Rwanda - Second and Third Banque Rwandaise de Developpement (BRD) Projects

Documint of The World Bank FOR OFFICIAL USE ONLY Report No. 8799 PROJECT COMPLETION REPOI. RWANDA SECOND AND THIRD BANQUE RWANDAISE DE DEVELOPPEMENT (BRD) PROJECTS (CREDITS 896-RW AND 1344-RW) JUNE 28, 1990 Industry and Energy Operations Division South Central and Indian Ocean Department Africa Region Ths document has a resticted distibution and may be used by reipients only in ote perfonmne of thei offieal duties. Its contents may not othewie be dicosed wihout Wodd Bank atbhorzation.  ACRONYMS BRD - Banque Rwandaise de D6veloppement PCR - Project Completion Report SSE - Small Scale Enterprise CURRENCY EQUIVALENTS (Period Average) Unit Rwanda Franc (RwF) 1987: US$1 - RwF 78.36 1988: US$1 - RwF 77.26 1989t US$1 - RuF 80.02 FISCAL YEAR January 1 - December 31  PM OFCIaL USE ONLY THE WORtDL ANK WaRmgton O.C. 20433 U.S.A. Otl .6 O,tm.Guf Opmatmm ibaku~W June 28, 1990 tfilAUoD aTO TME RIMCUTIVE DIRECT0R$ AND THE RESIDENT SUBJECTs Project Completion Report on Rwanda - Second and Third Banque Rwandaise de D4veloppement Projects tCredits 896-RW and 1344-RW) Attached, for infomation, is a copy of a report entitled "Project Completion Report on Rwanda - Second and Third Banque Rwandaise de ODveloppement Projects (Credits 896-RW and 1344-MI)' prepared by the Africa Regional Office. No audit of this project has been made by the Operations Evaluation Departtment at this tbie. Attacbment This docuumt ha a roeited disubutin and may be used by psnts onl in tlb p _forsam of their oMcl dutiea Its contents may ot odierwise be dislsesd without WOi Bank guatbotBlmn  FOR OFC1AL USE ONLY PROUECT COMPLETION REPORT RWMNDA SECOND AND THIRD BANQUE RWANDAISE DR DEVELOPPEMENT (BRDI PROJECTS (CREDITS 896-RW AND 1344-RW) TABLE OF CONTENTS Page No. PREFACE ........... ............................1 BASIC DATA SHEET ................ ........ i.i. EVALUATION SUMMARY ........... ... ........... ..... ..... .. .... t, XINTODUCTION .............. ..* ..e,o ..1.. o. II. MACROECONOMIC AND SECTORAL SETTING ...................... 2 FirAncial Sector o* ...... 3 Main Sectoral Issues ........ . ........... 4 * Interest Rates ... o .............. 4 ASEudit irm S................ ...** 5 Macroeconomic Framework oo.......... ........... 6 III. THE INSTITUTION .............*******.......*..0*.*. 6 Ownership .. ........6 Management and Organization ........................... 6 Staffing and Training 7 OpDerating Policies .....7 Main Institutional Issues ............ 7 Technical Assistance to SSEs 7 Quality of Appraisals 7....7 IV. OPERATIONS AND FINANCIAL PERPORMAJCE .................... 8 Operations ...... ................................. 8 Portfolio .................... .................... ...... a Financial Condition ........................* ................ 9 Resource Position ..... *... ** ....... ... ********.... 10 V. ALLOCATION OF THE CREDITS ........... .*....**********. 10 Credit 896-RW ..................................... 10 Credit 1344-RW ..... O.* ......................... ....... 11 VT. CONCLUSIONS AND LESSONS LEARNED ......................... 12 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  TABLE OF CO9TENTS (cont'd.) ASMM 1. Projected and Actual Lending Operations, 1983-88 ........ 15 2. Approvals by BRD 1983-68 8.*............ 16 3. Portfolio Condition as of December 31, 1983-88 .......... 17 4. Projected and Actual Balance Sheets, 1983-88 ... ......... 18 5. Projected and Actual Income Statemente, 1983-88 ......... 19 6. Projected and Actual Financial Ratio*, 1984-88 ........... 20 7. Characteristics of Subprojects Financed under Credit 896-RW ........... ........................ 21 8. Characteristics of Subprojects Financed under Credit 1344-RW .............................................. . 22 9. Summary Description and Present Status of Subprojects Refinanced under Credits 896-RW/1344-RW ............ 23 10. Compliance ith Major Covenant. ......... .*64...... ... 28 ATTACIIIDENTS 1. Comments Received from the National Bank of Rwanda ...... 31 2. Comments Received from BRD ....... ....... ... 0. . .33  PROJECT COMPLEION REPORT SECOND AND THIRD BANQUR RWANDAISE DE DEVELOPPEMENT (BRD) PROJECTS (CREDITS 896-RW AND 1344-RW) PREfACE This Project Completion Report (PCR) covers the experience with Credits 896-RW and 1344-RW, the second and third of a series of four lines of credit to finance SSE development and other investment projects in Rvanda. They were approved in 1979 and 1983 in the amounts of US$5.2 million and SDR 6.5 million (equivalent at the time to US$7.0 million) respectively. Disbursements under Credit 896-%W were completed in 1984 and under 1344-RW in July 1989. A fourth credit, 1650-RW was approved in 1986, and is now 701 committed. Both credits under review were made to the Government; the financial intermediary channelling the proceeds to specific investment projects vas the Banque Rwandaise de D6veloppement (BRD). The PCR vas prepared by the Industry and Energy Operations Di-ision of the South Central and Indian Ocean Department of Africa, and is based on information prepared by BRD and a review of Bank documents related to the project. A Project Completion mission visited BRD during June 1989. This PCR vas read by the Operations Evaluation Department. The draft PCR vas sent to the Borrower for comments; comments received from the National Baok of Rwanda and BRD are reproduced as Attachments to the Report.  - iii - PROJECT COMPLETION REPORT SECOND AND TRIED BASQUE EWANDAISE DE DEVELOPPEHEUT IBRD) PROJECTS (CREDITS 896-RW AND 1344-RW) BASIC DATA SEEZT CREDIT POSITION As of Mar. 31, 1990 Credit No. Ori4inal Disbursed Cancelled ReEaid Outstanding 896-RW (US$M) 5.20 4.48 0.72 0.02 4.46 1344-RW (SDR M) 6.50 6.04 0.46 0.00 6.04 CUMOJATIVE ESTIMATED AND ACTUAL DISLRMEMNTS (Cumulative Percentage) Cr. 896 FY81 f,P82 FY83 FY84 PY85 Appraisal Estimate (US$ M) 1.36 4.00 5.17 5.20 5.20 Actual (US$ M) 0.18 0.37 Oe55 1.07 4.48 Actual as S of Appraisal (S) 13.2 9.3 10.6 20.6 86.1 Date of Last Disbursements March 30, 1984 Cr. 1344 FY85 FY86 I!L7 FY88 PY89 2Y90 Appraisal Estimate (SDR M) 0.92 2.33 3.74 4.96 6.05 6.50 Actual (SDR M) 0.80 2.25 2.53 5.27 5.31 6.04 Actual as Z of Appraisal (2) 87.0 96.6 67.6 106.3 87.8 92.9 Date of Last Disbursement: July 17, 1989 pROJECT DM$E 896-RW 1344-RW Ortnal Atual idnal Actual Board Approval n.a. 04/24/79 n.a. 04/05/83 Signing n.a. 07113179 n.a. 07/07/83 Effectiveness 10/15/79 01/04/80 10112/83 02/14/84 Comnitment 12/31/82 12/31/83 09/30/85 12/31/86 Credit Closing 06/30/83 03/30/84 12/31/88 12/31/88  - iv - STAFF INPUTS (staff weeks) C7r as65 FY76 FY7f FYSO fIl UflM FY8 1184 flU Itoal Preappraisal 0.3 0.5 41.7 - - 42.5 Appraisal - 2.0 14.5 - - - 1- 6.5 Negotiations 12.8 - - 12.8 Supervision - 0.7 13.4 51 3.3 2.6 7.0 0.2 32.5 Total W.1 - 3 4337. T 3 Cr. 1344 FY80 FY81 FY82 FY8 fYeS FYa LX_ fill f3iJ ITcaL Preappraisal 0.4 2.2 20.0 - - - - 22.6 Appraisat - - 22.8 18.5 - - - 4.3 Negotiations - 6.1 - - - 6.1 Supervision - 1.1 2.4 5.4 3.8 2.1 2.8 17.6 other - - Total - MISSION DATA No. of No. of Staff days Date of Performance Month/Year Persons in Field ReDort Ratint Cr. 896 Appraisal 02/78 2 24 12/13178 -- Supervision 07/79 2 12 09/25/79 1 Supervision 05/80 1 8 06/20/80 1 Supervision 06/81 2 12 07/20/81 1 Cr. 1.44 Appraisal 05/82 2 20 08/11/82 1 Supervision 11/83 1 7 05/20/83 1 Supervision 01/84 2 7 05/21/84* 1 Supervision 02/85 3 20 11122/85 1 Supervision 02/86 2 10 04/17/86 1 Supervision 10/86 2 10 11/26/86 1 Supervision 05188 1 6 06/09/88 2 OTHER PROJECT DATA Borrower: Republic of Rwanda Executing Agency: Banque Rwandaise de Developpement (BRD) Follow-on Proiects Project: Fourth Banque Rwandaise de Developpemen.t Credit No.: 1650-RW Pmount: US$9.0 million Board Date: January 14, 1986 * Combined with appraisal of BRD IV.  - v - PROJECT COMPLETION REPORT SECOND AND THIRD BANQUE RWANDAISE DE DEVELOPPEMENT (BRDI PROJECTS (CREDITS 896-RW AND 1344-RW) EVALUATION SMRMARY Ob1ectiveg 1. IDA's objectives under the second and third credits were to support the development of productive activities by providing foreign exchange financing and to continue to strengthen BRD. The second line of credit (Credit 896-RW) was designed as a follow-up project emphasizing the strengthening of the still young institution. It incorporated few changes in BRD's policies or strategies. The project had the additional objective of assisting the government in undertaking a study to asseso the need for an audit firm and to design a program for its establishment. The third line of credit continued the institution-building efforts of the previous projects, but it also had the objective of assisting in the development of small-scale enterprises (SSEs) by providlng financing for a comprehensive study of the sector and for a pilot program of lending. Under the third project, greater emphasis was given to the analysis of subprojects, and the credit documents included a requirement for a full economic analysis for non-service sector subprojecte above the free limit (para. 1.03). Im2lementation Exoerience 2. With the exception of an interest rate issue, no major problems arose during the execution of the two projects. BRD continued to expand and became the largest source of investment financing in Rwanda. While commit- ments and disbursements under the lines of credit were somewhat slower than appraisal estimates, they were below Bank averages. BRD co mitted US$4.45 million out of a total of the second line of credit of US$5.0 million for 17 projects in 2