial sustainability by its fourth year of operation, by generating enough revenue, through user fees, to fully cover operating costs and equipment replacement. Financial simulations determined that the financial break-even point will be achieved when the average rate of installed capacity reaches more than 60%. This corresponds to about 5000 person-days of training per year, or that 15% of high-level (Category A) government officials take five days of training per year. For the first three years, DLC revenue is expected to cover 20%, 40% and 60% of operating costs for each successive year. The cost of training through the DLC is expected to be $100 per participant per day, which is lower than the cost of training delivery under current systems in Senegal (approximately $300 per participant per day). 3. Technical: As the technology involved is quite advanced, the project will provide DLC technical support staff with intensive training in operation and daily maintenance. World Bank information technology staff in the Senegal Resident Mission, experienced with this and similar technology, will also be available to provide support. Equipment maintenance will be contracted out to qualified firms in Senegal or representatives of the equipment suppliers. 4. Institutional: a. Executing agencies: The DLC was established during project preparation as an autonomous agency, governed by a Board made up of a broad stakeholder representation. Project preparation activities ensured that the DLC would be established and operational by project effectiveness. The project will gradually scale up the activities of the DLC to allow it time to increase its capacity. In addition, project component 2 is dedicated to providing assistance to the DLC to ensure that it can handle its functions adequately. b. Project management: The project will be implemented and managed by the DLC. The Ministry of Public Service will be responsible for overall project oversight and coordination. 5. Social: not applicable 6. Environmental assessment: Environmental Category []A [ B [X] C The project will have no environmental impact. 7. Participatory approach: a. Primary beneficiaries and other affected groups: The DLC Board will comprise representatives of the public and private sectors, education and vocational training communities, civil society and donors interested in supporting the distance learning initiative. The Board was designated through a consultative process as part of DLC establishment during project preparation. The Board will give guidance on DLC marketing and development policy, oversee implementation of its business plan and ensure that training activities and curricula are consistent with the country's priority. Primary beneficiaries will be senior civil servants, private sector managers, the education community (especially those providing education to ministries), NGOs, community groups and the media. Training  -9 - courses will be designed with the active participation of beneficiaries through annual market research conducted by the DLC Director. Trainees from the public and private sectors and civil society will benefit from access to a wider selection and higher quality of cost-effective training than is currently available. Educators will benefit from being able to present courses to a larger audience and to learn from their trainees about the Senegalese experience and context. b. Other key stakeholders: Other stakeholders include institutions and individuals currently providing training to the target group. This includes institutes in Senegal, institutes outside of Senegal and individual trainers. Many of the institutions involved (such as the African Virtual University, the University of Senegal, etc.) have been consulted to ensure that there is no duplication of efforts and to coordinate actions. Many of these institutions (especially those abroad) will be providing training through the Center. They will be consulted by the DLC management team to determine course content and scheduling to accommodate expressed demand. F: Sustainability and Risks 1. Sustainability: (This section is not to be completed in a LIL PAD) 2. Critical Risks: (reflecting assumptions in the fourth column of Annex I) From Outputs to Objective Government commitment to training of M Government commitment to use and pay for professionals in public and private sectors 30% of DLC capacity over the first 3 years. and civil society. Availability of resources for training. S Resources built into the Government budget and donor-financed project. Availability of Global Distance Learning M WBI courses, at least, will be provided; Network training courses and relevance to market study will fine tune the supply of local needs, particularly courses offered in training from other institutions to give the French. broadest range. ENAM interference and abuse of DLC S DLC will enter into an agreement facilities. (Memorandum of Understanding) with the ENAM to clearly define the circumstances and manner in which ENAM may use DLC facilities. Reliable management of satellite equipment. M Bank will assure initial management and will assist DLC in selecting a reliable and cost-effective satellite manager. Reliability of the technology. M The DLC will be under the Bank's technology umbrella. Appropriate equipment operation and M The project will provide intensive training maintenance. for technical staff; maintenance will be contracted out to a qualified contractor. Management team capacity. M A competitively selected, highly-qualified and business-oriented manager, with a proven track record, will be hired. Other institutions' cooperation and S Other institutions will participate in the willingness to pay (private sector, donors, DLC Board; marketing campaigns will be etc.). carried out by the management team.  - 10- Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N (Negligible or Low Risk) 3. Possible Controversial Aspects: Other training institutions (both domestic and foreign) may oppose the competition, particularly given the high degree of technology and cost-effectiveness of the training. During project preparation, the University of Senegal was consulted and supports the project. If competition does occur, it will stimulate the DLC management team as well as competitors to provide better service to consumers. The Bank has a large and proactive role in project preparation and implementation, but this is justified by its experience and contacts in Global Distance Learning, the economies of scale resulting from bulk procurement of distance learning equipment and its knowledge of latest technologies. The Bank is providing this assistance at no cost to the Borrower. G: Main Loan Conditions 1. Effectiveness Conditions: * Memorandum of understanding signed between the Distance Learning Center and the ENAM specifying the relation between the institutions and the terms for use of DLC facilities by the ENAM community. * DLC Director and key personnel (technician, facilitator and financial officer), with skills and experience satisfactory to IDA, hired. * Project Implementation Manual adopted by the Center's Board and the subsidiary agreement signed. * An adequate financial management system satisfactory to IDA is in place. * DLC first-year business plan submitted for IDA review before its adoption by the Center's Board. The plan is to be prepared by the Director upon his recruitment and is to include: management and development policy for the Center, course programming, video-seminars and other services to be provided, identified real training demand, the Center's pricing policy, willingness and ability to pay for training by identified clients, provisional budget and financial statement for the first year. * Auditor, with appropriate skills and experience, hired in a manner satisfactory to IDA. 2. Other: (classify according to covenant types used in the Legal Agreements) * Annual DLC business plan (program of activities, annual budget and provisional accounts, including replacement/rehabilitation expenses) submitted for IDA review two months before the beginning of each fiscal year, and adopted by the DLC Board by December 15 of the current year. * DLC retains a Director with qualifications and experience satisfactory to IDA. * DLC retains staff with qualifications and experience acceptable to IDA. * Commitment by the DLC to use its net cash flow to renew Center equipment that has become obsolete or that needs reconfiguration/updating. * Commitment by the Government to utilize at least 30% of its capacity over the first three years for the training of public sector staff (funding to pay for such services could come from each ministry's training budget or from projects which include activities to build the management and planning capacities of government officials).  - I1I - * Commitment by the Center to reserve at least 30% of space in its training courses for public sector staff. Financial: * Commitment by the DLC to cover 20%, 40% and 60% respectively of operating expenses (excluding depreciation) for the first three years of the project from Center revenues, sufficient to ensure that the Center will at least break even by its fourth year of operation. Auditina: * DLC Quarterly Activity Report submitted to the DLC Board and IDA within a month of the end of each quarter. * DLC Management Evaluation Report submitted to the DLC Board and IDA within three months of the end of each fiscal year. * Financial Audit Report of the Center's accounts submitted to the DLC Board and IDA within six months of the end of each fiscal year. H: Readiness for Implementation [X] 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. [ ] 1. b) Not applicable. [X] 2. The procurement documents for the first six month's activities are complete and ready for the start of project implementation; and a framework for agreement on standard bidding documents that will be used for ongoing procurement during the project has been established. [X] 3. The LEL's implementation plan has been appraised and found to be realistic and of satisfactory quality. [ 1 4. The following items are lacking and are discussed under loan conditions (Section G):  - 12 - 1: Compliance with Bank Policies [X] 1. This project complies with all applicable Bank policies. [ ] 2. The following exceptions to Bank policies are recommended for approval. The project complies with all other applicable Bank policies. Team Leader: Marc Lixi Sector Manager/Director: John A. Rome by Florent eh Country Director: Cadman Atta Mills (Acting)  - 13 - Annex 1: Project Design Summary SENEGAL: Distance Learning Project - LIL Sector-related CAS Goal: Sector Indicators: Sector / country Reports: (from Goal to Bank Mission) Improve the perforrnance *Productivity of senior civil Specific surveys to be Access to knowledge and of private and public sector servants. conducted every two inforrnation is transforrned professionals. * Quality of policy forrnulation years. into better policies and and implementation. improved performance by * Timeliness of economic and public, private and sector strategy implementation. community actors which * Effectiveness of commnunity have a positive impact on organizations and private firms. poverty alleviation. Follow-on Development Objective: * Number of public and private DLC Annual Report. Adequate supply, quality Mainstream the use of professionals trained (Yr 1: and relevance of training distance learning as an 1000 person-days of training; courses. ongoing tool to increase Yr 2: 2500 person-days of access of public and training; Yr 3: 3750 person- Absorptive capacity of private sector professionals days of training; and Yr 4: trainees. to global innovations and 5000 person-days of training). information. * Number and variety of organizations using DLC. Project Development Outcome / Impact Indicators: Project Reports: (from Objective to Goal) Objective: * Training cost less than DLC Annual Report. Trainee organization Increase access to high- $1 10/day. willingness and ability to quality, up-to-date and . Distance learning facility Annual audit report of pay. cost-effective training for utilization rate (60% by the Center. Acceptability of distance public and private Year 3) learning to public, private decision-makers and . DLC operating cost/income and community trainees. implementers to increase ratio (1.0 at Year 4) Regular availability of their capacity to design, ratio( atvYer 4). relevant courses and plan and manage economic * Number of providers of GDLN convenience of scheduling and social development courses (increase by 5 per for trainees. policies. year). Output from each component: Output Indicators: Project Reports: (from Outputs to Objective) 1. Distance learning * Distance learning facility DLC Annual Report. Government willing to facilities extensively used utilization rate (60% by contract out continuing to train decision makers, Year 3). Annual audit report of education. private sector managers * Number and variety of the Center. Technology works reliably and community leaders. organizations using DLC. and is accepted by trainees. . Number of public and private Willingness and ability to 2. Viable cost recovery professionals trained. pay by trainee plan in place and * DLC self-financing: 20% in organizations. operational. Year 1, 50% in year 2, 75% in Relevance of GDLN Year 3 and 100% in Year 4. training to country demand.  - 14 - Project Components/Sub- Inputs: (budget for each component) Project Reports: (from Components to Outputs) components: Donors willing to allocate 1. DLC Retrofitting and US$1,088,050 Quarterly Reports. part of training budgets to Equipment. project. Management team is 2. Support to DLC Start-up US$2,335,529 business oriented. and Operation. Course content relevant to local needs. Participating institutions willing to cover part of training costs. Private sector willing to cooperate.  - 15 - Annex 2: Detailed Project Description Senegal: Distance Learning Project - LIL By Component: Project Component I - US$1.1 million Distance Learning Center Retrofitting: This component comprises: (a) building facilities on the site of the ENAM for establishment of the DLC, including: (i) a videoconference room with a 30-person capacity; (ii) a computer room outfitted for 30 computer stations (hardware, software and Internet hook-up); (iii) a technical and administrative center; and (iv) mechanical outfitting such as installation and/or upgrading of electrical and telephone wiring. (b) equipment of the DLC, including (i) a Very Small Aperture Terminal (VSAT) (satellite communication terminal); (ii) video, telecommunications and microprocessor equipment; (iii) office and classroom furniture; and (iv) various other equipment for DLC operation and security. Project Component 2 - US$2.3 million Support for DLC Operation: This component aims to assist the DLC begin operation and become fmancially viable. It includes: (a) financing of DLC operation costs on a decreasing basis over the first three years of operation; (b) purchase of a vehicle to facilitate transport and marketing of DLC services; and (c) technical assistance for the training of Center staff, periodic evaluation of Center operation and management effectiveness, and establishment of financial accounts and their annual audit. Project Implementation Framework Implementing Agency: The project will be implemented by the Distance Learning Center, established as an autonomous nonprofit agency and housed in the ENAM. It will be considered a "public interest" organization in recognition of its role in promoting advances in policy, culture and technology among a wide range of actors. The DLC will be governed by a Board, comprising representatives of the Ministries of Public Service, Finance and Education, Senegalese academic institutions, the private sector and civil society (cultural associations, the media, etc.), and chaired by an official elected from among the members. Daily management of the Center will be entrusted to a Director selected on the basis of proven experience in enterprise management or management of similar educational entities. The Director will be assisted by a team consisting of a technician (computer specialist with telecommunications knowledge), a facilitator/trainer, an experienced accountant and an office assistant. Project Oversight and Coordination: The Ministry of Public Service will be responsible for project coordination and ensuring the participation of the public and private sectors and donor community in project monitoring and training development activities (through the DLC Board).  - 16- The DLC Board will oversee project implementation, through its executive secretariat. The Board is charged with monitoring DLC management and deciding DLC development policy, approving the annual business plan and program of activities, assessing the Center's financial statements and providing recommendations to help the Center become financially self-sustaining. Project Implementation: The project will be implemented and managed by the DLC. So that distance learning activities could begin as soon as possible after project effectiveness, project preparation included establishment of the DLC (legal procedures, formation of the DLC Board, recruitmnent of Director and staff) and preparation and equipment of the site (classrooms, videoconference room, computer room, administrative offices, etc). Project preparation activities were handled by the former Ministry of State Modernization with the assistance of AGETIP, for works, equipment, institutional aspects and studies. These activities have been funded through a Project Preparation Facility advance. In addition, the Bank, through its Information Solution Group, will provide assistance and expertise to procure, install and test videoconferencing equipment. Upon taking office, the Director will prepare a business plan based on a survey of training requests from the public and private sectors. The business plan, to be submitted for DLC Board and IDA review and approval, will include: market data, budget and sources of financing, training and other services to be provided (lectures, seminars, other), source and programming of training, rates for different types of training and financial projections in the form of a budget, operating account and marketing strategy. The business plan will be updated and submitted for IDA and DLC Board review and approval on an annual basis. To this effect, the implementing agency will continue to assess demand for training, identify and program appropriate training courses, market the services of the Center and increase its visibility in Senegal and abroad. For the first year of project implementation, most training courses will be selected from those offered by the World Bank Institute through its Global Distance Learning Network. However, over the first year, the DLC management team will identify and establish contacts with a variety of other training institutions capable of providing training over the GDLN. Over subsequent years, the DLC will match demand for training to the most appropriate supplier institution, both in terms of course content and schedule availability. Project Financing: To facilitate project implementation, a Special Account will be established by the Borrower in the name of the DLC of Senegal in a commercial bank on terms and conditions satisfactory to IDA. The DLC will operate this Special Account. The IDA credit will finance DLC retrofitting and equipment and consultant services and training related to DLC start-up through a PPF advance. Over the project implementation period, the IDA Credit will also finance, on a decreasing basis, DLC operating expenditures. As the market for its services develops, the DLC is to mobilize an increasing share of financing for its operating expenses, to achieve self-sufficiency within the project implementation period. It is expected that the DLC will cover 20% of operating expenses in the first year, 40% in the second year, 60% in the third year, and be completely self-financing as of the fourth year of project implementation. Financial Management and Reporting: (See Annex 8) As the implementing agency for this project (the DLC) is a new entity, the project will begin disbursement arrangements through a Special Account and SOEs. A LACI-compliant system will be installed from the beginning of the project. The DLC will produce quarterly activity reports. After one year of project implementation, as the DLC staff will be familiarized with LACI-compliant system tools, the financial management system and reporting system will be reassessed to shift from the SOEs-based disbursement system to a LACI-compliant disbursement system.  - 17- Accounting: The DLC will have the responsibility of the project's overall financial management. It will have to maintain both the project's accounts and its own set of accounts as an autonomous nonprofit yet revenue-earning entity. The DLC will be equipped with a computerized financial management system appropriate to the scale and nature of the project and capable of recording and reporting the project's operations (by components, sub-components, activities, expenditure categories, regardless of origin of funds), as well as its own operations. The computerized financial management system will be multi- currency and include the following modules which should be integrated: general accounting, cost accounting, budgeting, contract management, fixed assets register, preparation of withdrawal applications, reports generating. A manual of administrative and financial procedures will be developed for the project. Auditing: The financial statements of the project will be audited for each fiscal year by an independent auditor acceptable to IDA in accordance with standards on auditing also acceptable to IDA. Audit reports of reasonable scope and detail will be submitted to IDA within six months of the end of each financial year of the project. The selection of an auditor acceptable to IDA is a condition of effectiveness. Terns of reference for the recruitment of the auditors have been drafted and agreed on with the Government of Senegal. Reporting: Two sets of financial statements will be required: the project's separate financial statements and the DLC's (as an autonomous agency) financial statements. The project's separate financial statements will comprise: (i) a statement of Source and Application of Funds for the project during the current financial year, and cumulatively from the start of the project, and (ii) a balance sheet. These two financial statements will be prepared annually. In addition, the DLC agreed during negotiations to submit a quarterly report using the LACI models including financial statements, procurement/contracts schedule and output monitoring, one month after the end of each quarter. Due its legal status as an association, DLC is required for its own operation to follow the West African Accounting System, commonly called SYSCOA, under which a set of financial statements must be prepared annually. Monitoring and Reporting Arrangements: The Director will submit an initial business plan for DLC Board and IDA review and approval. An annual business plan will be developed and submitted by November 1 of each subsequent year to the DLC Board for review and approval and to IDA for review. The financial component of the business plan will detail operating expense financing, to specify, among other things, loan fund proceeds and the capital mobilized by the DLC itself. Thereafter, DLC should operate and renew its equipment through self-generated revenues; this will be determined during the fifth year of implementation. The DLC will submit a quarterly activity report to the DLC Board within 30 days of the end of each quarter. At the end of its fiscal year, but no longer than six months after its completion, the borrower and DLC will present to IDA financial audit reports of: (i) the Special Account as well as a special opinion on the SOEs; and (ii) DLC accounts and financial statements. DLC will maintain separate accounting records for the project components that it manages directly and for its own operations (see Annex 6).  - 18- Annex 3: Estimated Project Costs Senegal: Distance Learning Project - LIL A. Project Costs by Component A. CENTER RETROFITTING AND EQUIPMEN . . _ _ =_. Civil Works Civil Reconstruction 80,208 (80,208) 148,959 (148,959) 229,167 (2,6 Other Refifting 35,584 (35,584) 66,085 (66,085) 101,66 (101,669 Subtotal Component Base Cost 115,793 (115,793) 215,043 (215,043) 330,836 330,836 Price Contingencies Physical Contingencies 11,579 (11,579) 21,504 (21,504 33,084 (33,084 Subtotal Component Cost 127,372 (127,372) 236,548 (236,548) 363,920 (363,920) B GOODS 1. Network Access Equipment and Videocon Ferencing quipment Common Equipmpent for all Sites 25,205 (25,205' 2,801 (2,801 28,005 (28,005) Remote Baseband Equipment per Site 32,842 (32,842' 3,649 (3,649 36,491 (36,491' Remote RF Equipment per Site 41,130 (41,130) 4,570 4,5701 45,700 (45,700) Video Equipment 68166 (68,166' 7,574 (7,574 75,740 (75,740' T.120 Application Kit 10,800 (10,800' 1,200 1 12,000 (12,000 Audio Equipment _ __ 15,639 (15,639' 1,738 (1,738 17,377 (17,377' Audio Response Equipment 10,710 (10,710 1,190 (1,190 11,900 11,900) LAN Equipment 58,500 (58,500' 6,500 (6,500 65,000 (65,000) TV Receive only 13,500 (13,500, 1,500 (1,500 15,000 (15,000' PCs and Related Equipment 89,550 (89,550; 9,950 (9,950 99,500 (99,500; 2. Other Equipment and Furniture Office Furniture 18,750 (18,750, 56,250 (56,250 75,000 (75,000' UPS and Generator 17,500 (17,500) 52,500 (52,500 70,000 (70,000' Other Electrical/Electronic equipment 21,534 (21,534 3,800 (3,800 25,334 (25,334' Car 22,100 (22,100' 3,900 (3,900 26,000 (26,000' Video and TV Equipment 4,465 (4,465' 788 _788 5,253 5,253 Shipping and Installation of Equipment 42,500 (42,500' 7,500 (7,500 50,000 (50,000' Subtotal Component Base Cost 492,891 (492,891' 165,409 (165,409. 658,300 (658,300 Price Contingencies Physical Contingencies 49,289 (49,289) 16,541 (16,541 65,830 (65,830) Subtotal Component Cost 542,180 (542,180) 181,950 (181,950, 724,130 (724,130) C. CONSULTANT SERVICES AND TRAINING Supervision of Work (including AGETIP'S fee) 10,000 (10,000) 30,000 (30,000' 40,000 (40,000) Legal Studies _ 7,500 (7,500) 22,500 (22,500) 30,000 (30,000) Training for DLC Staff 45,000 (45,000) 5,000 (5,000' 50,000 (50,000) Audits 11,250 (11,250) 33,750 (33,750' 45,000 (45,000) Consulting Services 5,000 (5,000) 45,000 (45,000' 50,000 (50,000) Subtotal Component Base Cost 78,750 (78,750) 136,250 (136,250' 215,000 (215,000) Price Contingencies I_I Physical Contingencies 7,875 (7,875) 13,625 (13,625' 21,500 _21,500) Subtotal Component Cost 86,625 (86,625) 149,875 (149,875) 236,500 (236,500)  - 19- D. OPERATING COST Satellite Bandwidth & Servicing Cost 693,480 (246,129) 0 () 693,480 (246,129 Personnel 171,000 (41,636) 279,000 (127,754) 450,000 (169,390) Maintenance 213,837 (49,092) 348,892 (150,631) 562,729 (199,723) Utilities 29,260 (7,035) 47,740 (21,584) 77,000 (28,619 Variable Operating Cost 47,500 (10,905) 77,500 (33,460) 125,000 (44,365 Subtotal Component Base Cost 1,155,077 (354,796) 753,132 (333,429) 1,908,209 (688,225) Price Contingencies Physical Contingencies 115,508 (35,480) 75,313 (33,343) 190,821 (68,823) Subtotal Component Cost 1,270,585 (390,276) 828,445 (366,772) 2,099,029 (757,048) B. Project Costs by Category D. CIVIL W ORKS ___ Base Cost 115,793 (1,,29) 215,043 (215,043) 330,836 (330,8361 B. GOODS 1. Network Access Equipment 408,542 (408,542) 48,171 (48,171 J 456,713 (456,713) 2. Other Equipment and Furniture 84,349 (841349) 117,238 (117238) 201,587 (4 1,5879 C. CONSULTANT SERVICES AND Tt,iNING Base Cost 78,750 (78,750) 136,250 (136,250) 215,000 (215,000) D. OPERATING COSTI 1. Satellite Bandwidth Rent 693,480 (246,129) 0 ()693,480 (246,12 2. Operating Expenditure 461,597 (108,667) 753,132 (333,429) 1,214,729 (442,096) |Total Base Cost 1,842,510 (1,042,229) 1,269,834 (850,132) 3,112,345(1823, Total Price ContingenciesI Total Physical Contingencies 184,2511 (104,223)1 126,983 (85,013) 311,234 (189,236) |TotaliProject Cost X 2,026,7611(1,146,452)11,396,8181 (935,145) 3,423,579 (2,081,597)  -20 - Annex 4: Cost-Effectiveness Analysis Summary Senegal: Distance Learning Project - LIL [For projects with benefits that are measured in monetary terms] 1. The cost-effectiveness analysis is based on comparing the cost of delivering training courses through the Global Distance Learning Network with the current training and course delivery practice in its "target market". Currently, there are four main methods of in-service training of professionals: (a) international training, i.e., outside Africa; (b) regional training, i.e., in another African country; (c) local training by local trainers; and (d) local training by international trainers. 2. Main Assumptions. In the absence of reliable and comprehensive data on the training market in Senegal, preliminary data gathered in the field make it possible to estimate the following distribution of in-service training of professionals (mainly public sector employees who were trained in 1997-1998): 45% of professionals are trained internationally, 15% are trained regionally, 20% are trained locally by local staff, and 20% are trained locally by international staff. 3. Capacity: By design, the Senegal distance learning facility will have a capacity of 30 seats each for the conference and computer rooms. The Center may operate over 260 working days per year. In the long run (by Year 5), capacity utilization is estimated to be around 65%, corresponding to a production level of 5,000 student-days. For the first four years, a steady annual increase of the capacity utilization rate is projected as follows: 10%, 20%, 30% and 45% respectively for each successive year. 4. One of the indicators for comparing costs of course delivery in the current system of in-service training of professionals with the one proposed in the GDLN is the unit cost of course delivery per student-day. This indicator reflects all measurable components, except the "quality and convenience of the proposed system," as it will provide easier and wider access to state-of-the-art knowledge and information. In a comprehensive evaluation, these benefits need to be taken into account although they are difficult to quantify. 5. Cost of the Distance Learning Center: The unit cost of course delivery per student per day is defined as operating cost plus depreciation (i.e., total OC) divided by the total number of students trained over an average course length. The estimated cost structure of the DLC is detailed in Annex 5. The annual cost is determined to be around US$500,000. Fixed cost represents 85% of total cost, indicating that a high level of expenses will be incurred by the Center irrespective of the level of utilization of its facilities. The cost per day and per student depends on the level of demand, and hence the rate of use of the proposed facilities. The table below shows that the cost per student and per day is very sensitive to the rate of capacity utilization. Unit cost decreases sharply when utilization of the center facilities increases, whereas the operating cost remains largely unchanged due to the importance of fixed costs. Year 1 2 3 4 5 Capacity utilization (%) 10 20 30 45 60 Total operating cost (thousand US$) 486 492 497 502 502 Cost per student per day (US$) 585 333 210 145 107  -21 - 6. This simulation emphasizes the importance of a qualified business-oriented manager to develop effective marketing tools and attract enough clients to ensure DLC competitiveness and financial sustainability. Preliminary market data suggest that an utilization rate of 60% may be attained by the fifth year of operation corresponding to a reasonable unit cost of US$107 per day per student. This will require an intensive marketing endeavor by the DLC management team aiming at: diversifying Center products and services and winning customer loyalty through steady high-quality service, competitive pricing, and training content relevant to expressed demand and client expectations. 7. Unit Cost of the Existing Training System: Cost of in-service training was determined for each delivery method currently used and based on unit costs gathered in the field and including, when applicable, the following expenses: travel plus subsistence for students or teacher (when training is provided locally by international trainers), local expenses (for locally delivered training, other costs when identified. It is worth noting that no course charge (fees) was taken into account as no such fees were included in the GDLN system (operating costs assume that GDLN content is free of charge for the first years). Based on the above data and assumptions, the table below presents the unit cost (per day and per student) of the current in-service training system: Number of Course Days 5 days 10 days Unit Cost of Training Category % of total training International Training (US$) 45% 910 530 Regional Training (US$) 15% 410 280 Local Training by Local Staff (US$) 20% 35 35 Local Training by Inter. Staff (US$) 20% 75 43 Total Unit Cost of Current System (US$) 100% 493 296 8. Combining the four categories of the current training system in Senegal gives an estimate of the average unit cost for the current training system. Depending on the length of the course (and--for simplicity-- assuming that local courses are delivered by only one international trainer), this yields a range of unit cost of the current training system in Senegal of US$296 for a 10-day course and US$493 for a 5-day course. 9. This range of cost shows that the proposed Global Distance Learning Network (GDLN) training system will be much more cost-effective than the existing system which lowest possible cost (US$296 for 10 days course) is higher than the GDLN start-up unit cost (US$247 in the second year). In the long run, the estimated unit cost of the proposed GDLN (US$107) will be about 36% of the cost of the current system in its most favorable condition.  - 22 - Annex 5.a: Financial Summary (in US$ equivalent) Senegal: Distance Learning Project . LIL Years Ending 2005 A. Project Cost by Category 0 1 2 3 4 5 Total Investment Cost 1,109,136 35,000 30,000 30,000 1,204,136 Civil Works 330,836 330,836 Network Access Equipment 110,196 110,196 International Equipment for DLC 296,517 296,517 Studios Other Equipment and Furniture 201,587 201,587 Shipping and Installation of 50,000 50,000 Equipment Consultant Services and Training 120,000 35,000 30,000 30,000 215,000 Operating Cost 17,000 378,242 378,242 378,242 378,242 378,242 1,908,209 Fixed Operating Cost 17,000 353,242 353,242 353,242 353,242 353,242 1,783,209 Satellite Bandwidth & Servicing Cost 138,696 138,696 138,696 138,696 138,696 693,480 Personnel 15,000 87,000 87,000 87,000 87,000 87,000 450,000 Maintenance 112546 112546 112,546 112,546 112,546 562,729 Utilities 2,000 15,000 15,000 15,000 15,000 15,000 77,000 Variable Operating Cost 25,000 25,000 25,000 25,000 25,000 125,000 Total Project Cost 1,126,136 413,242 408,242 408,242 378,242 378,242 3,112,345 B. Project Financing monommismigoam ~ 0 1 2 3 4 5 Total Required Financing Total Project Cost 1,109,136 35,000 30,000 30,000 - - 1,204,136 Physical Investment Cost 989,136 - - - - - 989,136 Services 120,000 35,000 30,000 30,000 - - 215,000 Financed by IDA 1,109,136 35,000 30,000 30,000 0 0 1,204,136 C. Project Operation Financing 0 1 2 3 4 5 Total Required Financing Project Operating Cost 17,000 378,242 378,242 378,242 378,242 378,242 1,908,209 Revenue Generation - 80,000 147,500 236,000 346,500 458,000 1,268,000 Financed by IDA 17,000 298,242 230,742 142,242 688,225 Surplus 31,742 (79,758) (48,017)  - 23 - 1. Financial Analysis A financial analysis was conducted to determine the terms of financial viability of the proposed project. In the absence of adequate and reliable data regarding the training market in Senegal, the project team determined the financial goals (pricing policy and cost sharing principle) and market goals (level of demand and capacity utilization to be targeted) to be accomplished by the DLC management team if the Center is to be financially self-sustaining by the medium term (fourth year of operation). More market research is needed to have better information on characteristics of Senegal's training market and a precise understanding of its dynamics to help design an appropriate marketing policy for the Center. Therefore, during the project preparation phase, a consultant conducted a detailed market study which will be available to the DLC management team once it is in place later in calendar year 2000. The main use of the market study is to serve as a key input to business plan design by the DLC management team. The business plan will be drafted over the first two months of start-up of Center operations. 2. Main assumptions Revenue Income generation: The most crucial set of assumptions pertains to the revenue generation patterns. Given the rapid pace of project preparation, only a very preliminary understanding of the market dynamics was obtained. An altemative approach (admittedly sub-optimal) for deriving a set of precise revenue projections would have been to use training supply to determine the requirements for the Center to be financially viable and then analyze whether these requirements are reasonable from the demand side in the context of Senegal. Training supply is relatively precise as most of the DLC courses will be provided by the WBI at least for the first two years. The main assumption regards the utilization rates for Center facilities, which are projected, over the first five years of operation, to be 10%, 20%, 30%, 44% and 60%, and going up to 65% for each successive year. The maximum capacity amounts to 5000 student-days of training at a 65% utilization rate. The training fee is set at around US$100 per student per day, as this price seems to be competitive and affordable for most public and private institutions (see Annex 4) and is therefore expected to attract more students. Other financial revenue: The amount of financial support to the DLC to balance its operating cost over the first years of operation will be determined by the extent to which the Center can generate its own revenue. Hence, it is defined as the residual between the revenue generated and total funding required to cover operating costs before depreciation. Operating Cost Satellite Bandwidth Rent: The satellite bandwidth cost includes the yearly rental cost for the bandwidth and a corresponding service charge. Bandwidth costs are fixed costs, i.e. they don't depend on capacity utilization rates. Annual cost is estimated at US$138,700 on the basis of existing rates provided by the supplier. Personnel: It is assumed that the DLC will have eight local staff including a manager, a facilitator and a technician. Annual salary per staff is based on current market data for similar positions and responsibilities. Maintenance: The estimated maintenance costs are based on the following assumptions: locally procured equipment (furniture, etc.) and civil works have a yearly maintenance of 10% of initial investment cost; internationally procured equipment (equipment for videoconferencing room) has a yearly maintenance cost of 20% of initial investment cost. This high rate accounts for possible contracting out maintenance activities of sensitive equipment to a qualified foreign or regional company.  - 24- Utilities: Utility costs include expenditures on electricity, telephone and water, which were estimated to cost US$15,000 annually by comparison to similar computer services in Senegal. Variable Operating Cost: These mainly comprise costs related to training and office supply, and depend on capacity utilization. A flat cost of US$25,000 per year has been assumed at full capacity utilization. Depreciation: Equipment is assumed to depreciate at different rates in accordance with national accounting standards in Senegal. Fee/Interest and debt service: The Government of Senegal suggests carrying the interest and principal repayment in lieu of the Center to allow for sensible and attractive training rates. However, it is envisaged that the Center assumes reinvestment and renewal cost of its equipment. 3. Financial Statements and Results. Based on the above assumptions, basic financial statements of the Center have been established for the first five years of its operation. Annex 5.b presents the income and cash flow statement as well as its projected balance sheet. It shows that under the above assumptions the Distance Learning Center will be economically viable and self-sustaining (reach its break-even point) once its capacity utilization rate attains or exceeds 44% (or 3465 student-days per year are sold). This is the equivalent of 700 professionals attending a 5-day training per year. From the market perspective, this requirement seems to be achievable: (i) a rate of US$100 per day per participant compares very favorably with the average cost of the current training practice (US$296, see Annex 4); this attractive rate will allow for more participants within the same overall budget; (ii) 700 professionals trained annually represents around 20% of the high-level civil servant population in Senegal; however, private sector managers and community leaders will also take training, either reducing the number of civil servants who would need to be trained to maintain the assumption of 700 students per year, or increasing the number of students who could be trained in a given year above 700. 4. The income statement suggests that the break-even point (operating cost minus depreciation) will be attained in the fourth year, when the capacity utilization rate reaches 44% (at a unit cost of US$107 per day per student). The overall equilibrium (including depreciation to allow for reinvestment) is attained from the fifth year at a utilization rate of 60% or higher. To achieve this goal, an intensive marketing campaign will be needed from the Center management team to: diversify DLC products and services and win customer loyalty through steadily improving quality of service, competitive pricing, and providing training courses that meet expressed demand and client expectations. This emphasizes the importance of a qualified business-oriented manager to develop effective marketing tools and attract enough clients to ensure Center competitiveness and financial sustainability. 5. Initial pricing of the Center's services aims at promoting DLC products and attracting more professionals and decision-makers to strengthen their management and policy formation capacity, which is difficult to quantify in economic and financial terms. Consequently, the operating deficit of the first three years will be covered through special Governnent support through IDA credit proceeds from this proposed LIL. This financial support will match the exact deficit (without depreciation), projected to be around US$688,000 for the first three years, making up 54% of generated income over that period. This support will be provided on a decreasing basis over this 3-year period as follows: 80% of operating cost in the first year, 60% in the second, and 40% in the third. As the initial training rate, US$100 per person, is in the low range, it may be raised in relation to the market demand for certain high-demand courses. A flexible market-driven pricing policy should improve the financial viability of the project.  -25 - Annex 5.b: Financial Summary for Revenue-Earning Project Entities (in US$ equivalent) Senegal: Distance Learning Project - LIL Years Ending 2005 r d _1S M o0 1 2 3 4 5 6to 10 11 to 15 operating assumption: % capacity utilisation 10% 19% 30% 44% 59% 63% 64% number of student days 800 1,475 2,360 3,465 4,580 24,705 25,000 price per student per day 100 100 100 100 100 100 100 Revenue - 80,000 147,500 236,000 346,500 458,000 2,470,500 2,500,000 Fixed Operating Cost 17,000 353,242 353,242 353,242 353,242 353,242 1,766,209 1,766,209 Satellite Bandwidth Rent - 138,696 138,696 138,696 138,696 138,696 693,480 693,480 Personnel 15,000 87,000 87,000 87,000 87,000 87,000 435,000 435,000 Maintenance - 112,546 112,546 112,546 112,546 112,546 562,729 562,729 Utilities 2,000 15,000 15,000 15,000 15,000 15,000 75,000 75,000 Variable Operating Cost - 25,000 25,000 25,000 25,000 25,000 125,000 125,000 Total Cost 17,000 378,242 378,242 378,242 378,242 378,242 1,891,209 1,891,209 Operating Profit I Deficit (17,000) (298,242) (230,742) (142,242) (31,742) 79,758 579,292 608,792 Grant for Operating Cost 17,000 298,242 230,742 142,242 - -l Total Operating Profit / Deficit - - - - (31,742) 79,758 579,292 608,792 Depreciation - 163,209 159,043 164,043 169,043 169,043 682,713 616,046 Commitment Fee I Interest - - -I Net Income (163,209 159,043 164,043 200,784 89,284 103,421) (7,255 Resources Net Income - (163,209) (159,043) (164,043) (200,784) (89,284) (103,421) (7,255) Depreciation added back - 163,209 159,043 164,043 169,043 169,043 682,713 616,046 Loan / Credit Proceeds 1,109,136 35,000 30,000 30,000 - - - - Total Resources 1,109,136 35,000 30,000 30,000 (31,742) 79,758 579,292 608,792 Expenses Initial Investment 1,109,136 35,000 30,000 30,000 - Replacement/ Reinvestment - - - - 735,317 517,553 Loan Repayment (Principal) - - - - - - Total Expenses 1,109,136 35,000 30,000 30,000 - 0 735,317 517,553 Net Cash Flow - - - - (31,742) 79,7581 (156,026) 91,238 Net Cumulative Cash - - - - (31,742) 48,017 (108,009) (16,770) Net Fixed Assets 1,109,136 980,927 851,884 717,842 548,799 379,757 2,631,466 2,022,436 Plus Cumulative Depreciation 163,209 322,252 486,294 655,337 824,379 3,099,214 3,523,244 Fixed Assets * 1,109,136 1,144,136 1,174,136 1,204,136 1,204,136 1,204,136 5,730,680 5,545,680 Total Assets 1,109,136 1,144,136 1,174,136 1,204,136 1,172,394 1,252,153 5,185,317 5,723,241 LongTerm Loan 1,109,136 1,109,136 1,109,136 1,109,136 1,109,136 1,109,136 5,545,680 5,545,680 Equity (Capital & Retained Earnings) - 35,000 65,000 95,000 63,258 143,017 (360,364) 177,561 Total Liabilities 1,109,136 1,144,136 1,174,136 1,204,136 1,172,394 1,252,153 5,185,317 5,723,241 Operating Profit as % of Revenue -373% -156% -60% -9% 17% 23% 24% Net Cash as % of Revenue - - - _9% 17% -6% 4% Investment as % of Operating Profit -12% -13% -21% - - 127% 85%  -26- Annex 6: Procurement and Disbursement Arrangements Senegal: Distance Learning Project - LIL Procurement A. General 1. A Country Procurement Assessment review (CPAR) was carried out in July 1994, which findings remain valid for this program. In general, Senegal's procurement laws and regulations do not conflict with IDA Guidelines. No special exceptions, permnits, or licenses need to be specified in the Credit documents for International Competitive Bidding (ICB), since Senegal's procurement practices allow IDA procedures to take precedence over any contrary provisions in local regulations. IDA-financed Works and Goods or contracts financed by other donors eventually administered by IDA will be procured in accordance with Bank's Guidelines under IBRD Loans and IDA credits (January 1995, revised in January and August 1996, September 1997 and January 1999). National Competitive Bidding (NCB) advertised locally in at least two local newspapers of wide circulation would be carried out in accordance with Senegal's procurement laws and regulations acceptable to IDA provided that: (i) any bidder is given sufficient time to submit bids (four weeks); (ii) bid evaluation and bidder qualification are clearly specified in bidding documents and not be applied arbitrarily; (iii) no preference margin is granted to domestic manufacturers; (iv) eligible firms are not precluded from participation; (v) award will be made to the lowest evaluated bidder in accordance with predetermined and transparent methods; (vi) bid evaluation reports will clearly state the reasons for rejecting any non-responsive bid; and (vii) prior to issuing the first call for bids, draft standard bidding documents are submitted to IDA and found acceptable. IDA-financed contracts for Consultants Services will be procured in accordance with the Bank's Guidelines for the Selection of Consultants by World Bank Borrower published in January 1997, revised in September 1997 and January 1999. The standard Request for Proposal, as developed by the Bank, will be used for appointment of consulting firms. Simplified contracts will be used for short-term assignments, i.e., those not exceeding six months, carried out by firms or individual consultants. 2. Procurement Arrangements. The following procurement arrangements, presented in Table A, will apply to all contracts financed by the IDA credit. These anrangements were agreed upon during appraisal and were confirmed at negotiations. Table A: PROJECT COSTS BY PROCUREMENT ARRANGEMENTS (in US$ million equivalent including taxes, duties and contingencies) Expenditure Category Procurement Method Total Cost [CB NCB Other (incl. Cont.) 1. Civil Works 916 2. Goods (Office Furniture! Other equip.) $193.146 ($193,146) $28,600 ($28,600) $221,746 ($221,746) 3. Consultant Services and Training $66,997 ($66,997) $66,997 ($66,997) 4. Operating Cost _ a) Satellite bandwidth rent $762,828 ($270,742) $762,828 ($270,742) b) Operating expenditure $1,099,056 ($249,160) $1,099,056 ($249,160) 5. PPF 1,272,9521 (1,272,952) 1,272,952 (1,272,952) Total $0 ($0) $193,1461 ($193,146) $3,230,433 ($ 1,888,4515) $3,423,579 ($2,081,597) Figures in brackets represent IDA financing  - 27 - B. Procurement of Goods and Works 3. National Competitive Bidding (goods): Contracts for goods include office furniture (tables and chairs for the computers and conference rooms). These contracts are expected to be carried out by local suppliers, and bidding procedures and contracts will be managed by AGETIP under a Contract Management agreement. All contracts for goods which cost the equivalent of $50,000.00 or more, up to an aggregate amount not to exceed $0.36 million for works and $0.2 million for goods, would be procured through NCB in accordance with procedures acceptable to IDA. 4. Other Procurement Methods: Equipment for the Network access and for the videoconference room will be procured by the Bank (ISG department) ) on behalf of the Borrower (for compatibility reasons with the Global Distance Network) on a direct contracting basis to benefit from a bulk discount from Bank suppliers. This will be procured under the same contract as Bank network access equipment, which was awarded competitively. To this end, an agreement has been signed between the Government of Senegal and the International Development Association (IDA). Satellite Bandwidth Rent contract will be procured on a direct contracting basis (one supplier selected under the Bank umbrella). Small quantities of office supplies, a vehicle for the Center's operation, an electricity generator, and data wiring estimated at less than $50,000.00 per contract up to an aggregate amount not to exceed $0.3 million will be procured on the basis of national shopping in accordance with paragraphs 3.5 and 3.6 of the Guidelines. 5. Prior and post review by the Bank for Works and Goods contracts: All IDA-financed works and goods contracts above the threshold of US$50,000 per contract will be subject to prior review (PR) procedures in accordance with the Bank's Guidelines. Contracts under these thresholds will be subject to post review. Review thresholds are specified in Table B below. C. Procurement of Consulting Services 6. Recrtitment of consulting firms for design of a financial management system of the DLC will be carried out under the Quality and Cost Based Selection method (QCBS) in accordance with Bank Guidelines. Consultant services for the annual financial audit of the DLC and other audit services will be carried out under the Least Cost Based Selection Method (LCBS). Single Source Selection (SSS) will be used for the hiring of the Delegated Contract Management Agency (AGETIP). Contracts for these services will be awarded on a sole-source basis as they require specialized consultants and quick intervention to establish the Center. Tasks that do not require a multidisciplinary team and that are limited in scope will be procured on the basis of a comparison of qualifications (CVs) among a minimum of three qualified individual consultants in accordance with Bank Guidelines. 7. Prior and post review by the Bank for consultant contracts: Consulting assignments with firms and individuals that cost more than US$50,000 per contract and the contract with AGETIP will be subject to prior review by IDA. Review thresholds are given in Table B below.  - 28 - TABLE B: THRESHOLDS FOR PROCUREMENT METHODS AND PRIOR REVIEW Expenditure Contract Value Procurement Esbtmated Total Category (Threshold) (US$) Method Value Subject to Prior Review (PR) (US$) 1. Goods Office Furniture & 193,146 ($50,000) NCB PR = 193,146 other equipment 2. Consultant services 165,000 ($50,000) QCBS 0 Or LCBS 50,000 ($50,000) Individual Consultant 0 Contract Mgt Agency (AGETIP) 30,000 ($0) Sole Source PR = 30,000 D. Procurement Implementation Schedule and Advance Procurement Actions 8. The detailed investment implementation schedule will be presented in the Project Implementation Manual. This timetable will be used as a basis to monitor procurement processing. In particular, the following advance procurement actions have been identified and agreed with the Borrower: (a) draft technical specifications of the various equipment of the DLC; (b) draft terms of references and letter of invitation for works supervision; (c) blueprints are under way for various retrofitting scenario of the site, (d) draft bidding documents for goods to be procured by AGETIP. E. Overall Risk Assessment and Proposed Supervision Arrangements 9. The project appraisal did not include a formal Procurement Assessment Review (PAR) as the entity to be managing the project had just been created. However, most of the required procurement for this project was achieved during the preparation phase and most of it was handled by AGETIP. Also, National Bidding Procedures for public sector procurement in Senegal are in the process of being revised with the assistance of the Bank. A revised procurement code is expected to be approved soon, which will introduce simplified procedures and training of staff supported under an IDF Grant, and it is expected that the current National procurement framework will improve. Remaining procurement under the project will be handled by the Manager of the Distance Learning Center. They involve mostly office supplies, vehicle operating costs, salaries and other miscellaneous items. An evaluation of the capacity of the DLC in the area of procurement will be carried out once the Management Unit is established, to assess any need for training or recruitment of ad-hoc external services. Proposed frequency of supervision missions is one every six months including ex-post review of procurement decisions. F. Monitoring and Reporting 10. Accounting, Auditing and Reporting. DLC will maintain separate accounting records for the project components that it manages directly and for its own operations. An accounting and financial management system will be set up in DLC prior to the project effectiveness. In addition to its financial statements, DLC agreed during negotiations to submit a quarterly report, one month after the end of each quarter, presenting a summary of sources and uses of funds, procurementlcontracts schedule and statement and summary of expenditures by component and by category. Assurance has been obtained from the  -29 - Borrower that implementing agency accounts and financial statements, and the Special Account maintained by the Distance Learning Center will be audited annually in accordance with international audit standards by experienced and recognized audit firms satisfactory to IDA. 11. At the end of its fiscal year, but no longer than six months after its completion, the borrower and DLC will present to IDA financial audit reports of: (i) the Special Account as well as a special opinion on the SOEs; and (ii) DLC accounts and financial statements. 12. Financial Management and Reporting: (See Annex 8) As the implementing agency for this project, (the DLC) is a new entity, the project will begin with the LACI compliant system and disbursement arrangements through a Special Account and SOEs. The DLC will produce quarterly activity reports. After one year of project implementation, the financial management system and reporting system will be reassessed to shift from the SOEs-based disbursement system to a LACI-compliant disbursement system. Disbursement Arranaements 13. The proposed allocation of the credit is shown in Table C. The IDA project credit will be disbursed over a period of four years (from 2000 to 2004), with a closing date of April 30, 2004. 14. All applications to withdraw the proceeds of the credit will be fully documented for contracts subject to prior review by IDA. For contracts not subject to IDA prior review, disbursements will be made against Statements of Expenditures (see below) certified by the Financial Manager of the DLC. TABLE C: ALLOCATION OF LOAN PROCEEDS (IN SDR) (RATE OF FEBRUARY 29, 2000: 1 SDR = US$1.33995) Expenditure Category Amount % of Expenditures to be Financed 1. Goods 50,000 90% 2. Consultant service and training 50,000 100% 3. Operating Costs 500,000 90% 4. Project Preparation Advance Refunding 950,000 5. Unallocated 50,000 Total 1,600,000 Use of Statements of Expenditures (SOEs) 15. Statements of Expenditures (SOEs): Disbursement on the basis of Statements of Expenditures may be made for expenditures: (a) under contracts for civil works and goods costing less than US$50,000 equivalent each; (b) under contracts for the employment of consulting firms and individual consultants worth less than US$50,000 and US$25,000 respectively per contract. Supporting documents for SOEs will  - 30- be retained by the DLC and AGETIP and will be made available for review by Bank staff during supervision missions. The SOEs will be audited annually. Special Account 16. Special Account (SA): To facilitate project implementation, a Special Account will be established by the Borrower in the name of the DLC of Senegal in a commercial bank on terms and conditions satisfactory to IDA. The DLC will operate this SA. The authorized balance of the SA will be US$ 100,000. This amount is estimated to cover about three months of expenditures. The Special Account will be replenished through the submission, by the Borrower, of fully documented withdrawal applications to IDA, which will have been prepared by the DLC. Reimbursement applications submitted against the SA will include a bank statement showing account activity since the last application, with the balance certified by the bank holding the Special Account, and a reconciliation statement. The Borrower will submit replenishment requests to the Special Account on a monthly basis, or whenever the account is diminished by one third, whichever comes first. Upon credit effectiveness, 50% of the authorized allocation (or US$50,000) will be disbursed to the SA. The remaining 50% of the authorized allocation will be advanced to the SA once SDR 250,000 has been disbursed. 17. The SA will be used for all expenditures valued at less than 20% of the amount advanced to the Account. Direct payments and applications for issuance of Special Commitments must therefore equal at least 20% of the amount advanced to the SA.  -31 - Annex 7: Project Processing Budget and Schedule Senegal: Distance Learning Project - LIL Time taken to prepare the project (months) 4 4 First Bank mission (identification) 03/09/1999 03/09/1999 Appraisal mnission departure 07/06/1999 07/1011999 Negotiations 02/20/2000 03/08/2000 Planned Date of Effectiveness 05/15/2000 Prepared by: former Ministry of State Modernization Preparation assistance: PPF Advance Bank staff who worked on the project included: Marc Lixi Task Leader, AFMSN Alassane Diawara Principal Operations Officer, AFMSN Joseph K. Ingram Program Manager, World Bank Institute (WBI) Mehdi Roustayi Senior Information Technology Officer, ISGGC Michael Foley Senior Distance Education Specialist, WBIDL Axel Baumler Financial Analyst (Consultant, AFTQK) Amadou Tidiane Tour. Procurement Officer, AFMSN Ahmadou Moustapha Ndiaye Financial Management Specialist, AFMSN Serge Theunynck Sr. Implementation Specialist, AFTH2 AFMSN = Senegal Country Office, Dakar, Senegal ISGGC = Infornation Solutions Group, Global Connectivity Solutions WBIDL World Bank Institute, Distance Learning Unit AFTQK Operational Quality and Knowledge Services, Africa Region AFTH2 = Human Development 2, Africa Region  - 32 - Annex 8: Financial Management Arrangements Senegal: Distance Learning Project - LIL 1. The Distance Learning Center Project will establish a financial management system, acceptable to IDA, which will provide accurate and timely infornation regarding resources and expenditures. The financial management system will include accounting, financial reporting and auditing elements. Financial Management Assessment 2. The implementing agency for the project will be the Distance learning Center (DLC) that will also have the responsibility of the overall financial management of the project. A review of DLC financial management capacities was done during project preparation to assess the adequacy of the accounting and auditing practices, standards, and internal and other controls to ensure adherence to accounting and auditing standards and reporting formats acceptable to the Bank. The review was also intended to determine: (i) whether DLC can satisfy Bank requirements for the use of special accounts and statements of expenditures, and (ii) the eligibility of this entity for the LACI-based disbursement method. The main findings of this assessment have been taken into account to define an action plan. These findings are summarized hereafter. 3. The Distance Learning Project is composed of two components. Comnonent 1 - Distance Learning Center Retrofitting - will comprise building facilities for establishment of the DLC and equipment of the DLC, including: (i) a videoconference room with a 30-person capacity, (ii) a computer room outfitted for 30 computer stations, (iii) a technical and administrative center, and (iv) mechanical outfitting, such as installation and/or upgrading of electrical and telephone wiring. Component 2 will provide support for DLC operation through: (i) financing of DLC operation costs on a decreasing basis over the first three years of operation, (ii) purchase of a vehicle to facilitate transport and marketing of DLC services, and (iii) technical assistance for the training of Center staff, periodic evaluation of center operation and management effectiveness, and establishment of financial accounts and their annual audit. 4. It is important to note that most Component 1 activities will be implemented during project preparation and financed under the PPF. Hence, mainly Component 2 activities will be implemented during the life of the project from effectiveness to completion dates. The total amount to be disbursed during this last period is estimated at US$900,000 covering mainly operating costs such as satellite bandwidth and servicing costs, personnel, maintenance, utilities. Given these factors, the present project can be considered as "small Bank operation" in terms of amount and complexity. Therefore, the financial management system has to be simple to install, although some specific needs must be covered and will be taken into account in the design of the system. 5. The implementing agency of the project, the Distance Learning Center (DLC), has been established as an autonomous nonprofit agency. Given that it is a new entity, the assessment of its financial management capacity at this stage consists in identifying the needs to be fulfilled and defining an action plan to develop an appropriate and adequate financial management system satisfactory to IDA, to be in place prior to project effectiveness.  -33- Financial Management System, reporting, auditing and staffing I. Accounting: The DLC will have the responsibility of the project's overall financial management. It will have to maintain both the project's accounts and its own set of accounts as an autonomous nonprofit yet revenue-earning entity. This second aspect is very important as it will help in the assessment of the DLC's performance regarding its objective to mobilize an increasing share of financing for its operating expenses, to achieve self-sufficiency within the project implementation period. Given this objective, the financial viability of the DLC is vital to the success of the project. To meet these requirements, DLC will be equipped with a computerized financial management system appropriate to the scale and nature of the project and capable of recording and reporting the project's operations by components, sub-components, activities, expenditure categories, regardless of origin of funds, as well as its own operations. The computerized financial management system will be multi-currency and include the following modules which should be integrated: general accounting, cost accounting, budgeting, contract management, fixed assets register, preparation of withdrawal applications, reports generating. 2. In addition, a manual of administrative and financial procedures will be developed for the project. It will describe: (i) the overall organization of the project and that of the DLC including job descriptions; (ii) the accounting system: chart of accounts, cost accounting coding, accounting standards to be applied for the project, presentation of main accounts entries, formnat of the project's financial statements and other reports including PMR, diaries, filing system, etc; (iii) the various operational procedures including budget management (planning and monitoring), procurement of goods and services, recording transactions in the books of accounts, disbursement, reporting, etc.; and (iv) internal control procedures. 3. Terms of reference have been prepared and agreed on with the Government of Senegal during project preparation. They specify the Consultants scope of work which include the following aspects: (i) development of the manual of administrative and financial procedures, (ii) installation of a computerized financial management system, and (iii) training and assistance. 4. Financial reporting: Two sets of financial statements will be required: the project's separate financial statements and the DLC's (as an autonomous agency) financial statements. The project's separate financial statements will comprise: (i) a statement of Source and Application of Funds for the project during the current financial year, and cumulatively since the start of the project, and (ii) a balance sheet. These two financial statements will be prepared annually. In addition, DLC agreed during negotiations to submit a quarterly report using the LACI models including financial statements, procurement/contracts schedule and output monitoring, one month after the end of each quarter. Given the size and nature of activities to be financed during the implementation period comprising mainly operating costs, DLC should be able to make accurate expenditure forecasts which are necessary to prepare the LACI model financial statements. 5. Due its legal status as an association, DLC is required for its own operation to follow the West African Accounting System, commonly called SYSCOA, under which a set of financial statements must be prepared annually. They include a balance sheet, an income statement and a cash flow statement, which will provide the necessary information on the financial situation of DLC. DLC will be required to submit these annual financial statements to the Bank. In addition, an interim quarterly income statement showing comparisons of actual and budgeted incomes and expenses will be required. 6. Auditing: The financial statements of the project will be audited for each fiscal year by an independent auditor acceptable to IDA in accordance with standards on auditing also acceptable to IDA. Audit reports of reasonable scope and detail would be submitted to IDA within six months of the end of the audited period. The auditor will provide an opinion on:  - 34 - * the project financial statements (statement of Source and Application of Funds and Balance sheet); * the statements of expenditures (SOE); and * the special account (SA). 7. In addition to the audit of the project's financial statements mentioned above, DLC's proper financial statements will also be audited for each fiscal year by an independent auditor acceptable to IDA in accordance with standards on auditing also acceptable to IDA. Audit reports of reasonable scope and detail would be submitted to IDA within six months of the end of the audited period. 8. The auditor will also issue a separate management report on Internal Controls and operational procedures outlining any recommendations for improving internal accounting controls and operational procedures identified as a result of the financial statement audit. 9. The audit report will be submitted to IDA within six months after the end of each financial year. The selection of an auditor acceptable to IDA is a condition of effectiveness. Terms of reference for the recruitment of the auditors have been drafted and agreed on with the Government of Senegal. 10. Staffing: A qualified accountant acceptable to IDA will be hired to operate DLC as well as the project's fmancial management system. He/she should be in place prior to project effectiveness and his/her recruitment according to the terms of reference already drafted and agreed on with the Government of Senegal is a condition of effectiveness. PMR (Project Management Report) based disbursement 11. As mentioned above, all the tools necessary to prepare a quarterly PMR will be in place by the date of effectiveness. These tools consist of the computerized financial management system and the manual of administrative and accounting procedures. The computerized financial management system will be customized to the specific needs of the project to allow an automatic generation of the quarterly PMR according to the models presented in the LACI Implementation Handbook and Financial Management Manual (draft version). However given that the project implementing agency, DLC, is a new entity and despite all measures proposed above to develop appropriate financial management capacity, it is recommended to begin with traditional disbursement arrangements through a Special Account and SOEs (statements of expenditures). It is expected that after one year of project implementation, the implementing agency's financial management capacities will be strengthened enough to prepare accurate PMRs that could be used as a basis of disbursement as required under LACI. A new assessment of the financial management system will be done after 12 months starting from date of effectiveness for compatibility with LACI and to propose the use of the PMR-based disbursement method or any strengthening action plan necessary to meet LACI requirements.  -35 - Annex 9: Documents in the Project File* Senegal: Distance Learning Project - LIL A. Project Implementation Plan B. Bank Staff Assessments Summary of Negotiations (held March 8-9, 2000) Minutes of Decision Meeting (held on October 26, 1999) - e-mail dated November 8, 1999 C. Other Request for Supplemental PPF advance, dated January 6, 2000 Request for PPF advance, dated October 19, 1999 *Including electronic files.  -36- Annex 10: Statement of Loans and Credits Senegal: Distance Leaming Project - LIL Status of Bank Group Operations (as of May 31, 2000) Difference Between Closed Last Project Status Report Expected and Projects: 87 (PSR) Actual - IDA = 68 - IBRD = 19 Board Supervision Ratina Original Amount in USS Disbursements Date S = Satisfactory Millions Fiscal HS = Highly Satisfactory Year Active Projects Development Implementation IBRD IDA Cancel. Undisb. Oria. Frm Rev'd Obiectives Proaress 1995 P035615 COMM NUTRITION S S 0 18.2 0 1.54 3.74 3.77 ' 1995 P002376 PRIV.SCTR.CAP.BLDG S S 0 12.5 0 3.86 4.73 3 1995 P002346 WATER SECTOR HS S 0 100 0 54.25 65.47 61.02 1996 P002373 HIGHER EDUC I S S 0 26.5 0 11.2 -0.87 0 1996 P035621 PILOT FEMALE LITERAC HS HS 0 12.6 0 3.83 -2.18 0 1997 P041567 ENDEMIC DISEASES S S 0 14.9 0 12.91 8.19 2.33 1997 P046648 REGIONAL POWER s S 0 10.5 0 5.33 5.26 0 1997 P046768 SUST.PART.ENGY.MGMT. S S 0 5.2 0 3.99 2.52 0.11 1997 P044383 URBAN TRANS REF TA S S 0 6.6 0 3.03 2.74 0 1998 P051610 AG.EXPORT PROMOTION S S 0 8 0 6.16 2.51 -0.46 1998 P051357 ENERGY SEC. ADJ. S S 0 100 0 74.63 73.95 0 1998 P002369 INTEGR.HEALTH S.DEV. S S 0 50 0 35.94 17.92 0 1998 P002365 URB DEVT & DECEN PRO S S 0 75 0 58.68 24.09 0 1999 P002367 AGR.SRCVES&PROD.ORGS S S 0 27.4 0 27.16 11.41 0 1999 P002366 TRANSPORT II S S 0 90 0 82.94 -1.06 0 2000 P057996 NAT.INFRA.PROGRAM 0 28.5 0 27.57 0 0 2000 P047319 Quality Education For All Program 0 50 0 49.32 0 0 2000 P067498 Y2K NATIONAL ACTION PLAN S S 0 10.15 0 9.65 3.75 0 SUPPORT 2000 P055472 URBAN MOBILITY IMPROVEMENT 0 70.00 0 69.76 0 0 PROJECT TOTAL 0 716.05 0 541.75 222.17 69.77  - 37 - SENEGAL IFC - Committed and Disbursed Portfolio (As of April 30, 2000) (in US Dollars Millions) Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Paffic Loan Equity Quasi Partic 1980 BHS 0.00 .46 0.00 0.00 0.00 .46 0.00 0.00 1994/96 SOGECA 0.00 .28 0.00 0.00 0.00 .28 0.00 0.00 1996/97/98 AEF SERT .56 .43 0.00 0.00 .56 .43 0.00 0.00 1997 GTI DAKAR 11.81 1.59 0.00 9.81 5.91 1.27 0.00 7.13 1998 SEF SENTA .26 0.00 0.00 0.00 .26 0.00 0.00 0.00 Total Portfolio: 12.62 2.76 0.00 9.81 6.72 2.45 0.00 7.13 Approvals Pending Commitment Loan Eauity Ouasi Partic 1998 GTI DAKAR 3.11 .22 0.00 0.00 1999 CDS 13.50 2.35 2.35 0.00 Total Pending Commitment: 16.61 2.57 2.35 0.00 Note: BHS = Banque Habitat du Senegal (financial) SOGECA = Societe generale de credit automobiles (financial) AEF = Africa Enterprise Fund SERT = Societe d'exploitation des ressources thonneres (fishery) GTI-DAKAR = Power project SEF SENTA = Small Enterprise Fund, Senegal Tanerie (leather) CDS = Ciment de Sahel  - 38 - Anntex I11: Country at a Glance Senegal at a glance POVERTY*i4SOCIAL Shrn Lw San.~aI AMos = Dev.loprnent di.morK* Popuflo~~~,nld-year (flOi*iofl*) 92 52a 3.515 ~~~ Life expectancy ppulatlon ME 2.7 2.8 1.7 flitoat yes availabl, 199346) . 2.8 .1.9 GNP o Gross per primary Oat JISCOOt Oat mats ~~~~~~~~~~~capita enrollment Povert (% o(popod8tion ow neUonapovertyAfrse) . . pJronpopuxatio (% d(owa p000ltio 45 3 3 La ercpectancyatblfIh(yera 52 51 831 YnanmothyWr1,0WA4vbfths) .. 91 6 CMdinaraito fixn at Wicldren qrifd*r5 22 . .Access to safe water Il1111a101 0(%o/puhi6i6ig 154) 87 42 32 GssriayenrollmOnf (% al'seoc$.g. p io; Senegal Mlale7 844 11 Low-Incorne group Female ~~~ ~~~ ~~~~ ~ ~~57 89 10 _ _ _ __ _ _ _ _ __ _ _ _ _ _ 21 4.7 ~~~~~~Economlc raioe Gmesdomeoft, lnveamentiDP 11A 1 1.9 19,68 2. rad 6E6llaof ogoode old serOceeG0P 30.9 28.7 33.3 32.4 GrOss ftomWe*tIc /GOP 2. . 49 14. Cuerret scoownt balane/GP 451 07 4. 70 Dmsi Interest paymontslGDP i8 32 1.9 1.7 D t Investment Total debt/GOP 40~~~~~~8 70.7 71.0 65 Savings Present valu &09ebtGOP . . 4. 2 Indebtedness tavrao annual grwth) - eea GOP 2.9 3,0 5.7 5. 4.8 eea GNP pmcapita -0.1 046 3.9 2.4 2.1 Low-income group Exports of goocts nSW vices 3.0 2.4~ CO28. 8. ___________ STRUCTURE of the ECONOMY (% of GDP) ~ ~~~~1979 1989 1998 1999 Growth of Investmnent and GDP(% Agriculture 23.7 19.4 17.4 17.8 15 Industry 15.0 16.8 24.1 25.3 . Manufactunng 10.4 13.3 15.8 16.7 Services 61.4 61.9 58.5 5669 05 5 9 9T s 9 Private consumption 80.3 78.0 76.3 75.4 .10 General government consumption 17.3 15.6 10.3 10.2 OD -0.GOP Imports of goods and services 40.0 32.1 38.0 39.3 _________________ (average annua growth) 1979-89 1989-99 1998 1999 Growth of exports and imports(% Agriculture 1.8 1.6 -1.7 6.1 15 Industry 4.2 4.3 8.8 7.7 i0 Manufacturing 4.6 2.6 7.6 4.8 Services 3.0 3.1 7.1 3.9 Private consumption 2.2 3.0 2.8 3.7 9ogrl a g General government consuimption 3.4 -1.7 3.2 4.7 Gross domestic investment 4.1 3.5 7.8 9.4 .10f Imports of goods and services 1.7 0.7 8.0 6.6 -Expofts --Imports Gross national product 2.8 3.4 6.7 5.1 ----________________ Note: 1999 data are preliminary estimates. The diamonids show four key indicators In the country (in bold) compared with Its income-group average. If data are missing, the diamornd wAIl be incomplete.  - 39 - Senegal PRICES and GOVERNMENT FINANCE Domestic pes" 197i 1989 1998 19"9 Inflaton (%) (% change) 40 . Consumer prces 9.7 0.4 1.1 2.0 30 - Impliit GDP deflator 9.7 0.9 2.2 1.9 20 . Government flnance 10 - (% of GDP, incdudes current grants) 0o 5 I Current revenue 18.4 17.8 17.3 17.1 -10 94 4 go 97 go so Current budget balance .. -0.1 5.8 5.0 - GDP deflator -CPI Overall surplustdefidt .. -2.9 -2.6 -4.0 1 1 TRADE (US$ mJllions) 1979 1989 1998 1999 Export and import vwels (US$ mill.) Total exports (fob) 478 759 965 1,017 1,000 Groundnut 150 54 56 Fish 70 25 31 1,200 * Manufactures 167 265 281 1,000 Total imports (ri). 1,134 ,376 1,493 $Do _ Food .. 334 311 325 400 Fuel and energy 155 179 193 2_ Capital goods 173 211 245 o _ _ _ _ _ Exportprtceindex(1995=100) .. 104 104 113 93 94 96 tl 97 go W4 Importpriceindex(1995=100) .. 83 94 99 *Exports Kinrports Terms of trade (1995=100) .. 127 111 114 BALANCE of PAYMENTS (US$ mnilions) 1979 1989 1998 1999 Current account balance to GDP (%) Exports of goods and services 816 1,255 1,538 1,621 0 Imports of goods and services 1,104 1,514 1,844 1,965 2 Resource balance -288 -260 -307 -344 -4 Net income -79 -205 -38 -39 Net current transfers -48 16 53 31 4 I'll" ' Current account balance -415 448 -289 -352 - Financing items (net) 265 543 312 426 -10 Changes in net reserves 150 -95 -23 -74 -12 Memo: Reserves induding gold (US$ millions) 34 31 426 486 Conversion rate (DEC, 1ocaYUS$) 212.7 319.0 590.0 591.6 EXTERNAL DEBT and RESOURCE FLOWS 1979 1989 1998 1999 (US$ millions) Composition of 1999 debt (USS mill.) Total debt outstanding and disbursed 1,122 3,269 3,324 3,275 IBRD 41 94 9 5 IDA 88 592 1,448 1,588 F:. 620 Total debt service 135 359 163 158 E:S45 IBRD 6 18 8 5 __ IDA 1 6 18 15 Composition of net resouroe flo B: 1,586 Official grants 148 293 241 204 Official creditors 359 573 409 348 Private creditors 47 -51 -27 -28 D: 56S Foreign direct investment 6 -15 7 169 Portfolio equity 0 -205 -36 -39 C 1og World Bank program Commitments 32 22 233 0 A - IBRO E - Btlaterat Disbursements 27 49 108 145 B-iDA D0- Other muliliateri F - Private Principalrepayments 3 11 16 19 C-IMF G-Shormt-tem Netflows 25 38 93 126 Interest payments 4 13 10 1 Net transfers 21 25 82 125 Development Economics  -40 - Annex 12.a: Technical Specifications Senegal: Distance Learning Project - LIL Introduction The Distance Learning telecommunications network will provide a remote transfer of knowledge and tighter integration of educational outreach through multimedia communications. In utilizing efficiently and effectively modern telecommunication technology (DAMA for Demand Assigned Multiple Access), it provides "global service" by linking the clients and appropriate knowledge resources together in a worldwide distance leaming network comprised of interactive electronic classrooms, Intemet facilities and international telecommunications circuits. Specifically, the Distance Learning site can take advantage of the following: * voice and high speed, high capacity data and video connections simultaneously on the same network; * full capacity of the link to be automatically allocated among the various kinds of connections as needed to optimize the quality by allocating satellite transmission capacity among Distance Learning Centers based on differential demand; * any Center can communicate with any other Center without on intermediate stop at the World Bank hub (mesh connectivity); * very low reliance on local public communication lines which are subject to significant reliability problems in the "last mile" of the connection, thereby overcoming the significant local technical and logistical challenges in installing such a system; and * cost-effective management of performnance and capacity by using a shared satellite system. System description The Distance Leaming System has two components - the satellite network and the office techno logy/multi-conferencing network. The satellite network portion of the System features a VSAT (Very Small Aperture Terminal)-sized, INTELSAT Standard "G" earth station situated at the Distance Learning Center, equipped with dynamically-shared TDM and all other necessary earth station ancillary hardware and software needed to enable robust voice/FAX, data and video connectivity with the other distance leaming centers, and with the World Bank Headquarters. The office technology/multi-conferencing network portion consists of a NT/Lotus Notes based local area network (LAN), Picturetel based video conferencing, telephone system, fax and copier. A detailed list of equipment is attached in Annex 12.b. Technology and Maintenance Support The satellite network will be installed and maintained by MCI/Worldcom. The multi-conferencing and other distance leaming center equipment will be installed and maintained by World Bank ISG staff. For equipment procured locally, our recommendation is to contact out the support and maintenance of the hardware. In addition, the full-time, on-site presence of a competent Information Technology staff is mandatory for the successful operation and maintenance of the sophisticated system installed at the Distance Learning Center. A TOR for such a position is attached in Annex 12.c. Specialized training to operate the system will be provided by the World Bank. Scheduling DL sessions Using all HUGHES scheduling system, all video-conferencing sessions will be scheduled over the WEB, so it is fully automated. Training on scheduling will be provided by the World Bank during hand-over of the system.  -41 - Risk There is a risk that the technology at the Distance Learning Center will not operate satisfactorily. The Center, although operating independently, will be under the World Bank's technology umbrella. As such, it will receive special attention from the World Bank Network Group.  -42 - Annex 12.b: Distance Learning Site- SENEGAL List of Technology Equipment BASEBAND EOUIPMENT VENDOR OTY Low Density Chassis 4 Slot, Universal AC HUGHES NETWORK I 91000UMOD, CN, NR,7OMhz, DIM 50 HUGHES NETWORK I INTELSAT Channel Unit III HUGHES NETWORK 3 High Density Rack, 220V HUGHES NETWORK I Fax Interface Module 11(14.4 kbps), INTELSAT HUGHES NETWORK 3 Installation Kit, INTELSAT HUGHES NETWORK I TES Remote Install Port Manual HUGHES NETWORK I 2Wire/4Wire V.35 ICM INTELSAT HUGHES NETWORK I CISCO 2511 CISCO 3 VSAT Equipment UPS DELTEC 2 RF EOUIPMENT 3.8 INTELSAT H4 Antenna PRODLIN I RFE CN 40W 110/230V EF Data (NR) EF DATA I LNA Power Cable EF DATA I 40 deg. LNA CB EF DATA I VIDEO EQUIPMENT CODEC 4200ZX PictureTel 1 Additional Camera PTZ PictureTel I Document Camera 650 Cannon I Short Haul Modems VSU3556 Eastern Research 2 LCD Color Proiector/VGA Input DP9250 Proxima 2 Projection Screen Draper Clarion 2 T.120 APPLICATION KIT T.120 Kit with 24 Licenses PCT330 PictureTel & Dell I AUDIO EQUIPMENT Amplifier with Cables PS200 Crown I Loudspeakers Control 20 JBL 2 Wireless Microphones FMR/450C Telex 2 Microphones MX418D/C Sure 12 Phone Interface APIO Gentner I Audioconference System AP400 +AP800 Gentner I AUDIO RESPONSE EQUIPMENT (OneTouch) One Touch Site Controller Hughes I One Touch Key Pads Hughes 40 One Touch License Fee Hughes 40 LAN EQUIPMENT Active Com Hub 3M I NT Server Compaq I Server Printer HP I LOTUS Server Compaq 2 LS Software Notes I Router CISCO 2 CAT 5 Data Wiring Local Vendor I OFFICE AUTOMATION EQUIPMENT Personal Computers (Pentium IllIII) Local Vendor 40 Scaner Local Vendor I Plain Paper Fax Machine Local Vendor I Copier* Local Vendor I Telephone Lines Local Vendor 3 PABX/Telephone Sets Local Vendor 10 TV RECEIVE ONLY TV Monitors Local Vendor 3 VHS Recorders Local Vendor 3 MPEG2 Receiving System WEGNER I ELECTRICAL EQUIPMENT VENDOR OTY UPS (35KW) Local Vendor 1 Generator (45KW) Local Vendor I  -43 - Annex 12.c: Terms of Reference Distance Learning Information Technology Staff Senegal: Distance Learning Project - LIL Primary Skills/Qualifications * Superior analytical and problem solving skills; * Five years minimum experience with PC hardware and software support, including extensive knowledge of configuration and repair issues. Experience should include support of notebook computers and PC Card accessories for notebooks; * High proficiency in the use Windows NT, Lotus Notes, Word, Excel, PowerPoint, and anti-virus software); * Proficiency in designing Web pages and managing page content; * Working knowledge of client server technology and general network connectivity and maintenance issues (e.g., servers, hubs, routers, Ethernet cabling); Experience with network administration highly desirable; * Working knowledge of telecommunications equipment and software (e.g., PABX telephone configuration, and modems); * Working knowledge of videoconferencing equipment, (experience with PictureTel systems highly desirable); * Basic understanding of satellite technology (e.g. current uses and practices). Additional Skills * Must be a self-starter and possess the ability to apply knowledge and expertise to deliver high-quality work and to self-manage work program; * Ability to work in a team environment and to develop technology solutions that encourage the use of collaborative computing; A Demonstrated ability to assist end-users in learning standard software applications through demonstrations, written guides, etc. Other Requirements University degree preferably in Computer Science and two years relevant experience in the computer industry, or high school diploma and five years of highly relevant experience in the computer industry. Duties and Responsibilities * Support the Distance Learning Center's technology infrastructure; * Maintain and support NT and Lotus Notes client-server environment (40+ PCs), and administer NT/Notes activities (e.g., user names and login activity, services, regular maintenance and backup procedures, network printer connectivity, file services and IP connectivity); * Conduct regular maintenance and troubleshooting on existing office and communication technology equipment; * Participate in the design, installation, configuration and activation of new technology and communication services at the Distance Learning Center; * Maintain an up-to-date inventory of office equipment and software; * Provide expert advice and guidance to DL clients on hardware, and software.  -44 - Additional Responsibilities * Assist with hardware and software procurement and maintenance, evaluate local technology vendors, ensuring adherence to existing standards; * Provide proper security of equipment and data by ensuring that equipment is either locked or secured in place, and any data coming from outside agencies is thoroughly screened for viruses before being introduced in Distance Learning systems; * Establish regular contact with the other Distance Learning IT staff for the purpose of sharing experiences\best practices, etc. Remain abreast of the latest IT developments by maintaining regular contacts with outside vendors.