Rwanda - Technical Assistance Project

Document of The World Bank FOR OFFICIAL USE ONLY MICROFICHE COPY Report No. 10385 Report No. 10385-RW Type: (PCR) WISE, G. / X31679 / T9 003/ OEDD2 PROJECT COMPLETION REPORT RWANDA FIRST TECHNICAL ASSISTANCE PROJECT (STUDY FUND I) (CREDIT 1217-RW) FEBRUARY 28, 1992 Country Operations Division South Central and Indian Ocean Department Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (period average) Currency Unit - Rwanda Franc (RwF. 1989: US$1.00 - RwF 79.98 1990: US$1.00 - RwF 82.60 ACRONYMS BUNEP - Bureau National d'Etudes de Projets (National Bureau for the Study of Projects) ISAR - Institut des Sciences Agronomiques du Rwanda (Agriculture Research Institute of Rwanda) MINIPLAN - Ministare du Pl&i (Ministry of Planning) MINITRAPE - Minist6re des Travaux Publiques et de l'Equipement (Ministry of Public Works and Equipment) OED - Operations Evaluation Department PCR - Project Completion Report OPROVIA - Office National pour le D6veloppement et la Commercialisation des Produits Vivriers et de la Production Animale (National Agency for the Development and Marketing of Foodcrops and Animal Products) WEIGHTS AND MEASURES Metric System Metric British Equivalent 1 meter (m) - 3.3 feet 1 hectare (ha) . 2.47 acres I are (100 m2) - 0.02 acres 1 kilometer (km) - 0.62 miles 1 square kilometer (ki2) - 0.39 square mile (sq. mi.) 1 kilogram (kg) 2.2 pounds (lb) 1 liter (1) - 0.26 US gallon (gal) - 0.22 British gallon (imp gal) 1 metric ton (m. ton) - 2,204 pounds (lb) FISCAL YEAR January 1 - December 31  FOR OMCIAL USE ONLY THE WOQ2LD BANK Washington, D.C 20433 U.S.A. Offce ccf Directo.Ceneral Op.wations EtlMutiofn February 28, 1992 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Rwanda - Fir_t Technical Assistance Proiect (Study Fund 1) (Credit 1217-RW) Attached, for information, is a copy of a report entitled "Project Completion Report on Rwanda - First Technical Assistance Project (Study Fund I) (Credit 1217-RW)" prepared by the Africa Regional Office. No audit of this project has been made by the Operations Evaluation Department at this time. Attachment This document has a restricted distribution and may be used by recipients only in the performance of their official ditties. Its contents may not otherwise be disclosed without World Bank authorization.  FOR OFFICIAL USE ONLY PROIECT COMPLETION REPORT MbM& FIRST TECHNICAL ASSISTANCE PROJECT (Study Fund I) (CREDrr 1217-RW) TABLE OF CONTENTS Pre- PREFACE ........................................................ i EVALUATION SUMMARY ............................................. iii PART I - PRCJECT REVIEW FROM THE BANK'S PERSPECTIVE ................... I I. INTRODUCTON ............................................. 1 11. THE SETllNG ............................................... I il. THE PROJECTE ............................................... 2 Objectives ................................................. 2 Compositioi ................................ 2 Concept and Design ........................................... 3 Benefits and Risks ............................................ 4 IV. IMPLEMENTATOfN ........................................... 4 Overall Performance ........................................... 4 Disbursements ............................................... 5 Creation of a Study Fund and Portfolio of Projects ........................ 6 Improving Coordination ......................................... 7 Training ................................................... 7 Improving Local Capabilities to Prepare Project .......................... 8 Establishment of a Documentation Center .............................. 8 Government Performance .. . . . ..................................... 8 Bank Management and Supervision . 8 Bank and UNDP Cooperation ....................................... 9 V. IMPACT . Extemally-Financed Projects ...................................... to Institution. ................... 10 VI. CONCLUSIONS AND LESSONS LEARNED ............................ 11 PART 11- PROJECT REVIEW FROM BORROWER'S PERSPECTIVE .................. 14 Comments on Part I ............................................ 14 Bank Performance .............................................. 14 Borrower's Performance .......................................... 1S Lessons Learned ..... ......................................... 15 This document has a restricted distribution and may be used by recipients only in the performance o of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  TABLE OF CONTE>IT (cont'd.) PART 111 - STATISTICAL INFORMATION ................................... 17 1. Related Bank Credits .................. 17 2. Project Timetable .............................................. 17 3. Loan Disbursements ............................................ 18 4. Project Implementation ........................................... 19 5. Project Costs and Financing ........................................ 19 6. Project Results . ................................................ 20 7. Status of Covenants ............................................. 22 8. Use of Bank Resources .......................................... 23  PROJECT COMPLETION REPORT RWANDA FIRST TECHNICAL ASSISTANCE PROJECT (Study Fund I) (CREDIT 1217-RW) PREFACE This is the Project Completion Report (PCR) for the First Technical Assistance Project (Fonds d'Etudes I) to Rwanda, for which Credit 1217-RW in the amount of SDR 4.3 million was approved on March 16, 1982. The credit became effective in April 1982 and was closed on June 30, 1989, two and a half year behind schedule. It was fully disbursed and the last disbursement was on May 17, 1991. The PCR was prepared by the Country Operations Division of the South- Central and Indian Ocean Department (AF3CO). There was no completion mission. The Bank sent the Borrower Parts I and III with the request to prepare Part II which was received on June 25, 1991. The PCR is based on the Appraisal Report, the Credit Agreement, reports by and correspondence between the Bank and the Borrower, internal Bank memoranda and an OED report, Free-Standing Technical Assistance for Institu- tional Development in Sub-Saharan Africa, Report No. 8573, dated April 1990.  - iii - PROJECT COMPLETION REPORT RWANDA FIRST TECHNICAL ASSISTANCE PROJECT (Study Fund I) (CREDIT 1217-RW) EVALUATION SUMMARY Obiectives 1. The main objectives of the project were to develop Rwanda's absorptive capacity by increasing the number and improving the quality of projects to be submitted for external financing, strengthening the local project preparation capabilities and improving the coordination between technical ministries and the Ministry of Planning and thus the linkages between investment planning, programming and budgeting (para. 10). implementation Experience 2. Although the project enjoyed Government commitment at the highest level and successfully introduced a mechanism for making pre-investment studies and improving interministerial coordination, it fell short of expectation in terms of expanding Rwandese capacity to prepare projects. This was due to fundamental institutional weaknesses, especially the availability of qualified personnel. Implementation was late, because of difficulties encountered in hiring consultants. Some difficulties were also encountered with respect to procurement procedures. They were resolved to the satisfaction of the Bank (paras. 24-32). Results 3. The main objective has been reached; a decision-making system for investment is in place and working. A portfolio of projects has been constituted. Forty-two studies were completed auid half of them are expected to lead to actual projects. Of these, about ten are likely to be financed by IDA. However, tangible results in the form of an increase in the level of investment has yet to materialize, due to the long lag between studies and realization (paras. 35-43). Sustainabilitv 4. Sustainability of the results depends on the awareness of the Borrower as well as the donors of the nature of institution building, in contrast to institution support (paras. 66-74). Findings and Lessons Learned 5. The project implementation shows that availability of counterpart funds plays an important role in the successful implementation of suc-.  - iv - projects. The establishment of a coordinating commission staffed with rzpresent,', Es of technical ministries was an effective way to improve coordinat .etween technical ministries and the Ministry of Planning. Civil servants re. ining in the same position of responsibility is also an important factor for -he success of such proj'icts. The project became a model for similar projects in Africa and laid the ground work for other IDA-supported technical assistance to the Covernment for economic management. A follow-up IDA credit (1796-RW) of SDR 5.9 million (US$7.4 million) was extended in 1987 for sectoral and pre-investment studies and a Technical Assistance credit for improvement of public finance management (1565-RW) for SDR 4.9 million was extended in March 1985. The project proved also a success in terms of cooperation with UNDP, in spite of the differences in management and procure- ment procedures and evaluation criteria (paras. 75-89).  PROJECT COMPLETION REPORT RWANDA FIRST TECHNICAL ASSISTANCE PROJECT (Study Fund I) (CREDIT 1217-RW) PART I - PROJECT REVIEW FROM THE BANK'S PERSPECTIVE I. INTRODUCTION 1. This project, for which an IDA credit of SDR 4.3 million was approved on March 16, 1982, was the first technizal assistance operation supported by the Bank in Rwarda. II. THE SETTING 2. Rwanda achieved its independence from Belgium in 1962. Only 26,300 km2 in size, its rapidly-growing population (at 3.7% yearly, one of the fastest in Africa), has created a population density (in terms of arable land) of 500 per kM2 in some regions -- among the world's highest. With an estimated per capita income of TJS$300 and limited natural resources, Rwanda is one of the world's poorest countries. 3. Rwanda's development has been thwarted by a shortage of qualifZed administrative, technical and managerial talent. This shortage adversely affects the government's ability to prepare and carry out projects in all sectors. 4. In an attempt to counter this, in September 1973, the government set up the National Bureau for the Study of Projects (BUNEP) with the UNDP's assistance. Starting in 1978, the UNDP financed advisers to help the Directorate of Studies (UNDP Project RWA/78/007; Technical Assistance to Planning, executed by the UN Department of Technical Cooperation for Develop- ment). This assistance contributed to improved macro-economic and sector planning for the Second Five-year Plan (1977-81) as well as the Ministry of Plan's internal functioning. However, the Directorate of Programs, which had received no direct assistance, remained a weak link in the process of project preparation. 5. In consequence, many donors by-passed the government machinery and prepared their own projects thus further undermining the development of a Rwandese capacity to prepare projects -- and of the government's authority to make its own decisions. 6. BUNEP, an administratively and financially autonomous state enterprise (but under the Ministry of Planning's control and supervision), was made responsible for preparing documentation and tenders for projects proposed for external financing. It also was expected to train Rwandese in project  preparacion and carry out ad hoc assignments, such as studies, monitoring projects, etc., on the government's behalf. 7. Despite these efforts, Rwanda's development institutions generally remained weak. Deficiencies in planning and coordination of the development program have made it difficult to translate overall macro-economic and sectoral plans into specific projects. 8. In September 1980, the President of the Rwandese Republic asked the Bank President for help in project preparation and implementation. He specifically requested the Bank to station four or five "experts" in Rwanda to help prepare and implement projects. 9. Given the UNDP's on-going involvement in assisting the Ministry of Planning and BUNEP, an arrangement was worked out whereby IDA would finance a Study Fund for project studies, training seminars, the construction of and equipment for a Documentation Center and three vehicles. The UNDP would finance key personnel: a project economist for the Planning Ministry, a financial analyst for BUNEP and a documentalist for the Documentation Center. The Bank would be the executing agency for the UNDP project. III. THE PROJECT Obiectives 10. The President's Report set out three project objectives: (i) increase the number and improve the quality of projects submitted for external financing; (ii) strengthen local project preparation capabilities; and (iii) improve coordination between technical ministries and the Ministry of Planning, and, thereby, the linkages between investment planning, programming and budgeting. Composition 11. The project compriced the following seven elements; (i) creation of a Study Fund, managed by the Ministry of Planning's Directorate of Programs, to tinance prefeasibility, feasibility and detailed engineering studies (expected to consume 545 person-months of consultant services of which 70% in the form of expatriate services); (ii) training seminars in Rwanda on project preparation and implementation (eight person-months for instructors); (iii) a UNDP-financed project economist to help the Ministry of Planning manage the Study Fund (initially for two years, renewable for another two); (iv) a UNDP-financed financial analyst to work with BUNEP (for two years initially, renewable for another two);  - 3 - (v) construction of and provision of equipment for a Documentation Center, under the Ministry of Planning, to collect and maintain documents and information needed for the davelopment program; (vi) a UNDP-financed documentalist assigned to the Document Center; (vii; two vehicles for the Planning ministry and one for BUNEP. Concept and Design 12. The project was straightforward it icept and design. In order to produce projects for foreign financing, the Study Fund would finance the necessary studies. In the process, the Directorate of Programs (principally the Rwandese counterpart) would, with the help of the project economist (adviser), become better able to manage such studies. 13. BUNEP, for its part, would enhance its ability to prepare projects by conducting some of these studies--the President's Report estimated it would carry out about 302 of them. The UNDP-financed financial analyst would facilitate BUNEP's work through a Rwandese counterpart. 14. At the same time, expatriate instructors would organize and hold training seminars on project identification, preparation and monitoring for officials in the Ministry of Planning and the technical ministries. Through these seminars, responsible officials would acquire the basic skills needed for their project work, and contribute to better inter-ministerial coordination by applying uniform criteria. 15. This approach (Directorate of Programs managing the Study Fund, BUNEP carrying out some of the studies, and the training of Rwandese officials in a series of seminars) would strengthen the Rwandese capacity for project preparation. 16. The Study Fund, as a focal point for project preparation government- wide, would enable the various agencies involved to better coordinate their activities. Each ministry would submit its proposed studies to the Ministry of Planning twice a year. After review by the Directorate of Programs (in collaboration with the Directorate of Studies), the proposals would go to an advisory couv' 3sion, chaired by the Minister of Planning. 17. The Minister of Planning would decide on an annual study program and the Directorate of Programs would be responsible for their execution, including preparing terms of reference, approving the selection of and contracts with agencies carrying out the studies. The directorate would report periodically to the advisory commission on the studies. 18. A special role would be reserved for BUNEP in carrying out studies financed by the Study Fund (e.g., BUNEP would choose those studies from the program that it deemed it could perform satisfactorily). For these, it would submit proposals to the Ministry of Planning and the technic-.l ministry concerned. If accepted by the advisory commission, BUNEP would be awarded a contract for the study. Otherwise, consultants would be selected in conformity  with Bank guidelines. IDA's approval would be required for all activities financed by the Study Fund, including those assigned to BUNEP. 19. Increasing the Ministry of Planning's effectiveness -- and having officials from the various ministries involved together in the same IDA Project -- should make for greater cooperation and coordination among the different parties concerned with Rwanda's development program. 20. To replace inadequate existing units in the Finance and Planning Ministries, the Project would construct and equip a Documentation Center. The center would maintain a collection of social and economic documents, a file of feasibility and sector studies, and other information important for planning and project preparation. 21. The three long-term advisers would draw up work plans that the Minister of Planning and the Director of Programs and BUNEP would review every six-months, during IDA supervision missions. Benefits and Risks 22. According to the President's Report, the Project would benefit Rwanda by: (i) producing "a portfolio of well prepared projects ready for submission to financing sources"; (ii) improving "local capabilities for the preparation of investment projects"; (iii) helping "strengthen the institutions involved" and better equipping the Planning Ministry "to perform its coordinating functions"; and (iv) giving "Rwanda the capacity and technical competence necessary to translate its planned priorities into coherent investment programs." 23. The Report minimized the risks stemming from the inability of the Minister of Planning to coordinate the overall activities or of the Director General of Planning to integrate macro-economic and sector planning with project preparation. The Report did acknowledge, however, that "close supervision by the Association would be necessary to set up the requisite procedures" and that the timing of expected benefits was "uncertain and could extend beyond the project period." IV. IMPLEMENTATION Overall Performance 24. Performance on the Project overall was satisfactory. Clearly, it achieved its primary objectives of generating projects for external financing and improving inter-ministerial coordination. The Project also increased the government's capacity to prepare and program pre-investment studies, but the degree of improvement and the longer-term sustainability have yet to be confirmed. The rapid rotation of persons among posts of responsibility seriously reduced the Project's impact. 25. The Project established a Study Fund that financed forty-two pre- investment studies -- a substantial number of which are expected to lead to  externally-financed projects -- and put in place the machinery for preparing such projects. 26. Although behind schedule, a documentation center to collect and maintaiu information for planning and project preparation was constructed and partially-equipped. The documentalist was recruited and assigned to the center. More than 550 Rwandese participated in 12 project-organized training seminars. 27. An inter-ministerial advisory committee for coordination was established, procedurcs for the Study Fund set out, and the initial six-month program of studies approved by IDA by the time of the first Bank supervision mission in February 1983. 28. The implementation schedule called for the first list of studies to be financed by the Fund to be ready in January 1983. Although only a little over 1% of the credit had been disbursed a year after effectiveness, implemen- tation gathered momentum in 1983. By the end of 1983, eight studies, financed from the Study Fund, were underway. Construction of the Documentation Center, however, fell more than two years behind schedule, and the closing date of the credit was extended to June 30, 1989. 29. By the original closing date (end-1986), 70% of the credit had been disbursed. It was fully disbursed by May 1991 in the same proportions as specified in the credit agreement. The government made timely contributions of counterpart funde, totalin.g RwF 96 million (which far exceeded the amount set out in the project financing plan). 30. From the limited information available in the files, it appears that none of the Bank's supervision missions reported major problems with the project, except perhaps the delays in constructing the Documentation Center. According to the initial mission in February 1983, the only problem at that time was recruiting the financial analyst (adviser) for BUNEP. The mission in October 1984 repeated the need to get the BUNEP adviser in place and to liaise better with the UNDP. 31. A mission in January-February 1986 etiphasized the need to improve BUNEP's management, appoint a Rwandese official to run the Study Fund, and make more systematic use of the fund as a link with the preparation and implemen- tation of the public investment program. Although it rated project management and dsvelopment impact both "3" (major problems), the overal'l project rating was "2" (moderate problems). 32. Most of the UNDP-financed advisers apparently carried out their responsibiliti.- to the satisfaction of all parties. An aide m6moire (July 17, 1986) noted that the government was satisfied with the performance of the experts and their collaboration with local officials. Disbursements 33. Because of the delays in recruiting key personnel, the credit became effective in April 1982 and disbursements got off to a slow start. By the end of FY1983, only US$60,000 equivalent had been disbursed, i.e., 10% of the  - 6 - amount the President's Report anticipated to have been spent by July of that year. At the end of 1985, cumulative disbursements still reached only a little over one-half of the July 1985 projected level, reflecting the problems in building the Documentation Center. Even though disbursements picked up sharply in 1985 and 1986, 30Z of the credit still had not been disbursed by the end-1986 planned closing date. The credit was to all intents and purposes fully disbursed by June 1989 (although the final transaction was not completed until May 1991). The credit was disbursed in accordance with Schedule I of the Development Credit Agreement. 34. According to the President's Report, the government was expected to supply Rwanda Francs in the equivalent of US$380,000 (Rwanda Francs 35.3 million at the 1982 exchange rate of RwF 92.84 - 1 US$) to cover part of the local costs. The actual amount provided to the Project was Rwanda Francs 96 million (the equivalent of US$1.36 million). More than one-third of the total was made available in 1983. The ready availability of these local funds was a key factor in the Project's successful implementation. Creation of a Study Fund and Portfolio of Proiects 35. As pointed out above, the Project successfully established the Study Fund, an inter-ministerial advisory committee to coordinate project preparati.)n among the various government agencies and the procedures for this coordination -- as stipulated in the President's Report. The Planning Ministry's coordina- tion of the process improved significantly. With financing from the Study Fund, 42 studies were undertaken (see Part III, Table 6-B). 36. A Tripartite Evaluation in August 1985, by the government, UNDP and Bank, concluded that the Project had helped the Ministry of Planning introduce an improved system of project selection and preparation in close coordination with the technical ministries. 37. Further, according to an Operations Evaluation Department study (Free- Standing Technical Assistance for Institutional Development in Sub-Saharan Africa, Report No. 8573) completed in April 1990, the pre-investment studies financed by the Project's Study Fund had substantially expanded Rwanda's capacity to absorb external assistance. Foreign financing was either confirmed or highly probable to fund 23 of the 27 projects for which studies had been completed at that time (including IDA financing for 10). 38. Four of the studies had demonstrated that the proposed investments were not economically feasible. In 1989 19 studies were listed as completed, 10 still in progress, 9 in the promotional stage and 4 stopped, abandoned. 39. While it had been envisaged that the studies undertaken would be based principally on the Planning Directorate's priorities and sector studies, a number were sector studies, strategies and master plans. The OED study judged that only about one-quarter could be considered pre-investment studies in the sense of the original project concept. The quality of nineteen studies completed overall was quite acceptable -- ten were judged excellent, two very good and the remaining seven average or acceptable.  - 7 - 40. The credit agreement anticipated that the studies would pretty much follow the Rwandese 1982-86 Third Five-Year Plan's sectoral priorities. About 35Z of the funds would be spent on agriculture and rural development, 25% on industry and 15% each on transport and communications (together) and on human resources. The breakdown of actual outlays was quite different: industry received one-third of the total amount, transport and communications one-quar- ter, human resource 27% and agriculture and rural development only 15%. 41. In the course of implementing the project, the different procedures that the government and the Bank followed for employing consultants, namely the letter of invitation to potential suppliers and the use of two envelopes in the submission of proposals, proved to be a continuing source of difficulty. The problem, however, was resolved. 42. Some Bank staff also viewed the Study Fund largely as a facility for preparing possible IDA projects. In their attempts to speed up the process, they dealt directly with line ministries, thus by-passing the Ministry of Planning and, in effect, subverting the Fund's basic purpose. A joint February 1986 memo from the two Bank division chiefs responsible ended the matter. 43. Another basic objective of the project, noted earlier, was the development of local capacity to prepare and monitor projects by employing local consultants, mainly the state-owned BUNEP. In fact, a special role was reserved for BUNEP in carrying out Project financed studies. The President's Report estimated that BUNEP would handle about one-third of all studies. Unfortunately, neither BUNEP (nor any other local consultants) possessed sufficient expertise or experience to satisfactorily fulfill this expectation and benefit materially from the Project. In the end BUNEP carried out only 4 studies. Improving Coordination 44. Under the Project's aegis, the Inter-ministerial Advisory Committee for Planning was created. The committee, staffed essentially by Rwandese, proved to be a highly effective tool for coordination at both policy-making and working levels. As a result, the government established another six similar committees, each with representatives from the concerned government agencies and chaired by an appropriate ministry, to foster coordination. 45. The six new committees covered (i) rural development and health, (ii) economic policy (chaired by the Ministry of Finance and Economy); (iii) industrial policy; (iv) housing, urban and regional development; (v) political and security matters; and (vi) training, employment and youth promotion. Training 46. The Project trained 550 Rwandese officials in the twelve seminars held during 1983-88 (see Part III, Table 6-C). The seminars ranged from one on project identification and preparation, lasting 15 days with 33 participants, to a three-day round table on projects with 50 participants. 47. Roughly half of the seminars focused on sector strategies -- industry, urban, environment and health. There were no seminars on the agricultural  - 8 - sector as such, however, despite the fact that this was the most important in the Rwandese economy and first priority in the development program. 48. Unfortunately, few of these participants remained in each of their positions for very long. (According to the OED study, at least forty of the civil servants who had participated in the seminars changed their responsibili- ties during the course of the Project). In consequence, they were able to acquire only limited experience in any specific area and not profit signifi- cantly from their training. Improving Local Capabilities to Prepare Proiects 49. As a means of enhancing local ability to prepare projects, BUNEP, assisted by a UNDP-financed financial analyst, was to do some of the Project studies. It carried out four of the studies. According to the 1987 Presi- dent's Report of the follow-up project (Pre-investment Studies Project), however, BUNEP's performance was not wholly satisfactory due to poor management and staffing weaknesses, particularly the lack of financial expertise. 50. IDA recommended that the Ministry of Planning perform a financial and management audit of BUNEP (which at the beginning of the follow-up project still had not been done). The Ministry also was advised to restructure BUNEP's management, introduce cost accounting, draw up a staff training program, prepare work programs and introduce improved techniques to manage studies. Establishment of a Documentation Center 51. Cot.struction of the Center fell behind schedule, due to modifications in the original plans, slow work and disputes with the contractor, and was only completed eighteen months after the target date. Appropriate staff were not assigned to the center, government support generally was weak, and the documentalist was unable to carry out his assignment satisfactorily. 52. The failure was due mainly to institutional factors that the project had failed to consider adequately (e.g., the center, which was assigned a government-wide service function, did not command a very high priority in the Directorate General of Statistics and was not appropriately staffed, etc.). Government Performance 53. Overall, the government supported the project to a marked degree. One measure of the government's commitment was its ample counterpart funding. Another indicator was its adoption of the coordinating machinery introduced by the project and internalizing and widening its use. The interest in continuing follow-up technical assistance, notably the Sectoral and Pre-investment Studies Project, which is a continuation of the project discussed here, further attests to this support. 54. As far as the credit's formal conditions were concerned, the government satisfied most of them (Part III, Table 7). The government fully complied with the accounting and auditing requirements, the procedures for hiring consultants and their rules of employment, the requirement for yearly  - 9 - submission of programs of studies and the maintenance of records and provision of information. Bank Management and Supervision 55. Bank performance on the project generally was good. The response to Rwanda's request for help in developing a portfolio of projects was prompt. The project it helped design added a longer-term institution-building dimension -- although, as already noted, it underestimated the weaknesses in the institutional environment and the measures needed to make lasting improvements. Overall, the project was well prepared and implemented. 56. Relations with the borrower and the UNDP generally were quite satisfactory. Problems created by different Rwandese and Bank procurement procedures and the UNDP's and Bank's unilateral decision not to renew the contract of the project economist were not of major nor lasting dimensions. In a similar vein, disagreements between the UNDP and Bank arising from differing documentation and administrative procedures were not serious obsta- cles. 57. The Bank's management of the Project apparently was, on the whole, low-key, bordering at times on benign neglect. The OED study concluded, nevertheless, that the method of Bank management was a good type of collabora- tion, useful for the three parties involved. 58. The Bank's supervision was irregular, in spite of the stipulation in the President's Report that, "close supervision by the Association would be necessary to help set up the requisite procedures" and minimize the "risks related to integration and coordination." It was proposed that supervision missions go every six months to Rwanda. Supervision missions visited the country in February 1983, with subsequent missions in September 1983, October 1984, September 1985 and January and September 1986. 59. In any case, the Bank's and the UNDP's resident representatives played key roles in managing arnd supervising the Project. It was doubtless their close day to day collaboration with the government that was most important to the Project's successful implementation. Frequent supervision from Washington was not essential, since timely decisions could be obtained when needed. Bank and UNDP Coop.ration 60. The project was, in effect, an amalgam of two different projects -- a UNDP iechnical Assistance project financing the four long-term advisers and part of the Study Fund and the IDA project financing the bulk of the Study Fund, training seminars, the documentation center and vehicles. As such, the two projects involved different kinds of documentation, administrative procedures, expected results, reporting and evaluation criteria. 61. While these differences, according to the OED study, created tensions from time to time, they did not seriously affect the project's execution. That study concludes that the type of collaboration in the project was very useful for the three parties involved.  - 10 - 62. That the UNDP and Bank continued this cooperative endeavor in the 1987 successor project attests further to the mutually satisfactory working relationship that prevailed. Doubtless, much of the credit for this relation- ship can be attributed to the two institutions' resident missions in Rwanda. V. IMPACT Externally-Financed Proiects 63. The US$6.38 million cost of the project represents a substantial investment for a country of Rwanda's size and economic wealth. The fact that, after eight years, the project has yet to produce any tangible results in the form of investments generating employment and financial resources is a cause for concern. 64. It is still early to evaluate the economic impact of the project in terms of level and quality of investment projects, since none have as yet been completed. About one-half of the studies, though, are expected to lead to externally-financed projects, of which a few are being considered for IDA financing. 65. The project became a model for similar study funds established in other countries and a blueprint for Bank-UNDP cooperation. A successor project, Second Study Fund, financed by an IDA credit (1796-RW) of US$7.4 million was approved in May 1987. The initial project laid the groundwork for this second project and was instrumental in generating interest among several bilateral donors in participating in the second fund. Institutional Impact 66. The project has made a positive impact in improving coordination in the government's planning and project preparation process. As a consequence of the Project, and the establishment of coordinating machinery and procedures, the Ministry of Planning enjoys greater prestige and is better able to direct and manage the planning and project preparation process. The government internalized the process well. It also appointed a Director of Project Evaluation to manage the pre-investment mechanism and ensure its administrative sustainability. 67. Moreover, extending the inter-ministerial coordinating committees government-wide hoidc out the promise of improving development policy formuilation and management. This was an unanticipated benefit of the project. The government decided to use the coordinating mechanism developed under the project for all pre-investment studies, regardless of source of financing, and all activities related to planning process itself. 68. On the other hand, however, the project made only minimal impact on longer-term institution-building. It did not -- and, given its design, could not have been expected to -- succeed in creating adequate local capacity to prepare and implement projects. As the OED report repeatedly points out, the design of the project did not take account sufficiently of the institutional weaknesses.  - 11 - 69. Most of UNDP-financed advisers apparently were effective in their specific assignments. As mentioned earlier, the government, the UNDP and the Bank all expressed their satisfaction with their performance, However, their ability to contribute significantly to long-term institution-building understandably was limited. Investment programming only started recently. 70. The project-provided training no doubt was useful in upgrading staff capabilities. But in the absence of a comprehensive, systematic program, the training did not -- nor could be expected to -- produce the needed number of trained Rwandese cadre. 71. The training seminars contributed importantly to breaking down inter-ministerial barriers and improving coordination, since each included participants from the various government agencies concerned. The seminars could not in themselves, however, be expected to substantially improve the capability of government ministries, nor to fully equip individual Rwandese officials to handle project identification and preparation. 72. This was especially true in the face of the quick turnover and frequent rotation of Rwandese government officials in responsible posts. This weakness was only a reflection of a government-wide management problem. 73. The failure of the project to satisfactorily develop the Documentation Center and BUNEP's capacity to prepare and monitor projects was described briefly in preceding sections (and is detailed in the OED study). 74. On balance, the project's major impaut was in introducing the Study Fund and the system for coordinating the preparation of projects in terms of improving local capacity for preparing projects and providing needed documents and other development information, however, its impact was limited. Any longer-term impact was to a large extent muted by the weakness of the institutions. VI. CONCLUSIONS AND LESSONS LEARNED 75. This initial IDA-financed technical assistance project in Rwanda was successful overall. It improved inter-ministerial coordination, bolstered the Ministry of Planning and established a study fund from which forty-two studies were financed. Roughly half of the studies are expected to lead to projects, including several that are being considered for IDA financing. 76. It also laid the fotndation for subsequent technical assistance, most notably a 1987 follow-up project (Sectoral and Pre-investment Studies Project, financed by a US$7.4 million IDA credit (1796-RW), and an IDA-financed Project for the Improvement of Public Finance Management. In addition, the project became a model for similar study funds established in other countries and a blueprint for Bank-UNDP cooperation. 77. Nevertheless, it is still early to evaluate the economic impact of the project in terms of level and quality of investment projects, since none have as yet actually been carried out. Moreover, the project probably has made only  - 12 - minimal impact on longer-term institution-building. It did not succeed in creating adequate local capacity to prepare and implement projects. 78. This concluding section briefly highlights some of the lessons learned in the course of implementing the project in terms of its design and the Bank's management and supervision of them. Concept and Design 79. The project's concept was a good one, appropriate for dealing with Rwanda's problems of an inadequate portfolio of projects for external financing and the absence of a system for coordinating the preparation of such projects. 80. The government's decision to extend the coordination mechanism developed in the project to cover all aspects of development policy, planning and financing bears witness to its utility. However, the project's design clearly failed to adequately assess the institutional milieu prevailing in Rwanda -- the weaknesses in terms of personnel, organizational structures, policies and procedures -- in its quest for introducing major and sustainable institutional improvement. 81. The institutional climate eroded the benefits of the on-the-job training provided by the project's long-term advisers to their Rwandese counterparts. It also reduced whatever effectiveness the project's training seminars had. Given the shortage of qualified Rwandese, the training supplied no doubt was useful. However, in the absence of a comprehensive, systematic program, the training did not, nor could it be expected to, produce the needed number of trained Rwandese cadre. 82. The impediments inherent in the Ministry of Planning's organization and the difficulties in establishing an effective Documentation Center and in enhancing BUNEP's ability to prepare and monitor projects were greatly underestimated as well. Thus, it is not surprising that the successor project provides for helping the government re-design the Ministry's organizational structure and functions. 83. Most of the lessons appear to have been at least recognized and steps taken to deal more realistically with institutional weaknesses in subsequent projects. 84. The project also led to exaggerated expectations on the part of the Rwandese in terms of the time it would take to prepare projects, obtain external financing for them and see them actually being implemented. As noted earlier, after eight years no project has as yet been actually carried out. 85. Thus, both reports, even though five years apart, foresee that the mechanisms set up by their respective credits "would give Rwanda the capacity and technical competence necessary to translate its planned priorities into coherent investment programs." 86. It ii quite likely that subsequent projects -- whether domestic or externally supported -- will be needed before this goal is achieved.  - 13 - Bank Management and Supervision 87. It is difficult to draw many lessons of great significance regarding the Bank's management and supervision of the project. Obviously, in retro- spect, more time and attention should have been given to the Rwanda's institutional environment and the implications it had for the design of the project. 88. It also could be argued that the Bank's supervision was inadequate. However, there is not necessarily any direct relation between the intensity of the supervision -- and management from headquarters -- of a project and its successful implementation. Obviously, closer follow-up of the project from headquarters probably could have proved beneficial in some instances. 89. However, especially in a project of this nature, and one involving UNDP as a partne;, the key to good implementation lies in the field -- in the Bank's resident mission. In the case of this project, the mission apparently played a highly constructive role. Assigning the resident mission primary responsibility for overseeing the project early in the process should be standard procedure. Equally important, the resident representative should ensure that there are periodic project reviews at the working level (not waiting for formal tripartite reviews), followed by timely reporting back to headquarters on problems as they emerge.  - 14 - PART II - PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE Comments on Part I of the PCR 1. The Borrower confirms the accuracy of the information contained in Part III of the PCR. 2. In general, the Government confirms its satisfaction with the results of the Study Fund I, Credit 1217-RW, which met its primary objective: - create new projects to be financed with external financing; - improve inter-ministerial coordination; - increase administration's capacity to prepare and program studies of pre-investments; on this last item, the degree of improvement and the long-term durability need to be confirmed. 3. The analysis in Part I concerning the following points: creation of a project portfolio, improvement of coordination, training, improvement of local capacity to improve project preparation; establishment of a Documentation Center is very objective and this meets our full approval. 4. As a whole the project has been well prepared and executed despite the fact that the institutional environment of the Borrower was underestimated and the necessary measures were not taken for a long-term improvement at the initial stage. Bank Performance ir. the execution of the Proiect 5. The Bank's performance as managing and executing agency of this project has been good in general - quick and positive response to the Government's request for assistance in eatablishing a portfolio of projects; - provision of good high caliber experts with technical as well as human relations skills; - independent management of the project, as a sign of gooc. communication necessary to the 3 parties involved (Borrower, UNDP and the Bank); but irregular supervision missions delayed the implementation of the required procedures and lessened the risks linked to integration and coordination. Performance of the Borrower in the execution of the proiect 6. Thanks to this Project, the Borrower was able to accomplish the following: - Improving coordination for the planning and preparation of projects in the Rwandese administration;  - is - - greater prestige in the administration and management of the planning and preparation process of the project; - extension of the coordination process developed in this project to the planning and preparation of all projects no matter what the financing source may be; - extension of the inter-ministerial coordination committee to the active Rwandese administration; - establishment of a portfolio of 42 studies of which about half have the potential to become viable projects; - training of 550 Rwandese through 12 seminars organized in the cadre oi the project; - implementation of a good administration and secretarial team. 7. On the other hand, the project did not succeed in creating adequate local capacity for the preparation and execution of projects in the services in charge of planning and analysis of projects. The training component of the project has been hindered by the absence of a systematic and steady training program, by the mobility of the civil servants, by the lack of good personnel management in the public administration, by poor administrative management which does not always allow full and rational use of training methods available to the Government through the project; by the loss of competent staff due to the fact that individuals trained by the project did not return to their previous functions. In its initial stage the project did not take into account the institutional climate of the administration - its lack of qualified personnel, organizational structures and procedures. Lessons Learned from the Proiect 8. The Rwandese administration gave full support to the project by respecting the spirit of the credit agreement, by providing the counterpart to the project, and by internationalizing and extending the use of the coordina- tion mechanisms. 9. During the execution of the project, the cooperation between the Government and the Bank was very good; this was manifested in the Bank's quick responses to the requests for assistance from the Government, in its discretion in the management and supervision by allowing a certain leeway when applying Bank's procedures for the selection and preparation of project studies in the context of the credit agreement and in providing a team of competent experts. 10. However, it appears that most of the measures described above have been identified and that actions have been taken so that future projects take into account the realities of institutional weaknesses: - that the formulation and the conception of the future project adequately consider the institutional environment of the country by insisting on the updating of a systematic complete and continuous training, based on the introduction of methodological management tools  - 16 - of the projects cycle, on the possibility to finance the identifica- tion missions and the elaboration of terms of references for pre- identification and feasibility studies. that the supervision of the project become the responsibility of the resident mission of the Bank in the form of periodic tripartite reviews (Government, UNDP, Resident mission of the Bank) of the project at the operational level, at the end of which reports will be sent to Washington as needed or when problems occur. that the objective of the Study Fund project be respected and considered as a fund for the preparation of projects eligible for financing from other external sources, including IDA. that the Bank's identification/preparation missions of the sectorial strategies will, during their visit of the different technical departments, benefit from the Study Funds, managed by the MINIPLAN to submit project ideas or terms of reference of the pre-investment studies to the financing of this Fund. that the Rwandese administration in the context of rational utiliza- tion of technical cooperation projects follows the preparation and implementation of immediate measures in order to remedy the weaknesses in personnel matters, organizational, political and procedural structures.  - 17 - PART III - STATISTICAL INFORMATION 1. Related Bank Credits Loan/Credit Year of Title Purpose Approval Status Comments 1565-RW To assist the March 1985 Effectiveness: This credit in the amount Public Sector Goverrnment in 1/10/86 of USS4.8 million experienced Management improving the Closing Date: slow disbursement rates. economic pol icy 6/20/92 Effective since January 1986, making and strengthening only 63X is disbursed as of of the Finance Ministry March 31, 1991 (5 year later). 1796-RW To give Rwanda May 1987 Effectiveness: This credit in the amount Second Study the capacity and 8/18/88 US$7.4 million picked up where Fund technical compe- Closing Date: the Study Fund I Left. Slow tence necessary to 6/30/93 start. As of March 31, 1991, translate its plan- the disbursement was only ned priorities into USS.63 million against the coherent investment plamed USS2.37 million. programs. 2. Proiect rimetable Date Date Date Item Planned Revised Actual - Identification --- --- 01/13/81 (Executive Project Summary) - Preparation --- --.- . - - Appraisal Mission 04/24/81 --- 4/24/81 - Loan/Credit 12/07/81 --- 01/15/82 Negotiations - Board Approval 01/26/82 -.- 03/16/82 - Loan/Credit --- --- 04/05/82 Signature - Loan/Credit 07/06/82 --- 11/22/82 Effectiveness - Loan/Credit Closing 12/31/86 --- 06/30/89 - Loan/Credit Completion 06/30/86 --- 06/30/88 - Last Disbursement --- --- 05/17/91  - 18 - 3. Loan Dtbursements Disbursements (in S Million) Loan 1217-RWA Bank Fiscal Year Estimated ActuaL Actual X of And Quarter Cumutative Cumulative Estimated 1981/82 1 2 3 .05 - 0 4 .10 0 1982/83 1 .30 - 0 2 .40 - 0 3 .'0 .03 6.0 4 .0 .03 5.0 1983/84 1 1.00 .03 3.0 2 1.40 .03 2.1 3 1.80 .05 2.8 4 2.10 .05 2.4 1984/85 1 2.50 .16 6.4 2 3.00 .43 1.4 3 3.40 .63 18.5 4 3.80 .74 19.5 1985/86 1 4.10 .96 23.4 2 4.40 1.17 26.6 3 4.70 1.46 31.1 4 5.00 " 1.88 37.6 1986/87 1 5.00 2.28 45.6 2 5.00 2.60 52.0 3 5.00 2.97 59.4 4 5.00 3.17 63.4 1987/88 1 5.00 3.64 72.8 2 5.00 3.92 78.4 3 5.00 4.17 83.4 4 5.00 4.32 86.4 1988/89 1 5.00 4.42 88.4 2 5.00 4.46 89.2 3 5.00 4.51 90.2 4 5.00 4.65 93.0 1989/90 1 5.00 4.89 97.8 2 5.00 5.03 100.6 3 5.00 5.10 a 102.0 1/ The credit 1217-RWA was in the amount of SDR 4.3 million which is equivalent to USS 5,094,083. The amount of USS 5 million shown here (and in the President Report) is due to the conversion rate US#/SDR at different dates. Its disbursement is scheduLed to be completed in 4 years, by end FY86. However, actual disbursement were almost nil during the first two years of the project. 2L The last disbursement was made on May 17, 1991.  - 19 - 4. Proiect Imalementation President Report Actual /or Indicators Estimates PCR estimates 1. Recruitment process for long-term advisors April 1983 financed by UNDP began in Fall 1981 Delayed " 2. First list of studies to be financed by the Fund would be ready in January 1983 June 1983 3. Facilities for the Documentation Center would be completed by Septenber 1983 December 1985 4. Documentalist would arrive in October 1983 June 1985 5. Training Seminars on project preparation and monitoring would start in January 1983 September 1983 6. Project is expected to be completed by June 30, 1986 June 1988 IL There were difficulties in recruiting qualified consultants for the jobs. The project analyst was hired only in July 1984, the financial analyst was hired in January 1985, and the documentalist was hired in June 1985. As a result, the date of effectiveness of the project was postponed to 11/22/82. S. frlect Cods nd Fd A. Project Costs Foreign Exchange Local Foreign Total Comoonents (USS thousands equivalent) (percent) Long-term advisors 140 550 690 80 Study Funds 1,000 3,250 4,250 76 Training Seminars 80 80 160 50 Documentation Center 70 180 250 72 Vehicles 20 60 80 75 Contingencies 230 720 950 76 Total 1 1,540 4,840 6,380 76 I/ Taxes included in project costs are negligible as all items would be exempt from import duties and local taxes.  - 20 - B. Project Financing IDA UNDP Planned Actuals Government Total Long-term advisors 690 -- . 690 Study Funds 200 3,800 3,990 250 4,250 Training Seminars --- 160 194 --- 160 Documentation Center --- 180 230 70 250 Vehicles --- 65 96 15 80 Contingencies 110 795 430 45 950 ...... ....... . . ------- ..... . ... .....------..... ..... ... Total 1,000 5,000 380 6,380 in X (16%) (78%) (6X) (100%) Actuals n/a 5,094 1,360 1/ j/ The Government was expected to suptly RWF 35.3 million at the 1982 exchange rate of RUF 92.84 per USS to cover part of the local costs. The actual amount provided was RWF 96 million (the equivalent of USS 1.36 million). This availability of the Government funds was a key factor in the project's successful implementation. i. Proj Results A. Direct Benefits Indicators Appraisal Closins Date At Full Develooment 1. Creation of Study Number of studies to be 42 studies were n/a fund and Portfolio undertaken by the Study undertaken. Actual of Projects was not specified, but distribution of proceeds the indicative sectoral was: 15% for agriculture distribution of the Study and rural development, Fund proceeds would be: 33% for inrdustry and 35% for agriculture and crafts, 27% for human rural development, 25% resources, 25% for for industry and crafts, t r a n s p o r t a n d 15% for human resources, communication. 15% for transport and communications, and 10% for other sectors. 2. Training Seminars Two cycles during the 12 seminars were held for n/a project period. Each a total of 90 days cycle cover a twelve- altogether. The total month period. Each number of participants is seminar conprises of 20 551. participants. 3. Documentation Facilities would be Facilities completed in Documentation Center center compieted by September December 1985. 1983. 4. Vehicles Purchase of 2 vehicles. 3 vehicles were 3 purchased.  - 21 - B. Studies LIST OF STUDIES FINANCED BY THE STUDY FUNDS Financing Results/ Studies Tbpe