PROJECT: TOGO AGRO-FOOD PROCESSING ZONE PROJECT (PTA-

TOGO)

COUNTRY: REPUBLIC OF TOGO

PROJECT APPRAISAL REPORT

RDGW/AHFR

July 2018

Translated Document

AFRICAN DEVELOPMENT BANK GROUP P

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Table of contents

Currency Equivalents, Fiscal Year, Weights and Measures, Acronyms and Abbreviations, Project Profile,

Executive Summary, Results-Based Logical Framework, Implementation Schedule i-vii

I. STRATEGIC THRUST AND RATIONALE ...................................................................... 1

1.1 Project Linkages with Country Strategy and Objectives .................................................. 1

1.2 Rationale for Bank Involvement ...................................................................................... 2

1.3 Aid Coordination .............................................................................................................. 3

II. PROJECT DESCRIPTION ................................................................................................... 4

2.1 Project Components.......................................................................................................... 4

2.2 Technical Solutions Adopted and Alternatives Explored ............................................... 8

2.3 Project Type..................................................................................................................... 9

2.4 Project Cost and Financing Arrangement........................................................................ 9

2.5 Project Area and Beneficiaries ...................................................................................... 11

2.6 Participatory Approach for Project Identification, Design and Implementation ........... 12

2.7 Bank Group Experience and Lessons Reflected in Project Design ............................... 12

2.8 Key Performance Indicators .......................................................................................... 13

III. PROJECT FEASIBILITY ................................................................................................... 13

3.1 Economic and Financial Performance ........................................................................... 13

3.2 Environmental and Social Impact ................................................................................ 15

IV. PROJECT IMPLEMENTATION ...................................................................................... 18

4.1 Implementation Arrangements ....................................................................................... 18

4.2 Project Monitoring and Evaluation ................................................................................ 20

4.3 Governance ..................................................................................................................... 21

4.4 Sustainability .................................................................................................................. 22

4.5 Risk Management ........................................................................................................... 22

4.6 Knowledge Building ....................................................................................................... 23

V. LEGAL FRAMEWORK ..................................................................................................... 23

5.1 Legal Instrument ............................................................................................................ 23

5.2 Conditions for Bank Involvement ................................................................................. 24

5.3 Compliance with Bank Policies...................................................................................... 26

VI. RECOMMENDATION ........................................................................................................ 26

Appendix I: Togo’s Comparative Socio-economic Indicators ...................................................... I

Appendix II: Current Bank Portfolio in Togo .............................................................................. II

Appendix III: An Analysis of Togo's Fragility ........................................................................... III

Appendix IV: Agro-food Processing Zone (ZTAs) : ................................................................ VII

Appendix V: General Table of ADF and TSF Grant and Loan Resource Allocation ................ IX

Appendix VI: Details of the Economic and Financial Analysis .................................................. X

Appendix VII: Map of PTA Intervention Area in the Kara Region ......................................... XII

i

CURRENCY EQUIVALENTS – May 2018

Currency Unit : CFAF

UA 1 : CFAF 780.9

UA 1 : xx EUR

EUR 1 : CFAF 655.957

FISCAL YEAR

1 January – 31 December

WEIGHTS AND MEASURES

Metric System

ACRONYMS AND ABBREVIATIONS

ADF African Development Fund (of the Bank Group)

AFD French Development Agency

ANGE National Environmental Management Agency

APA Advance Procurement Action

ATC Agricultural Transformation Center (Villages level)

DED Detailed Engineering Design

FEED Front End Engineering Design

FRP Full Resettlement Plan

CSP Country Strategy Paper (of the Bank)

DCE Bidding Documents

DPA Agricultural Policy Document (2016-2030)

DWS Drinking Water Supply

ECOWAS Economic Community of West African States

ERR Economic Rate of Return

ESIA Environmental and Social Impact Assessment

ESMP Environmental and Social Management Plan

GCF Green Climate Fund

GHG Greenhouse Gas

HDI Human Development Index

ICAT Technical Advice and Support Institute

ICT Information and Communication Technologies

INDC Intended Nationally Determined Contribution

INFA National Institute of Agricultural Training

ISS Integrated Safeguards System

ITRA Togo Institute for Agronomic Research

PDA Public Development Assistance

PGPP Pests and Pesticides Management Plan

PMU Project Management Unit

PPF Project Preparation Fund

RAP Resettlement Action Plan

SESA Strategic Environmental and Social Assessment

SME Small and Medium-Sized Enterprise

TFP Technical and Financial Partners

TSF Transition Support Facility (Bank Group)

VRD Roads and Main Networks

WB World Bank

WSC Water and Soil Conservation

ZTA Agro-food Processing Zone (AFPZ)

ii

PROJECT INFORMATION SHEET

Client Information

___________________________________________________________________________

BORROWER: Republic of Togo

EXECUTING AGENCY: Agency for Promotion and Development of Agropoles in Togo

(APRODAT)

Financing Plan

Source Amount

(UA M)

Amount

(CFAF M)

Amount

(USD M) Instrument

ADF (including PPF) 4 635 3 619 700 Grant

ADF 8 040 6.278 830 Loan

TSF (Pillar I) 8 320 6 497 500 Loan

BOAD 12 804.92 10 000 000 Loan

Saemaul Globalization

Foundation (South Korean) 3 524.19 2 752 220 5 000 Grant

Government (including

PPF) 7 741.95 6 046 080 Budget

TOTAL COST 45 066.07 35 194.33

* PPF advance: UA 995 000

Key Financial Information on the Loans and Grants

Maturity (years) 40

Grace Period (years) 10

First Period (years) 10

Amortisation Rate (%) 2.0

Second Period (years) 20

Principal Amount Amortisation Rate (%) 4.0

Service Commission (%) 0.75

Commitment Fee (%) 0.50

Interest Rate (%) 0

Concessionality (%) 61

NPV (baseline scenario) CFAF 56 959 375

ERR (baseline scenario) 23.23%

Timeframe – Key Milestones (expected)

Concept Note Approval March 2018

Project Approval July 2018

Effectiveness October 2018

Last Disbursement December 2023

Completion September 2023

Last reimbursement December 2058

iii

Executive Summary

A. Project Overview

A1. The Togo Agro-Food Processing Zone Project (PTA-Togo) is a pilot project implemented

as part of the Togo Agropoles Strategic Development Plan 2017-2030 and the Feed Africa Initiative

2016-2025. The aim of the project is to create conditions conducive to private investment, notably

in the processing of agricultural products, the supply of inputs and marketing, in the Kara region.

The main outcomes expected from the Project are as follows: (i) increase in the productivity and

agricultural production of import substitutes (rice, maize, soybean, broiler meat) and exports

(cashew nuts and sesame); (ii) increase in the share of agricultural products processed in situ (from

19% to 40%) through private investment in the Agro-park (90,000 tons/year of rice paddy, 15,000

tons/year of maize, 10,000 tons/year of soybean, 20,000 tons/year of feed, 10,000 tons/year of

cashew nuts and 10,000 tons/year of sesame, production of 3 million chicks per year, slaughtering

of 2 million broilers/year); (iii) Strengthening of the people’s food and nutritional security; (iv)

creation of wealth and employment, including for young people and women; (v) Preparatory studies

funded by the Project Preparation Fund (PPF). These studies focused on: (1) analysis of the agri-

business environment and market potential; (2) development of a master plan for the Agro-park; (3)

full studies on the electrical and telecommunication networks of the Agro-park; and (4) preliminary

detail design studies of mini-dams, irrigated schemes, drinking water supply systems and access

roads.

A2. The project will bring direct benefits to about 303,000 people in the Bassar, Doufelgou,

Kéran, Bastar and Dankpen Prefectures, 51% of whom are women, and indirect benefits to the

estimated 769,940 people of the Kara region. The main impacts expected from the project for the

direct beneficiaries are as follows: improved food and nutritional security and incomes thanks

particularly to better access to markets, agricultural inputs, agricultural services and financing. To

that end, it is expected that the project would lead to: (i) an increase in private investments thanks to

a more favourable business environment for the establishment of infrastructure in the Agro-park

(roads and sundry networks, single window, training room, maintenance centre, incubation centre,

etc.); (ii) increase in agricultural production capacities thanks to expected rural infrastructure (dams,

irrigated areas, roads, etc.); (iii) capacity building for operators in the 10 multipurpose agricultural

transformation centres (ATCs) (inputs, farm equipment, technologies, financing, harvest

aggregation, etc.). The project will be implemented following the value chain approach through a

partnership between the State (facilitator and regulator), the private sector (promoter) and

professional farmers’ organisations (FOs). In addition to capacity building for FOs (technical and

organisational management), the project will support the operation of consultation frameworks for

priority chains, to ensure the inclusion of farmers and agreements with the private sector.

A3. This pilot project will be implemented over a five-year period at a total pre-tax cost of

about UA 45,066,070 (about CFAF 35.194 billion), broken down as follows: (i) ADF loan: UA 8.04

million (17.8%); ADF grant: UA 4.046 million (10.3%); TSF loan: UA 8.32 million (18.5%) (ii)

BOAD: UA 12,804,920 (28.4%); (iii) Saemaul Globalization Foundation: UA 3,524,190 (7.8%);

and (iv) State: UA 7,741,950 (17.2%). The project has four components: (a) support policy,

governance and incentive measures; (b) infrastructure for processing and accessing agricultural

inputs and services; (c) capacity building for actors in priority agricultural chains; and (d)

coordination, management, monitoring and evaluation. It will be implemented by the Agency for

the Promotion and Development of Agropoles in Togo (APRODAT), which was established by

Decree No. 2018-036/PR of 27 February 2018 to promote and develop ten agropoles over the next

fifteen years.

iv

B. Needs Assessment

B.1 Despite the strong contribution of agriculture to the country’s GDP, estimated at 40% on

average and bringing together 60% of the population, with 87% of assets often family-owned and

revolving around agriculture, Togo’s level of investment in the agricultural sector remains weak

compared to its needs. Public spending, including that of donors, remains low: it went from CFAF

25 billion in 2010 to CFAF 50 billion in 2013-14 and CFAF 44 billion in 2016. Private investments

are quite insufficient compared to the needs and potential of the agricultural sector, owing to,

among other things, a less-than-enticing environment, lack of infrastructure and poor structuring of

agricultural sectors. Investment and management weaknesses explain to a large degree the low

agricultural productivity and insufficient access to domestic (import substitution) and export

markets. The PTA of the Kara region, which is part of the Agropoles Strategic Development Plan

2017-2030, will have to help mobilise private financing to transform the agro-food sector, including

for the six promising sub-sectors that were identified following preliminary studies and broad

consultations.

C. Bank’s Value Added

C.1 The Bank’s goal, through the 2013-2022 Ten-Year Development Strategy, including the

Feed Africa 2016-2025 Strategy and its Agro-Food Processing Zones (ZTAs) flagship programme,

is to increase private investment in the agricultural sector through facilities and incentives

implemented by the State. In that connection, the Bank and its partners have the relevant expertise

and financial resources to facilitate the preparation and implementation of this type of project. The

experience accumulated by the Bank through its previous interventions in the agricultural and rural,

infrastructure, governance and private sectors not only in Togo but in the rest of Africa argues in

favour of such intervention, which concerns both the public sector (for this project) and the private

sector (the principal investor, the Kalyan Group, has submitted a financing request to the Bank that

is currently under review). The Bank also wishes to support the country in the transformation of its

agriculture by promoting private investment through the incentive measures built into the project,

concerning, in particular (i) the business environment; (ii) establishment of basic infrastructure; and

(iii) improvement of the operation of the sub-sectors.

D. Knowledge Building

D.1 Since the Togo-ZTA planned for the Kara region is a pilot operation for the country, a

comprehensive mechanism will be set up to monitor and evaluate the outcomes and impacts of the

project and the Agropoles Strategic Development Plan 2017-2030. In addition to building the

technical, financial, managerial and other capacities of actors, the project will put in place an

adapted mechanism for monitoring the performances of the pilot project, but also of the Agropoles

Strategic Development Plan 2017-2030 for the Agency for the Promotion and Development of

Agropoles in Togo (APRODAT) and institutional actors. The external evaluation of the project,

which will be supervised by the Board of Directors of APRODAT, will should help to provide

baseline as well as end-of-project data. In addition, studies and support specific to APRODAT will

be set up for an in-depth examination of the major issues (including legal, institutional and financial

issues, public-private partnerships and community involvement). Lastly, it is expected that

information-sharing platforms would be set up, analytical reports would be produced, and

consultation meetings would be organised to share experiences and learn useful lessons from this

innovative project to be used by national authorities and those of the Bank.

v

Results-based Logical Framework of Togo-ZTA

NAME: Togo Agro-food Processing Zone Project (PTA-Togo)

GOAL: Contribute to inclusive agricultural growth, which will create wealth and jobs, and to the reduction of food imports through increased private investment in priority value chains, including

agricultural processing and the supply of inputs and agricultural service.

RESULTS CHAIN PERFORMANCE INDICATORS MEANS OF

VERIFICATION

RISKS AND MITIGATION

MEASURES Indicators

(including SCI)

Baseline situation Target

IMP

AC

T

1. Contribute to reducing the volume of food imports per

capita

2. Contribute to reducing the poverty rate (especially in

rural areas)

1. Value of food imports in USD / per capita

2. % of population living below the poverty line (less than

USD 1.90/Day)

2.1 Increase in household food security levels

2.2 Decrease in % of children affected by chronic

malnutrition (including girls)

21.3 (2014)

49.1% (2015)

32.1% (Kara region)

16 (2030)

25% (2030)

28.9% (2025)

National Statistics,

Statistics of the

United Nations

System

Demographic and

Health Survey 2013-

2014 (Baseline

situation)

OU

TC

OM

ES

1. The share of locally processed agricultural products has

increased

2. The living conditions of rural inhabitants of the project

area have improved

1.1 Share of agricultural production of the project region

processed in situ

1.2 Private investments catalysed in agribusiness in the

Kara region (USD million)

2.1 Rate of household access to basic social services in the

project-affected villages has improved: (i) Electricity; (ii)

all-weather roads (within 5 km)

2.2 Number of direct and indirect jobs created / enhanced (of

which 50% are held by women)

2.3 Crop yields of crops t/ha: (i) Irrigated rice (double-

cropping); (ii) lowland rice; (iii) rain-fed rice; (iv) Corn;

(v) soybeans; (vi) sesame; (vi) cashew nuts;

2.4 % of children aged 6-23 months with a minimum

acceptable diet

19%

0

(i) 16%; (ii) 11%

0

(i) 2; (ii) 1.5; (iii) 1;

(iv) 1.2; (v) 0.5 ; (vi)

1; (vii) 0.5

10.5% (Kara region)

36%

>100

(i) 43%; (ii) 22%

39,000

(i) 10 ; (ii) 4; (iii) 2;

(iv) 3; (v) 1; (vi) 1;

(vii) 1

20%

Baseline Survey

and End-of-Project

Reports

National statistics

Demographic and

Health Survey in

Togo 2013-2014

Risk 1: Land security is not

enough to attract the private

sector and protect farmers

Mitigation 1: SESA has

identified mitigation

measures, including decrees

to implement the Land Code

and establishment of the

Kara one-stop-shop

Risk 2: Inadequate attention

to the needs of women and

youth

Mitigation 2: The

Foundation's SESA

(including RAP, ESIMP and

PDC), and gender and

nutrition-sensitive

participatory approach will

have positive effects on the

population

Risk 3: Climate change and

harmful population practices

could degrade natural

resources (NR)

Mitigation 3: Integrated NR

management and the

development of alternative

livelihoods should scale up

the project impacts.

vi

OU

TP

UT

S

A / Support Policies, Governance and Incentives

1. Support to improve the institutional framework of

the ZTA

2. Establishment of the ZTA Governance System

3. Support to non-financial and financial institutions

B / Support infrast. for processing, production and

access to agricultural inputs and services

4. Implementation of Agro-Park development

infrastructure

5. Infrastructure for production aggregation and access

to agricultural inputs & services

6. Establishment of agricultural production support

infrastructure

C / Capacity building of sector actors

7. Capacity building of priority value chain POs

8. Capacity building for communities

9. Strengthening access to state services

D / Coordination, management and monitoring and

evaluation

Steering and Coordination, Procurement, Financial

Management

Audit, Monitoring and Evaluation

1.1 Land Code implementing regulations are enacted

1.2 SSEA-related implementing legislation is enacted

1.2 The national directorates of the Ministry of Industry in

charge of food quality are equipped and trained

2.1 APRODAT's capacities are built

2.2 The Agro-park management company is operational

3.1 The capacity of training, advisory support and

certification structures is built

3.2 Percentage of partner FI portfolios invested in

agriculture: (i) Banks; (ii) MFIs

4.1 Area of the Agro-park and developed (VRD+BC)

4.2 Annual capacity of Agro-park industrial units (x1000):

(i) Rice; (ii) Corn; (iii) Soybean; (iv) Sesame; (v) Cashew

nuts; (vi) Feed; (vii) Broiler chicken; (viii) Chicks

5.1 No. of ATCs built and equipped

5.2 Total length of rehabilitated roads

6.1 Number of small dams built (capacity in m3)

6.2 Area covered by studies (i) Irrigation schemes; (ii)

Lowlands developed (ha)

7.1 No. of ATCs with capacity built

7.2 No. of key OPAs trained and supported

7.3 Number of farmers with access to services provided by

ATCs (inputs, harvest management, e-farming, etc.)

8.1 No of OPA support sub-projects completed (2 ATCs)

8.2 Number of improved stoves installed

8.3 Number of civil status documents established through

the project

9.1 Capacity building of state services in participatory

approach, gender, health and nutrition, etc.

9.2 Capacity building for SESA implementation

9.3 Monitoring of ESIA, ESMP, RAP and PGPP (ANGE)

Financial management /accounting/procurement procedures

and systems prepared and implemented

Number of PM Plans submitted on time and approved

Annual audit report submitted on time

Number of semi-annual progress reports submitted on time

Project baseline and completion surveys conducted

0

0

0

0

0

0

(i) 0.3%; (ii) 10%)

0

(i) 0 ; (ii) 0 ; (iii) 0 ;

(iv) 0 ; (v) 0 ; (vi) 0 ;

(vii) 0 ; (viii) 0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

1

1

1

1

1

1

(i) 3% ; (ii) 15%

46 ha

(i) 90T; (ii) 15T; (iii)10T;

(iv) 10T; (v)10T; (vi)20T;

(vii) 2000; (viii) 3000

10

100 Km

2 (Vol. >15 M.m3)

(i) 1500 ha; (ii) 1500

ha

10

50

10 000 (incl. 30% wom.)

10 000 (incl. 30% wom.)

6

5000

50 000

1

1

1

1

5

5

10

2

Baseline and

Project

Completion

Surveys Reports

Baseline data: year

2017

Project semi-

annual activity

reports

Bank Supervision

Reports

Risk4: Lack of private

sector interest could limit

investment in the Agro-park

Mitigation4: (i) Meetings

have been held with the

private sector (including the

Kalyan Group, a key

investor), and their needs

taken into account;

(ii) The Project will finance

infrastructure for the

development of the Agro-

park site and production

areas; (ii) support for the

implementation of PI

reforms is planned (land,

standards and quality

control, PPPs, etc.); and (iii)

Technical assistance (legal,

technical, management,

PPPs, etc.) will be made

available to APRODAT.

Risk 5: Project delays due to

APRODAT's lack of control

over the Bank's procedures)

Mitigation 5: Substantial

institutional support (see

action plans) is planned for

APRODAT within the

framework of the project.

KE

Y

AC

TIV

ITIE

S Components: (1) Support Policies, Governance and Incentives; (2)

Support Infrastructure for Processing, Production and Access to

Agricultural Inputs and Services (3) Capacity Building for Agro-industrial

Sector Actors; (4) Coordination, Management and Monitoring and

Evaluation

Resources by component: (1) Component A: UA 4.983 million (11%); (2)

Component B: UA 30.339 million (67%); (3) Component C: UA 4.440

million (10%); (4) Component D: UA 5.304 million (12%)

Sources of funding: (i) ADF loan: UA 8.04 million, ADF Grant (with

PPF): UA 4.635 million; (ii) TSF: UA 8.32 million; (iii) BOAD: UA

12.80 million; (iv) Saemaul Foundation: UA 3.52 million; (v) State: UA

7.74 million

vii

Project Implementation Schedule Year 2018 2019 2020 2021 2022 2023

Quarter 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Preparatory activities

Project appraisal

Loan, grant negotiations and approval

Signing of loan/grant agreements and compliance with conditions precedent to first disbursement

Publication of General Procurement Notice

Finalisation of selection of key staff and project launch

I / Support policies, governance and incentives

Recruitment of the technical assistance firm at APRODAT and delivery of services: preparation of procedures

manual, legal instruments, specifications of the management company, Technical Assistant to the Contracting Authority (ACA), training, etc.

Procurement of equipment and capacity building for: APRODAT, Quality Directorates in charge of quality

(Min.industry), Agricultural Technical Services, Agro-Park Management Company, etc.

Recruitment of firms and feasibility study for two new ZTAs (OTI and Haut Mono) Selection of and capacity building for non-financial and financial institutions (equipment and training): guarantee

funds, IT equipment and agribusiness-oriented training

II/ Support infrastructure for processing, production and facilitating access to agricultural inputs and services (i) Architectural Studies and preliminary project design and bidding documents (APD/DCE) for the Agro-park;

(ii) APD/DCE for small dams and irrigated areas; (iii) complete studies on dam B9; (iv) Access roads and

Agricultural transformation Centres-ATC (10)

Development of the Agro-park including roads and sundry networks (drinking water, electricity, sanitation, roads, etc.), DWSS, WTP and BC: selection of service providers &works implementation

Rehabilitation of access roads (national budget)and construction of 10 ATCs (ADF/TSF) selection of service

providers and works implementation

III/ Capacity building for actors in agricultural sectors Capacity building for 10 ATC (sector structuring, technical and management training, support for input

procurement/management, agricultural services including e-farmers platform, etc.)

Support for the implementation of priority sub-projects in the key sectors of 2 pilot ATCs (Saemaul Globalization Foundation)

Capacity building for rural communities: local planning, environmental management, nutrition manufacture of

improved stoves, civil status documents, etc.)

Capacity building for central and decentralise services (local development approach, action plans for protected

areas and pesticides, ESMP/RAP, missions and training, etc.)

IV/ Project coordination and management

Implementation of the financial, administrative and accounting management system

Establishment of the baseline situation and implementation of the monitoring and evaluation system

Coordination and management, monitoring and evaluation and communication

Technical assistance to APRODAT (procedures manual, engineering, legal matters, etc.)

Annual audit reports

Mid-term review

Completion report

1

REPORT AND RECOMMENDATION OF BANK GROUP MANAGEMENT TO THE

BOARD OF DIRECTORS CONCERNING THE AWARD OF LOANS AND GRANTS

TO THE REPUBLIC OF TOGO TO FINANCE THE TOGO AGRO-FOOD

PROCESSING PROJECT (PTA-TOGO)

Management hereby submits this report and its recommendation concerning a proposed loan of

UA 8.04 million from the African Development Fund (ADF) country allocation and UA 8.32

million from the Transition Support Facility (TSF), as well as a grant of 4.635 million from the

ADF allocation, to the Government of Togo to finance the activities of the Togo-ZTA.

I. STRATEGIC THRUST AND RATIONALE

Project Linkages with Country Strategy and Objectives

1.1.1 Following the end of the implementation period of its Accelerated Growth and

Employment Promotion Strategy (SCAPE) 2013-2017, the Togolese Government has started

preparing its National Development Programme 2018-2022 (NDP 2018-2022), which is expected

to be adopted in 2018. The NDP 2018-2022,

which will be the sole reference for the

Government’s activities over the medium term

(including for this project), builds on three

activities (i) establishing an excellence

logistical hub for international trade; (ii)

creating jobs through the development of agro-

processing centres (case of this project),

manufacturing and extractive industries; and

(iii) consolidating social development and

strengthening inclusion mechanisms. At a

recent Cabinet meeting held on 7 March 2018,

the Government also approved draft legislation

on the Land Code that would be more

favourable for investment, particularly in the

agricultural sector. The Government has also

set its Intended Nationally Determined

Contribution (INDC), to limit the effect of

climate change; in that connection, this project

will help in achieving the INDC goals

concerning adaptation to climate change

(considered a risk) and strengthening the

resilience of the production systems and

sustainable livelihoods.

1.1.2 The country has also formulated and

adopted the Agricultural Policy Paper (DPA)

for the period 2016-2030. The overall objective

of the DPA 2016-2030 is to help speed up economic growth, poverty reduction and improvement

in living conditions, while ensuring social inclusion and environmental protection. The project

should, therefore, help to achieve the specific objectives of the DPA, namely to ensure, in a

sustainable manner: (i) food security; (ii) readjustment of the agricultural trade balance; (iii)

improvement of agricultural income levels; (iv) creation of decent jobs in the agricultural sector

AGROPOLES DEVELOPMENT PROGRAMME IN

TOGO (PRODAT)

The Agropoles Development Programme in Togo-PRODAT (2017-2030), approved by Decree No. 2017-110/PR of 29/09/2017 is the strategic development plan for Togo's agropoles. The main objective of the programme managed by the Agence de promotion des Agropoles (APRODAT) is to accelerate economic growth and reduce poverty through better performance of the primary, secondary and tertiary sectors. The specific objectives are to: (i) develop irrigation schemes, rural infrastructure and agricultural mechanisation; (ii) promote the value chain approach for priority sectors with a market (national and export); (iii) develop agro-industry and the supply of agricultural services; (iv) develop the ICT sector; (v) promote research, innovation and training; (vi) build the capacities of sector actors. Thus, in the long term, the Government targets structural transformation of the agricultural sector through the promotion of 10 ZTAs or 'agropoles' over the next 15 years. The ZTA or "Agropole" is defined as a "given geographical area in which professional organisations (companies, farmers’ organisations, etc.) which maintain functional relations in the activities of production, processing, services and marketing of products of plant, animal, fisheries or forestry origin". The Kara Region CTA is, therefore, the first to be implemented, with in particular the Bank's support.

2

and reduction of labour instability; (v) and maintenance of a high growth rate. In that regard, the

Agropoles Strategic Development Plan 2017-2030 (PRODAT 2017-2030) established by Decree

No. 2017-110/PR of 29 September 2017, designed to establish ten (10) agropoles over the next

fifteen (15) years, underpins Togo’s PTA. The project will ultimately facilitate private

investment in the agro-industrial sector for the development of value chains of interest in terms

of import and export substitution.

1.1.3 Lastly, this project is also part of the Bank’s Country Strategy Paper (CSP) 2016-2022,

Pillar 1 of which concerns the “development of inclusive growth and agribusiness

competitiveness poles”, through the development of agro-industrial processing zones known as

“agropoles”.

1.2 Rationale for Bank Involvement

1.2.1 Togo’s average GDP growth over the 2011-2015 period was 5.3%, compared with

2.7% for the 2006-2010 period. However, in the Human Development Index (HDI) rankings for

2015, Togo was ranked 162nd out of 188 countries with a score of 0.484. The incidence of

poverty fell from 61.7% in 2006 to 58.7% in 2011 and 55.1% in 2015, but the level of poverty

remains high. The rate of extreme poverty did not improve tangibly, going from 28.6% in 2006

to 30.4% in 2011 and then to 28.7% in 2015. In 2015, the incidence of poverty in rural areas

stood at 68.9%, compared with 34.3% in Lomé and 37.8% in other urban areas. The rate of

under-employment rose from 22.1% in 2011 to 24.9% in 2015, according to data from the 2011

and 2015 QUIBB1 surveys. The breakdown of that rate by social category indicates a level of

unemployment, and even under-employment, of about 53.2% for women and about 59% for

young people. In 2014, the prevalence of chronic malnutrition among children under 5 was 28%

at the national level and 32% for the Kara Region.

1.2.2 Despite the political and economic progress made, Togo remains a fragile country,

because its average score following the Country Policy and Institutional Assessment (CPIA) of

the Bank and the World Bank is 3.2 out of 6. Despite structural reforms undertaken by the

Government between 2006 and 2015, the country’s environment remains tense, with political

protests since 2017, notwithstanding the intensification of dialogue between the Government and

the opposition. Another source of fragility concerns the economy’s high level of dependence on

the phosphate sub-sector (+40% of export revenue) and income from seaport and airport traffic,

on the one hand, and socio-economic spatial disparities, on the other.

1.2.3 The country’s economy remains largely dominated by agriculture which, in 2015,

employed 72.6% of the population and accounted for 47.6% of GDP, while services accounted

for 36.2%, and industry 16.2%. There are barely 22 large agro-industrial enterprises in the

country and they supply less than 5% of the products processed and sold on the domestic market.

According to customs statistics for 2014, Togo imported the equivalent of USD 160 million

dollars of food products (including 100,000 tonnes of rice), but only exported the equivalent of

USD 50 million. Over the period 2011-2014, the agricultural trade balance recorded a deficit of

about CFAF 60 billion, owing primarily to growing imports of food products.

1.2.4 The constraints analysis shows that agriculture remains unproductive and not

integrated into the markets, owing to limited access to agricultural equipment, inputs, financing

and land, especially for women and young people. These challenges are compounded by low

level of support infrastructure for agricultural production, storage, processing, packaging and

marketing. This is true for the products targeted by the project in terms of import substitution

3

(rice, maize, soybean, broiler meat) or export (cashew nuts, sesame). The project is located in the

Kara region, deemed a priority area in the implementation of the PRODAT 2017-2030, based on

the following criteria: (i) geographic position; (ii) socio-economic infrastructure; (iii) natural

potential (water, arable land, etc.); and (iv) possibility of growing high-value-added crops.

1.2.5 The Bank has a comparative advantage in the implementation of this project financed

through the public sector window and designed to create favourable conditions for private

investors (the main one being the Kalyan Group, which is interested in cashew nuts and sesame,

and has submitted a financing request to the private sector window that is currently being

reviewed). Moreover, the Bank’s

intervention, which is aimed at helping in the

implementation of the Agropoles Strategic

Development Plan 2017-2030, is perfectly in

line with the Feed Africa Strategy 2016-25,

whose goals are to: (i) help eliminate extreme

poverty; (ii) end hunger and malnutrition; (iii)

make Africa a net food exporter; and (iv)

move Africa to the top of export-oriented

global value chains where it has a

comparative advantage. The project will also

help to achieve the objectives of the Bank’s

Ten-Year Strategy (2013-2022), especially its

operational priorities concerning the

development of infrastructure, the private

sector and inclusive growth.

1.3 Aid Coordination

1.3.1 Within the Government, external aid

is coordinated by the Ministry of Planning,

Development and Economy and Finance.

Since 2010, the Government has put in place

an official development assistance framework

known as Official Development Assistance

(ODA), which is the reference structure for

technical and financial partner (TFP) support.

The framework, which is divided into 11

sectoral committees, including one on

agriculture, is a platform where TFPs

exchange information and align their

interventions with the country’s policies and

strategies. The Bank’s collaboration with the

TFPs, therefore, revolves around the sectoral committees, joint review activities and co-

financing. The Bank, which is very active, co-chairs with Germany the TFP committee on the

agricultural sector. It also plays a leadership role in the dialogue on economic infrastructure,

Agro-Food Processing Zones or ‘agropoles’, fiscal reform and inclusive finance.

PARTNERSHIP WITH THE PRIVATE SECTOR

Project preparation was facilitated by studies

conducted on key agricultural value chains,

potential markets and the business environment.

The mission conducted extensive consultations

with the private sector, including:

The focus group held with the Private Sector to identify their expectations, particularly in terms of the business environment;

Focus group with commercial banks and financial institutions, to assess the risks they face;

Targeted interviews with private groups that expressed interest in financing the agro-park, including (i) the Kalyan Group, a key investor that requested financing from the Bank; (ii) SOMDIAA (malting), (iii) NIOTO (oil mill); etc.

Consultations made during the investment promotion days in the Kara Agropole organized on 05 and 06 April 2018 by Togo’s Chamber of Commerce and Industry (CCIT) and the National Employers Council (CNP)

Exchanges made in the field with agricultural cooperatives and SMEs having invested in several value chains (fish farming, market gardening, poultry farming, etc.), which made it possible to identify their constraints

Interviews with the government services

(including Togo Invest) in charge of the

promotion of private investment

4

1.3.2 Togo’s main TFPs in 2016 were the following: West African Development Bank

(BOAD) with 11.43% of total PDA; Compassion International (10.54%); World Bank (9.69%);

European Union (8.75%); Global Agriculture and Food Security Programme - GAFSP (7.05%);

United Nations system (6.73%); International Fund for Agricultural Development (6.60%);

China (5.48%); Arab Fund (5.44%); Global Fund (4.56%). The AfDB disbursed USD 17.40

million in 2016, representing 3.94% of PDA; the sectoral breakdown of the PDA was as follows:

infrastructure (29%); social protection and employment (25%); governance (13%); agriculture

(13%); health (10%); water, sanitation and environment (6%); education (3%).

Sector or sub-

sector*

Importance

GDP Exports Labour

Agriculture 31% 14% 66% of the workforce

Stakeholders-Annual public spending (average) 2011-2015

Years

Government (internal

public resources) (in

CFAF)

Total agricultural

expenditure of technical and

financial partners-TFPs (in

CFAF)

Total public expenditure of the

agricultural sector (in CFAF)

2010 12 962 743 316.30 13 036 336 918.00 25 999 080 234.30

2011 18 969 601 917.75 8 945 649 877.19 27 915 251 794.94

2012 24 334 975 318.35 13 346 112 440.15 37 681 087 758.50

2013 14 453 025 773.66 31 579 754 732.06 46 032 780 505.72

2014 14 981 443 966.86 35 636 939 006.25 50 618 382 973.11

2015 14 229 608 562.00 37 196 105 916.22 51 425 714 478.22

2016 14 566 951 868.00 30 152 960 156.22 44 719 912 024.22

Aid Coordination Level

Existence of thematic work groups [Yes]

Existence of a comprehensive sectoral programme [Yes]

Role of AfDB in aid coordination*** [M]****

Source: DPD being finalised

II. PROJECT DESCRIPTION

2.0.1 The overall objective of the project is to promote inclusive agricultural growth that

creates jobs and reduces imports thanks to incentive measures for private investment in key areas

(rice, maize, soybean, sesame, broiler meat and cashew nuts).

2.0.2 The specific objectives of the project are to: (i) facilitate private investments in key

areas thanks to policy support, governance and incentive measures; (ii) promote the development

of priority value chains through the establishment of infrastructure to support production, storage

and processing; and (iii) build the capacities of stakeholders in priority agro-industrial areas.

Project Components

2.1.0 Project preparation was largely informed by the conduct of several PPF-funded studies,

including the following: (i) Studies on priority agricultural sectors, potential markets, and the

business environment; (ii) Study on the development of the agro-industrial park master plan; (ii)

preliminary design study of dams, irrigation schemes, DWS and electrification of 6 villages; (iv)

Detail design study of Agro-park electrification and access to the ICT network. Thus, these

studies underpinned the design of this pilot project, which is developed as the first Agro-food

Processing Zone (ZTA) in the Kara region and in the country. It includes measures to support

political, regulatory and institutional reforms with a view to attracting private investment, as well

5

as measures to improve rural infrastructure in the project area and build the capacities of

stakeholders in priority areas in terms of import substitution (rice, maize, soybean, broiler meat)

and exports (cashew nuts and sesame). Specifically, the project has a multidimensional

approach:

2.1.1 At the institutional level, several measures in favour of private investment are planned

under the project, including:

Capacity building of the Agropoles Promotion and Development Agency of Togo

(APRODAT), established by Decree No. 2018-036/PR of 27 February 2018 to achieve the

objective of implementing ten agropoles in the next 15 years (see paragraph 4)

Support for the future semi-public company for the promotion and management of the

Kara Agro-Park, to promote private investment in agro-processing and input supply. and

agricultural services

Improvement of the regulatory and institutional framework for private investment in

agribusiness, in particular through:

The operationalisation of land reform through technical assistance for the drafting of

implementing decrees relating to agricultural and rural land law voted by the

National Assembly on 5 June 2018, including the establishment of a single land

tenure office;

Support to the Directorates and Agencies of the Ministry of Industry in charge of the

implementation of ongoing reforms in standardization and metrology, through

provision of equipment (including laboratory equipment) and training;

Improvement of access to financing, particularly for SMEs and cooperatives, by

setting up a guarantee fund with financial institutions and by providing ad hoc

support (IT equipment and training);

The study to be carried out by the TA firm for the development of the Agro-park

business plan taking into account the targeted markets (national, regional and

international), the business environment, and possible desirable incentives;

Measures to build the capacities of universities and other research, training and

advisory support institutes operating in the agro-industrial sector (IT and laboratory

equipment, training, etc.)

2.1.2 At the physical level, the infrastructure development works planned under the project

to improve the private sector intervention environment will concern three major entities, namely:

A central portion or Agro industrial-park composed of developed land with roads and

sundry networks (drinking water supply, sanitation, electricity, ICT, etc.), logistical

support and specialized facilities and services (cold chain, laboratory and certification,

business services, waste treatment, single window, etc.); a joint savings company will be

responsible for promoting and managing the Agro-park, where private companies invest in

the processing of agricultural products and the provision of services and inputs.

Agro-transformation centres (ATCs), located in 10 village centres, are multipurpose

platforms for use by agricultural operators comprising: (i) an aggregation, sorting and

primary storage centre; (ii) an input distribution centre; (iii) a service centre (agricultural

credit, business centre, farm equipment rental and maintenance, zoo-sanitary clinic, etc.);

(iv) a food quality control and seed certification service; (v) an education and training

centre for producers.

6

Agricultural production zones: They cover zones targeted to provide agricultural products

to the Agro-park through the ATCs. They will benefit from public investments (dams,

irrigated areas, roads, etc.) that will help to boost agricultural productivity for the selected

areas.

2.1.3 Concerning the strengthening of value chain actors to favour greater inclusion, the

project will support implementation of the following measures:

Support the establishment and capacity building of consultation frameworks of the main

targeted sectors, to facilitate business relations with the private sector;

Enhance the capacities of the Agricultural Production Organisations (OPA) of the ten (10)

Agricultural Transformation Centres identified in the three agricultural zones (irrigated,

lowland and rain-fed) with the Saemaul Foundation for Globalization;

Improve the capacity of village communities in participatory diagnosis, participatory local

planning, and the formulation and implementation of community projects (Saemaul

Foundation for Globalization);

Support capacity building of government services and other partners involved in the

implementation of project activities;

Support the implementation of priority sub-projects in support of agricultural sectors

identified by two ATCs (Saemaul Foundation for Globalization);

Support for the implementation of risk mitigation measures as identified in the

Environmental and Social Strategic Assessment (SESA): compensation of

displaced/affected persons, compensation, protection of sensitive sites, etc.

2.1.4 The components, sub-components and activities of the project are presented in the

following table.

Components Cost CFAF M) Description of the Components

A/ Support

policy,

governance and

incentive

measures

4.98

A1/ Improvement of the policy, regulatory and operational framework

Technical assistance for the preparation of instruments for

implementation of the Land Code (voted by the National Assembly on 5

June 2018), the specifications of the Agro-park management company

and operationalisation of the single window

Support for the development of a legal, regulatory and operational

framework for the Strategic Environmental and Social Assessment

(SESA)

Support for the national departments responsible for quality, standards

and metrology (facilities, training) at the Ministry of Industry

Technical assistance for the implementation of private investment

promotion measures in the Agro-park (including instruments and

incentives), financial and management procedures and support for project

management (APRODAT)

Convening of an investment promotion forum for the ZTA (2)

A2/ Establishment of the ZTA governance system

Institutional support for APRODAT’s capacity building (staff, legal,

technical and management assistance, training, etc.)

Support for the preparation of the specifications of the Agro-park

management company, its recruitment (CAT) and monitoring of

performance quality

Feasibility study for two new ZTAs (OTI and Haut Mono regions)

7

Components Cost CFAF M) Description of the Components

A3/ Strengthening State and non-State public institutions

Support for non-financial institutions (computer and laboratory equipment

and training): research institutes (Togo Institute for Agronomic Research

(ITRA)), consulting (Technical Advice and Support Institute (ICAT)),

training (CIDAP, INFA-Tové), Technical Advice and Support Institute

(ICAT), universities, etc.) and seed control/certification

Support for financial institutions: Establishment of a risk insurance fund,

procurement of equipment (computer hardware and software), and

capacity building for banks and financial institutions (including in

agribusiness)

B/ /

Infrastructure

for processing

and accessing

agricultural

inputs and

services

30.91

B1/ Agro-park development infrastructure (Broukou)

Architectural, detailed engineering design/bidding documents studies and

supervision of construction work

Site development works & roads and sundry networks (roads, drinking

water supply, sanitation, electricity, telecommunication, fencing, etc.);

drinking water supply station, water treatment, etc.

Construction of buildings: (i) administrative and residential block; (ii)

services block (training centre, conference centre, laboratories, etc.); (iii)

socio-collective infrastructure block (school, health centre, hotel, etc.);

(iv) etc.

Agro-park electricity supply (CEET) and fibre optic telecommunication

works

Assistance for the establishment of a business incubator (provider)

B2/ Infrastructure for aggregation and access to agricultural inputs and

services

Establishment of basic infrastructure for 10 ATCs located in 10 village

centres covering the three agricultural production areas (irrigated,

lowlands, rain-fed), under the ADF:

- Technical studies and supervision of the construction of ATCs

- Construction works on 10 ATCAs (harvest storage stores, input storage

hangars, cooperative offices)

- Procurement of agricultural, cleaning and logistical equipment

Detailed preliminary design study of the main road (100 km) and

secondary roads (50 km):

Work on the rehabilitation of roads (100 km) including ancillary

structures

Control and supervision of rehabilitation works on the main road

B3/ Support infrastructure for agricultural production

Detailed engineering design/bidding documents studies for three mini-

dams and irrigated areas (1 500 hectares)

Supervision of the construction of two mini-dams (Vol>15 Mm3)

Full technical and economic studies on the B9 dam with irrigated areas

Construction of two mini-dams for agricultural use (potential of 1,500

hectares) and industrial use (4,000 - 5,000 m3/day for the Agro-park)

C/ Capacity

building for

actors in priority

agricultural

sectors

4.44

C1/ Capacity building for agricultural producers (with the Foundation)

Networking of sub-sectors (rice, maize, soybean, sesame, cashew nuts

and broiler meat) and development of consultation frameworks

(Foundation)

Building of the technical and management capacity of 10 ATCs of

villages situated in the three agricultural zones (irrigated, lowlands, rain-

fed) – Saemaul Foundation

Establishment of an information system for use by FOs (e-farmers, e-

aggregation, e-inputs, e-services, etc., ADF)

Increased access to financing by FOs (guarantee fund)

Training and TA of state workers on the Saemaul Foundation approach

8

Components Cost CFAF M) Description of the Components

C2/ Strengthening central and decentralised services

Training and technical assistance from State services (with ICAT) in the

participatory, gender, nutrition and local development approach

Implementation of the safeguards included in the SESA: (i) Preparation of

a resettlement policy framework; (ii) Preparation of a wastewater and

solid waste management blueprint; (iii) Preparation of an environmental

best practices manual; (iv) Implementation of the Environmental and

Social Impact Assessment Plan (ESMP) and pesticide management plan;

(v) Environmental and social baseline situation

Monitoring implementation of the Environmental and Social

Management Plan ESMP (ANGE), RAP (ANGE) and PGPP (ANGE)

Procurement of motorcycles and computer equipment (agricultural

regional administration)

D/Coordination,

management,

monitoring and

evaluation

5.30 Steering and coordination

Procurement

Administrative, financial and accounting management

Monitoring and evaluation (M&E)

2.2 Technical Solutions Adopted and Alternatives Explored

2.2.1 The aim of the Togo PTA is to contribute to the transformation of Togolese agriculture

to achieve inclusive agricultural growth that would reduce poverty and food imports and also

create jobs. Expected investments would come from both public funds (to attract private

investments) and private funds (including in the processing of agricultural products, supply of

inputs and agricultural services), to ensure better integration of import substitutes (rice, maize,

soybean, broiler meat) and exports (cashew nuts and sesame). The measures envisaged under this

innovative project include: (i) establishment of a conducive political, regulatory and institutional

framework that would attract direct private financing and also facilitate access to financing for

small and medium-sized enterprises (SMEs) and cooperatives (insurance funds and technical

support for banks); (ii) development of an Agro-park, including roads and main networks (clean

water, electricity, sanitation and ICTs) in order to facilitate the establishment by private parties

of processing units, agricultural services and access to inputs; (iii) rehabilitation of access roads

to production areas and markets, fully connected to regional and national road networks; (iv)

establishment of Agricultural Transformation Centres in 10 village centres (aggregation of

harvests, supply of inputs and services, capacity building, financing, etc.); and (v) construction

of mini-dams (2) and conduct of detailed studies for other infrastructure (irrigated areas,

developed lowlands, partial control of water in rain-fed areas), while waiting for the mobilisation

of additional financing (including green climate funds). The project will also cover the costs of

detailed studies on the construction/equipping of basic social infrastructure needed to develop

economic activities and improve the living conditions of the local population (drinking water and

electricity). The capacity building segment for actors (beneficiaries, State services, training and

research centres) will be implemented through a participatory approach, with the support of the

Saemaul Foundation. The costs related to the implementation of the Environmental and Social

Impact Assessment Plan (ESMP) will be fully supported by the project.

9

Table 2.2: Alternatives Explored and Reasons for Rejection

Alternatives Short Description

Reason for Rejection

Implement a

traditional project

to support the

improvement of

agricultural

production

Finance the

development of

agricultural

production

infrastructure and

equipment

The State has neither the intention nor the resources to

invest sustainably in tools to increase agricultural

production

The sustainable increase in agricultural production is

only possible if sufficient private investments are

mobilised for processing and marketing

Finance only

partial water

control in the

project

Exclude from the

project the

construction of dams

and irrigated areas

The sharp drop and even stoppage of river water flow

represents a major risk, especially for rice

Drilling capacities are too low; only one dam may be

able to permanently supply water to the Agro-park

2.3 Project Type

2.3.1 The Togo-PTA is a public investment project which aims to create the requisite

conditions for boosting private investments in six priority areas, in particular in the processing of

agricultural products, supply of inputs and provision of agricultural services and marketing.

2.4 Project Cost and Financing Arrangement

2.4.1 Project cost: The total project cost is estimated at UA 45.07 million (CFAF 35.19

billion), net of taxes and custom duties. The cost is broken down as follows: UA 25.53 million

(CFAF 19.94 billion) in foreign exchange and UA 19.53 million (CFAF 15.26 billion) in local

currency. It comprises provisions for physical contingencies and price escalation estimated at 2%

each, on average. The provision for price escalation was estimated based on the current and

projected levels of inflation of the cost of the local currency and the foreign exchange at 2% and

1.5% per year, respectively, on average. The provision for physical contingencies is estimated at

between 0% and 3%. A summary of the estimated project cost by component and by expenditure

account is presented in Tables 2.3, 2.4 and 2.5 below, while the details are provided in the

Technical Annex to the project appraisal report.

10

Table 2.3: Summary of estimated costs by component

PROJECT COMPONENTS

(CFAF million) (UA '000)

%

Dev.

%

C.B

Local

currency

Foreign

exchange Total

Local

exchange

Foreign

currency Total

A. SUPPORT POLICY, GOVERNANCE

& CAPACITY BUILDING 2 379.97 1 457.20 3 837.17 3 047.53 1 865.94 4 913.47 38 11

Support policies & improvement of ZTA

operational framework 633.97 583.20 1 217.17 811.79 746.79 1 558.58 48 4

Establishment of ZTA governance system 488.00 672.00 1 160.00 624.88 860.49 1 485.37 58 3

Strengthening of State and non-State

public institutions 1 258.00 202.00 1 460.00 1 610.86 258.66 1 869.52 14 4

B. DEVELOPMENT OF PROCESSING

AND ACCESS INFRASTRUCTURE 7 214.96 15 457.40 22 672.35 9 238.69 19 793.08 29 031.77 68 67

Kara (Broukou) Agro-park infrastructure 2 150.81 4 896.06 7 046.87 2 754.10 6 269.37 9 023.46 69 21

Access to input infrastructure and

agricultural services 1 279.64 2 975.84 4 255.48 1 638.57 3 810.54 5 449.11 70 13

Production support infrastructure /b 3 784.50 7 585.50 11 370.00 4 846.02 9 713.17 14 559.20 67 33

C. STAKEHOLDER CAPACITY

BUILDING 2 425.82 1 019.40 3 445.22 3 106.24 1 305.33 4 411.57 30 10

Producers of key sectors 2 150.81 4 896.06 7 046.87 2 754.10 6 269.37 9 023.46 69 21

Rural communities 1 279.64 2 975.84 4 255.48 1 638.57 3 810.54 5 449.11 70 13

Central and decentralised services 3 784.50 7 585.50 11 370.00 4 846.02 9 713.17 14 559.20 67 33

D. PROJECT MANAGEMENT &

COORDINATION 2 797.70 1 244.84 4 042.55 3 582.44 1 594.01 5 176.45 31 12

TOTAL BASE COST 14 818.45 19 178.84 33 997.28 18 974.91 24 558.35 43 533.26 56 100

Physical contingencies 169.83 338.20 508.03 217.46 433.06 650.53 67 1

Financial contingencies 267.15 421.86 689.02 342.09 540.19 882.28 61 2

TOTAL PROJECT COST 15 255.43 19 938.90 35 194.33 19 534.46 25 531.61 45 066.07 57 104

Table 2.4: Summary of project costs and expenditure categories

EXPENDITURE CATEGORIES

(CFAF million) (UA '000)

%

Dev.

%

C.B

Local

currency

Foreign

exchange Total

Local

currency

Foreign

exchange Total

I. Investment costs 12 371.80 18 667.24 31 039.04 15 841.99 23 903.26 39 745.25 60 91

A. WORKS 6 170.21 14 397.15 20 567.35 7 900.90 18 435.43 26 336.33 70 60

Dams and development schemes 3 000.00 7 000.00 10 000.00 3 841.48 8 963.45 12 804.92 70 29

Infrastructure 2 960.21 6 907.15 9 867.35 3 790.52 8 844.55 12 635.07 70 29

Construction and rehabilitation 210.00 490.00 700.00 268.90 627.44 896.34 70 2

B. GOODS\a 431.97 867.38 1 299.35 553.14 1 110.67 1 663.81 67 4

Vehicles 57.00 171.00 228.00 72.99 218.96 291.95 75 1

Equipment, materials and inputs 374.97 696.38 1 071.35 480.15 891.71 1 371.86 65 3

C. SERVICES\b 3 442.27 3 402.72 6 844.99 4 407.80 4 357.15 8 764.96 50 20

Training 1 149.52 766.35 1 915.87 1 471.95 981.30 2 453.25 40 6

Technical assistance 213.75 1 211.25 1 425.00 273.71 1 551.00 1 824.70 85 4

Studies 1 160.25 1 088.87 2 249.12 1 485.69 1 394.29 2 879.98 48 7

Various studies 641.70 784.30 1 426.00 821.69 1 004.29 1 825.98 55 4

Preparation advance 518.55 304.57 823.12 664.00 390.00 1 054.00 37 2

Contractual services 885.00 295.00 1 180.00 1 133.24 377.75 1 510.98 25 3

Audits 33.75 41.25 75.00 43.22 52.82 96.04 55 -

D. MISCELLANEOUS 2 327.35 - 2 327.35 2 980.15 - 2 980.15 - 7

II. Recurring costs 2 446.65 511.60 2 958.25 3 132.92 655.10 3 788.01 17 9

A. PERSONNEL 1 572.00 - 1 572.00 2 012.93 - 2 012.93 - 5

B. TRAVEL EXPENSES 407.43 - 407.43 521.70 - 521.70 - 1

C. MAINTENANCE, OPERATIONS &

REPAIRS 295.10 454.22 749.32 377.87 581.63 959.50 61 2

D. OVERHEAD EXPENSES 172.13 57.38 229.50 220.40 73.47 293.87 25 1

TOTAL BASE COST 14 818.45 19 178.84 33 997.28 18 974.91 24 558.35 43 533.26 56 100

Physical contingencies 169.83 338.20 508.03 217.46 433.06 650.53 67 1

Financial contingencies 267.15 421.86 689.02 342.09 540.19 882.28 61 2

TOTAL COST OF THE PROJECT 15 255.43 19 938.90 35 194.33 19 534.46 25 531.61 45 066.07 57 104

11

Table 2.5: Schedule of expenditures by component (in UA thousand)

COMPONENTS PROJECT YEARS

Total 2017 2018 2019 2020 2021

A. SUPPORT POLICIES, GOVERNANCE &

INSTITUTIONAL CAPACITY BUILDING 2 646.68 1 611.11 710.68 7.12 7.21 4 982.79

Support policies & improvement of ZTA operational

framework/a 1 392.21 125.88 39.13 7.12 7.21 1 571.55

Establishment of ZTA governance system 714.67 643.71 171.23 - - 1 529.61

Strengthening of State and non-State public institutions 539.80 841.51 500.31 - - 1 881.62

B. DEVELOPMENT OF PROCESSING AND ACCESS

INFRASTRUCTURE 3 418.78 11 660.38 14 583.38 677.02 - 30 339.56

Kara (Broukou) Agro-park infrastructure 475.53 3 472.24 4 830.56 677.02 - 9 455.35

Access to input infrastructure and agricultural services 2 443.54 2 072.12 1 127.76 - - 5 643.42

Production support infrastructure/b 499.70 6 116.02 8 625.07 - - 15 240.79

C. STAKEHOLDER CAPACITY BUILDING 1 382.98 1 312.24 1 070.38 336.94 337.45 4 439.97

Producers in key sectors 926.07 1 134.61 926.61 301.52 301.52 3 590.32

Rural communities 60.33 74.47 61.98 21.80 22.11 240.68

Central and decentralised services 396.58 103.16 81.79 13.62 13.82 608.97

D. PROJECT MANAGEMENT 2 110.66 873.57 828.69 743.00 747.83 5 303.74

TOTAL COST OF PROJECT 9 559.08 15 740.07 17 479.64 1 764.07 1 092.49 45 635.35

2.4.2 Financing Mechanism: The project will be financed by an ADF loan and grant, a TSF

loan, BOAD and the Korean Fund, to the tune of UA 8.04 million (17.8%), UA 4.635 million

(10.3%), including the PPF refund of UA 995,000; UA 8.32 million (18.5%), CFAF 10 billion

(UA 12.8 million), USD 5.068 million (UA 3.52 million), respectively, and the Togolese

Government to the tune of CFAF 6.046 billion, (including the PPF counterpart of CFAF 46.08

million). The breakdown of expenditure by source of financing and according to the list of goods

and services is presented in Table 2.6.

Table 2.6: Project financing plan

SOURCE OF

FINANCING

(CFAF Million) (UA '000)

% Local

Currency

Foreign

Exchange Total

Local

Currency

Foreign

Exchange Total

ADF loan 1 887.43 4 391.41 6 278.83 2 416.84 5 623.16 8 040.00 17.8

TSF loan 2 250.64 4 246.86 6 497.50 2 881.93 5 438.07 8 320.00 18.5

ADF grant 2 374.41 1 245.30 3 619.70 3 040.41 1 594.59 4 635.00 10.3

BOAD 3 331.70 6 668.30 10 000.00 4 266.21 8 538.71 12 804.92 28.4

Korean Fund 2 122.27 629.95 2 752.22 2 717.55 806.64 3 524.19 7.8

State of Togo 3 288.99 2 757.09 6 046.08 4 211.52 3 530.43 7 741.95 17.2

Total 15 255.43 19 938.90 35 194.33 19 534.46 25 531.61 45 066.07 100.0

2.5 Project Area and Beneficiaries

2.5.1 In the 2016-2020 Agricultural Development Programme, 10 ZTAs or ‘agropoles’ were

identified among the priorities to be financed over the next 15 years. Ongoing studies on the

Project Preparation Fund (PPF) are concentrated in the Kara region, which is deemed a priority

by the Government, considering the current level of poverty, the high agricultural potential (rice

in particular), the opportunities in terms of synergy offered by ongoing projects (PARTAM,

PBVM, PDRI-Mô and PDRD) and the presence of a dynamic private sector (including the

Kalyan Group). The project covers the Bassar, Doufelgou, Dankpen and Kéran prefectures in the

Kara region, located between latitudes 9° 00’ and 10° 00’ North and between longitudes 0°15’

and 1°45’ East.

2.5.2 The population of the Kara region comprises 769,940 inhabitants distributed as follows:

184,693 inhabitants in urban areas and 585,247 inhabitants in rural areas. The activities

envisaged for the project will affect about 303,419 people directly, of whom 151,710 will be

12

women. The population that would be indirectly affected is estimated at around 769,000 people

(51% women).

2.6 Participatory Approach for Project Identification, Design and

Implementation

2.6.1 The project formulation was facilitated by the establishment of an Inter-Ministerial

Steering Committee involving all stakeholders. Discussions between the key players (private

sector, OPAs, banks, etc.) and the Bank’s mission continued during private investment

promotion days in the Kara region, held on 5 and 6 April 2018 by the Chamber of Commerce

and Industry of Togo (CCIT) and the National Council of Employers (CNP). Targeted meetings

were held with the private sector, including with the Kalyan Group, which has applied for a loan

from the Bank’s private sector window to finance its planned investments in the Agro-park for

sesame and cashew nuts. Several meetings were also held with TFPs including the World Bank,

the French Development Agency, GIZ, UNIDO and FAO. At the local level, the people and local

chiefs were involved and their expectations on major issues have been addressed including the

issue of compensation for impacted persons. Awareness and information campaigns for various

social groups (men, women and young people) were conducted throughout the project

formulation process.

2.6.2 The consultation momentum that emerged during the project preparation phase will be

maintained during the implementation phase through: (i) an APRODAT steering entity comprising

representatives of major stakeholders (including the private sector and civil society); (ii)

technical assistance to strengthen the APRODAT; (iii) participatory approach selected for the

implementation of activities to be funded by, among others, the Saemaul Foundation; (iv) the

results-based and project impact monitoring and evaluation mechanism; and (v) joint supervision

missions. Special efforts will be made during project implementation to ensure that women

participate in all forms of consultation undertaken under the project.

2.7 Bank Group Experience and Lessons Reflected in Project Design

2.7.1 The current portfolio consists of 13 operations for a total commitment of UA 212.71

million spread across ten national operations of UA 102.81 million (48.33%) and three

multinational operations of UA 109.90 million (67.88%). The main sectors are transport

(75.55%), economic and financial governance (13.88%), and the social sector (8.77%). The

portfolio’s performance is deemed satisfactory, with an average age of two years (more than

50% of the projects approved between 2015 and 2017). The conditions precedent to the first

disbursement under the loan and grant agreements were fulfilled in time for all the

portfolio’s projects.

2.7.2 The CSP 2011-2015 completion report shows that implementation of the Bank’s

assistance strategy is positive overall. The two regional road projects helped to create 5,000

temporary jobs and 750 permanent jobs and improve traffic flow through a fivefold reduction in

travel times in some large cities. The Bank’s support in governance enabled the Government to:

(i) operationalise the Court of Auditors; (ii) produce management accounts by the Public

Treasury; (iii) improve the public procurement process; (iv) adopt trade and transport facilitation

measures: and (v) establish the Togolese Revenue Board.

2.7.3 Lessons learned from the implementation of the previous CSP, the IDEV long-term

evaluation report (sixth selectivity criterion) and periodic reviews of the CSP brought to light

recurring difficulties relating to counterpart resource mobilisation, slow pace of the procurement

13

process, disbursement red tape, and weaknesses in quality-at-entry of operations. Several project

design measures were therefore taken, including: (i) mobilisation of PPF resources to finance the

feasibility studies; (ii) allocation of an amount of CFAF 206 million in the State budget for 2018;

(iii) signing of a decree establishing the APRODAT and appointing the Board of Directors; (iv)

use of advance procurement action; (v) inclusion of poor people (including women) and

protection of the environment; and (vi) synergy of inter-sector interventions (energy, transport,

water, telecommunication).

2.7.4 The measures that have been taken into account in the project’s design, with a view to

accelerating its implementation, are as follows: (i) mobilisation of PPF resources to finance

feasibility studies (development of the Agro-park, dams and irrigation schemes, rural roads,

DWS) and the preparation study; (ii) the establishment, since December, of a Preparation

Monitoring Committee co-chaired by the Bank's Office and the Office of the Prime Minister,

which meets weekly; (iii) inclusion of an amount of CFAF 206 million in the 2018 State budget;

(iv) signing of the Decree establishing APRODAT and the appointment of members of the Board

of Directors and the acting Director General of the Agency; and (v) use of advance procurement

(including for the recruitment of project staff); (vi) ongoing appraisal of a financing request

submitted by the main private investor (Kalyan Group) (vii) inclusion of destitute populations

(including women) and environmental protection through SESA and (viii) synergy of inter-sector

interventions (energy, transport, water, telecom).

2.8 Key Performance Indicators

2.8.1 The key performance indicators such as those presented in the project’s logical

framework are the following: Impact indicators (i) level of household food security; (ii) value of

food imports per capita; (iii) percentage of the population living below the poverty line (less than

USD 1.90/day) (iv) percentage of children suffering from chronic malnutrition (including girls);

Output indicators: (i) share of agricultural production from the region processed in situ; (ii)

number of direct and indirect jobs created/strengthened (including 50% women); (iii) trend of

yields of priority sub-sectors (rice, maize, soybean, sesame, cashew nuts); (iv) rate of household

access to basic social services (electricity, roads); (v) Volume of private investment catalysed in

agribusiness in the Kara region; Output indicators: (i) % of partner FI portfolios invested in

agriculture by Banks and MFIs; (ii) Number of dams constructed (capacity in m3); (iii) Number

of ATCs built and strengthened; (iv) Number of km of rehabilitated roads; (v) Financing volume

mobilised by the private sector; (vi) level of people’s access to a civil status document (including

70% women).

III. PROJECT FEASIBILITY

3.1 Economic and Financial Performance

3.1.1 The project is designed to generate a minimum of eight (8) types of benefits:

(i) increased value added of cashew nuts by boosting their productivity from about 36.8 kg/tree

to about 73.5 kg/tree, representing a yield improvement from 368 kg/hectare to 735 kg/hectare;

for an area of 3,027 hectares (including new trees covering 1,500 hectares), production is likely

to reach 2,229 tonnes/year; (ii) processing of cashew nuts into higher value-added products such

as almonds, cashew nut juice and biogas; (iii) additional farm products from sesame and

soybean; (iv) enhancement of most of the agricultural production benefitting from the facilities

and climate regulation function of forest cover created by cashew trees, particularly for rice and

maize; (v) improvement of the people’s welfare by preventing drought and hunger, boosting

food security, reducing labour insecurity for families and in particular for women and vulnerable

14

groups, improving the people’s life expectancy, increasing their income to allow them to have

access to health care and education, etc.; (vi) improvement of animal production and livestock

breeding owing to the quality and abundance of pasture and water; (vii) effects of carbon

sequestration (carbon credit); and (viii) creation of temporary and permanent jobs resulting from

the benefits generated by the project.

3.1.2 Financial Analysis: A significant part of the impacts listed above are not subject to

commercial transactions, or are not even tangible and, therefore, do not lend themselves to

financial performance analysis, based on existing markets. Under these conditions, it was not

deemed relevant to include them in a quantitative analysis, based on the production model or

income-generating-activity approach. Nonetheless, it was possible to carry out a FARMOD

analysis based on the following five (5) models: (i) cashew nut production; (ii) rice production

resulting from the development of the Agro-park; (iii) maize production; and (iv) soybean

production.

3.1.3 In light of the above, the financial analysis related to the dividends from agricultural

production was conducted for the cashew nut production and processing models, as well as for

the crops mentioned above. The operation cycle is 25 years.

3.1.4 The financial analysis led to the following results: (i) a financial impact of about CFAF

4.45 billion per year as of the fourth year of operation projected over 25 years, in line with

similar operations, depending on the lifespan of the investments; this means that the financial

dividends from the project over the operating period exceed the cost of investment needed for its

financing; (ii) a cost/benefit ratio of 1.48, meaning that the benefits are higher than the cost of

investments; (iii) an internal rate of return of 23.84%, which is higher than the capital

opportunity cost (capital cost of financial resources for investments under the project) estimated

at 12%. Based on these results, it can be concluded that Togo’s PTAT has a rate-of-return

profile that offers a financial justification for the cost of the project’s investments.

3.1.5 Economic Analysis: The economic analysis was conducted using the reference price

method, namely prices under economic efficiency conditions, in accordance with the “Pareto”

optimum criterion. It was also conducted based on a comparison between the “without project”

and the “with project” scenarios of the production models discussed in the financial analysis. In

this model, cashew nuts were considered a tradeable commodity, meaning that they could be

traded outside the country (FOB delivery at the port and CIF delivery at the Hamburg Port).

Under these conditions, the reference price of cashew kernels (economic price) is evaluated

based on the ex-ante balance of this crop to obtain the export-parity farm gate price. Labour was

estimated at 65% of its financial value of CFAF 1,000/day, considering the inelasticity of

demand for labour in the country as a whole and in the project area in particular.

3.1.6 Based on realistically defined assumptions, the project’s economic rate of return is

estimated at 23.91%, with a cost/benefit ratio of 2.14. Consequently, the overall rate of return of the

project may be deemed satisfactory in light of these results.

3.1.7 Sensitivity Analysis: The sensitivity tests conducted based on a reduction in production

prices helped to measure the stability of the financial and economic performance indicators. The

tests show that prices will have to be reduced to 27.20% (profitability threshold) to offset the

additional financial and economic benefits generated at the financial and economic levels

respectively, with the IRR and ERR equivalent to the opportunity cost of capital, or 12%. This

test shows that the project’s rate of return is robust, although it was not performed on all

endogenous values of the model. Nonetheless, the price variable is more significant, being the only

15

variable that is not subject to the management, and hence operation, of the project. A summary of

the sensitivity analysis is presented in the annex to the report.

3.2 Environmental and Social Impact

3.2.1 Environment

3.2.1.1 In accordance with the requirements of the Integrated Safeguards System (ISS), the

project was classified in Category 1, considering the scope of its environmental and social

impacts. A strategic environmental and social assessment (SESA) was conducted to ensure that

the incidence of the future activities carried out in the project area are already taken into account

and possible mitigation measures have been identified. The SESA was approved by the Togo

National Environmental Management Agency (ANGE) on 23 February 2018. A summary of the

study was published on the AfDB website on 27 February 2018.

3.2.1.2 The SESA will be implemented taking into account the AfDB and BOAD safeguards

policies and will be in conformity with the environmental laws of the Republic of Togo for each

activity to be developed on the site. In that regard, environmental and social impact assessments

(ESIAs), resettlement action plans (RAPs) and pest and pesticide management plans (PPMPs)

are being prepared to study in more detail the impact of the Agro-park infrastructure, the

infrastructure of the production area (dams, rural roads, irrigated areas, developed lowlands and

social infrastructure), and the electricity and telecommunication line.

Positive Environmental Impacts

3.2.1.3 From an environmental standpoint, the project will contribute to: (i) improved control

of water resources in the three agricultural zones (water-fed, lowlands and irrigated) and of their

availability throughout the year (thanks to mini-dams, among other things); (ii) flood risk

management (effects on flooding); (iii) creation of wet zones conducive to the development of

biodiversity; (iv) restoration of the plant cover of the hills located near the facilities and

protection of the natural habitats and banks of the water courses on which dams are built; and

(v) development of the biomass through the production of steam or any other type of energy

from agricultural by-products (cashew nut shells, etc.).

Negative Environmental Impacts

3.2.1.4 The SESA revealed the most significant negative impacts that might be generated

during construction and operation of the project, namely: (i) loss of biodiversity; (ii) ecological

fragmentation; (iii) disruption of fish habitats; (iv) degradation of air quality; (v) greenhouse gas

emissions; (vi) water pollution; (vii) soil pollution through the contamination of chemical inputs;

and (viii) production of solid waste and waste water. Several mitigation measures have been

proposed to contain the negative impacts, including standard measures to be implemented during

construction of infrastructure (watering, compensatory reforestation, awareness-raising, waste

management plan, etc.) and specific measures to be taken during the operation phase. The SESA

has established appropriate lists of mitigation measures as well as occupational health and safety

measures for each product line. For each specific impact assessment to come, a detailed

Environmental and Social Management Plan (ESMP) will be prepared based on these

indications. A social and environmental management plan (ESMP) will also be developed to

promote the provision of resources and the establishment of a framework conducive to the

identification, management and monitoring of the project’s impacts, while observing the Bank’s

safeguards measures.

16

3.2.2 Social

Positive Social Impacts and Enhancement Measures

3.2.2.1 At the local level, the beneficial effects of the PTA relate to: (i) development of

intensive agricultural activities in the project area; (ii) creation of direct and indirect jobs,

especially for young people; (iii) technical education for farmers through training and

internships; (iv) development of the primary sector (livestock farming, agriculture, fishery, etc.);

(v) opening-up of the main production centres; (vi) strengthening of means of transport

(production roads) and means of storage (stores); (vii) increase in gross income per farmer; and

(viii) increase in the people’s purchasing power as a result of improved nutritional intake and

living conditions of households. At the national level, the project will help to boost food

production, especially rice production, and reduce rice imports.

3.2.2.2 Enhancement measures have been built into the PTA. The project will support the

construction of social infrastructure to improve the people’s living conditions through: (i) the

conduct of comprehensive studies on the establishment and rehabilitation of mini-drinking water

supply (DWS) systems; (ii) long-term electrification of village centres; (iii) implementation of

various activities to build the capacities and facilities of the 10 village centres; and (v)

installation of 5,000 improved fireplaces, and reforestation.

Negative Social Impacts

3.2.2.3 The major social, economic, security and health impacts are as follows: (i) physical or

economic displacements; (ii) loss of tangible and intangible cultural heritage, (iii) nuisances such

as noise and dust during construction work; (iv) increase in the incidence of endemic, parasitic,

water-borne and sexually transmitted diseases; (v) increased risks of accident during construction

works: (vi) social disturbances and conflicts due to a population influx and deepening of social

disparities; and (vii) increased competition for the use of resources. Just like for the

environmental impacts, mitigation measures have been proposed to manage the negative social

impacts. These measures involve compensation for the affected population, education on health,

security and work schedules, supply of individual protective equipment (IPE), arrangement of

work schedules and detour routes, etc. These measures will be included and explained in detail in

the Environmental and Social Management Plan (ESMP) of upcoming impact assessments. The

Environmental and Social Management Master Plan (ESMMP) includes strategic measures for

the management of social and environmental impacts.

3.2.3 Environmental and Social Management Master Plan

3.2.3.1 SESA provides for strategic environmental and social measures to create a framework

for identifying, managing and monitoring project impacts. These measures concern: (i)

strengthening the political, institutional, environmental and social framework (implementing

texts dealing with the SESA); (ii) sound knowledge of the area (baseline situation); (iii)

management of natural resources; (iv) surveillance, monitoring and evaluation; and (v) training

of actors involved in environmental and social management and education of the people. The

implementation of these measures will be supported by the APRODAT and the relevant State

entities. Implementation of the ESMMP will be under the responsibility of the APRODAT,

which will recruit an Environmental Expert and a Social Development Expert. The

implementation of the ESMMP will be monitored by various technical services under the

coordination of the ANGE. The total cost of the environmental and social strategic measures is

CFAF 486,000,000, which has already been taken into account.

17

3.2.4 Involuntary Resettlement

3.2.4.1 Resettlement action plans are being prepared for the Agro-park and rural infrastructure.

Based on the estimate of land area that will be affected and the value of the land in the area, a

provision of CFAF 800 million has been set aside to compensate affected persons. A

resettlement master plan will also be prepared as part of the project. Although it is not a tool

proposed by the Bank’s ISS, the resettlement policy framework (RPF) is required as a

precaution, to specify the procedure by which land that is not currently affected by the project

will be developed subsequently.

3.2.5 Climate Change

3.2.5.1 Togo and the Kara region are facing severe deforestation related to tree-cutting for

farming and alternative income-generation needs. The rate of deforestation is about 15,000

hectares/year, compared with a reforestation rate barely exceeding 3,000 hectares/year. This

situation exacerbates the problem of climate change by depleting carbon stock. The PTA also has

the potential to contribute to greenhouse gas emissions, owing to tree-cutting for the farmland

development, rice production and building of dams.

The PTA economic model will help to strengthen climate resilience through less-carbon-emitting

activities throughout the agricultural production chains. These activities will involve: promotion

of diversified agro-ecological systems and application of green technologies for waste

management, as well as production of renewable energy that helps to reduce greenhouse gas

emissions. The potential impacts are the following: (i) reduction of deforestation; (ii) increase in

farmers’ incomes; (iii) enhanced food and nutrition security in the communities; (iv) soil

productivity; (v) waste management through organic composting; (vi) employment of women

and young people; (vii) use of improved, drought-resistant grains and seeds; and (viii) improved

management of water resources.

3.2.6 Gender

3.2.6.1 According to the 2010 general population census, the Togolese population comprised

48.6% men and 51.4% women, while the rural population, which lives essentially on agriculture,

comprises 48.8% men and 51.2% women. The project area is one of the poorest, with a fairly

visible impact on women and children. Women are involved in most of the product lines: rice,

soybean, sesame, maize. Land insecurity, access to improved seeds, equipment and markets to

sell their crops are major problems for women in the area.

3.2.6.2 The following measures and actions will be taken to boost the role of women and

maximize their contribution to the project: (i) grouping of women farmers by food product line

(rice, maize, soybean and sesame); (ii) allocation of at least 30% of developed land to groups of

women farmers; (iii) allocation of a 30% quota, at least, for women industrial promoters in the

CTA; (iv) facilitation of women’s access to modern agricultural production and processing

equipment: inputs (seeds, fertilizers and phytosanitary products), processing materials and

equipment (rice parboiling, maize husking); (v) building of the entrepreneurial capacities of

women’s groups in the production, storage, processing, packaging and marketing of agricultural

products; (vi) building of women’s capacities in business plan preparation, marketing and

networking for the market and access to financing; (vii) facilitation of access to basic services,

such as water and electricity; and (viii) facilitation of the process of obtaining civil status

documents, such as identification and nationality cards. The budget to be allocated for specific

gender promotion and women’s empowerment activities is UA 7.2 million. The project is

18

classified under category 2, according Gender Marker System. For a detailed gender analysis of

the entire value chain and the budget for implementation of the gender component, see Annex

B.7.

IV. PROJECT IMPLEMENTATION

4.1 Implementation Arrangements

4.1.0 The PTA-Togo will be implemented by the Agency for the Promotion and

Development Agropoles in Togo (APRODAT) which was established by Decree No. 2018-

036/PR of 27 February 2018 to steer the implementation of the Togo Agropoles Strategic

Development Plan. The Ministers responsible for Agriculture and Industry respectively will

provide joint supervision of APRODAT which has two organs: (i) a Board of Directors, chaired

by the Prime Minister, and comprised of seven active members (public and private) and observer

members, and (ii) a Directorate General (DG). The Board of Directors will meet quarterly to

review and approve the work programme and activity reports. The Directorate General to be set

up with project support will eventually comprise five Directorates: the Directorate of Legal,

Administrative and Financial Affairs, the Directorate of Forecasting, Planning, Monitoring and

Evaluation, the Directorate of the Promotion of Financing and Investments, the Directorate of

Facilities and Works Control and the Directorate of Training, Research and Development. A

team of experts will be recruited to build APRODAT's capacity, particularly in the

implementation of the PTA. This team, under the responsibility of the Director General, PTA

Coordinator, will include: an Administrative and Financial Officer, an Accountant, an Agro-

Industry Specialist, an Investment Specialist, a Monitoring and Evaluation Specialist, a

Procurement Specialist, a Rural Infrastructure Specialist, an Agronomist (Development), an

Environment and Social Specialist, a Social Development Specialist, a Legal Officer, an Internal

Auditor and Specialist in Organisation Management, Gender and Capacity Building. The PTA

implementation team will be supported by a Project Assistant and Drivers. Similarly, the Project

will support APRODAT in partially covering equipment and personnel costs and in setting up

the administrative, financial and accounting management system required for the project

financed by the Bank. In accordance with the provisions of the Presidential Decree establishing

APRODAT, the entity in charge of promoting and managing the Kara Agro-park will be

managed as a semi-public company involving the State and the private sector and will therefore

have administrative, financial and accounting management autonomy.

4.1.1 Procurement Arrangements

4.1.1.1 The procurement of goods (including non-consultancy services), works and

consultancy services, financed by the Bank as part of the project, will be carried out in

accordance with the Procurement Framework for Bank Group-Funded Operations, October

2015 edition and the provisions set out in the Financing Agreement. More specifically, the

procurements will be carried out as follows:

Borrower’s Procurement System (BPS): Procurement methods and procedures (PMP)

based on Togo's procurement system including its laws and implementing decrees (Law

No. 2009-013 of 30 June 2009 and implementing Decree No. 2009-277/PR of 11

November 2009 relating to the Public Procurement Code as well as its subsequent

implementing decrees and texts), based on standard national competitive bidding

documents (SNCBDs) or other bidding documents as approved during project

negotiations for works and low-complexity goods contracts provided for in the project

and generally available in Togo.

19

Bank Procurement Methods and Procedures (BPM): The Bank's standard BPM,

based on the relevant standard competitive bidding documents (SCBDs) for major and

more complex works and goods contracts, as well as consultancy services, deemed to be

the most appropriate. Given the delays in procurement and in order to limit their impact

on project implementation, the Government submitted to the Bank a request to use

advanced procurement action (APA) to make procurements for: (i) the recruitment of

APRODAT's key project implementation staff (Director General, Administrative and

Financial Officer, Accountant, Agribusiness Specialist, Investment Officer, Procurement

Specialist, Legal Officer And Internal Auditor, Specialist in Environmental and Social

Issues, Rural Infrastructure ,Specialist, Specialist in Organisation Management, Gender

and Capacity Building); (ii) procurement of APRODAT furniture and office equipment

provided for under the project; (iii) the recruitment of a consulting firm for the

development of a summary preliminary design and a detailed preliminary design of Agro-

Park facilities; and (iii) the recruitment of a consulting firm for the development of the

detailed preliminary designs for studies on small dams/irrigated areas and roads ; and (iv)

procurement of office furniture for APRODAT and the Kara Agro-Park Management

Company.

4.1.1.2 Procurement Risk and Capacity Assessment (PRCA): The assessment of country,

sector and project risks as well as of the capacity of the executing agency (EA) for procurement

purposes was conducted1 for the project and the outcomes served to guide the decision on the

choice of procurement system (Borrower or Bank) used for specific activities or for all similar

project activities. The Project Executing Agency is the Agency for the Promotion and

Development Agropoles in Togo (APRODAT) which is a public institution with legal

personality and management autonomy. It is under the joint supervision of the Ministries

responsible for Agriculture and Industry. APRODAT is not fully operational because only the

Board of Directors and the acting Director General have been appointed and therefore the

procurement risk is deemed "high". In fact, APRODAT does not yet have procurement bodies

(Procurement Officer, Public Procurement Board and Procurement Control Board), while staff

members have not yet been appointed or recruited, particularly the Procurement Specialist,

dedicated to the Project and having the required qualifications and experience. In order to reduce

the risk to "low", APRODAT will have to recruit a Procurement Specialist and set up

procurement bodies. Moreover, the Bank will finance technical assistance in which procurement

will be taken into consideration. The Borrower and the Bank will agree on a procurement plan

for the first 18 months of the Project, which will be updated annually or as needed, in order to

reflect the actual project implementation needs. Any revision of the plan will be subject to prior

approval by the Bank. Appropriate risk mitigation measures have been included in the PRCA

action plan outlined in paragraph B.5.9 of Annex B5.

4.1.2 Financial Management and Disbursement Arrangements

4.1.2.1 Established on 27 February 2018, APRODAT is in the process of being set up.

Whereas the Board of Directors which will act as the PTA Steering Committee has been

appointed pursuant to Decree No. 2018/036/PR of 27 February 2018, and its Chairman appointed

Acting Director General, it will be necessary to wait for the recruitment of financial management

staff and the establishment within APRODAT of an operational financial management system to

ensure full transparency, traceability and accountability in the use of PTA funds. To this end, the

Togolese Government will have to take the following actions:

1 See the Technical Annexes for more details

20

(i) Completion of the organisation chart in accordance with the principles of internal

oversight, particularly the separation of incompatible functions, and the appointment of

the heads of services making up the directorates mentioned in the Decree, especially

those of the directorates involved in the implementation of the SCPP (Administrative

and Financial Officer, Accountant, Procurement Officer, etc.);

(ii) Development of the administrative, financial and accounting procedures manual, on

which its internal oversight system will be based, covering all management cycles:

expenditure management cycle (procurement procedures for goods and services), asset

management cycle (fixed assets, inventories, etc.), cash management cycle (scheduling,

disbursement, cash monitoring and control, etc.), resource mobilisation cycle

(fundraising, direct payments, etc.), accounting, financial and budgetary information

cycle, personnel management cycle, control and internal audit cycle;

(iii) Development, where appropriate, of an operations manual for facilitation and financial

intermediation activities (access of processing units to financing);

(iv) Establishment of an integrated multi-project and multi-user management system to

ensure the keeping of budgetary, analytical and general budget accounts. General

accounting has to be a private accrual accounting system, applying the SYSCOHADA

standards and taking into account the specific features of development projects;

(v) Establishment of internal audit mechanisms, with the recruitment of an Internal Auditor

who will ensure that the SCPP control system is operational and effective; and

(vi) Establishment of external audit mechanisms through the hiring of independent external

auditors on a competitive basis and in accordance with the terms of reference agreed

with the Bank, in line with the Bank's requirement that audit reports be submitted no

later than 30 June of the year following the year audited.

4.1.2.2 Pending the establishment and operationalisation of APRODAT, the overall fiduciary

risk, incorporating the inherent risk and the risk of non-control resulting from the evaluation of

the agency’s financial management capacity, will remain high. Details are provided in the

Technical Annexes of the Appraisal Report.

4.1.2.3 Disbursements: Bank financing will be mobilised in accordance with the rules and

procedures of the Bank Disbursement Manual through the three disbursement methods: (i) direct

payment (for the procurement of works, goods and services and other relatively high-cost

expenditure...); (ii) the special account (mainly for operating expenditure); and (iii)

reimbursement, where appropriate.

4.2 Project Monitoring and Evaluation

4.2.1 Technical and Financial Monitoring. The Project Monitoring and Evaluation Officer

appointed from within the project management unit will be responsible for collecting, analysing

and compiling information on physical achievements and financial execution. For this purpose,

he/she will have a roadmap with quantitative indicators on Project progress, relating to

implementation of the sub-components. Such monitoring will make it possible to obtain, every

six months, the following information for each activity: physical objective, achievement level,

expected costs, actual costs, differences and explanations for possible deviations. This

information will be used to prepare the half-yearly project progress reports. Moreover, in

21

addition to the Steering Committee’s review work, the Bank will carry out two supervision

missions per year, to which should be added a mid-term review mission.

4.2.2 Impact Assessment. The Project impact assessment will be conducted through

participatory studies. The first step in this assessment will be the study of the baseline situation

which will aim at determining the level of the following indicators at Project year zero: (i)

current average household income; (ii) major crop yields (t/ha); (iii) current production levels;

(iv) industrial processing rates; (v) level of organisation of supply of inputs and delivery of

agricultural services (including mechanization and electronic payments); (vi) level of

organisation of marketing; and (vii) volume of funding mobilised. The same study will be

conducted at project completion based on the same sample.

4.3 Governance

4.3.1 According to the 2017 Mo Ibrahim Report on the Assessment of Global Governance in

Africa, Togo is ranked 26th out of 54 countries assessed (compared with 33rd in 2016) with a

score of 51.7 over 100. This relatively average ranking notwithstanding, Togo with an average

improvement of +10 points, is ranked 2nd best reforming country in governance over the period

2007-2016, behind Côte d'Ivoire (12.6), and ahead of Zimbabwe (+9.5) ), Rwanda (+8.7) and

Liberia (+6.5). In 2016, it was the only country whose global governance had steadily improved

with progress in each of the 14 sub-categories of the IIAG. With regard to corruption perception,

the 2017 Transparency International Report ranks Togo 117th out of 180 with a Corruption

Perception Index (CPI) of 32 compared with 29 in 2014, on a scale of 0 (high corruption) to 100

(very low corruption).

4.3.2 In order to support the ongoing reform momentum in the country and foster good

governance, the Bank, in close collaboration with the IMF and other partners, has regularly

maintained sustained policy dialogue with the Togolese authorities through reform and

institutional support operations. In 2017, the Bank approved budget support totalling UA 9.53

million for the Governance and Agribusiness Promotion Support Programme (PAGPA), which

focuses on reforms aimed not only at creating an enabling environment for private and public

investments for the promotion of agribusiness but also at improving revenue mobilisation to

enhance investment expenditure. The government has undertaken significant strategic and

structuring reforms as part of this reform support operation. These include (i) the revision and

adoption of the Land Code; (ii) preparation of the national agropoles development strategy; and

(iii) preparation and adoption of the private sector development strategy. Other major reform

measures planned for 2018 are underway, namely, the preparation and adoption of the country's

national industrialisation policy and strategy, as well as the issue of decrees on the organisation

and functioning of national entities responsible for quality, standards and metrology.

4.3.3 The SCPP, which is a continuation of PAGPA, will contribute to the improvement of

governance in the agricultural sector through the operationalisation of the major reforms

mentioned above as well as amendments to the institutional, legislative and regulatory

arrangements required for the development of Agro-Food Processing Zones (ZTAs). The Project

also includes a component to provide technical, methodological and material capacity building

for APRODAT, the agropoles governance and steering structure, the devolved administrative

services involved in staple crop promotion, private sector development as well as training

institutes.

4.3.4 Lastly, the activities planned, particularly through the Korean Saemaul Foundation, will

enhance project inclusiveness by involving the beneficiaries (including women and young

22

people) in the decision-making process. Specific actions are planned to build the people’s

capacity so that they can organise themselves in cooperatives, improve their agricultural

performance and interact with other actors (especially the private sector).

4.4 Sustainability

4.4.1 The project is in line with a sustainable development approach and its sustainability is

based on the fact that most of the activities to be financed were identified with the collaboration

of stakeholders. The participatory approach implemented during the project preparation phase,

with the State as "facilitator", the private sector as "investor", and the professional agricultural

organisations (PAOs) as "direct actors", should create the conditions for good sustainability of

project outputs and impacts. The key actors (producers, private sector, financial institutions, etc.)

of the six priority value chains (rice, maize, sesame, soybean, broiler chicken and cashew nuts)

were therefore consulted, particularly during the studies (Agro-park, water supply, irrigation,

roads, electricity, ICT, etc.) and their concerns were taken into account in the context of this

project.

4.4.2 The Project will help not only to improve the political, regulatory and institutional

framework for the establishment of planned Agro-Food Processing Zones (ZTAs), but also to

mobilise significant resources for the construction of basic infrastructure (roads, clean water,

sanitation, electricity, ICT, etc.) needed to encourage private investment, particularly within the

Agro-park. Such private sector (leader) involvement is the guarantee of easier access to markets

(national, regional and international), technology and financing (especially for PAOs and SMEs).

This public-private partnership is a key to the sustainability of the approach advocated by the

Project.

4.4.3 The various actions targeted by the project, such as capacity building for

entrepreneurial culture, business management and the organisational spirit of beneficiary groups,

are likely to foster inclusive growth. These effects will provide an additional guarantee for

sustainable achievements, while allowing continuation of the momentum ushered in beyond the

end of the project. Secondly, the technical assistance provided for under the project will have a

positive direct impact on the capacity of national institutions and PAOs to make optimum and

sustainable utilisation of the infrastructure put at their disposal. This initial activity will thus

enable each professional organisation to regularly generate resources capable of supporting the

identified activities and facilitate the implementation of other sub-projects that are likely to make

investments more profitable. This component is, therefore, essential to ensure the sustainability

of the actions.

4.4.4 Furthermore, with the complete modernisation of infrastructure, works and irrigation

equipment projected in the study reports, including the introduction of equipment and more

efficient varieties in water use, abstractions on already heavily reduced water resources will be

minimized. Lastly, for road maintenance, project will utilise the mechanisms already defined

under the current National Transport Strategy.

4.5 Risk Management

4.5.1 The main risks associated with the project implementation were identified their

potential impacts analysed and the mitigation measures specified (see table).

23

Risks Risk level Mitigation measures/actions

Risk 1: Land security measures are

insufficient to attract the private sector and

protect small farmers

Moderate

Mitigation 1: The SESA has identified mitigation

measures in the project, including the

implementing decrees of the new Land Code and

the establishment of single window for land tenure

in Kara

Risk 2: The significant benefits expected

from the project could be monopolised by a

minority

High

Mitigation 2: SESA (including RAP, and ESIMP,

PDC), and Saemaul Foundation participatory and

gender sensitive approach and nutrition of the will

have positive effects for the people

Risk 3: Climate change and harmful practices

of the people could degrade natural resources

(NR)

Moderate

Mitigation 3: IWRM and the development of

alternative livelihoods should sustainably enhance

the project effects

Risk 4: Lack of interest by the private sector

could limit investments planned in the Agro-

park

Moderate

Mitigation 4: (i) (i) Meetings were held with the

private sector (including Kalyan Group, key

investor) and their needs taken into account; (ii) the

Project will finance infrastructure for the

development of agro-parks and production areas;

(iii) support for the implementation of NP reforms

is planned (land security, standardization and

quality control, PPP, etc.); and (ii) technical

assistance (including legal, technical, management,

PPP etc.) will be made available to APRODAT

Risk 5: Delays in project implementation due

to poor knowledge of Bank procedures by

APRODAT

High

Mitigation 5: Substantial institutional support (see

action plans) for APRODAT is envisaged under the

project

Risk 6: The significant benefits expected

from the project could be monopolised by a

minority

Moderate

Mitigation 6: The SESA provides for the

implementation of actions (Population

Resettlement Action Plan, ESIMP and PDC) that

will have positive impacts on the people

4.6 Knowledge Building

4.6.1 This Project differs from those conventionally financed in Togo by the Bank, mainly

because of the following innovations: the development of public-private partnership in the agro-

industrial sector to finance all the needs of competitive sectors. Through documented monitoring

and evaluation of the innovations, lessons learned by the State, the private sector (agribusiness,

banks, etc.) and consultation frameworks from priority sectors will be drawn. These lessons

learned will not only be taken into consideration by APRODAT but will also be used by the

Bank in experience sharing between the regional member countries. At the end of the project, the

lessons learned will be consolidated in the completion report.

V. LEGAL FRAMEWORK

5.1 Legal Instrument

5.1.1 The project will be financed through an ADF grant of UA 4.635 million (including the

PPF refund of UA 995,000), an ADF loan of UA 8.04 million from the country allocation, and a

TSF loan (pillar 1) of UA 8.32 million.

24

5.2 Conditions for Bank Involvement

5.2.1 The ADF and TSF loans and the ADF grant will be subject to the following conditions:

Conditions precedent to effectiveness:

a) The effectiveness of the ADF and TSF Loan and Grant Agreements will be subject to

the fulfilment by the Borrower, to the satisfaction of the Fund, of the conditions set

forth in Section 12.01 of the General Conditions applicable to Loan, Guarantee and

Grant Agreements of the African Development Fund as may be amended periodically.

b) ADF Grant: The effectiveness of the ADF Grant shall be subject to its signature by the

Donee and the Fund and in according accordance with the provisions of the General

Conditions Applicable to the Grant Agreement of the Fund as may be amended

periodically.

Conditions precedent to first disbursement

a) Loan and Grant: In addition to effectiveness of the ADF and TSF Loan Agreements and

the ADF Grant Agreement, the disbursement of the loan and grant resources shall be

subject to fulfilment, by the Borrower, and to the satisfaction of the Fund, of the

following conditions:

b) Provide the Fund with evidence of the completion of the Executing Agency's

organisational chart and the filling of positions of responsibility, including the positions of

Directors and Service Heads, Procurement, Financial Management, Accounting, Internal

Audit and Monitoring and Evaluation Officers.

Special Conditions Precedent to the Disbursement of Loan and Grant Resources for Works

Involving Expropriation

a) Loan and Grant: In addition to effectiveness of the ADF and TSF Loan Agreements and

the ADF Grant Agreement and fulfilment of the conditions precedent to first disbursement,

the disbursement of the loan and grant resources for works involving expropriation shall be

subject to fulfilment, by the Borrower, and to the satisfaction of the Fund, of the following

conditions

b) Submit to the Fund the reports of environmental and social studies (Environmental and

Social Impact Assessment, Environmental and Social Management Plan, Populations

Resettlement Action Plan and Pests and Pesticides Management Plans) of the Agro-park

and rural infrastructure approved by the National Agency for Environmental

Management (ANGE); and

c) Provide, as work progresses, and before any work begins on an area concerned,

evidence of compensation and/or resettlement of project persons affected in that area, in

accordance with the ESMP and the Resettlement Framework Plan (RFP) and the

relevant African Development Bank Group rules and procedures, in particular the

Involuntary Resettlement Policy and its Integrated Safeguards System. It is specified

that when this compensation or resettlement is not possible, either totally or partially,

due to the impossibility of identifying the beneficiaries or in the event of litigation or

other impossibility beyond the Borrower’s control duly justified and acceptable to the

Fund (hereinafter referred to as "Contentious Cases"), the condition may be deemed to

25

be fulfilled if the Borrower provides evidence that the resources allocated to the

compensation and/or the resettlement of the Contentious Cases are deposited in a bank

account acceptable to the Fund specifically earmarked for such compensation and/or

resettlement, or remitted to and deposited with a trustworthy third party acceptable to

the Fund.

Other Conditions

a) ADF and TSF Loans: The Borrower undertakes, to the satisfaction of the Fund, to:

i). Provide, prior to the request for disbursement of ADF and TSF loan resources in

special accounts, evidence of the opening by the Executing Agency of a special

ADF account and a special TSF account, in the name of the Project, with a bank

acceptable to the Fund, intended to receive the resources of each loan.

b) ADF Grant: The Donee undertakes, to the satisfaction of the Fund, to:

i). Provide, prior to the request for disbursement of Grant resources in the special

account, evidence of the opening by the Executing Agency of a special account, in

the name of the Project, with a bank acceptable to the Fund, intended to receive

the resources of the Grant.

Commitments: The Borrower undertakes, to the satisfaction of the Fund, to:

(i) prepare and forward to the Fund for opinion, no later than four (4) months after

effectiveness of the ADF and TSF Loan Agreements and the Grant Agreement,

for opinion, the Administrative, Financial and Accounting Procedures Manual, the

basis of its internal control system, covering all management cycles: expenditure

management (procedures for the procurement of goods and services), asset

management (fixed assets, inventories, etc.), cash flow management

(authorisation, disbursement, monitoring and control of cash flow, etc.), resource

mobilisation (requests for transfer of funds, direct payments, etc.), accounting,

financial and budgetary information, personnel management, control and internal

audit cycle;

(ii) prepare [no later than twelve (12) months after effectiveness of the ADF and TSF

Loan Agreement] an operations manual for financial facilitation and

intermediation activities in view of access to financing by processing units;

(iii) set up an integrated multi-project and multi-post management system to ensure

that the budgetary, cost and general accounting modules of the Project are kept in

accordance with the financial management rules for Fund-financed projects;

(iv) set up internal audit mechanisms, with the recruitment of an internal auditor who

will ensure that the Project's control system is operational and effective;

(v) implement the Project and have it implemented by the Executing Agency and its

contractors in accordance with : (a) the relevant rules and procedures of the Fund;

(b) national law; and (c) the recommendations, requirements and procedures

contained in the ESMP;

26

(vi) not to commence work in a given area without the project-affected persons in

that area having been fully compensated in accordance with Section 4.03

paragraph ii) above; and

(vii) provide the Fund with half-yearly reports on ESMP implementation, including

any shortcomings and corrective actions initiated or to be initiated, and any

documents reasonably necessary for monitoring the Project’s implementation.

5.3 Compliance with Bank Policies

5.3.1 The Project will contribute to three of the Bank's High-Fives, namely: (i) "Feed

Africa"; (ii) "Industrialise Africa"; and (iii) "Improve the quality of life for the people of Africa".

It is also consistent with the Bank's environmental and social management policies, guidelines

and procedures.

VI. RECOMMENDATION

6.1 Bank Management recommends that the Board of Directors should approve an ADF

grant of UA 4.635 million (including the PPF refund of UA 995,000), an ADF loan of UA

8.04 million under the country allocation and a TSF loan (pillar 1) of UA 8.32 million to the

Togolese Republic for the purpose and under the conditions set out in this report.

I

Appendix I: Togo’s Comparative Socio-economic Indicators

Year Togo Africa

Develo-

ping

Countries

Develo-

ped

Countries

Basic Indicators

Area ( '000 Km²) 2017 57 30,067 80,386 53,939Total Population (millions) 2017 7.7 1,184.5 5,945.0 1,401.5Urban Population (% of Total) 2017 40.1 39.7 47.0 80.7Population Density (per Km²) 2017 141.4 40.3 78.5 25.4GNI per Capita (US $) 2016 540 2 045 4 226 38 317Labor Force Participation *- Total (%) 2017 81.0 66.3 67.7 72.0Labor Force Participation **- Female (%) 2017 81.0 56.5 53.0 64.5Sex Ratio (per 100 female) 2017 97.9 0.801 0.506 0.792Human Dev elop. Index (Rank among 187 countries) 2015 166 ... ... ...Popul. Liv ing Below $ 1.90 a Day (% of Population) 2015 49.1 39.6 17.0 ...

Demographic Indicators

Population Grow th Rate - Total (%) 2017 2.6 2.6 1.3 0.6Population Grow th Rate - Urban (%) 2017 3.7 3.6 2.6 0.8Population < 15 y ears (%) 2017 41.8 41.0 28.3 17.3Population 15-24 y ears (%) 2017 19.4 3.5 6.2 16.0Population >= 65 y ears (%) 2017 2.8 80.1 54.6 50.5Dependency Ratio (%) 2017 80.6 100.1 102.8 97.4Female Population 15-49 y ears (% of total population) 2017 24.5 24.0 25.8 23.0Life Ex pectancy at Birth - Total (y ears) 2017 61.0 61.2 68.9 79.1Life Ex pectancy at Birth - Female (y ears) 2017 61.7 62.6 70.8 82.1Crude Birth Rate (per 1,000) 2017 34.1 34.8 21.0 11.6Crude Death Rate (per 1,000) 2017 8.3 9.3 7.7 8.8Infant Mortality Rate (per 1,000) 2016 50.7 52.2 35.2 5.8Child Mortality Rate (per 1,000) 2016 75.7 75.5 47.3 6.8Total Fertility Rate (per w oman) 2017 4.4 4.6 2.6 1.7Maternal Mortality Rate (per 100,000) 2015 368.0 411.3 230.0 22.0Women Using Contraception (%) 2017 22.2 35.3 62.1 ...

Health & Nutrition Indicators

Phy sicians (per 100,000 people) 2008 5.8 46.9 118.1 308.0Nurses and midw iv es (per 100,000 people) 2008 30.0 133.4 202.9 857.4Births attended by Trained Health Personnel (%) 2014 44.6 50.6 67.7 ...Access to Safe Water (% of Population) 2015 63.1 71.6 89.1 99.0Access to Sanitation (% of Population) 2015 11.6 51.3 57 69Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2016 2.1 39.4 60.8 96.3Incidence of Tuberculosis (per 100,000) 2016 46.0 3.8 1.2 ...Child Immunization Against Tuberculosis (%) 2016 79.0 245.9 149.0 22.0Child Immunization Against Measles (%) 2016 87.0 84.1 90.0 ...Underw eight Children (% of children under 5 y ears) 2014 16.2 76.0 82.7 93.9Prev alence of stunding 2014 27.5 20.8 17.0 0.9Prev alence of undernourishment (% of pop.) 2015 11.5 2 621 2 335 3 416Public Ex penditure on Health (as % of GDP) 2014 2.0 2.7 3.1 7.3

Education Indicators

Gross Enrolment Ratio (%)

Primary School - Total 2016 123.9 106.4 109.4 101.3 Primary School - Female 2016 120.8 102.6 107.6 101.1 Secondary School - Total 2011 55.1 54.6 69.0 100.2 Secondary School - Female 2007 30.7 51.4 67.7 99.9Primary School Female Teaching Staff (% of Total) 2016 16.2 45.1 58.1 81.6Adult literacy Rate - Total (%) 2015 63.7 61.8 80.4 99.2Adult literacy Rate - Male (%) 2015 77.3 70.7 85.9 99.3Adult literacy Rate - Female (%) 2015 51.2 53.4 75.2 99.0Percentage of GDP Spent on Education 2016 5.1 5.3 4.3 5.5

Environmental Indicators

Land Use (Arable Land as % of Total Land Area) 2015 48.7 8.6 11.9 9.4Agricultural Land (as % of land area) 2015 70.2 43.2 43.4 30.0Forest (As % of Land Area) 2015 3.5 23.3 28.0 34.5Per Capita CO2 Emissions (metric tons) 2014 0.4 1.1 3.0 11.6

Sources : AfDB Statistics Department Databases; World Bank: World Development Indicators; last update :

UNAIDS; UNSD; WHO, UNICEF, UNDP; Country Reports.

Note : n.a. : Not Applicable ; … : Data Not Available. * Labor force participation rate, total (% of total population ages 15+)

** Labor force participation rate, female (% of female population ages 15+)

TogoCOMPARATIVE SOCIO-ECONOMIC INDICATORS

May 2018

0

10

20

30

40

50

60

70

80

90

100

20

00

20

05

20

10

20

11

20

12

20

13

20

14

20

15

20

16

Infant Mortality Rate( Per 1000 )

Togo Africa

0

500

1000

1500

2000

2500

20

00

20

05

20

10

20

11

20

12

20

13

20

14

20

15

20

16

GNI Per Capita US $

Togo Africa

2.3

2.4

2.4

2.5

2.5

2.6

2.6

2.7

2.7

2.8

2.8

20

00

20

05

20

10

20

12

20

13

20

14

20

15

20

16

20

17

Population Growth Rate (%)

Togo Africa

01020304050607080

20

00

20

05

20

10

20

12

20

13

20

14

20

15

20

16

20

17

Life Expectancy at Birth (years)

Togo Africa

II

Appendix II: Current Bank Portfolio in Togo

Sect. Project Name

Share

Commit

(%)

Window

Approval

Date

Amount

Disbursed

Amount

Approved

Disburs

Rate

(%)

Wa

ter

&

Sa

nit

at.

Toilets for all in Sokodé through the valorisation

of faecal sludge AWF 19/04/2013 860 540 1 003 905 85 .72

Sub-Total - Water and Sanitation 0.6% 860 540 1 003 905 85.72

Ag

ricu

ltu

re

PPF- Agropoles Development Project

ADF 29/02/2016 762 950 995 000 76.68

Sub-Total - Agriculture 0.6% 762 950 995 000 76.68

Go

ver

na

nce

Resource Mobilisation and Institutional Capacity

Building Support Project (PAMOCI) TSF 09/10/2014 2 970 136 5 000 000 59.40

Tax Governance Support Project (PAGFI) TSF 17/02/2016 580 492 3 080 000 18.85

TSF 17/02/2016 2 309 346 11 920 000 19.37

Governance and Agribusiness Promotion Support

Programme

05/12/2017 2 320 000 2 320 000 100.00

05/12/2017 7 210 000 7 210 000 100.00

Sub-Total - Governance 18.2% 15 389 974 29 530 000 52.12

So

cia

l

Kara and Lomé Markets Reconstruction and

Traders Support Project

ADF 22/01/2014 1 015 852 1 930 000 52.63

ADF 22/01/2014 855 893 1 650 000 51.87

FAPA- Market Reconstruction Support Project FAPA 26/01/2015 539 652 561 771 96.06

Youth Employability and Integration Support

Project

ADF 28/10/2015 593 914 6 670 000 8.90

NTF 28/10/2015 654 655 6 500 000 10.07

TSF 28/10/2015 31 754 1 330 000 2.39

Sub-Total - Social 11.5% 3 691 720 18 641 771 19.80

En

erg

y Pilot Phase of the Rural Electrification

Programme CIZO SEFA 08/08/2017 0 684 629 0.00

Total - Energy 0.4% 0 684 629 0.00

Fin

an

ce Project to Support the Financial Inclusion of

Vulnerable Women (PAIFFV) TSF 22/08/2016 512 357 1 152 173 44.47

Sub-Total - Finance 0.7% 512 357 1 152 173 44.47

Total - National 24.4% 21 217 541 52 007 478 40.80

Tra

nsp

ort

Mu

ltin

ati

on

als

Benin/Togo: Project to Rehabilitate the Lomé -

Cotonou Road and Facilitate Transport on The

Abidjan-Lagos Corridor – Phase 1

ADF 05/10/2011 1 587 374 4 810 000 33.00

Togo/Burkina Faso Road Rehabilitation and

Transport Facilitation on the Lomé-Ouagadougou

CU9 Corridor

ADF 27/06/2012 15 082 941 17 800 000 84.74

ADF 27/06/2012 23 168 917 30 230 000 76.64

TSF 27/06/2012 15 648 435 21 500 000 72.78

EU-AITF 23/02/2015 922 956 991 198 93.12

Benin/Togo: Lomé-Cotonou Road Rehabilitation

(Phase 2) and Coastal Protection Project

ADF 16/12/2016 96 118 9 000 000 1.07

ADF 16/12/2016 0 930 000 0.00

GEF 16/12/2016 0 6 303 265 0.00

TSF 16/12/2016 0 18 350 000 0.00

TSF 16/12/2016 0 30 000 0.00

Sub-Total - Transport 67.9% 56 506 740 109 944 463 51.40

Total - Multinationals 67.9% 56 506 740 109 944 463 51.40

Total - Public Sector 76.1% 77 724 281 161 951 941 47.99

Pri

va

te

Sec

tor

Container Terminal AfDB 15/07/2011 36 005 049 36 005 049 100.00

Container Terminal (Priv. Sect. Credit Enhance

Facility) 75.6% AfDB 04/11/2015 0 14 852 083 0.00

Sub-Total – Non-Sovereign 23.9% 36 005 049 50 857 132 70.80

GRAND TOTAL 100.0% 113 729 331 212 809 073 53.44

III

Appendix III: An Analysis of Togo's Fragility

Fragility factors

identified by the

fragility

assessment

The situation, challenges and resilience measures supported by

General State Policy with assistance from Technical and

Financial Partners (TFPs)

Measures supported by

African Development

Bank intervention under

PTA-Togo (2018-2023)

Political,

institutional and

security-related

factors

1. Legitimate policies and political governance (legitimacy, inclusivity, consolidation of the

State and trust in its institutions)

Legitimacy: Togo has made significant progress which has

undoubtedly set the country on the path to achieving long-lasting resilience. Its achievements to date include increased security and

stability, an economic recovery which has seen average growth rates

of 5% during a ten-year period, the implementation of major institutional and economic reforms, a return to stability, the

strengthening of social cohesion and enhanced regional

cooperation. The TFPs continue to largely commend the Togolese Government for its efforts to rebuild its infrastructure and revive the

country's economy since cooperation resumed in 2006. Yet, despite these improvements, the process of reconstruction following the

political and democratic crisis is far from complete. Beginning in

August 2017, the country once again witnessed a series of political demonstrations calling for a return to the country’s constitution of

1992 that limited the number of presidential terms of office to two. The draft law excluding key provisions on retroactive application

were rejected by the opposition, hence a referendum will be held in

order to separate the two parties, who agreed to take part in negotiations in February 2018 under the supervision of the

President of Ghana, Nana Akufo-Addo. In addition, ethnic and

regional polarisations between the North and South of the country continue to undermine its political stability, and underpin the

entrenched political splits between Togo's political figures. The relative slow pace of democratic transition and the weakness of the

country's institutions are major challenges for political governance

in Togo. This has aggravated the mutual mistrust that exists between the dominant coalitions and led to poor ownership of sustainable

mechanisms for respectful, inclusive and constructive dialogue within the political class and between the elite.

PTA proposes a series of

initiatives designed to improve the legal,

regulatory and institutional

framework for a number of sectoral policies, in order

to in turn improve

economic governance and the transparency of

government action. The introduction of a new Land

Code addresses the issue of

institutional credibility and trust systematically, in

order to improve certain pockets of fragility detected

in political governance.

The consultation

frameworks including

traditional leaders and NGOs strengthen the local

ownership and inclusion process.

Governance: Togo has taken a number of steps to improve its

situation. This process, coordinated by the Permanent Secretariat for Reforms, has enabled several relevant texts to be drafted; these

include a public procurement code, documents on the

operationalisation of the Court of Auditors, the General

Inspectorate of Finance, the creation of a Treasury one-stop service

and the production of reports on the budget review law. Both centrally and locally, the capacity of the Togolese administration

remains weak with regard to contract management and award procedures, as well as the planning, implementation, monitoring and

evaluation of programmes and projects for the development or

assimilation of the principle of accountability.

The implementation of the

proposed system of

governance for agropoles and the operationalisation

of a one-stop land service

are measures designed to

supplement the action

already instigated by the government in order to

improve political, economic and financial

governance. Improvements

to organisations responsible for quality,

standards and metrology

will boost the capacities of control and anti-corruption

bodies to deliver improved quality of services to the

population.

Transparency: Despite remarkable progress, corruption perception

in the country remain high, with Togo ranked 117th out of 179

countries in 2017 on Transparency International's Corruption

Perception Index, compared with 116th out of 176 countries in 2016.

The country's corruption perception rating also places it below the

international average for the 176 most corrupt countries (32

IV

Fragility factors

identified by the

fragility

assessment

The situation, challenges and resilience measures supported by

General State Policy with assistance from Technical and

Financial Partners (TFPs)

Measures supported by

African Development

Bank intervention under

PTA-Togo (2018-2023)

compared with an average of 43). Public-private partnerships

(PPPs) are plagued by the absence of a formal framework for

consultation – a situation that leaves room for the practice of

directly negotiated agreements that can sometimes be misused.

Other challenges include lack of transparency in the management

and allocation of rights to natural resources: the lack of

transparency and good governance in the award of public contracts

and the abuse of private operational permits for mining on large

areas of land are symptomatic of major, unresolved problems and

weaknesses in the governance of natural resources. To remedy this

situation, the Government decided to set up an institution with the

resources needed to fight this type of corruption, and the High

Authority for the Prevention and Fight against Corruption

(HATPLC), an independent administrative body, was established on

28 July 2015. Its members were appointed on 3 January 2017 and

officially sworn in on 7 February of the same year. The purpose of

this anti-corruption body is to promote and strengthen efforts to

prevent and combat corruption and similar violations within

government services, public institutions, private enterprises and

non-governmental organisations. It enjoys financial and

administrative autonomy, and must also ensure the protection any

individual who, acting in good faith, reports the details of

established offences to the relevant public authorities. Since this

organisation is neither a law enforcement body nor a court of law, it

is obliged to forward all substantiated complaints to the Public

Prosecutor so that investigations may be conducted and state action

initiated.

2. Questions of security and violence, and security sector capacity and performance

Security: Despite Togo's largely stable security situation, sporadic

incidents with the potential to destabilise the country continue to occur, justifying continuous efforts towards social sector reform in

order to address the diverse and now recurrent demands for better

conditions for individuals in the education and health sectors. More generally, security problems are reflected in acts of violence against

people and property and the criminalisation of the economy, including the informal sector or even illegal exploitation of natural

resources.

PTA makes no direct

contribution to issues of security. It does, however,

offer solutions to food

insecurity, and it works to mitigate risks that could

worsen the security situation.

3. The justice sector (inclusive access to justice, the rule of law and independence of the

judiciary, as well as checks and balances)

Weakened judicial system: Successive crises arising from the

democratic transition, and sanctions imposed by Togo's main

technical and financial partners for a decade have taken a significant toll on the judicial system. With its ability to operate

diminished by the various causes of fragility, this system has been manipulated for political purposes by the entire political class, and

appears undermined by a lack of independence, problems of

corruption, and inadequate technical and material resources. Therefore, even after the end of the crises, those seeking justice

PTA makes no direct

contribution to the justice

system. However, it addresses the issue of

social and spatial inclusion, a source of

social injustice, by

mainstreaming the concerns of vulnerable

V

Fragility factors

identified by the

fragility

assessment

The situation, challenges and resilience measures supported by

General State Policy with assistance from Technical and

Financial Partners (TFPs)

Measures supported by

African Development

Bank intervention under

PTA-Togo (2018-2023)

continue to feel a deep mistrust of the justice system. Aware of this

situation, regional leaders in every member country have begun the work of judicial reform. Significant progress has been made thus far,

though it remains modest in the eyes of the populations concerned.

In view of this disparity, Togo was requested and has pledged to accelerate the process of modernising the justice system, the

adoption of the Penal Code and Criminal Procedure Code, as well

as reform of the National Human Rights Commission (CNDH).

groups in its activities -

especially women and young people.

Financial and

Economic

Factors

4. Strengthening the economic base and the resilience of communities (equitable access to

infrastructure and the benefits of natural resources)

Togo's macroeconomic performance has been encouraging, and this has undoubtedly enabled its return to growth. However, the situation

remains fragile and extremely sensitive to exogenous shocks and unpredictable climatic events because of the structure of the

country’s economic fabric, which witnessed little change in recent

years. Growth remains at a structural disadvantage because of low overall productivity and high production factor costs. Similarly,

although improvements in education have enabled the workforce to

expand, the accumulation of physical capital has stagnated since the 1990s, contributing to the steady decline in overall factor

productivity since 1980. Togo needs to make the most of its geographical position and turn it into an asset. With the

modernisation of its seaport and airport, and considering that the

country is the hub for ASKY Airline, it has at its disposal the

structuring infrastructure required to recapture its past position.

A range of structures and forms of support offered by

the PTA are likely to help create an environment

conducive to diversifying

the country’s economy, which has an agricultural

sector representing nearly

40% of its GDP. The creation of agropoles and

greater professionalization of agriculture will mitigate

the effect of exogenous

shocks and offer new

opportunities for the

private sector, which is a driver of economic growth.

Social Factors:

Poverty and

Inequality

4. 5. The increased mobilisation of resources to develop opportunities for employment, revenue

and inclusive access to basic social services, with a focus on the crucial role played by the

State; improved financial governance and an appropriate refocusing of the functions of the

State

Inequalities: The pace of progress in human development varies by

region and prefecture, and is insufficient to meet the Agenda 2030 sustainable development objectives. Although slow progress can be

seen in education and healthcare, as well as in living standards of

the Togolese population, several factors are holding back this

improvement: the presence of inequalities, which reduce the impact

of growth on poverty reduction, the absence of any real structural transformation, which restricts economic opportunities, and a lack

of progress towards gender equality, which has a knock-on effect on

the development of businesses and skills. Beyond these observations, the country faces enormous difficulties to deliver human

development for a young and growing population which is

increasingly mobile in the search for work, and these difficulties should be factored into the vast reform programme the Government

embarked upon following the resumption of cooperation with its various donors.

The range of activities

supported by PTA aims to produce an environment

conducive to the

operationalisation of

agropoles as a key plank in

the structural transformation of the rural

social fabric, which is more

affected by inequalities and widespread poverty among

women caused by barriers

to economic opportunities.

Revenue sources: The economy’s reliance on the phosphate sector,

as well as seaport and airport traffic, is a source of fragility. The

greatest share of the country's GDP is produced by two prominent

business sectors, namely the Port of Lomé and the mining of a huge

PTA's proposals include

the active involvement of

the private sector,

particularly agricultural

VI

Fragility factors

identified by the

fragility

assessment

The situation, challenges and resilience measures supported by

General State Policy with assistance from Technical and

Financial Partners (TFPs)

Measures supported by

African Development

Bank intervention under

PTA-Togo (2018-2023)

phosphate deposit, which generates over 40% of the country's export

revenue. Togo is the world's fifth largest phosphate producer. Many studies have revealed that "countries with economies that are

dependent on exporting a limited number of primary products are

more prone to political fragility" and conflict. To change this, the authorities plan to invest heavily in the structural transformation of

the under-productive agricultural sector by developing agropoles, in

order to consolidate the share of GDP represented by agriculture and gradually reduce expenditure on food imports.

and financial research

institutions, to produce in the commodities the value

addition that the country

needs to increase its tax base and support the

sustained mobilisation of

revenue.

Regulatory framework (the State’s role in service provision): Togo enjoys the advantage of having renovated the road network that

connects the country to its neighbours, and developed good quality urban roads in the capital city, even though their condition has

deteriorated as a result of the political and democratic crisis.

Impediments to the development of infrastructure to improve the quality of the State’s service provision vary in magnitude from one

sector of activity to the other. Progress has been observed in the

international transport sector, despite the persistence of significant regional disparities. However, sectors covering public utilities such

as water, waste treatment, electricity and transport are finding it hard to take off due to lack of swift and efficient action), as well as

financing delays. The unbalanced distribution of public services

across regions and sections of the population constitutes another fragility factor which could, in the long run, exacerbate socio-

political tensions if corrective action is not taken to eradicate the

potential for a social divide.

PTA’s geographical location is an initial

response to the imbalance in the provision of services

noted between urban and

rural areas. PTA proposes a number of elements

designed to facilitate the

implementation of agropoles, and in terms of

their operationalisation, agribusiness centres of

excellence with all public

service rights necessary will be constructed to

promote the successful

socio-economic integration

of communities.

VII

Appendix IV: Agro-food Processing Zone (ZTAs) :

A Flagship Programme of the “Feed Africa Strategy”

A/. What is an Agro-food Processing Zone?

An Agro-Processing Hub is a well-defined, centrally managed tract of land developed,

subdivided and dedicated to supporting firms and other stakeholders engaged in agro-processing and

related activities, located throughout the production area surrounding the hub. (FAO, 2017);

Agro-food Processing Zones are agro-based spatial development initiatives designed to

concentrate agro-processing activities within areas of high agricultural potential to boost

productivity and integrate production, processing and marketing activities. These initiatives

may or may not be granted Special Economic Zone status;

They are purposely built shared facilities to enable agricultural producers, processors, aggregators

and distributors to operate in the same vicinity in order to reduce transaction costs and share business

development services for increased productivity and competitiveness.

B/. Main Objectives of Agro-food Processing Zones (ZTAs)

The main objective of an Agro-food Processing Zone is to transform the African rural landscape into

prosperous economic zones through the development of agro-industry in major agricultural production

area. Its specific objectives are to:

Promote private investment, particularly in agro-industry, in order to increase value addition to

agricultural products and facilitate marketing;

Increase productivity and agricultural production of sectors with a market potential at national

(substitution of imported products) and international (exports) levels;

Increase the contribution of the agriculture sector to GDP, and to wealth and employment creation,

especially in rural areas.

C/. Main Geographical Entities of a Agro-food Processing Zone

The Agro-food Processing Zone is a geographically defined area designed to cover one or more

agricultural production areas relevant to the priority value chains identified following the conduct of

studies. It comprises three major entities which should be perfectly connected by proper transport

infrastructure:

A Hub or an Agro-park consisting of a developed area with roads and main networks (clean water,

sanitation, electricity, ICT, etc.), logistics and specialized facilities and services (cold chain,

laboratory and certification, business services, waste treatment, etc.), all of which are required for the

conduct of agro-industrial activities by the private sector. The ownership and management of the

hub are often left in the hands of an independent entity, usually in the context of a public-

private partnership arrangement.

Agricultural Transformation Centres (ATCs): The ATC is a physical complex of facilities centrally

located in the middle of a farming community, where required services are offered to farmers,

including:

Aggregation, sorting and primary storage centres for agricultural products

Agricultural input distribution platforms (seeds, fertilizers, etc.)

Service centres (agricultural credit, business centres, rental and maintenance of agricultural

equipment, zoo-sanitary clinic, etc.)

Food quality control and seed certification

The extension and training centre for producer organisations

Basic social services (schools, health centres, DWS, etc.).

VIII

Centres de transfor-mationagricole

Conglomérats agricoles modernes

SerresExploitations

modernesExploitations

piscicoles

Recherche et développement,

bibliothèqueCentre de formation

Zones de transformation

agricole

MécanisationCentre de réparation

Centre de conférence

Salles de réunion

Services publics et Entretien

du sol

Accueil Centres de santé

Centres de nutrition

Écoles Terrain de

sport

Chambres froidesChambres de maturation

Entreposage

Logistique des marchés

terminaux

Conditionnement Complexe des affaires

/ administratif

Centres de transfor-mationagricole

Centres de transfor-mationagricole

Centres de transfor-mationagricole

Plateforme agro-industrielle

Commercialisation

Agricultural production zones: These correspond to the zones targeted to supply agro-parks

with basic agricultural products via Agricultural Transformation Centres (ATCs). They can

benefit from public investments that can facilitate the increase of agricultural productivity

and the production of the farmers of the sectors selected for the Agro-food Processing Zone.

D/. Key Success Factors:

A ZTA should be based on an Agricultural Transformation Strategy and Plan that targets

areas of high agricultural potential, which are provided the basic infrastructure (water, electricity,

roads / tracks, etc.) by the State (facilitator) in order to promote private investment (promoter),

especially in agro-industrial activities.

The implementation of ZTAs should be facilitated by the State by creating a conducive policy,

regulatory and institutional environment for innovation, skills transfer and private investment,

including through tax and customs incentives.

Agro industrial-parks should provide the private sector with reliable hard and soft

infrastructure required by agro-industries to become competitive (uninterrupted power

supply at a competitive cost, good road infrastructure, clean water, ICT, waste treatment,

proximity to the administrative regulatory offices and the one-stop-shop system).

The structuring and operation of consultation frameworks for priority value chains should

be supported and encouraged by the State. The objective is to improve the functioning of the

value chains in order to improve the performance of the actors.

Inclusion of local communities and capacity building for smallholder farmers are essential

for ensuring the success of ZTA initiatives. Building the capacity of local communities,

smallholder farmers and SMEs is imperative for improving their agricultural performance and

their access to agricultural markets, and for preventing potential conflicts.

Agricultural

Transformation - Centres

Modern Farms Clusters

Green Houses Modern

Livestock Farms Fish Farms

Research and Development,

Library Training Centre

Agro- Processing Zones

Mechanisation Repair

Shop

Conference Centre

Meeting Room

Utilities and Ground Maintenance

Hospitality Health Centres

Nutrition Centres

Schools Sports

Grounds Cold Stores

Ripening Chambers

Warehousing

Terminal Markets

Logistics Packaging

Business/Administrative Complex

Agricultural Transformation -

Centres

Agricultural Transformation -

Centres

Agricultural

Transformation -

Centres

Agro-Industr ial Hub

Marketing

IX

Appendix V: General Table of ADF and TSF Grant and Loan Resource Allocation

LIST OF GOODS AND SERVICES ADF Loan TSF Loan ADF Grant TOTAL

LC FE Total LC FE Total LC FE Total LC FE Total

A. WORKS

Developments - - - 1 037.73 2 421.36 3 459.09 - - - 1 037.73 2 421.36 3 459.09

Infrastructure 1 883.56 5 303.74 7 187.30 274.42 645.99 920.40 - - - 2 157.97 5 949.73 8 107.70

Construction & Rehabilitation - - - 38.86 90.50 129.36 - - - 38.86 90.50 129.36

Sub-total 1 883.56 5 303.74 7 187.30 1 351.00 3 157.85 4 508.85 - - - 3 234.56 8 461.59 11 696.15

B. GOODS

- -

Vehicles - - - 8.00 24.01 32.01 42.54 127.61 170.15 50.54 151.62 202.16

Equipment - - - 169.12 314.40 483.53 53.32 99.24 152.56 222.44 413.65 636.09

Sub-total - - - 177.13 338.41 515.54 95.85 226.85 322.71 272.98 565.26 838.25

C. SERVICES

- - -

1. TRAINING - - - 86.66 57.63 144.29 181.57 120.78 302.35 268.23 178.41 446.64

2. TECHNICAL ASSISTANCE - - - 145.31 823.14 968.45 67.93 385.10 453.04 213.24 1 208.25 1 421.49

3. STUDIES

- - -

Various studies 70.21 85.82 156.03 642.60 785.33 1 427.93 65.13 79.65 144.78 777.94 950.80 1 728.74

Preparation advance - - - - - - 605.00 390.00 995.00 605.00 390.00 995.00

Sub-total 70.21 85.82 156.03 642.60 785.33 1 427.93 670.13 469.65 1 139.78 1 382.94 1 340.80 2 723.74

4. Contracting services - - - 173.11 57.69 230.80 183.09 61.00 244.09 356.20

118.68 474.89

5. Audit - - - - - - 28.81 35.21 64.02 28.81 35.21 64.02 Sub-total 70.21 85.82 156.03 1 047.68 1 723.79 2 771.47 1 131.54 1 071.74 2 203.29 2 249.43 2 881.36 5 130.79

D. MISCELLANEOUS - - - 192.07 - 192.07 - - - 192.07 - 192.07

E. STAFF - - - - - - 1 640.31 - 1 640.31 1 640.31 - 1 640.31

F. OPERATION 349.90 - 349.90 10.82 20.12 30.93 148.09 261.31 409.40 508.81 281.43 790.23

Unallocated 113.17 233.60 346.76 103.23 197.90 301.13 24.62 34.68 59.30 241.01 466.19 707.20

TOTAL 2 416.84 5 623.16 8 040.00 2 881.93 5 438.07 8 320.00 3 040.41 1 594.59 4 635.00 8 339.17 12 655.83 20 995.00

X

Appendix VI: Details of the Economic and Financial Analysis

SENSITIVITY ANALYSIS

Summary of scenarios

Present values: Fall in Price -2.5% Fall in Price -5% Fall in Price -25% Fall in Price -26.36% Fall in Price -30% Fall in Price -32.5% Fall in Price -35%

Variables cells: Profitability threshold

Price drop 0.00% 2.50% 5.00% 25.00% 27.20% 27.50% 30.00% 35.00%

Resulting cells B35:

NPV 56 304 609.37 53 489 949.80 50 689 002.81 28 775 079.70 26 418 125.95 26 097 545.92 23 433 724.71 20 783 616.09

IRR 23.23% 22.24% 21.24% 12.95% 12.00% 11.87% 10.78% 9.67%

Cost/Benefit Ratio 2.03 1.98 1.93 1.55 1.51 1.50 1.45 1.40

XI

XII

Appendix VII: Map of PTA Intervention Area in the Kara Region